In the fifties and sixties, Walter Reuther became one of the symbolic figures of American affluence, the leader of a union in an industry so wealthy that not only did its managers and stockholders become rich, but its workers were able to have lives of constantly increasing prosperity. Where other unions in their affluence became corrupt, his remained uncommonly pure. Where other unions shied away from social issues, the UAW remained committed to them, though how much of that social conscience trickled down from the top management to the workers themselves during the sixties was a matter of some question. Of the union’s power there was no question. One did not readily receive a Democratic presidential nomination in those years without the approval of Walter Reuther.
He was critical of the companies, and yet in ways that he did not entirely comprehend, he was not only their opponent but also—as everyone became more prosperous, manager and worker—their partner. No one was better at playing the companies off against each other; he had the dynamics of the relationship down perfectly, and he knew how, in that flush market, to isolate one company, threaten to deprive it of its revenues, and then convert his victory over it into a victory over all three companies. He was brilliant at sensing which company least wanted a strike and moving against it. The memories of those golden days, when there was always going to be more, lingered long after the pie began to shrink, and later, when UAW officials gathered, they sometimes reminisced. They would nostalgically recall the time they had called on GM during Ed Cole’s reign, and they had sat in the outer office, waiting to see one of the GM executives, and Cole had come bouncing into the room, and, not even looking at these strangers waiting there, had continued the conversation from the meeting just ended, saying, “We have got to get this goddam strike settled, and settled fast—no matter what it takes. We just can’t risk the strike.” They had sat there licking their chops when they heard that. Those were wonderful days. Yet in the end it was an essentially monopolistic union in an essentially monopolistic industry, in an era when American companies never seemed able to produce enough goods and when their greatest fear was of being shut down by a strike. There was a drawback, of course. Higher labor costs were inevitably passed on to the customers. Reuther had never liked that, and in 1946, while fighting for a large wage increase, he demanded that there be no price increase. But GM stonewalled him. What they did with prices was their business, they said, not his. The pass-on became a norm of the industry, and the UAW, voluntarily or no, accepted it. It was a world without illusion. The company and the union had an investment in each other. Bigness begat bigness. As the companies became increasingly centralized, so did the union. On both sides there was more and more at risk. Their relationship was about power and well-respected boundaries. At the end Walter Reuther was a man caught in the extraordinarily successful and profitable system that he had helped create.
He was aware of some of the threatening new trends, especially the coming of the small imported cars. Largely because of Volkswagen the number of small imports was beginning to rise to an appreciable figure. He had always thought Americans ought to be able to produce good, inexpensive small cars. But he knew that Detroit’s heart was not in it, that the companies thought of small cars as a profitless hole. So he came up with an idea, a plan under which the three companies would be exempted from antitrust legislation for the purpose of pooling their efforts to make a high-quality small car. One company might build the body, another the transaxle, another the engine. He took the idea to Washington and called his old UAW sidekick Jack Conway, who was working in the Office of Economic Opportunity at the time. He asked Conway to set up a meeting with Lyndon Johnson. Conway did, but Johnson treated the idea unenthusiastically. The last thing he wanted to do was go to the auto manufacturers and waive the antitrust statutes. Politically, he knew it was a live hand grenade. “Walter, that sounds like a very good idea to me. Makes a lot of sense,” he said. “Now, I don’t know the world of auto makers very well, but I’ve got a man working for me who does—Bob McNamara. You go over and see Bob about that, and if he thinks it’s a good idea, why, we’ll get right behind it.” So Reuther went to see McNamara, who duly praised the idea even more generously and then said the companies would never stand for it, and the idea quickly died.
It was his way of trying to get free of the dynamic that the UAW had become part of. The union’s wages and benefits had gone up constantly, and as they had risen they had become a large part of the company’s rationale for producing bigger cars. The very success of the union had other implications. He saw the growing gap between what American workers and foreign workers were making, and recognized the eventual threat of that to American competitiveness. On occasion with friends he spoke eloquently about it. But he had become enmeshed in a system many aspects of which he disliked and few aspects of which he could control, a system that gave his workers a very good living. He was still caught in this dilemma at the time of his death. In May 1970, as he flew in a small private jet to the UAW’s handsome new recreational center at Black Lake, Michigan—he had complained to friends about the high wages of the construction workers who built it—his plane crashed, and he and his wife were killed.
In a way the best example of Reuther’s journey from radical, socialist outsider to powerful insider of the liberal establishment came during the Vietnam War, when, well into 1968, despite his own deep pacifist origins and his misgivings about this particular war, he stayed loyal to Lyndon Johnson and supported the war. All of the strains of his position and of his power and success, and of the contradictions between them, were revealed at a Passover dinner in the spring of 1968 at the home of Irving Bluestone, a top UAW official and a very close friend of all the Reuthers. The Bluestone seder was something of a tradition, for the wives of both Walter and Roy Reuther were Jewish, and there was a sense on this night of the Bluestones and the Reuthers as one extended family. Indeed, Walter Reuther loved the Passover ceremony, and when Irv Bluestone would read of the hardships suffered at the hands of the Egyptians, he would say, “There—the first speed-up in recorded history.”
In 1968, however, the extended family was torn apart by the war. Barry Bluestone, son of Irv, was going out with Leslie Woodcock, daughter of Leonard Woodcock, the number-two man in the union. Barry and Leslie were both students at Ann Arbor, were serious antiwar protesters, and were embittered because Reuther, unlike Martin Luther King, was unwilling to break with Johnson on the war. They therefore refused to attend the seder. Eventually, in the good UAW tradition, after much negotiation, it was agreed that they would come and they would participate in the seder for fifteen minutes as Vietnam dissenters, Barry reading from the speeches of Martin Luther King, Leslie reading poems from World War I. When they finished, the atmosphere was emotional; both young people were in tears, and their elders were moved. Then Walter Reuther said, “You both obviously have a very good point. Let me, if I can, explain why I have not come out against the war.” The UAW, he said, had debated the issue at great length, and feelings were very high. “But because we have major negotiations coming up soon—a very delicate time—there is a very strong feeling that this is not the time to break ranks with the President on this issue.”
Even as he was finishing, Leslie Woodcock was shouting at him. “You’ve said it! You’ve finally said it!”
“What do you mean?” Reuther asked.
“For fifty cents an hour extra in the pay envelope,” she said, “you’ll let thousands of Vietnamese and Americans die in the war.”
Roy Reuther, normally the gentlest of men, shouted at her, “That’s not what Walter meant!”
“That’s exactly what he meant,” she said.
20. THE MUSTANG
LEE IACOCCA’S TIMING COULD not have been better. He was rising through the Ford Motor Company in almost perfect step with the rising prosperity of postwar America. As director of marketing under Robert McNamara in the late 1950s, he was a great salesman in a salesman’s paradise. There was so much to sell and so man
y people with so much money to buy it, and there was television, a wonderful new way to advertise. America was rich and optimistic, and it was a nation still in love with its cars. Gas remained cheap at the pump. But Iacocca was not merely selling cars; he was adapting the map of Ford to the new map of America. For those were years of great demographic change. Small towns were dying or declining. Farmland on the outskirts of countless cities was being developed into residential areas. Suburbs were appearing everywhere, a new American form of instant community: the ground was laid out, the housing subdivisions created, the highway built, the shopping centers and malls erected, all of it so quickly that the surveyors seemed barely to be gone before the moving trucks started arriving. These communities were often more affluent than the cities they were rivaling, and they could only be reached by car, which mandated that every home have one. Families with one car were buying their second. Families with two were buying a third for their children.
As much as anyone at Ford, Iacocca understood the altered American landscape, and he was doing an inspired job of making sure that everyone in this new, more affluent America could find a friendly Ford dealership nearby. The dealerships, of course, had been located in the old downtown areas, which in this rush of affluence people were leaving. It was Iacocca’s job to push the old-time dealers into the new promised land, moves that many of them made reluctantly. (“You can get tired of telling your dealers,” he confessed to a friend, “that if there are people in a subdivision, there will be businesses, and if there are businesses, there will one day be a Rotary or Kiwanis club there as well.”)
When McNamara became president of Ford, in November 1960, Iacocca became general manager of the Ford division, a prized job at the very center of the company. Iacocca was thirty-six. Only Henry Ford II, it was said, had climbed faster in the company. There was a part of Iacocca that was grateful to McNamara, for McNamara had reached down and pulled him up and had greatly accelerated his career. But he had also chafed under McNamara’s caution, his utilitarian automotive instincts, and his curious belief that auto makers had social obligations, such as in the area of safety. When McNamara went to Washington a few months later to become Secretary of Defense, Iacocca felt liberated. It was soon clear that Iacocca’s regime would be more profitable than McNamara’s. He created a successful truck line, and he invented the idea of a white sale in January, traditionally a terrible month for auto makers. The idea, which was to sell white cars at bargain rates, seemed almost childish at first, but it worked.
Iacocca was very careful in handling Ed Lundy and his finance people. On occasion this took every bit of his self-control. It constantly enraged him that someone so influential within the company could have so little feel for cars. Yet although Iacocca could be quite rough, single-minded to the point of insensitivity, in dealing with people whom he did not respect, he was always aware that to challenge Lundy was to challenge Henry Ford, since Lundy was Ford’s life-support system. After a meeting, when he was back with his own men, he might storm about something that Lundy had said, but he was extremely polite in all encounters. Once there had been an exchange on the question of how much a certain car would cost per month. Iacocca had quickly quoted the monthly installment price, and Lundy had looked puzzled, because all he knew was the sticker price. Few of his friends and fellow executives, after all, bought cars on time. But Iacocca was the dealer’s man, he still identified with the average customer, and he knew most Americans bought their cars on time. For them the critical question was how much per month. That was the real cost of the car, not the sticker price. “I don’t think any of these goddam people know any real people,” he told a colleague.
On another occasion he and Don Frey, his deputy, mentioned to Lundy that it was time to change the sheet metal on an aging model. Lundy asked why. Because the dealers were getting tired of it, Iacocca answered. What did that have to do with it? Lundy asked. The dealers, Iacocca explained—and Frey, knowing the explosiveness of his superior, marveled that he did not blow up—had to hype their salesmen, who in turn had to hype their customers. Thus it was important to keep the dealers excited. If the dealers became sluggish, he continued, the whole process began to unwind. In that case, said Lundy, go ahead. Afterward Iacocca turned to Frey and shook his head. “Can you goddam imagine it?” he asked. “Can you imagine that son of a bitch trying to hawk a car?”
The finance men were a constant affront to him: They did not know cars and yet they regularly thwarted his will. He saw their power increasing at the possible expense of his own. Once when Lundy planted one of his boys in a line job, which was a little unusual, a nice pleasant man with no sense of cars and product, Iacocca fumed. It was as if the very nature of the man, so clean and upright and positive, offended him. Piffle, Iacocca nicknamed him. How’s Piffle doing? he would ask. He knew immediately what Piffle’s weaknesses were, and he was, in the months that followed, at once exceedingly gracious to Piffle and adept at creating situations in which Piffle’s flaws were exposed. It took him only a few months to get rid of Piffle.
In the beginning he had seen Lundy’s people as simply an opposing force; later he sensed the finance men, if not Lundy himself, were going after him in a way that was almost personal. Yet he never retaliated, he seldom fought back. For a man as volatile and combative as Iacocca, ready to retaliate against even the smallest slight, it was a measure of his astounding self-discipline. Yet only someone as aggressive as Lee Iacocca could have operated so effectively for so long against the numbing power of the finance people. He simply wanted success and power that much more than they did. In the smooth modern world of corporate Ford, he triumphed by the fury of his ambition, by knowing more about every aspect of the Ford Motor Company, by always being better prepared, than anyone he was dealing with. He was a man of Ford rather than of GM, for his ambition was too naked for GM, where the system was everything; he would never have lasted there. At Ford, although the system was powerful, there still was some room for idiosyncrasy. At GM ambition was supposed to manifest itself as aspiration for the system rather than for the self. Lee Iacocca’s ambition was always about self. At Ford, a far more political place than GM, riddled as it was with factions (mainly because of the whimsicality of Henry Ford’s leadership, his pleasure in playing people off against each other, his fear of any one executive becoming too powerful), Iacocca was the ultimate political man. In a company with so many pitfalls, he was the only man who, in fellow executive Norman Krandall’s phrase, could “see around the corners.”
Although he was not as mechanically gifted as the early generation of car men, he was a throwback to them in another way: He was intensely single-minded, willing to bend the rules to his needs. But Iacocca was operating in an era far less congenial to that kind of behavior. The modern era summoned a new kind of corporate ambition: Play it safe, understand the company’s unwritten interior rules, bide your time, make no enemies, have no opinion save that of your superior, and in the end throw yourself upon the ultimate mercy of the corporation, for if you served the corporation, it would protect you. For most modern managers it was enough simply not to lose; for Iacocca it was of the essence that he win, and that everyone knew that he won. There was a certain barely concealed anger implicit in Iacocca’s ambition that went beyond money and power. It set him apart from his generation in the industry. For Lee Iacocca there was always more to prove.
Most of the other people in the auto industry were good pleasant men from small Midwestern towns. They came from the middle class, perhaps the lower echelons of that class but at least from some part of it. Their parents might have been a little less prosperous than the town’s first families, but they belonged. Most were Protestants, a few were Catholics. They were never, and this was at the crux, outsiders; unlike so many immigrants, they had never felt scorned. By going into the auto industry, which was a beacon of success throughout the Midwest, these men were opting for status and security. They were always ambitious, but it was a correct kind of ambi
tion, mannerly, restrained, expressed according to the guidelines of class and region. They were the good, solid Americans of the heartland, confident of the essential justice America guaranteed to those who played by its rules, who served their superiors well and waited their turn.
The raw striving of the newer immigrants to America, which affected competition in certain other areas of American life, rarely touched the upper levels of the dominant industrial companies. Those immigrants, notably Jews and Italians, leery of Protestant justice, had produced sons who were fueled as much by resentment as by aspiration. They were dogged competitors, determined to avenge in one generation wrongs inflicted on their parents and grandparents. For the existing America had both welcomed and mocked the new immigrants. Edgar Guest of Detroit, then one of America’s most popular writers, delighted his readers in The Detroit Times with a derisive ethnic ditty about a Ford worker named Giuseppe Tomassi who wore a white collar and silk hat and carried a walking stick when he took his girlfriend, Rosa, for a Sunday stroll:
He smok’ da cigar weeth da beega da band,
Da “three-for-da-quart” ees da kind;
Da diamond dat flash from da back of hees hand
Ees da beegest Giuseppe could find....
For Giuseppe, he work at da Ford.
Most of the immigrants had shied away from the big companies. Aware of prejudice against their kind in their own hometowns, they believed the odds against them were likely to be great in the large, traditional companies. They assumed, not without good reason, that if there were two or three qualified men up for a particular job, then prejudice would inevitably weigh against them. The higher they managed to climb in the executive reaches of companies like that, the clubbier it would become, and the more important social subtleties would be in determining advancement. Unlike their parents, these young men had been able to go to college, but they still bore some of the immigrant rage within them, and they tended to choose occupations in which they would be credited as directly as possible for their own work. In terms of motives and attitudes, Iacocca was not different from the instant tycoons of Hollywood, or some of the nation’s top lawyers or business entrepreneurs, but he was almost unique first in entering a place like Ford, a big, bureaucratic company, and second, once inside Ford, in staying true to his own self-definition, refusing to blend, as he so readily might have, into the company culture.
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