Mr. Earl's effort to reduce the height of the car ran into engineering problems. The car body of the late twenties, as I have pointed out, did not drop down between the front and rear wheels, as it does today, but rested upon the axles and was therefore so high that a running board or step was needed to enter the car. Mr. Earl wanted to lengthen the wheel base and move die engine forward of the front wheels, from its position behind them, so that the frame and body could be lowered and the passengers could sit ahead of the rear wheels, instead of above them. But if the body were lowered to this extent, it created the problem of where to put the transmission. The engineers also objected that lengthening the body added weight, and shifting the position of the motor changed the standard weight distribution, all of which created new and difficult problems.
There were various ways of overcoming these problems. One was the "drop frame," in which the frame took a dip between the axles. The Art and Color Section put on a dramatic demonstration in the interest of showing how a "drop frame" could reduce the over-all height of a car. On one occasion a Cadillac chassis and a separate body were shown assembled in the conventional manner on a stage before us. A number of workmen lifted the body from the chassis and proceeded to cut the chassis frame apart with acetylene torches. Proceeding very quickly, they welded the frame back together in such a way as to lower its height by a good three inches. When they replaced the body on the makeshift frame they had proved a point—not only could the body be lowered but in its new position it looked 100 per cent better.
The roofs, too, got the stylists' attention. General Motors body construction was still wood framing in the main with sheet metal used on all exterior surfaces, except the roof. The center portion of the roof was covered with a synthetic rubber material joined to the steel side panels. But water, dirt, and so forth collected in this juncture, causing a gradual deterioration of the roof. In a salt atmosphere the process was accelerated. Fisher Body was hard pressed to keep up with warranty replacements. Furthermore the stylists had a profound dislike for the appearance of the "half-and-half" roof.
When the steel industry perfected the modern high-speed strip mill and came up for the first time with sheet steel in eighty-inch widths, we were able to make a one-piece steel roof. There were many people in the corporation who were dead set against this innovation. Some of the old-timers, remembering how early versions of the all-steel roof made a drumming noise, objected. But the old roofs were square and boxy while the new design had a generous crown and curved sides which helped to reduce the "drumming." The new silhouette also fitted into the main line of development of automobile styling.
But the new roof led to some heated discussions among the responsible executives of the corporation. When a division chief engineer would condemn the design for noise-making characteristics, another executive would claim that the trouble was caused not by the design but by the vibrations within the engine. But the advanced ideas won out and in 1934 the corporation's 1935 models appeared with all-steel tops, the now famous "Turret Tops." This was a constructive move, one of the big advances in car design, in car safety, and in manufacturing technique. It made it possible to stamp out whole tops on a monster press.
In the early thirties the Art and Color Section proposed making the trunk an integral part of the body, an idea that was quite a departure from the then accepted practice of using a separate trunk strapped to a rack. The idea was tried out on the 1932 Cadillac and on other luxury cars, and, after this tryout, was adopted on the high-volume Chevrolet in 1933. The built-in trunk and its partner, the extended deck on which it sits, were significant, however, because they altered the over-all shape of the car and helped make it longer and apparently lower. And by providing storage space for the spare tire, the built-in trunk helped eliminate one more projection from the car. Here was another case where styling changes made some people unhappy, for these developments meant an apparent loss of accessory business in trunk racks, tire covers, and the like, at a time when accessories were very profitable items. But such is the price of progress.
The first sedan to use an extended deck was the 1938 Cadillac 60Special. This car holds an important place in styling history. It was the first "special" car, designed to introduce new features and to be sold at a higher price, and was followed later by the Ford's Lincoln Continental and other special cars. It was the first General Motors car and the first modern mass-production car without a running board. In addition to disposing of another projection, the elimination of the running board made it possible to widen the basic body pattern to the full tread of the wheels, so that the standard car became one that could hold six passengers. It was the first car that, though a sedan, was styled like a convertible, and was thus a forerunner of the very successful "hardtop," introduced by Buick, Oldsmobile, and Cadillac in 1949. It was well received in the market, and demonstrated the dollars-and-cents value of styling, for consumers were ready to take smaller trade-ins on old cars to acquire it.
The growing importance of styling was symbolized by the appointment of Harley Earl as a vice president of the corporation on September 3, 1940. He was the first stylist to be given such a position, and indeed, I believe, the first designer in any major industry to become a vice president.
During World War II automobile styling ceased, for no new models were produced, and the Styling Staff engaged for a time in military camouflage design. It was at the end of the war, as I have said, that we concluded that the consumer would rank styling first, automatic transmissions second, and high-compression engines third. But in the years immediately following World War II there were few extensive changes in automobile design, for the first aim of all manufacturers was simply to supply the great backlog of demand. However, in these years the long lead built up by General Motors in styling before the war paid off. General Motors had had the first styling staff and for a long time the only one. After the war Ford and Chrysler set up systems of styling, and of integrating styling into production, similar to those first developed at General Motors, and staffed their new departments in part with men who had learned styling under Harley Earl. The sequence of sketches, full-scale drawings, miniature scale models in various sizes, full scale clay models, and fiberglass reinforced plastic models, which Mr. Earl and the Styling Section had pioneered, now became standard throughout the industry.
The role of styling became dominant in the industry as competitive conditions returned. Until the late 1940s it had been customary to change bodies on a four-year or even five-year cycle, with "face-lifting" changes in between. But as the desirability of new body styles became apparent, a shorter cycle of varying lengths became common.
One of the factors contributing to the increased tempo of change in styling was the experimental car. The first of these, the "Y-job," was built by the Styling Staff and the Buick Division in 1937. The idea of the experimental car was to test new styling and engineering ideas in a complete, new car. After the war we built new experimental cars and exhibited them to the public to test the reaction to the advanced ideas they incorporated. The reactions of the hundreds of thousands of viewers to these so-called "dream cars" showed that the public wanted and was ready to accept more daring steps in styling and engineering.
The Styling Staff also built experimental cars of such advanced design that they were not expected to influence production cars for years to come. Such was the XP-21 Firebird I, the first gas turbine passenger automobile in the United States, built in co-operation with the Research Laboratories in 1954.
Indeed, the rapid movement in styling in the late forties and fifties sometimes seemed to many people to have become too extreme. New styling features were introduced that were far removed from utility, yet they seemed demonstrably effective in capturing public taste. One of the most striking of these features of the postwar car was the "tail fin," which first appeared on the Cadillac in 1948 and which, though at first it was not easy to sell, has since appeared on almost every major line of cars, in one exaggerated
form or another. The story of the tail fin began during the war when an air force friend of Harley Earl invited him to see some new fighter planes. One of them was the P-38, which had twin Allison engines, twin fuselages, and twin tail fins. When Mr. Earl saw it, he asked if he could have some of his designers look at it, and after they received clearance, they were allowed to view the plane. They were just as impressed as Mr. Earl, and a few months later their sketches began to show signs of fins.
One important new development has been a growing emphasis on special types of cars—sports cars, station wagons, hardtops, and other special cars at higher prices. Years of prosperity have made it possible for many families to own two or even three cars, and it is reasonable for the second or third car not to be a standard sedan. For this and other reasons the demand rose also for the small car — thus widening the range of the market at the bottom as well as the top. The growing emphasis on leisure-time activities has led to a greater interest in pleasure cars, as was the case in the early days. As Harley Earl has said: "You can design a car so that every time you get in it, it's a relief—you have a little vacation for a while." Today the Styling Staff designs a variety of "vacations." At the same time the automobile is more than ever the dominant form of basic ground transportation in the United States.
Chapter 16 - Distribution And The Dealers
Whenever the automobile market shifts from a buyers' to a sellers' or a sellers' to a buyers' market, a turbulence takes place in the industry, which disturbs both producers and dealers, and certain adjustments have to be made to meet the changing conditions. Some of these adjustments are commonplace, but since history never exactly repeats itself, there is always some element of novelty to be met. So it is in the present and so it has been throughout the development of the dealer system of distribution.
When I was chief executive officer of General Motors, I gave a large part of my attention to dealer relations, amounting at times, you might say, almost to a specialization. I did so because the experience of the 1920s, when the modern problems of automobile distribution took shape, taught me that a stable dealer organization is a necessary condition for the progress and stability of an enterprise in this industry.
Contrary to this, the prevailing attitude of the industry in the early twenties was rather that the manufacturer should attend to the product, the prices, the advertising and promotion, and leave the rest of the elements of distribution to the dealer to work out. There were some who minimized the role of the dealer. They assumed that the customer was for the most part sold before he entered a dealer's salesroom, and so neglected to develop a stable dealer organization. The soundness of the individual dealer's position and the complexity of the internal problems of his organization and market were not considered to be the concern of the manufacturer.
From my point of view, the welfare of the more than 13,700 General Motors passenger-car dealers in the United States, with their $2 billion or so of invested capital, must be a major concern of the corporation. The franchise system of distribution makes sense only if you have a group of sound, prosperous dealers as business associates. I have never been interested in business relationships that are not of benefit to all concerned. It is my belief that everyone should hold up his end of the relationship and be rewarded accordingly.
The significance of the dealer in automobile distribution is twofold. First, as in many industries, the dealer makes the direct personal contact with the customer; he makes and closes the deal that sells the car. The producer's contact, on the other hand, is with the dealer, not the customer, except to the extent that the producer speaks to the public as a whole through advertising, automobile shows, and other instrumentalities—and I might add that the product on the streets and highways is a persuasive message to the consumer.
Second, in the automobile industry, the dealer is franchised. What is a franchised dealer? If you imagined a spectrum of the types of retail distribution in the United States, you would find typically at one end the merchant, such as the corner grocer, who sells numerous and often competing products made by various manufacturers, and whose only relationship with any manufacturer is that of a conventional buyer. At the other end of the spectrum is a merchant—for example, a gas-station owner—who is the agent of a single manufacturer, even sometimes a branch or subsidiary of a manufacturer. In this spectrum, the franchised automobile dealer, in his relation to the manufacturer, lies somewhere between the above extremes. Legally he is not the agent of the manufacturer. Yet in his community he is identified with the manufacturer's product. Generally speaking he is assigned an area of sales responsibility for cultivation. However, he is not restricted from selling elsewhere, and the other dealers are free to sell in his area.
The individual franchised dealer, usually a substantial businessman in his local community, meets the customer, often as a neighbor, trades with him, and services the product sold. The personality, 1 acquaintance, and standing of the dealer as a local merchant are basic to the type of franchise distribution which has become the custom in the automobile industry. Our entire sales approach is based upon this system of individually financed merchants, to whom we offer a potential profit opportunity based upon the General Motors franchise.
Both the dealer and the manufacturer in their relationship have special rights and undertake special obligations. They sign a selling agreement that involves conditions; in other words, the relationship of dealer and producer is governed by the franchise. The dealer agrees to provide capital, a place of business, an adequate number of salesmen, mechanics for service, and the like. He is expected to cultivate his area of responsibility, and to stock and sell spare parts, and so on. In return for such franchise obligations, the manufacturer sells almost entirely through the franchised dealer. Dealers as a group obtain the privilege of selling the manufactured, trademarked products and are supported in their sales effort by the general merchandising activities of the manufacturer. The manufacturer makes large investments in tooling for the annual model change and in research and engineering development to ensure that his product is desirable. A special feature of the franchise system is the amount and type of assistance that the manufacturer renders to the automobile dealer. This includes technical help and programs in all phases of the dealer's business, such as sales and service, advertising, business management, and specialized factory-conducted training programs designed to assist in every phase of the dealer's operation.
The automobile is not like the usual product that customers buy "off the shelf" every day. It is a highly complex mechanical product. It represents a large investment for the average purchaser. He expects to operate it, perhaps daily, yet the chances are he possesses little or no mechanical knowledge. He depends on his dealer to service and maintain the product for him.
Therefore the dealer must not only make a substantial investment in facilities and organization for the display and sale of his product —which is practically the sole function of the average retail establishment—but he must also provide facilities and an organization to service the product after it is sold and throughout its useful life. Beyond this, he must be prepared to take in trade, recondition, and sell one or two used cars on the average for each new car sold, since he may need to resell the used car on a trading basis.
Both the manufacturer and the franchised dealer undertake normal and related business risks, the dealer in his investment in selling and service facilities, the manufacturer in his investment in producing facilities, including engineering development and high annual tooling costs. Both depend upon the appeal the manufacturer gives to the product and the ability of the franchised dealer efficiently to sell and service the product.
The achievement of our two goals in distribution—namely, the economic movement of the product, and a stable network of franchised dealers who move the product—has taken much thought and work over many years, for the problems are complicated, they change to some extent with changing circumstances, and the solutions have not alway
s immediately presented themselves. Policies and practices that were satisfactory at one time may not be best suited to later conditions. A "new model," so to speak, in dealer relations may be needed from time to time.
Before 1920 automobile distribution was based in the main upon distributor-wholesalers who subcontracted to dealers in their jurisdiction. But in the course of time, manufacturers, generally speaking, took over the wholesale function for more intensive cultivation, and the franchised dealers maintained the retail function.
The question might arise why the automobile industry adopted tins form of distribution. The answer, I think, in part is that automobile manufacturers could not without great difficulty have undertaken to merchandise their own product. When the used car came into the picture in a big way in the 1920s as a trade-in on a new car, the merchandising of automobiles became more a trading proposition than an ordinary selling proposition. Organizing and supervising the necessary thousands of complex trading institutions would have been difficult for the manufacturer; trading is a knack not easy to fit into the conventional type of a managerially controlled scheme of organization. So the retail automobile business grew up with the franchised-dealer type of organization.
Between 1923 and 1929 the leveling of demand for new cars logically resulted in a change of emphasis in the industry from production to distribution. On the sales end that meant a change from easy selling to hard selling. Dealer problems of an entirely new nature began to arise.
My Years With General Motors Page 34
