Restoring the Sacred

Tuesday, June 14, 2011

Contrasting CEOs and What They Wrought

Arthur Herman, a visiting scholar at AEI, wrote an insightful piece at National Review Online yesterday about two very different kinds of men who have served as CEO of General Motors (unfortunately, one of them still does). Mr. Herman is the author of Gandhi and Churchill: The Epic Rivalry That Destroyed an Empire and Forged Our Age. He was a finalist for the Pulitzer Prize in 2009.

The first CEO discussed by Mr. Herman is "General Motors’ current CEO, Dan Akerson, who last Monday told the Detroit News that Congress needs to slap a dollar-a-gallon tax on gasoline. That way Americans won’t buy as many gasoline-powered cars and will be forced to turn to alternative vehicles instead. That’ll be good for the environment, he claimed. But it will also be good for sales of his Chevy Volt, which, despite a hefty government subsidy, has more wheels than buyers." You got to love that guy, right?

Former CEO Bill Knudsen, on the other hand, happens to be the man who made General Motors the greatest automobile company in the world (notice past tense).

"William Signius Knudsen arrived in this country as a Danish immigrant and started work with a gang of Irish riveters in a Brooklyn shipyard. Then he moved to Buffalo to work in a bicycle factory, making parts for Henry Ford’s Model T. Ford was so impressed with Knudsen’s skill in organizing the shop floor that he brought him to his Detroit Highland Park plant in 1913, where Knudsen turned the mass-production technique Ford had created there into a flexible system that could be set up anywhere. Knudsen built more than 20 Ford plants around the country and in Europe. Then in 1922 he moved to GM, where he used the same flexible mass production to introduce the idea of annual model changes for cars.

"Knudsen’s idea revolutionized the American auto industry. It turned Chevrolet from GM’s biggest money-loser into its lead division, surpassing Ford in sales in 1931.

"He did it all with no government subsidies or loans. He saw his duty as making a better car at a lower cost, not asking Washington to raise his customers’ costs."

To read the entire article, click on the link below.

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