Biggest Industry

It was the week before Christmas and all through Detroit a great many creatures were stirring. That familiar figure, the man in the street, would have said that Detroit was "dead," "flat" or at least very quiet. But that would be because the Ford factories were shut down and production was at a low ebb in many another plant. Actually there was intense invisible activity--as in a huge household of which the important members had all shut themselves in their rooms to wrap up Christmas presents, cautiously guarding their keyholes against prying children (newspaper reporters) and fretting in secret over finishing touches to their gifts. The largest manufacturing industry in the U. S., the automotive, was preparing its annual surprises for the U. S. public.

The surprises would not be revealed until just after New Year's. With the Manhattan automobile show begins a strenuous stretch of weeks when the automobile men of the U. S. flock from city to city in a mood half carnival, half belligerent. What important Detroiters were doing last week-- besides conferring finally with engineers, designers, bodybuilders and advertising experts--was to make hotel reservations, dates with friends, memoranda of wives' shopping orders, etc., etc. Their big annual party and grim selling campaign, were about to begin.

Meantime, aided by statisticians, prophets indulged in prophesying. The year just closing had been neither a bad year nor a boom. The sales volume, both in dollars and units (cars), would exceed even record-smashing 1925.* That seeming certainty, after the gloomy predictions of last spring, augured well indeed for 1927. The new record would result chiefly from large gains by a few big companies, but gains made at no expense to the small. After any bad year most of the companies set out to recuperate by developing new lines or by cutting prices. This year Detroit anticipated only a new Hudson-Essex line and new Reos. It eyed South Bend for a Studebaker announcement. In Indianapolis, Marmon had announced a new light eight, and Auburn another. John North Willys had already announced a new Willys-Knight 70, his Overland "Whippet" of 1926 having failed to excite the public as calculated. Fresh refinements, knickknacks, improved appearance were expected in such cars as Dodge, Nash and Chrysler, but nothing radical. All these companies finished the year strongly. Overshadowing everything was the apparent overhauling of Henry Ford in volume of unit production by General Motors. In 1921 every second car made in the U. S. was a Ford. In 1924, only one car in three was a Ford; one in five was made by General Motors. In 1925 General Motors made one in four, and in the last five months of 1926 (estimated to December 31), one in three. The end of the year, with Ford production stopped, probably will find General Motors actually a little ahead of Ford, leaving a third of total U. S. production to the field.

The largest question in Detroit and Wall Street was, what would Henry Ford do about it? General Motors announced that it would follow its recent policy of advertising to create a market and thus be enabled to keep its prices down. Would Henry Ford, whose keyhole was most tightly plugged, follow a like policy? Would he, as dismissed workmen hinted, put on the market one of several six-cylinder models he had ready for production at any minute? He had denied this plan, repeatedly. He drily denied it again last week, saying: "Several good automobile companies are now producing sixes. . . . We keep the engineers working on a lot of things to prevent them from tinkering too much with the Ford car." Then he sidetracked his interviewer by discussing the beauties of "economic leisure" embodied in the new five-day Ford working week.

Whatever Mr. Ford did, it would have to be and would be something striking. Detroit felt that he was gathering himself for an effort which, with General Motors continuing its progress, might well result in the two producing on a "forty-forty" basis in 1927 or in 1937; leaving only 20% of the country's unit production and less than 50% of the dollar volume (of which Ford and General Motors shared 49% this year) to all other manufacturers combined.

General Motors was clearly on the way to its place in such a mass-production situation. Its Chevrolet car, brightest star in a banner year, issuing from the factories at the rate of one every twelve seconds of the working year,* has sold in numbers 40% greater than last year. Indications were that Chevrolet would be the largest singly advertised product in the U. S. next year.

General Motors total production figures for August through December (showing, unlike many another company's, actual retail sales, not factory output) were 37% above the corresponding, most prosperous period of prosperous 1925. Stocks of unsold cars were far lower proportionately than last year. The corporation had declared $248,935,098 in dividends during 1926, including $4 per share extra ("to show our confidence in the future") and had carried 80 millions over into surplus.

"Motors stabilize industry," a saying goes. General Motors, largest corporation in the largest industry at the end of its largest year, found itself in an excellent position to bear out that saying. Its own stability was implied by its possession of a car for every pocketbook--Cadillac, Buick, Oakland, Oldsmobile, Pontiac, Chevrolet; of specialties and accessories-- Yellow Cab and Coach, G. M. C. Truck, Delco Light, Fisher Body, Jackson Wheel, A. C. Spark Plug, Harrison Radiator; and of the huge sideline, Frigidaire, which ranked only after Buick and Chevrolet as an earner this year.

When the remote yet democratic little sphinx of Highland Park entirely dominated the industry, automobile men had but one personality to picture. Now they contemplate a large, vigorous family in which all the members vie as keenly with one another as with outsiders. Has Cadillac a new convertible coupe? Buick jumps in quickly to match it as best it can on a lower price level. Oakland and Oldsmobile, with only shades between their prices, engage in brotherly tussles from drafting room to sales floor. Nor is this the result of commands by a stern pater familias. At the head of all, little known in Detroit save as "no stuffed shirt," quietly industrious at the head of the super-organization in Manhattan and a frequent but unostentatious visitor at the plants, is a man who, when he came to power five years ago, baffled a thousand editors by his unobtrusiveness. He was not even in Who's Who. Even today he is known by nothing more tangible than the facts that he has no time for golf, no patience with sloppy management and no small pride in saying, "I never give orders." He is just a tall, lanky, soft-spoken gentleman of 51, slightly greying, nervous "but not peevish," Alfred Pritchard Sloan Jr., Connecticut Yankee, who probably experienced a twinge of disgust last week when a news-syndicate ballyhooed him as "a Man of Silent Power." The only people who know him well are the big executives, who regard him as the prince of salesmen and call him "Alf."

The largest motor corporation is almost entirely his own handiwork, and he set it rolling off some billiard balls. When he was graduated by Massachusetts Institute of Technology in 1895, he went down to Newark, N. J., to sit at a draughting board in a plant his father partly owned. His employer, John Hyatt, was perfecting mechanisms for making billiard balls and some of the patents young Mr. Sloan helped obtain are still in his name. But more important were his convictions that the automobile era had arrived, that a simple greased axle like a wagon's would never do for cars moving at any great rate of speed and that axle bearings could be made for industry in John Hyatt's plant quite as easily as ivory spheres for indoor sport. He went on the road, sold axle bearings. From a gross business of $2,000 the first month he was there, the Hyatt company grew up to a year's earnings of four millions, with Mr. Sloan as president. Of the many motors men he came to know, W. C. Durant was one. When Mr. Durant acquired General Motors in 1916, he wanted the Hyatt Roller Bearing Co. among other accessory companies and he wanted Mr. Sloan's executive services. So Mr. Sloan became president of United Motors, a corporation that was being prepared for consolidation with General Motors. When the merger took place, Mr. Sloan became a General Motors vice president. Then in 1920, Mr. Durant was ousted. Pierre du Pont agreed to be temporary president of General Motors on the condition that Mr. Sloan would do most of the work, as "operating vice president." Mr. Sloan did all the work, with the motor industry in its worst slump, and has continued to do it since Mr. du Pont resigned in 1923. In the first year of his presidency, General Motors doubled its manufacturing capacity out of earnings.

*Department of Commerce figures: 1925 1926 (12 mos.) (11 mos.) Cars 3,696,490 3,627,589 Trucks 478,396 465,265

*At one time the Ford plants turned out 10,000 cars per eight-hour day, or a car every two seconds.