A Ghost's Memoir: The Making of Alfred P. Sloan's My Years with General Motors

Overview

Published in 1964, My Years with General Motors was an immediate best-seller and today is considered one of the few classic books on management. The book is the ghostwritten memoir of Alfred P. Sloan, Jr. (1875-1966), whose business and management strategies enabled General Motors to overtake Ford as the dominant American automobile manufacturer in the 1920s and 1930s.What has been largely unknown until now is that My Years with General Motors was almost not published.
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Overview

Published in 1964, My Years with General Motors was an immediate best-seller and today is considered one of the few classic books on management. The book is the ghostwritten memoir of Alfred P. Sloan, Jr. (1875-1966), whose business and management strategies enabled General Motors to overtake Ford as the dominant American automobile manufacturer in the 1920s and 1930s.What has been largely unknown until now is that My Years with General Motors was almost not published.
Although it was written with the permission of General Motors -- and slated for publication in
October 1959 -- at the last minute General Motors tried to suppress the book out of fears that some of the material in it could become evidence in an antitrust action against the company. This book,
by John McDonald, Sloan's ghostwriter, tells the behind-the-scenes story of the book's writing, its attempted suppression, and the lawsuit that eventually led to its publication. McDonald's narrative is partly the David-and-Goliath story of a lone journalist taking on the world's then-largest corporation and partly a study of strategy in its own right. McDonald's struggle to publish the book led him to navigate a complicated course among the competing interests of General Motors, Fortune magazine (his employer), and Time, Inc. (Fortune's owner). In many ways this "book about the book"
parallels the Sloan book as a tale of successful, brilliantly planned strategy.

The MIT Press

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Editorial Reviews

From the Publisher

"McDonald has given us what may be the best book about business, and about book publishing, to appear this year." John Maxwell Hamilton Marketplace (American Public
Radio)

The MIT Press

"More than a book about a book, it describes how a gutsy gadfly thwarted a giant corporation..." Rich Barlow Boston Globe

The MIT Press

Library Journal
Between 1954 and 1959, McDonald, an editor and writer at Fortune magazine, helped Alfred P. Sloan write his groundbreaking classic on business management, My Years with General Motors. After the book was completed and a deal was made for Doubleday to publish, the lawyers at General Motors took over and forced Sloan to suppress the book. On the surface, this is the riveting story of the process by which the book was written, the ruthlessness of the lawyers who blocked its publication, the lawsuit by McDonald, and the compromise that paved the way for its publication in 1964. At a deeper level, it gives the reader a basic understanding of what it takes to write a book, the need for independence in such projects, and the chilling effect that fear of governmental intervention can have on such endeavors (GM's lawyers thought that the book could become evidence in an antitrust action against the company). It is essential reading for anyone considering undertaking a similar project or anyone who wants to learn and appreciate the key strategies that led General Motors to dominate the U.S. automobile industry. Recommended for both public and academic libraries. Norm Hutcherson, California State Univ., Bakersfield Copyright 2002 Cahners Business Information.
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Product Details

  • ISBN-13: 9780262632850
  • Publisher: MIT Press
  • Publication date: 10/1/2003
  • Pages: 220
  • Product dimensions: 5.37 (w) x 8.00 (h) x 0.50 (d)

Meet the Author

John McDonald (1906-1998) was an editor and writer for Fortune magazine for three decades and the ghostwriter for Alfred P. Sloan's My Years with General Motors. He was also the author of books on business, game theory, and fly fishing.

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Read an Excerpt

A Ghost's Memoir
The Making of Alfred P. Sloan's My Years with General Motors


By John McDonald

The MIT Press

Copyright © 2002 Christie McDonald and Joan McDonald Miller.
All rights reserved.
ISBN: 0262134101



Chapter One


On March 4, 1959, Mr. Sloan called me into his office. I sat down beside him at the corner of his desk, as I had done a great many times in the past several years. He then made an announcement which, if effective, would wipe out the record of his genius as the longtime head and developer of General Motors. With it would also go the core of the internal history of that corporation.

    He said: "John, we are not publishing."

    In the courtesies of address across our generations, he—Alfred P. Sloan Jr., a very formal man out of the nineteenth century whose graven face was surrounded by the collar which had once seemed to hold up his chin, but had come down over time—he was Mr. Sloan and I was John; few and only those from far back called him Alfred. We observed this decorum faithfully, and I maintain it here.

    A distractedness in his voice, then rare for him, conveyed a sense that he was as shocked as I at what he was saying. For after four and a half years of work together with Catharine Stevens, the project's manager, and her substantial staff, we were thirty days from the delivery of a manuscript of the memoir of Mr. Sloan's life at General Motors—the book's working title was then The General Motors Story, later changed to My Years with General Motors—to Doubleday for fall publication.

    Not publishing? That was hard to believe.

    Mr. Sloan said: "They say it will destroy General Motors." "They" were the lawyers for General Motors.

    "How?" I asked.

    His composure giving way further, he answered: "I don't know. You talk to them."

    I didn't think that at arm's length, a distance I would have to keep, they would tell me what they had not told him.

    He said resignedly: "What can you do when they say you've got cancer?"

    I protested his part in stopping publication.

    He said dryly, his composure restored: "Complain to the right parties."

    I understood his drift: The book would "destroy" General Motors by disclosing violation of antitrust law, the remedy for which would be the forced breakup of the corporation into two or more parts. The violation: excessive growth in market share, which metaphorically suggested "cancer" to the man who with Charles Kettering was a major backer of the American cancer research taking place at the Sloan-Kettering Cancer Center in New York. He took no blame for canceling the book and directed me to "the right parties." Unknowingly he had sketched the future of the book.

    The continued existence of General Motors as an entity producing more than half of the automobiles in North America was in fact in jeopardy at this time. Prosecutors from the antitrust division of the Justice Department had recently called a grand jury to consider indicting the corporation for violation of laws against monopoly. They had been investigating General Motors for several years, and had recently requested documents going back to 1929 from the corporation's files. General Motors' defense was in the hands of a team headed by Bruce ("Judge") Bromley from the distinguished New York law firm Cravath, Swaine, and Moore. Another senior member and future presiding partner of that firm, Maurice T. ("Tex") Moore, was chairman and chief counsel of Time Inc. (now AOL Time Warner) and Mr. Sloan's personal lawyer. He had brought Mr. Sloan the message that instigated this cancellation of the publication of the book. These individuals and their institutions would play major parts in the fight that would take place over the unpublished book.

    Mr. Sloan was a legend in the automobile industry, one of its original participants in the United States from around the turn of the century. He had worked with as well as socialized with Walter Chrysler, and had passed evenings with Henry Ford in the club car of the New York-Detroit Wolverine during the teens of the century. Ford was then an outstanding businessman and Mr. Sloan's largest customer for his Hyatt Roller Bearings. Without overweening personal ambition, Mr. Sloan came out on top of General Motors and superseded Ford to take the company to the top of the industry; he is remembered as a managerial genius. Mr. Sloan looked back on all this while working on his memoir, believing he had done the right thing—and now that it was done he found himself told he was in the wrong.

    What was at stake in the book as the alleged destroyer of General Motors was not the jobs of 600,000 employees nor necessarily the values of the stockholders, which "corporate raiders" would say could be improved by the breakup of General Motors. For this was before the takeover era, in the time of corporate loyalties in the United States. From the 1920s through the 1960s, such loyalty was a jealously held value and a factor in business strategies, creating resistance to the mergers and takeovers that have become common today. Mr. Sloan's predicament was his being caught between the values represented in the book—personal values and the values of General Motors—on the one hand, and the perception of these values on the part of his own and General Motors' lawyers on the other. They wanted to destroy his book to save General Motors from the burning issues of the time: big business and monopoly. And they had the power to attempt to do so.


1948-1954


The book that the lawyers thought so threatened General Motors dealt with Mr. Sloan's business life, beginning with his graduating from MIT in the Class of 1895 as an engineer. The book described Mr. Sloan's entry into the automobile business through the manufacture of roller bearings, and covered his career at General Motors from 1918. It had its origins in conversations I had had with him in the late 1940s and early 1950s, when he was already thinking about how to resolve the potential conflict between the great growth of General Motors and the antitrust laws then presumed able to restrain that growth beyond some percentage share of the automobile market. Political opposition to the phenomenon of large corporations and their influence on public affairs was of course also on his mind. Hearings were then being held in Washington by a "Senate Subcommittee on the Concentration of Economic Power." As the largest industrial corporation in the United States and first on the Fortune 500 since that ranking had begun, General Motors was a target on both counts. The book had been my idea, but Mr. Sloan had had a lot of nerve to undertake such a disclosure of corporate information in the first place.

    I had been a writer at Fortune for three years when, one day in 1948, I called Mr. Sloan's office to request an interview for an article I was writing on General Motors' diesel engines. He agreed to see me, on his own as it turned out. I had only to walk across the street from my office in the old Time and Life Building to his private suite at 30 Rockefeller Plaza. I found him sitting in modest grandeur behind his desk. His austere visage was lined and ruddy with aging life, and quite familiar from photographs. A vase of fresh mixed flowers stood off to the side. He rose to greet me in a courtly manner and with a Brooklyn accent that was uniquely New York.

    "You want to talk about diesel engines?" he asked. Mr. Sloan was happy to talk about diesel engines, and unworried at having won a nearly absolute monopoly in diesel locomotives with an engine that had been developed by Charles Kettering, General Motors' chief of research. After having bought two small locomotive companies, General Motors had developed diesel-powered locomotives with such success that they knocked the big duopoly of steam locomotives—Baldwin and American—out of the market. As diesel locomotives represented economic (though not in everyone's mind aesthetic) progress, General Motors appeared to be relatively sale for a while as sole possessor of that market.

    Mr. Sloan liked the emphasis his locomotive story gave to performance—that is, in economists' terms, expanded products, lower costs and prices, and steady output across time—over market share, or what is often called the "structure" of markets. But Mr. Sloan was a realist and the next time we met, in 1949, to discuss the Sherman Antitrust Act banning agreements and monopoly, about which I was then writing a piece, he talked about accepting a ceiling on General Motors' share of the postwar automobile market, which was being strongly revived at the time.

    "General Motors," he said, according to my notes, "would like to get back the percentage of the automobile business it had before the war." He said that General Motors would take a ceiling of 40-45 percent and grow relative to the total growth of the economy. If the economy grew as he expected—and he was quite prescient about the potential for economic growth—the ceiling on the General Motors share of the market would not interfere, he thought, with the dynamics of efficiency and growth in the operation of the business. He was more concerned with the populist politics against big business than with the antitrust issue of market share. "Bigness," he observed, "is unrelated to the Sherman Act." And he said, "I don't believe business [generally] will get any bigger in relation to the size of the country. The limiting factor here is government policy, which may slow up the rate of progress."

    Mr. Sloan's willingness in 1949 to put a ceiling on General Motors' share of the automobile market in spite of his preference for performance as the test of a competitive market was the result, presumably, of his realization that it was possible that an antitrust suit would be brought by the Justice Department—likely, if General Motors gained close to or more than half the American car market. Later General Motors did in fact gain more than half the market, and as noted, in 1954 the Justice Department started an antitrust investigation of the corporation.

    As Mr. Sloan had a lot to say out of experience and was facing the issue of monopoly in practice, I urged him in 1949 and thereafter to write about it from the perspective of a businessman. He said he would like to try, and he had the time. He had chosen to resign as chief executive of General Motors in 1946, and though still Chairman of the Board and of the Finance Committee and a power in the corporation, his responsibilities there were limited to participating in policy-making decisions and top executive appointments. His attentions to the Sloan Foundation, the Sloan-Kettering Medical Center, and the MIT School of Industrial Management (later to be renamed the Sloan School of Management) had not filled the gap. Mr. Sloan had moved his office from the old General Motors building in New York to a suite in Rockefeller Center, and he came to this office from his nearby Fifth Avenue apartment every day. He sat behind his desk and read the current data on automobile production and sales that filled its top right drawer much as an orchestra director would pore over a musical score. He was always available for a conversation, and we had a good many. I convinced the managing editor of Fortune to publish an article he had written on "big business." I was to assist him with the article editorially.

    On May 26, after several discussions in early 1950, Mr. Sloan wrote me a rather formal letter confirming his resolve to write, with my assistance, an article for Fortune. The article would be on, as he put it, "the effectiveness of large-scale enterprise using the performance of General Motors as an example. ..." He added that pending litigation involving General Motors meant that his article would need the approval of the legal department. The litigation was the government's antitrust suit against the Du Pont company alleging that, as a supplier, Du Pont got too much of the paint business from General Motors while also owning a controlling interest in the company and being represented on its Board of Directors. Despite the hazard, he agreed to proceed.

    In July of 1950, Mr. Sloan wrote me asking for a delay. He thought that people would not be interested in his article, given the outbreak of the Korean war. The next deadline was to have been July 1, 1951, but on May 15 he wrote: "I have been so tied up with all kinds of things that I think I must ask you for another month on that article. And this is the last time that I will ask you for the same."

    By now he was into his version of writer's block, and we were into an editorial relationship. On June 29, 1951, he wrote:


I received your message about the article we have discussed for so long.

    I just can't take the responsibility of a September issue because it is too important for me to do so. I have been constantly interrupted in my work on the article and have been delayed in getting some pertinent data that I felt belonged to the same. I plan to go down to Hot Springs the latter part of July to spend a month and while there devote my time exclusively to the article.

    I hate to keep procrastinating because I am just as much interested in it as ever, but I think we will agree that it is not significant that it will be done one month as against another, and in Hot Springs where I will not be interrupted and can do the job I want to do and you want to have me do.


    I replied on July 7, 1951 that I would find a place for his article in a later issue, and gave him a new manuscript date of September 1. He wrote back immediately: "I highly appreciate the consideration you are extending me in this job of mine which I admit I have not done very well. I hope to do better in the immediate future." But on September 26, at the end of a letter thanking him for his comments on a piece of mine on another subject, I could only comment: "When am I going to be your editor?" Indeed, in response to a standing invitation, I often gave him a call and dropped in. He was of course an excellent source for a journalist on business subjects, and so willing that for a couple of years he gave me more time contributing his knowledge to the needs of my work than I gave him on the writing end of his.

    On January 22, 1952 I wrote to him: "Are you not still considering your own piece on big business?"

    He was, and finally one day in the spring of 1953, he called me over and handed me a manuscript carrying the title: "Business Bigness and Bigness Efficiency," by Alfred P. Sloan, Jr. It was quite unsatisfactory as an article for Fortune, but in the rejection letter of June 29 I wrote him several thousand words of commentary. In summary: "It is too abstract and cold. It lacks concreteness, color, warmth of personality and the actuality of your participation in the development of General Motors. ... It should be a great story. It should contain the genesis of the ideas out of which General Motors was built. The main tests that were met...." And, I said, it should contain an account of his own life in General Motors.

    This was a pretty heavy load of editorial comment, and so it was not surprising that my author came up with another hitch. On September 1, 1953, he wrote:


I hate to write you along the following lines because I have disappointed you so often and have made so many comments about what I might do and then have not done it. However, circumstances compel me to say that it is just impossible for me to finish the article in time for the issue that you mentioned when you were last here in my office.

    I told you I was limited in the time I would put on it, by family problems. Since you left on vacation I have had to face the loss of a very close relative which has put me in a position, psychologically and time-wise, where it is hard for me to concentrate on an abstract problem of this kind. However, I am working on it as best I can. I will be able to send you two more chapters for criticism, within a few days, so far as I can now foresee.

    In addition to my own time factor, the story has got to go before General Motors and I do not think that will present any difficulty, but it will require a certain amount of time because all the people there have so much to do. Therefore, let me say I will hammer away on it because I am just as anxious to do the job as I can possibly be. I am taking real pride in doing it and now that I have finally got started the limitations mentioned above, cause me to write as I have.

    I hope you are enjoying a fine vacation in Montana. You certainly escaped a week of ten days of terrific heat—at least I suppose you have—because I can't imagine it getting as hot in Montana as it is here.

(Continues...)


Excerpted from A Ghost's Memoir by John McDonald. Copyright © 2002 by Christie McDonald and Joan McDonald Miller. Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.


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