Customer Reviews

My Years with General Motors

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Alfred P. Sloan Jr. was CEO of General Motors from 1923 to 1946. This book was originally published in 1964. Sloan is seen as the first person to have worked out systematic organization in a big company, planning and strategy, measurements, the principle of decentralization - in short, basic concepts of a discipline of management. This is a difficult book to review, since it is more a historic piece on GM's history and development from Sloan's perspective than an autobiography. It does not discuss the individual Alfred P. Sloan Jr., it discusses Alfred P. Sloan Jr. as professional manager. The chapters also come across as business school lessons in different subjects, ranging from general management through to accounting, marketing and compensation strategies.

The book consists of two parts. "Part One is an integrated continuous story of the main lines of General Motors' progress, involving the origin and development of the corporation's basic management concepts in the areas of organization, finance and product." It discusses the extreme growth and development of the automobile industry from the early 1900s through to the early 1960s. It also discusses the methods General Motors introduced used to manage the corporation (Sloan all through the book keeps emphasizing the concept of the corporation). He later became known as a committee-man, because he used different types of committees to get/keep various divisions talking and working with each other.

"Part Two consists of individually distinct sections dealing in some detail with engineering, distribution, overseas operations, war and defense products, incentive compensation, and other aspects and branches of the enterprise." This part of the book discusses in greater detail the different experiences and events during Sloan's reign as CEO. It discusses some very interesting subjects, such as the evolution of the automobile, relationships with dealers, World War I and II efforts, and personnel and labor relations. Chapter 23 and 24 are really the conclusion to this book.

Yes, this is a great book. It is a TRUE business classic. It discusses all the subjects involved in business from a CEO's point of view. I was amazed to see the amount of detail Sloan has gone through while writing this book, there are plenty of quotes from annual reports, memoranda, conversations, etc. However, some readers will be disappointed by the lack of insight into Sloan's personal life. This particular edition includes an introduction by Peter F. Drucker, who explains why this book is MUST reading for all MBA and business students, but also all people that want to be serious about management. Highly recommended. The book is written in simple business US-English.

Alfred Sloan can tell it like no other. From the early days of GM to the time he retired, this book chronicles the issues that faced GM. Marketing, segmentation, labor relations, competition, and many other aspects of managing an industrial giant. If you like this type of book, this is a classic. Prefer the tales and hype of the net economy, then this one will probably put you to sleep, though there are lessons here that anyone can learn from.

On the good side, this book has a great deal of information about the growth of General Motors, and it's ghost-written by a journalist, so it's easy to read.

Sloan was one of the first modern-style businessmen. He grew GM from a bunch of mechanical geniuses and seat-of-the-pants administrators to the biggest company in the world after World War two.

However, the U.S. auto industry was at the peak of its powers and was about to begin the long slow (but inevitable) decline. And unfortunately you can see why. In 1964 autos wouldn't last more than a few years, and were sold on the basis of the annual model change. It truly was a seller's market, and you can see how the problems of today stem from the attitudes of that time.

Sloan is at his best describing the period 1921-1929 when the industry fell into place. The thirties get little mention and the period after the war is treated as one long period with no developments.

Sloan is glib when it comes to showing off the attitudes of management of that time. Because GM couldn't sell high-profit cars during the war but instead did defence work, this "proves" that wars do not benefit business. There are two chapters, one on labor relations ("how we kept the hourly paid workers' wages down"), and following that, on executive bonuses ("must be kept in place").

It's a worthwhile read, but it's becoming more historical than instructional.

Alfred Sloan teaches the reader how an successful manufacturing company should be organized and operated.

He shows how GM involved the Kettering Research Labs in elements of product improvement, how the various divisions of GM were organized and their relationship to the parent organization, how they employed developments from Kettering Labs such as the electric self starter and the "Kettering Ignition System" into modern auto design.

Mr. Sloan also describes how GM entered non-automotive businesses such as Frigidare Refrigerators and diesel electric train engine manufacturing and grew those entities into successful enterprises.

A must-read for students of the manufacturing business.

In this book, Alfred P. Sloan tells the story of his years as president and CEO of General Motors. His story is relevant for anyone who needs advice on how to save a company that is on the verge of bankruptcy and get it growing. Sloan has divulged his insights on organizational structure, management processes, financial control, product strategy and research. Here is some of the advice he offers:

· Balance cooperation and control: Sloan implemented a framework of coordinated policy and decentralized operations. Top managers made policy, and individual business units were free to implement the policy in the way they wanted. He created interdivisional committees to ensure continuity.
· Management. Rather than expecting managers to behave like drill sergeants, Sloan pushed for "selling" at all levels. Corporate leaders were expected to sell their policy decisions to divisions. Division managers were encouraged to sell operational initiatives to top management.
· Finances. Sloan created a system for reviewing appropriation requests to control spending. He also created a system of four-month forecasts to make sure the size of inventory did not exceed the needs of production.
· Product Strategy. Sloan developed a marketing strategy for General Motors to offer an automobile for every price range. The company had previously been stuck offering cars only in the mid-price range, and had lost considerable market share to Ford.
· Research. Sloan recognized that research was just as important as manufacturing and put both research and operations on the same organizational plane.
· Distribution. Sloan turned automobile dealers into business partners and simplified the process of distribution for General Motors. He also created GMAC, a financing entity that allowed the "average man" to buy a car and pay in installments. When he began this program, banks refused to lend money to working people to buy automobiles, considering them a bad risk.

I have been hearing for years that this book is a must read for anyone who aspires to be a great manager in the business world. What I found it to be was a fairly dry chronicle of the ascension of GM. I have no doubt that Sloan was a genius and perhaps the book was more of a revelation in 1963.

However, today many of the strategies discussed are somewhat obvious. For example, one of the overarching themes in the book is Sloan's belief in decentralization. At some point he realized that some centralization relative to certain business functions is needed. The company fine tuned this balance over the years and this is discussed in detail. This makes alot of sense but this a process that is taken for granted today. Anyone working in the business world for a few years at a medium to large sized company has seen this phenomena in action.

There is also quite a bit of material about financial controls which is good, again nothing revolutionary although the techniques were probably innovative for the time. In the end, I think the book works better as a decent history of the auto industry and GM although the writing style is so dry most "car nuts" would find it boring.

The history of the auto industry is populated with some remarkable characters, many of which were very eccentric with a real passion for automobiles. You won't find any anecdotes about that in this book, and of course that was by design. Sloan's intent was to chronicle the history of GM and his involvement with the company, and that is what he does. However, he does it in such a matter of fact way that some folks might find it tough to stick with it to the end. Not exactly a cure for insomnia but comes dangerously close at times.

An incredible man! We need more like him to throttle the huge corporations and return us to making America prosper. Keep your dollars in the USA!

This book "My Years with General Motors" was originally published in 1963 and is just as relevant reading today as any books written by top managers since then. The book is not easy to read, it is well over 400 pages of thoughtful text, but it is well worth reading for people with an interest in the history of General Motors, the history of the automobile, history of industrial technology in the 20th century, etc...

It was published shortly after I was born and I was aware of it during grade school but unfortunately didn't bother reading it until recently. The book is well-positioned with the Bill Gates quote on the cover that reads, in part, "... the best book to read if you want to read only one book about business...". I completely agree with that!

This book is better than any other book I am aware of regarding the Automobile industry if you are interested in business and management evolution. It provides much better insights into business than books I have read by and about say John DeLorean, Lee Iacocca, or Howard Hughes. Those other books may be more entertaining however for people looking for entertainment. This book provides broader insights into general industrial management for contemporary use than say the two books written by Bill Gates do.

This 1990 edition of "My Years with General Motors" also provides an insightful introduction by Peter F. Drucker that adds considerably to the understanding of Alfred P. Sloan. This book is interesting for what it doesn't cover as well as for what it does cover.

It does seem Mr Sloan believed in the importance of a well defined structure for management, a constitution if you will. However, the ultimate goal is to put people to work to produce the best possible result. Leadership is seen as more important than structure by Sloan, this is not what the popular opinion of General Motors would be however.

That is why I recommend reading this book as an Excellent Historical Account of Management at General Motors. Four out of Five Stars.

It was a bit depressing reading this triumphant memoir - indeed, one of the greatest business books written during the twentieth century - in May 2009 as the benighted American industrial icon, General Motors, slid into bankruptcy. It made the story of Sloan's storied leadership and GM's dramatic early success all the more incredible. Beyond that, "My Years at General Motors" resonated with me for a number of reasons.

First, Sloan provides a fascinating overview of the early automotive industry in the United States. As someone who was raised in a "car family" (my father sold Fords and my uncle managed a GM dealership), the story of how Durant and then the DuPonts and Sloan built GM to overtake Ford and ultimately dominate the car industry is a captivating one. The fact that I spent the first decade of my professional career in the software industry, which in the 2000s roughly equates to the car business in the 1920s, only added to the allure of this book.

Second, as an executive in a central role in a business unit-dominated company I sympathized with the challenges that Sloan faced in getting control of such a distributed organization as GM in the 1920s. As Sloan describes it, his goal was "decentralization with co-ordinated control."

Third, it is sobering to read what can happen to a genuinely disruptive innovative organization over time. According to Sloan, GM was a pioneer on multiple fronts: the first to develop market segmentation of car brands and the roll-out of the annual model; the first to create a dedicated, central group focusing on body styling; the first to create a range of financial operating metrics across business units; the first to treat their dealers as an integrated part of their total operations; the most aggressive automotive firm in developing consumer finance (GMAC) for car purchases; a technical innovator in the commercial development of the diesel engine for locomotives; a leader in human resource incentive compensation models; and a leading inventor in consumer refrigeration (Frigidaire). Most amazing, from my perspective, was the work of GM's Post War Policy Planning Group, which before the German defeat at Stalingrad issued a detailed report that accurately laid out the contours of the coming Cold War and described how GM would compete in a bipolar political world. ("The net result of the foregoing general viewpoints...is that there will probably be certain lines of demarcation or division to the west, south and east of the Soviet Union, within which the Russian idea will predominate, and outside of which the American and British viewpoint will prevail.")

That said, for all of GM's purported innovation under Sloan, his story makes it clear that the greatest factor in the demise of Henry Ford's dominance was classic external market disruption, namely the emergence of the used car market and installment paying. GM simply took better advantage of these developments and others than Ford.

Finally, Sloan and his fellow GM executives were incredibly lucid writers. For me, this was the most glaring difference between then and now in corporate America. Much of this memoir is made up of extended quotes from Sloan's internal policy papers. The clarity and crispness of these documents is impressive. By reading these nearly century-old memoranda - and without knowing the first thing about the automotive industry in general or 1920s era General Motors in particular - one can easily grasp the central facts and critical dilemmas that Sloan and his fellow executives faced. Just imagine trying to do the same reading the interminable e-mail threads and obtuse PowerPoint strategy decks that undoubtedly have flown back-and-forth between recently ousted GM CEO Richard Wagoner and his top lieutenants. (Note: interestingly enough, the contemporary exception to this Twitterization of business strategy is Amazon.com, where CEO Jeff Bezos requires that any new ideas be presented in clearly articulated white papers, not PowerPoint.)

In sum, Alfred Sloan is a real lion; an aggressive and imaginative businessman of the first order. In the closing chapter of his celebrated memoir Sloan writes: "There have been and always will be many opportunities to fail in the automobile industry." Unfortunately, it appears that his unworthy executive heirs at GM have, in a perverse sense, taken full advantage of the many opportunities afforded them.

"My Years with General Motors," by Alfred P. Sloan, Jr, Doubleday, NY, 1963, with introduction by Peter Drucker, 1990. Sloan was President/CEO/Chairman of the Board of General Motors from 1923 to 1956. He created the systems and organization that made GM a great corporation. That organization was studied as the model for large corporations for decades. The book also provides a look into the history of GM and its various strategies.

General Motors was created by William C. Durant in 1908. Beginning with Buick, he acquired a series of auto companies including Olds, Oakland, and Cadillac, with the idea of competing with the then market leader, Henry Ford's Model T. Durant was the visionary who brought together much of the modern GM, but his organizational style was hands on-producing delays in decision making. He also lacked adequate financial controls. He was forced to resign as President in 1920 when the slowdown of 1921 forced financial difficulties on the company and later on Durant himself caused by margin calls due to speculation in company stock.

The Dupont Company was a major investor in General Motors until forced to divest its shares in the 1950s. Dupont's investment began in 1917, when they saw GM as a growth opportunity. They hoped to supplement earnings that might otherwise decline after World War I. In addition, Dupont made the transition from an explosives company to a chemical company after World War I based on surplus nitrocellulose capacity. Plants had been constructed for the Allies during the war to make smokeless powder and later were sold at distress prices. Nitrocellulose proved suitable in auto paint and in the fabric coatings used on auto tops. The investment gave Dupont access to the chemical needs of the auto industry during a major growth phase. Initially Dupont personnel staffed the GM Finance Department.

Pierre S. Dupont came out of retirement to succeed Durant as President of GM. He brought experience in the management of a large corporation. Sloan, meanwhile, came up through a manufacturer of roller bearings acquired by GM. He rose steadily through the ranks and succeeded PS Dupont as President after his resignation in 1923.

A strategy had evolved to compete with Ford on styling and quality. Ford had over 50% market share; no one could compete with his costs on much smaller volume. But he kept prices low by making the same model with little or no change year after year. That made Ford slow to adopt improvements. GM planned to compete with Chevrolet, which was to have similar costs based on an air-cooled, copper-clad engine. Air cooling avoided the need for a water jacketed engine block, water pump, radiator, and associated plumbing-a considerable savings. GM Research under Charles Kettering was confident the engine would perform, but the operating divisions were uncomfortable with this unproven engine design. Overheating was a problem which Research worked to resolve, but then 1923 proved to be a strong sales year, and a decision was needed. PS Dupont had put his faith in the copper-clad engine, but it was dropped soon after his resignation. Some say Corvair is the only air-cooled GM model to reach the market (after the VW Beetle established practicality).

Sloan makes clear that GM is primarily an engineering company. Most executives have engineering backgrounds. The company is heavily committed to developing new technologies and bringing improvements to market. Sloan pioneered decentralized management to allow divisions to make their own decisions promptly. Headquarter's role was to set policy. He then used corporate committees to promote interactions where appropriate such as in purchasing. He created a return on invested capital system to measure performance of the divisions. This is presumably the system that favored production of SUVs rather than small fuel efficient vehicles.

It was Sloan who came up with the pricing brackets that differentiate the GM divisions. (Pontiac was created in 1925 to fill in a gap in the line as a low priced six cylinder model.) He also instituted installment selling (and GMAC to finance it), used car trade-ins, the closed auto body (and added Fisher Body to the GM family), and the annual model change. The annual model was intended to leverage the trend toward comfort, convenience, power, and style in selling new cars.

Sloan took pride in the steady improvement in auto technology during his tenure. He mentions the development of ethyl gasoline and high compression engines, improved transmissions-eventually automatic transmissions, balloon tires and improved suspensions, and in 1923, Duco lacquers that made it possible to finish an automobile in an 8 hr shift rather than the two to four weeks once required. Duco was also available in a variety of colors. The first production vehicle was the "True Blue" Oakland in 1924.

Styling was not ignored. Harley Earl was brought in as stylist in 1926, initially to assist the Cadillac division. His focus was to lengthen and lower the American automobile.

Strong dealers were considered essential to success. GM helped its dealers implement accounting methods to better manage their businesses. Financing was available to assist promising dealer candidates who lacked capital.

GM was a major factor in the development of diesel locomotives for railroads. The business was a logical extension of internal combustion engines, but also a diversification should recovery of auto sales be slow after the Great Depression. GM's Electromotive Division was the leading manufacturer of diesel locomotives for over 50 years.

GM's venture into household appliances, later Frigidaire, began in 1918, when Mr. Durant acquired Guardian Refrigerator Company of Detroit, a home refrigerator company. The initial machines were large and cumbersome. The 1922 model weighed 834 lb. Weight was reduced with an air cooled compressor and air cooled coils in 1926. GM Research in co-operation with Dupont invented Freon-12 as a non-toxic, non-flammable refrigerant gas in 1931. In 1929 they had made 1MM units; in 1932, 2.225MM. Competitors included Kelvinator (1914), GE (1927), Norge (1927), and Westinghouse (1930). Frigidaire was expanded to include a full line of household appliances after World War II.

GM ventured into aviation in the days when the piston engines used were not unlike those in motor vehicles. GM had an interest in Bendix Corporation, North American Aviation, TWA, and Eastern Air Lines. Soon after the 1927 Lindbergh flight, some thought personal airplanes, called flivvers, might be in the future. The initial investment was the US division of Fokker Aircraft, the famous Dutch aircraft maker. GM bought a 40% interest while they made planes for the US military and commercial airlines. Later Fokker US was renamed General Aviation and merged into North American Aviation. North American was a holding company that owned Eastern Airlines and stock in TAT, predecessor to TWA, and Western Air Express. The Air Mail Act of 1934 prohibited airplane manufacturers from owning airlines. TWA stock was sold in 1935; Eastern in 1938 (when Eddie Rickenbacker arranged backing to buy the airline). In 1937, Allison Div. of GM completed development of a 1000 hp reciprocating aircraft engine that was widely used in fighter aircraft in World War II. By 1947, 70,000 engines had been made at the plant in Indianapolis.

During World War II, the company rapidly converted to production of military equipment. A major problem was the shortage of skilled manpower. Tanks were welded in a merry-go-round system that required learning only one simple weld rather than full scale training.

In his later years Sloan created the Alfred P. Sloan foundation to fund basic research, but especially to support talented researchers. He also participated in formation of the Sloan Kettering Cancer Hospital.

The book ends with a discussion of labor relations and incentive programs. The appendix includes sales by division for 1909 to 1962, and staff organizational charts. Indexed.

This is a highly readable account of the GM story. Sloan omits some unpleasantries. He does not mention the death of workers in the development of leaded gasoline, GM's role in supplying Nazi Germany through its Opel division in World War II, or the violence of some auto strikes. Most will find it fascinating reading.