The Best and the Brightest

by David Halberstam

  The arrival of the GM executive group, which the Whiz Kids had not known anything about, slowed down the latter’s takeover of Ford (Thornton, restless, left after a year and a half for Hughes Aircraft, where he sensed greater possibilities, finally ending up at Litton Industries). But the system worked very well for Henry Ford. The young men were scattered throughout the company (with McNamara and Arjay Miller, who succeeded McNamara as president of Ford, working in finance). There they worked to convert the incredibly archaic, helter-skelter operation of old Henry to the new classic corporate style used at General Motors, with its highly accountable decentralized units, the different company operations turned into separate profit-and-loss centers where each executive would be held directly responsible, and where slippage and failure would be quickly spotted. The lead of General Motors in that postwar period was enormous: Ford had very little in the way of a factory, its machinery was badly outdated, not easily retooled. In contrast, GM had converted to war production, but it had been very careful to establish in its factory and production lines the kind of systems that could be easily converted to peacetime production. Chevy thus had a massive lead; it could bring out a car for much less than it actually did, but if it lowered its prices it would kill Chrysler and bring the wrath of the Congress down for antitrust. (“Don’t ever hire anyone from the auto industry,” Gene McCarthy, one of McNamara’s severest critics later said of him. “The way they have it rigged it’s impossible to fail out there.”) So Chevy kept its prices higher and produced a much better car than Ford. The true difference between Ford and Chevy then was reflected in the used-car market: a two-year-old Chevy sold on the used-car market for about $200 more than a two-year-old Ford, a very considerable gap.

  The prime aim of the two new management teams at Ford was to close the gap. Here Breech and McNamara combined their talents; they had to figure out how to produce a car that was at least partially competitive with Chevrolet, and at the same time make enough profit that could be plowed back into the company to build the desperately needed plants. They could not do it by borrowing from the banks, Ford’s credit rating simply wasn’t good enough, so they did it by skinning down the value of the car, mainly on the inside where it wouldn’t be seen. Ford had always been known for styling and speed, so they kept that, and worked on having a modern design, with a zippy car, good for the youth market, though eventually, and sometimes not so eventually, the rest of the car would deteriorate (as was also reflected in the used-car price). The Ford buyers seemed to know it, but curiously enough, continued to buy Fords. By these means Breech got the money to buy and modernize the plants, while it was McNamara’s particular genius to raise the quality without raising the cost, a supreme act of cost effectiveness. This was, of course, McNamara’s specialty, and he had a bonus system to reward stylists and engineers who could improve the car without increasing the cost. The McNamara phrase—it came up again and again at meetings, driven home like a Biblical truth—was “add value rather than cost to the car.” And slowly he and Breech closed the gap on the used-car differential while at the same time modernizing the company.

  It was at Ford during this period that McNamara was being converted from a bright, hard-charging young statistician into a formidable figure, a legend, McNamara the entity, someone to respect, someone to fear, a man who rewarded those who met his standards handsomely, and coldly rejected those who did not.

  If someone were to be driving with McNamara during work hours, he would see it: Bob was driving, but he was thinking of grilles that day, only grilles existed for him, cheap ones, expensive ones, flashy ones, simple ones, other cars rushing by on their way to lunch, on their way home, and Bob running it through his mind, oblivious to oncoming traffic, frightening his companions. Bob, watch the road, one would say, and if he were in a good mood, he might apologize for his mental absence. McNamara never stopped pushing; in those days he was watching Chevy—how was Chevy doing? The night each year when they got hold of the first Chevy, everyone gathered around in a special room and broke it down piece by piece into hundreds of items, each one stapled to a place already laid out for it, and they concentrated on it—no brain surgeon ever concentrated more—everyone muttering, wondering how Chevy had done this or that for a tenth of a cent less, cursing them slightly—so that was how they had done it!

  When Thornton left, there was considerable curiosity as to who would emerge as the top Whiz Kid; it soon became clear that it was McNamara. He symbolized a new kind of executive in American business (later one friend would call him “dean of the first class of American corporate managers”), men who had not grown up in the business, who were not part of the family but who were modern, well educated, technicians who prided themselves that they were not tied to the past but brought the most progressive analytical devices to modern business, who used computers to understand the customers and statistics to break down costs and productions. At Ford what distinguished McNamara was the capacity to bring a detailed financial system to the almost total disorganization of the company. He was brilliant at systematizing, telling Ford where it was going before it got there. He set up a corporate accounting system which reduced the element of surprise in the business. His system of rewards for reducing costs provided incentive (though occasionally, in the view of his critics there, the system backfired, the rewards going to people and ideas whose efficiency would be only short-range).

  He rose quickly because he was moving in something of a vacuum. Henry Ford was new and unsure of himself, particularly in the field of financial systems. To an uneasy, uncertain Ford, McNamara offered reassurance; when questions arose he always seemed to have the answers, not vague estimates but certitudes, facts, numbers, and lots of them. Though his critics might doubt that he knew what the public wanted or what it was doing, he could always forecast precisely the Ford part of the equation. He had little respect for much of the human material he found around him, the people who claimed, when he reeled off his overwhelming statistics, that they had always done it the other way in the auto business. Such people, when they challenged him, were often proved wrong. Slowly he surrounded himself with men who met his criteria, men who responded to the same challenges and beliefs, and he would respect their judgments. This was a formative experience in his life, because years later, when the doubters about Vietnam began to express themselves, they at first tended to be people who did not talk his language and who were very different from his kind of people. They did not think in terms of statistics, or rationalizing systems, and they did not support their judgments with facts as he knew them, but rather by saying that it did not smell right, or that it just did not feel right; he would trust his facts and statistics and instincts against theirs just as he had before at Ford when confronted by the businessmen who had doubted his facts and charts.

  In Detroit he was the odd man in. The auto world is a very special segment of America, with the normal American exaggerations blown even larger. Like a mini-Texas. It is a world closed in, auto men talk to other auto men, auto traditions passed on in generations of families. Ford people living among Ford people, General Motors among GM people. A Ford country club. A General Motors country club. Cocktail conversations about cars and the company. Dinner conversations about cars and the company. There is a self-belief that what they are doing is not only good for America, it is America. In this atmosphere McNamara was the last puritan. He came to it, met it on his terms, never really changing, conquered it by sheer mathematical and tactical ability, rose to the highest position, a penultimate corporate victory, forcing the head of the company to adjust an entire system to his style. McNamara was never of Detroit and never really of the auto industry. They were backslappers, good fellows, and he was never one for slapped backs, his or theirs. While they frolicked, he plowed through the unabridged Toynbee. Even his public relations man was different; other PR men specialized in expense-account lunches, plush trips, the usual lures to wine and dine and con journalists; McNamara by contrast paid a very hand
some salary to a man named Holmes Brown because Brown was very good, knew a lot about the auto industry and was well informed. Brown’s treatment of reporters was considered unusually Spartan by Detroit standards. McNamara preferred to live in Ann Arbor among the eggheads, many of them liberals and Democrats (at Ford executive meetings Henry Ford would occasionally mention contributions to the Republican party and then note with a certain distaste that “Bob here will probably give to the Democrats”), reading books, buying paintings. When the dealers and their wives showed up every year, the head of Ford would traditionally show them around while the wife would take care of the ladies for a day. Normally it meant fashion shows with mink coats. Under Marg McNamara they went for a tour of the University of Michigan cyclotron. Indeed it was said that the McNamaras deliberately managed to be elsewhere when Henry and Ann Ford gave great gala parties for their daughters.

  But it was more than just a stylistic difference with Detroit, it was something far deeper. In business philosophy as well as personal life McNamara was a puritan, and the auto business is not the place for a puritan, nor is it necessarily the place for someone who has an abiding faith in man as a rational being committing rational acts. The buying of a car is not necessarily a rational act; it takes more than the transportation aspect to sell a car. Detroit is and always has been happiest when it can foist on a potential customer more than he needs, adding chrome, hard tops, soft tops, air conditioners, speakers, extra horsepower. McNamara was different; he thought the customer should be rational, and worse, in the eyes of some colleagues, he thought he was rational. The auto industry essentially believes the buying of a car is an impulse; McNamara insisted it was a rational decision. It pained him to approve a convertible, the idea that a customer would pay $200 more for a dangerous car that would deteriorate more rapidly offended him (after he left Ford and they made a convertible version out of his beloved Falcon he wrote a rare message to a friend at Ford: “You must be crazier than hell”). He believed deeply in the simple utilitarian car, that it was a raw, functional thing, that man seeks the highest form of efficiency without grace, and without psychological feelings at all. His opponents in the auto industry argued that this is not the way the world is, and in particular, it is not the way the auto industry is; man will opt for comfort and status every time, and has since men flaunted better-looking horses and carriages at one another.

  But it was as if McNamara felt that there were certain things which were good for people and other things which were bad, and he would be the arbiter, he knew better than they. It was, said one friend, a quiet kind of arrogance. One of his colleagues thought he should have been the head of production at the Moskva works in the Soviet Union, the utilitarian man producing the utilitarian car for the utilitarian society, no worry about frills there. If he hadn’t gone to work at Ford, thought another, he’d still be teaching at the Harvard Business School, probably happier, driving a VW to work and laughing like hell at all the fools around him with their big cars and automatic transmissions. He not only believed in rationality, thought a friend, he loved it. It was his only passion. “If you offended it at a meeting, you were not just wrong, you had violated something far greater, you had violated his sense of the rational order. Like offending a man’s religion.” If you did show a flash of irrationality or support the wrong position, he would change, speaking faster, the voice like a machine gun, cutting into you: chop chop chop. You miscalculated here. Chop. You left this out. Chop. You neglected this. Chop. Therefore you’re wrong. Chop. Chop. Chop.

  He was a powerhouse at those meetings, driving things through, always in great command, doing his own homework, never respecting those who did not (later when he was at the Pentagon a general would turn at a meeting and ask a colonel for the answer to a question, and it would be the general’s last appearance around McNamara). His power was facts, no one had more, and no one used them better, firing them out, one after another, devastating his opponents (though sometimes friends would feel that there was a missing piece, that sometimes this brilliant reasoning was based, yes, on a false assumption). He was, if anything, too strong a personality; he so dominated meetings that other men felt submerged and suppressed. Sometimes his meetings seemed to less friendly eyes to have a sham quality. There would be a meeting, say, to plan a car, its style, content and prospective price. McNamara would arrive at the meeting with his own homework done, his own decisions made, so that he came with a fixed position. He would seemingly defer to the others, ask what they thought, yet there was an overpowering personality and ego there. He perhaps did not mean it to be that way, but despite the appearance of give-and-take, the whole thing would become something of a sham, the classic Harvard Business School approach with loaded dice.

  Those who attended the meetings learned to play the game; the McNamara requests to speak freely were not to be taken too seriously. He would telegraph his own viewpoint, more often than not unconsciously, in the way he expressed the problem, and in particular he would summarize in an intimidating way, outlining point by point, using the letters of the alphabet, A through J, if necessary, and his position always seemed to win out in the summation. If you dissented or deviated, he listened, but you could almost hear the fingers wanting to drum on the table; if you agreed and gave pro evidence, he would respond warmly, his voice approving in tone. Gradually those who disagreed learned their lesson, and just as gradually he would reach out to men who were like him until he was surrounded by men in his own image. Those who knew him well could tell when he was angry, when he was going to explode. He would become tense, and if you looked under the table you could see him begin to hitch up his pants, a nervous habit, done because he knew he could not control his hands if they were on the table. The more restless he became, the more his antagonist assaulted his senses, the higher the pants would get, showing thick hairy legs. On bad days the pants might reach to the knees, and then suddenly he would talk, bang bang bang. You’re wrong for these reasons. Flicking his fingers out. One. Two. Three . . . He always ran out of fingers.

  Though he was often blamed for the Edsel (particularly by Barry Goldwater in 1964), he had remarkably little to do with it; the car was essentially antithetical to his position. The old GM people at Ford had long wanted to emulate the GM pattern, a different car in each of several different markets, different stalls in the market place (Ford-Mercury-Lincoln dealers were together, whereas the GM lines were sold separately). Finally they saw their chance: upgrade Mercury and slip the Edsel in between. The decision was made in 1955, a prime year, but the car came to fruition in 1958, which was a bad auto year, post-Sputnik, the worst year, for instance, Buick had. When the Edsel went bad, Lewis Crusoe had a heart attack, and McNamara was put in charge of all the car divisions. He consolidated some of the other divisions and put a stop to the Edsel.

  Instead of playing games with consumer tastes, he spent those years fighting the battle to keep the prices down and the cars simple, fighting with the other people at Ford, fighting with the dealers. Always trading and swapping to hold the line. The dealers wanted more frills. The dealers wanted a crank on the front-window vents. And McNamara would say, all right, you can have that, but we’ll have to take all the chrome off the car. Some of the men fought about the width of the car, wanting it wider so it could be a hard-top, which entailed a wider frame. McNamara would listen and tell them (words which would be remembered long after), “If you persist in demanding this, I’ll have to take the car away from you.” The men around him began to shade things in talking to him, not really lies, just a certain hedging of the truth to please him. For instance, McNamara wanted a two-speed automatic transmission, so he promoted a design which would perform as well as a three-speed but cost less. There were considerable doubts that the two-speed would work as well, but he was finally given assurances that it would; the engineers wanted it to work because he wanted it to work, because there would be bonuses and smiles of approval, but sadly it never did; it performed durably but sluggishly,
just as his critics had predicted.

  Yet he was good at Ford, no mistake about that. He brought his system to that declining empire at just the right time; they held the line, they did not decay and collapse as they might have, and they finally grew back, in part owing to his enormous drive and pressure, his utilitarian view, probably perfectly suited to what Ford needed and could afford at the time. His greatest triumph was the Falcon, the vindication of his years at Ford, the definitive utilitarian car, the direct descendant of the Model T, his ultimate contribution to cost effectiveness, a car low enough in price to compete with foreign imports but large enough to transport an American family around. He did not want a revolutionary car, just a classic, simple car. It was a great success, though not as great as McNamara had hoped; he envisioned a million in the first year, and it went instead to 600,000. Its success was to come just before he left Ford; it enabled him to gain the presidency, and he left on a note of triumph. But after he left, Lee Iacocca, who would eventually succeed him, said that Bob McNamara had damn near ruined Ford by pushing that Falcon, too simple a car, with too small a profit for the company. Iacocca symbolized exactly the opposite of McNamara in the auto world. For instance, he brought racing to Ford, and Henry liked that, Henry pictured with his pretty new wife in Europe after having virtually bought Le Mans, an invasion of American power and industry somewhat short of that flashed on D-Day. McNamara hated all that, hated racing, and now here was Henry and the Ford name advertising for it. Lee brought in the Mustang, a car designed for the American consumer in just the way McNamara’s cars were not. They had looked at the design and thought, we have a doll of a car and people will buy it, and now let’s figure out how to build it. Lee liked bigger, plusher, flashier cars, and to him the Falcon was a reminder that Ford might be growing customers for GM, bringing them into auto consumption, and then as they grew wealthier, turning them over to GM, which was stronger in the middle range of cars. So Lee was critical of McNamara, and so occasionally was Henry Ford, now more confident, now more his own man, and sometimes given to making statements which indicated a measure of disenchantment with McNamara, that perhaps the good old-style auto people were better than the new intellectuals.