Arizona sun (Phoenix, Ariz. ) 1950-01-06 [p PAGE EIGHT] · 2019. 3. 23. · The Makers Os The Jeep...

The Makers Os The JeepArthur Gaeth, who is heard each Monday night over

KPHO at 9 p.m., discusses further the “high cost ofmanagement” in the automobile industry in the follow-ing article. Mr. Gaeth’s column appears in this paper

each week through tht courtesy of the United Electricand Machine Workers Union.

“I want to present more evidence on the ‘high cost ofmanagement' how it keeps prices up, cuts into job possi-bilities, and tends to reduce dividends for investors.

“Toledo, Ohio, is a community that has never for-gotten the manipulations which have centered around itsautomobile industry, whether it was Pope-Toledo, Pope-Hartford, or Willys-Overland. Today that big automobileplant is the home of the Universal Jeep—a tough four-cylinder mechanism which got as much publicity aroundthe world as any other war-time product of this country.But today jeep, jeepster, station wagon, sedan-delivery,

and medium duty truck selling—in a $1,600 to SI,BOO classhave not been cashing in on that goodwill and are finding

The JourneyA little work, a little sweating,A few brief, flying years;A little joy, a little fretting,Some smiles and then some tears;A little resting in the shadow,A struggle to the height;A futile search for El Dorado,And then we say good-night.

Some toiling in the strife andclamor,

Some years of doubt and debt,Sbme words we spoke in foolish

angerThat we would fain forget;Some cheery words we said un-

thinking,That made a sad heart light;The banquet with its feast and

drinking,And then we say good-night.

Edsel Ford’s death, when Bennettbecame a Director of the Company.Ford Motors apparently became toosmall for both Bennett and Soren-s'on. According to the automobileeditor of the Detroit Free Press,‘Sorenson was fired after clashingWith Bennett.’ This time Ford didhis own firing and the order reach-ed Sorenson in Florida by telephonedirect from Ford’s winter homein Ways, Georgia.

"Cast Iron" Tactics

"With his Ford salary runningfrom $150,000 to $250,000 a year,Sorenson had built a little paradise

of his own. He was master ofmore than a thousand acres, someof it acquired in the tragic daysof the 30’s when the small farmerswere frozen out on tax foreclos-ures. Sorenson picked up some ofthose places for as little as $35 anacre. Out in New Hudson, they

still tell how a dogged, determinedman and woman, -trying to build ahome for a family of children,stubbornly resisted attempts to dis-lodge them and outsmarted Soremson saving their home.

"He really wanted that 2% acreswhich he bordered on three sides.There was even a cloud on thetitle of the place but the judgeruled in the family’s favor. ThenSorenson’s tenants went to work.Their fence was only six feet fromthe kitchen-side of the little home.They lined it up with troughs filledthem with swill and, day after day,fed their pigs under the very nosesof the determined little family.When that didn’t budge them thesows were bred under their win-dows in spite of the fact that noneof the children were older thanten. Then the law took a hand.There were still irritations such astrying to keep the family fromgetting the electricity which hadcome to the community. Thatacres of land helped to rear fiveof the nicest youngsters you’d everwant to meet. Post-war after thefather died, it provided work fora couple of young Gl’s who neededa home.

** ‘ Cast-Iron Charlie’ actually es-tablished himself at Algonac,Michigan, in a spacious mansionwith grilled-iron gate, tennis court,golf practice range, with electricelevator in his boat house for thedaycruiser and a private dock for

Billy—for the best in

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the going tougher with each day.You can find these cars stockpiledon the plant roof and in the yards,whenever the plant tries to putthem out to near-capacity.

"Back in ’45 and '46 there wasplenty of talk of Willys-Overlandgetting into the small 6-cylindercar class —there was working capi-tal available; they tell me muchof it has gone now. With the wholeautomobile industry facing moredifficult times, the automobilemanufacturers of Toledo willhavetested their ability to survive witha product which is generally re-garded as fancily-priced.

Big Business Ethics"On the books, Willys-Overland

is not paying nearly the salaries orbonuses of General Motors, for

'

example. But the profits that theCanaday-Ritter controlled EmpireSecurities have taken out of Willys-Overland properties since their re-organization in 1936 plus the bene-fits which have been paid to oneCharles E. Sorenson, the same‘cast-iron Charlie’ of the Fordfoundry are something for thebooks.

"In the hectic 1930’s when Willys-Overland went into receivership,Ward M. Canaday, who oncehandled the company’s advertising,

and George W. Ritter, a Toledoattorney, created Empire Securi-ties, first with the aid of the origi-nal Mrs. Willys and several otherswhom they later bought out. In areorganization, Empire Securitiestook over Overland. It was decidedto separate motor car productionfrom other Willys-Overland facili-ties, then put the company’s Pon-tiac foundry, huge ‘white elephant'office building called ‘John Willysfolly,’ surplus factory space andequipment into a Willys-Overland

x Real Estate Realization Corpora-tion.

"Not putting much more than$500,000 of their own money intothis Real Estate Realization com-pany, Canaday and Ritter put to-gether about $2,500,000, half of itfrom bank loans. They picked up amilliondollars of the company’s oldcash impounded in the banks. Andat a most propitious time, theyhad the Willys-Overland MotorCompany buy back the foundryfor $3,500,000 on which they ad-mitted a profit to them of $2,800,-000—and then the office building,plant space, and equipment for$2,300,000 on which they admitteda profit of about $1,450,000. Ontheir original about 2% million dol-lar investment these fellows clean-ed a nice tidy 4% million dollars—-they had the small stockholdersyelling they’d been taken buteverything was legal and legiti-mate according to the ethics ofbusiness.

"Even Fortune Magazine raisedan eyebrow, however, in writingabout Mr. Ritter’s and Canaday’ssad duty as representatives of thereal estate company having to tellthe same Ritter and Canaday ofthe Board of Directors of the au-tomobile company that if they didnot pay out of the automobilecompany’s treasury over to them,these tidy sums, they’d have tosell those properties to other bid-ders. Ritter and Canaday couldn’tlose but some of the holders ofMotor Corporation stock are surethey did. This is a brilliant exampleof the high cost of some modemmanagement

Post-War Development"In 1944 came time when the

directors of Willys-Overland Mo-tors were looking to post-war de-velopment. They were anxious toget a real ‘big automobile’ namethat would do things to their re-putation. Lo and behold ‘Cast-Iron Charlie’ of Ford fame, whomFortune describes as a cold, lonely,introspective Dane, who for 40years had helped to rule the Fordroost, had been fired by HenryFord.

What a contract then 56-year-oldSorenson of the Rouge signed inJune 1944—51,000 a week for ten

years—win, lose, or draw, whetherhis genius was required or not. Inaddition, an option on 100,000shares of stock at $3. No soonerwas it announced, then Willys-Overland stock was on the way-zooming in 18 months all the wayup to $26.75 from three bucks. Butby that time the Willys board hadchanged its mind about the mi-racle workings of Sorenson —andthis time brought in a General Mo-tors man from the Navy, James D.Mooney, to take over the pres-idency.

"Mooney set ui) a little side showof his own—Technical Managers,Incorporated, to which Willys con-tributed about $30,000 a year aslong as Mooney lasted—the idea topromote and develop Americanproducts, including jeeps, all overthe world. Sorenson continued tofish, yacht, and shoot golf in Flor-ida and Algonac, Michigan andcollect his SI,OOO a week and heultimately unloaded his stock op-

tions for what has been reportedas a profit of about $600,000. Thatmeans that Willys-Overland willby 1954, have given ‘Sorenson ofthe Rouge’ over $1,100,000.

Ford Specialists"What a career this fellow Char-

les E. Sorenson has had. KeithSward bares many details in hisLegend of Henry Ford. ‘Cast-IronCharlie’ started out with Ford asa boss of the pattern shop in 1904.Soon he became expediter extra-ordinaire of the Ford asembly line.In 1921 when Ford purged the bulkof his foremen and even tossed out

their desks, it was ‘Cast-Iron Char-lie’ who flew about the plant atHyland Park and chopped off thenecessary heads, all at Ford’s be-hest.

•Sorenson made his reputation at

Ford’s as & fireeater. This mancould display his scorn for someperformance in the factory by

simply tipping over a worker’sbench.

"Ford held that men worked fortwo reasons only—‘for their wages

and for fear of losing their jobs.’

And Sorenson expressed the fullestconcurrence with this thesis of

human behavior. At least he dis-tinguished himself in the 20’s as aFord specialist in the psychologyof job insecurity if not as the dis-penser of high wages. He came toexcel, before long, at the art ofsurrounding his fellow administra-tors with an atmosphere of chronicanxiety. And under the turbulentregime that followed, swift andarbitrary dismissals, with no ex-planation given, became the orderof the day. With Sorenson’s riseto power, job security went out atthe Ford Motor Company. Soren-son was key in the new Ford speed-up, the 5-day week, and, as ForbesMagazines reported ‘replacing fam-ily men and veteran employees whohad been earning $7 and $8 a day,with boys and single men at astarting wage of $3.20.

"But there also came a day ofreckoning in June, 1943, following

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his houseboat, generally kept inFlorida where Sorenson sports an-other palatial residence at NorthMiami Beach.

High Cost Jeep•Until a few months ago, when

some of the minor stockholders atWillys-Overland sued to break theSorenson contract, the mellowingex-Ford fire-eater was rarely seenat Willys, for he enjoyed fishing,

1 yachting and practicing golf shots.He said himself when he was inthe vicinity he went to the plantonce, maybe twice a week, thetelephone was a wonderful inven-tion.

"With his stock options sold, hedraws his SI,OOO for genius andadvice on which record shows, thecompany does not depend. But forthe impetus his name once gave tothe stock of the company, the sell-ing price of each jeep must con-tinue to bear the cost of Sorenson.It, along with many other charges,adds to the overhead of a companywhere the crying need is to reduceprices if there-are to be continuingjobs for the automobile workersof Toledo who have had many ananxious moment in the last 20years because of what has beendone by management at Willys.

"The high cost of management,so often out of proportion to anyservice that management may ren-der, and certainly out of line withwhat is paid for services in govern-ment, education, science, farming,and other basic operations, is acrying evil of our times which re-mains nicely covered up and over-looked. But each day we feel itin many of the commodities thatwe buy. And so it really is time,and it is important, that we exposeit.”

Watch for next week’s discussionby Arthur Gaeth.

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FRIDAY, JANUARY 6, 1950

Well Folks—

Did you start the New Year offright? So far everything prettymuch all right with us here atReddy’s Corner with the exceptionof one thing. That one thing is theselling of liquor to minors. Now itisn’t our wish or intention to sellto minors at anytime, our biggestproblem is to keep others frombuying it for them. People justdon’t seem to realize that there isa pretty severe penalty for contrib-uting to the delinquency of a min-or. That is what they are doing ifthey buy for, give to, or sell liquorsto a minor.

Now we would dislike very muchto bring any charges against anyone for any reason but I believethat you will agree with me thatIwould certainly be justified in do-ing so to protect my own interest.If I were to be convicted of sellingto a minor the least that I couldexpect to he penalized would beabout a 30 day suspension of mylicense and it could mean the abso-lute revoking of my license. Nowof course I don’t want that to hap-pen and particularly so if it werethat we had innocently sold to anadult and they in turn had givenor sold the liquor to a minor.—Yousee the minor will very seldom"squeal” on the friend or personbut they will say that they boughtit for themselves. So all I can doto protect myself is to put the fin-ger on those that I know, or feelare buying liquor for minors. Thatwe would dislike very much to haveto do, so if you will just cooperatewith us on this matter we# will ap-preciate it very much.

Thanks Folks, thanks indeedAnnie Mae—Virleeand Reddy

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