Automobile Biographies
Walter P. Chrysler
Walter P. Chrysler became one of the best-known production men in this country.
One sweltering forenoon in August, 1906, a man stood in the doorway of the shops of the Chicago Great Western Railroad. As he watched, the noon whistle blew and the men began to file out. In their anxiety to reach the open air they jostled against one another and crowded the forward line impatiently.
As they trickled out through the doorways the man followed them. He watched them moving off in groups, some of them aimlessly, others taking a more direct route. Many of them were men whose hair was streaked with grey good mechanics, all of them. He thought of the rows of little brick houses where they lived, two families in a house. Nice, respectable little homes, clean as a pin, most of them; but was that all life had to offer?
At that time he was superintendent of motive power of the road. He had come up in nine years from those very shops. At thirty-three he was the youngest man who had ever held a position of that importance. He had won it through sheer driving power of will, an almost uncanny mechanical ability, and that marvelous capacity for turning out work which still makes him one of the wonders in the automotive industry.
As he crossed the yard he took a swift account of his abilities. He knew he had qualities which he had never used. One of them was a certain interest in finance. It irked him to see inefficient management, shortsighted policies, waste and ineffective effort. He had vision, but he was often handicapped in using it, for his work lay largely along the mechanical side; he gloried in responsibility, but he was at the top of his particular heap. Regardless of ability, he felt he had reached a place where promotion was impossible, for one of the inflexible laws of railroading is that a mechanical man never reaches the executive’s chair.
Suddenly he came to a stop right in the middle of the yard. In that instant he sensed the difficulty. He was on the wrong side of the desk. Instead of repairing cars and running trains, he wanted to build and sell. It was not enough to do other people’s bidding; he wanted to use his own judgment and foresight. It was the turning point in Walter P. Chrysler’s career. From that moment he determined to blaze his own trail.
This story is important because it gives a swift picture of Chrysler’s uncanny ability to get at the heart of things. When it came to him that he was on the wrong track for big advancement he did not hesitate to give up the position which had been the result of nine years of unremitting labor and start again in the shops of a new company where he could build under competitive conditions.
The American Locomotive Company’s Pittsburgh works was in need of a works manager and Chrysler asked for the job, feeling that by utilizing his knowledge of the mechanical side and at the same time developing his genius for management and finance, he could not only hold the job but make it a stepping stone on the upward trail. He got it and went to work with a will. He soon found that he could use all his knowledge of shop practice and that in addition he would secure just what he had sought for, the opportunity to figure comparative and competitive costs. Within two years he had made such a study of nonproductive effort, waste, and the value of increased individual output that the shop was being run at a big profit, and he was asked to become general manager of the company.
But all this time his mind had been racing far ahead of his actual accomplishment. While he was still superintendent of the Great Western Railroad he had become interested in the automobile. At first the appeal was purely mechanical, but later his clear vision saw in it a magnificent opportunity.
“As I visualized its future», Chrysler said in telling me about it, “it far outran railway development, which in a sense had reached its zenith, because the automobile provided flexible, economical, individual transportation which could be utilized for either business or pleasure. It knew no limits except a right-of-way, it was bounded by no greater restrictions than individual effort and will. To me it was the transportation of the future and as such I wanted to be a part of it. That was where I saw opportunity”.
It so happened that about this time Charles W. Nash had succeeded W. C. Durant as head of General Motors. It was the same Nash who had moved up from the Buick company, which he had been so successful in building up. Bankers are always on the lookout for live men to head the organizations for which they are assuming the financial responsibility, and the banking fraternity was following closely Chrysler’s achievements at Pittsburgh.
The upshot of it was that he was called to head Buick production under Mr. Nash and such was his genius for organization and accomplishment that the Buick product became one of the most talked-of cars in the automobile field. Into this constructive effort for his company Chrysler put all that was best of him, body and soul. Day and night he worked with a power possible only to a man of his remarkable vigor. He scoured the country for experts to add to his already notable staff. He worked with them through endless sessions to perfect even the smallest details that went into the make-up of the Buick car. He devised new tests for metals, enforced greater exactness in trying out the engines, changed the old wooden body to a neat steel body of simpler and more elegant design, and, incidentally, raised the production of Buick cars from about forty to close to 600 a day within a period of eight years, in addition to supervising and building an enormous new plant. When he left the company its net profits were in excess of $48,000,000 a year.
All this energy and interest had for its foundation a simple incident of the days when he was still with the Great Western Railroad. Those were the early days of the automobile show, and the cars were still objects of curiosity, especially to expert mechanicians. This interest drew Chrysler and he went to the Chicago show with no other intention than to make a study of the mechanical side of the cars.
One of the outstanding features of the show was a huge white car upholstered with unusual elegance in bright red leather. From the moment he entered the show that particular car held Chrysler’s attention. It held every one’s, for that matter, for it came pretty near being the king pin about which the show revolved. He listened to the purr of its engines, he studied it forward, aft, and amidships. He went home at night and dreamed about it, and then came back to the show in the morning to examine it again.
Chrysler had saved up $700. He had a wife and two children. His salary was not large and his prospects were in no way remarkable. The price of the car was $5,000. He borrowed $4,300, and bought it. To talk of the incident still stirs him.
“When my wife heard about it it nearly broke up the family», he said, “for we were doing without many things in those days, but there was some urge within me which made me buy that car. When I got it home I promptly took it to pieces, and I think that in the three years it was in my possession I pulled it to pieces altogether about forty times”.
From that time on Chrysler was obsessed with the idea of building automobiles, and through all his construction work at the American Locomotive Company that thought was always dormant in the back of his mind. It was really the foundation of his entrance into the automobile field.
When Chrysler left General Motors in 1920, he was president of Buick and first vice-president of General Motors. In the few years of his connection with that company he had become one of the best-known production men in this country. He left them to take over the job of helping to put the Willys-Overland company back on its feet.
In the great shake-down which followed in the wake of the armistice, many of the companies had suffered, and the Willys-Overland was one of them. It was over manned, was carrying enormous inventories which it could not reduce, and its heavy commitments were burying the company under an investment which it could not swing. When Chrysler first came on the scene the company’s bank loans totaled $46,000,000. Within a short time they had been reduced to $18,000,000. It was done by accepting the daily quotas until the makers of parts had absorbed their own high-priced material, and in the meantime he built up the distribution of Overland cars until the agents had been relieved of their overstock and were once more on their feet.
Right in the middle of this nerve-racking job came the call to the aid of the Maxwell-Chalmers company, at that time in serious difficulties. Its indebtedness to banks amounted to $18,000,000. It also owed creditors $14,000,000. It was said to be within twenty-four hours of bankruptcy, and conditions were so serious that settlement would have been at approximately 20 cents on the dollar. Information given Mr. Chrysler was that the company had 26,000 cars scattered all over the country, many of them still in transit. They were being held on sidings, in freight cars, and other places of storage. Notes receivable to the amount of $10,000,000 which required liquidation were being held against these cars. Worst of all, the company’s product had been discredited, and he would have to face, not alone the company’s indebtedness, but its reinstatement to a position of confidence in the public eye and in the automobile world.
It is indicative of Chrysler’s disposition that all these difficulties only whetted his eagerness. Not only did he accept the proposition, but he got right to work. It meant two jobs instead of one, each of them bigger than the ordinary man would want to tackle, but that was the very thing which caught his interest.
One of the outstanding accomplishments of 1924 was the rapid success of the Chrysler Six, for the Chrysler Company during its first twelve months did a larger gross business than any other company during its first year. And at the same time the Maxwell company had one of the best years in its history.
The credit for this enormous advance should be placed where it belongs on Chrysler’s shoulders.
“What is the secret of your ability to make going concerns out of these bankrupt companies?” I asked Mr. Chrysler.
“The first thing I do when I start to look into the affairs of a failing company is to study the personnel of the organization and the individuality of the men. I am concerned first of all with executives, because if their principles are not right it is useless to look for results from the men. When I have measured up in my own mind the capacity of the executives, I get out into the operation of the plant and watch the men. I look around to see how many of them are standing still and how many of them are moving around the plant. Highly paid workmen should be busy with accomplishment, not useless motion. If there is a lot of movement I know the plant is being badly operated.
I do not believe in idle machines or idle men. Outside of the idle investment involved, it is bad policy. If a man is working next to an idle machine it not only has a bad effect on him mentally, but he takes less care of his own machine because he thinks he has a ready substitute. I believe in keeping people out of temptation, for many of them cannot resist it.
I have the floor space measured and estimate the amount of its productive capacity and then check up to see whether it is overcrowded or is running under its capacity, also whether the plant is overmanned. If it is over manned and we are over-producing, I reduce the force arbitrarily». (Chrysler has often been criticized for his drastic reduction methods. He says that if expenses are too high they must be cut and cut immediately. There is no use letting them run on another minute.) “I proceed to get the organization into shape by cutting out every unnecessary expense and wasteful practice the minute I discover it. Some forms of non-productive effort are necessary in every organization, because all forms of service are not productive in themselves, even though they contribute to the general plan; but to allow wasteful practices to continue after they have been analyzed and proved wasteful is to sap the energy of your organization at its source”.
At one time while Mr. Chrysler was with Buick, money was wanted for a larger sheet metal plant. Mr. Chrysler investigated and gave orders that the “trackers” should come to work at 8 instead of 7, that they should work during the noon hour when the plant was clear, and should also work an hour later than the rest of the force. During the noon hour and the last hour of the day the plant was cleared of finished products and raw materials put in their place. That meant that when the men came to work in the morning and after lunch they found raw materials awaiting them. The result of the order was that no new building was needed and the production of the plant was speeded up without the expenditure of a single cent. That is typical of the way in which Chrysler works. When all is explained it seems very simple.
“The majority of men pay too much attention to the way stations and not enough to the terminals”, Chrysler said in speaking of meeting difficulties. “When railroad engineers come to a mountain they do not always go through it; sometimes it is best to go around it. Success comes through a judicious expenditure of energy. Sometimes it takes less to go around, and serves the same purpose. Men should look forward, and progress stops when they refuse to listen to other people’s opinions, although they should make their own decisions. I never want to get to the place where I so dominate the job that no one under me dares to make suggestions”.
It is interesting to note right here that every so often ten or fifteen of the biggest dealers in Chrysler’s cars are called to the factory to offer new suggestions as to the output and distribution. And he listens to what they have to say, adopting all feasible measures.
Like all big and successful executives Chrysler has a wonderful ability to judge men.
“I gauge them through my intuition and experience», he replied in answer to my question as to how he did it. “Then, too, these cuts in the organization give me a big opportunity to learn something about my man power. I find out how much fight the men have in them and learn a lot about their individual force. By cutting to the quick I get rapid contacts and am able to measure up my men’s resourcefulness under emergency conditions without delay”.
Chrysler’s great strength has always been his ability to cut costs. When he goes into a new organization he first establishes the volume of business and then decides on the amount of the financial quota. He works entirely on a budget system. Every office and department is budgeted and is operated strictly on that basis. All sheets carry in detail from month to month a statement of all productive and non-productive labor in that department.
“We then have our statisticians set up the amount necessary for administrative purposes”, said Mr. Chrysler, “which is based on a conservative quota. The items cover the capacity of the plant, productive labor, non-productive labor, productive materials, nonproductive materials, all fixed charges, depreciations, sales administration, and executive administration. These are all counted in on the cost per car.
Next we estimate our inventory turnover per year and our turnover of sight drafts from shipping the cars, so that we can see the rapidity of cash returns. They average about fifteen days. Cash requirements for credits and operating expenses are also carefully figured. Retail sales are followed closely, and production is increased or decreased in proportion to sales.
We pay the strictest attention to each individual territory by counties, even analyzing our situation to the extent of determining what the dealer and we ourselves lose in profit on a territory when it fails to sell its quota. We estimate this both for ourselves and for the dealer, to see what each one of us has lost and, when necessary, we send out men to help the dealers check their records”.
Confronted with the necessity of disposing of over production in quick order, Chrysler has developed some remarkable distribution principles. Jumping from operating to sales, he is quick to measure them and see whether they are equal to plant capacity, but he goes on record as unalterably opposed to loading up his dealers in order to move over-production.
“To force on your dealers more cars than they can sell is not only poor business, but also not constructive selling», he says. “Our agents all carry less than thirty days’ stock, except where shipments might be delayed in reaching them, as for example on the Pacific Coast. We do not feel that it is fair to our dealers to let them tie up their money in large stocks, but we do expect them to merchandise up to our quota standards. We look after them closely and try to help them make the quick turnover we feel to be one of the big points of our business.
All territories are operated on a quota basis, the quotas being set at the home office. We base the establishment of the quota on the actual volume of automobile sales of all makes in the past in that territory, and then figure our percentage to the total sales. Quotas are often unfair, for they are not set on actual conditions. Past sales are a reality and you are not unfair to a man when you ask him to sell a share of what is being sold. We feel this system is just, because if general business in a given territory falls off we are not expecting unreasonable things of our representatives. Often an injustice is very apparent to the men, whereas the organization is perfectly ignorant that it is expecting any more of them than it should. Where sales fall off in a given territory we send our sales expert there immediately and he gives the dealer the benefit of his expert advice”.
I have told you of Chrysler, the executive, but his human side is no less interesting. He is a driving power, a beautifully balanced, smoothly running engine, but his dynamic energy is not restricted to his business, and as he has risen in power he has never lost the human touch.
Once, at an important conference in San Francisco, when time was precious as gold, there came a clamor at the door and out of it a brogue so thick you could have cut it with a knife. It was an old chum of Chrysler’s who had worked side by side with him on an engine in the early days. Did Chrysler go out to see him? He did. And he made an appointment to have lunch with him the next day.
Mr. Chrysler early in 1926 financed an expedition to the African jungle for the purpose of bagging a hundred or more live specimens of rare wild animals for the National Zoo at Washington.
Chrysler’s personal story is one of absorbing interest. He started as a wiper of locomotives, at five cents an hour; within sixteen years he was building them. At seventeen he entered the Union Pacific shops as a machinist’s apprentice and lived on what he made, which was 7 1/2 cents an hour. Whenever somebody wanted a man willing to do a hot, dirty job, they called Chrysler; he never side-stepped, and he always made good.
