Authors:
Historic Era: Era 9: Postwar United States (1945 to early 1970s)
Historic Theme:
Subject:
February/March 1995 | Volume 46, Issue 1
Authors:
Historic Era: Era 9: Postwar United States (1945 to early 1970s)
Historic Theme:
Subject:
February/March 1995 | Volume 46, Issue 1
If you want to know how much the world can change—and stay the same—in half a lifetime, consider the United States Defense Department, the General Motors Corporation, and the man who, 40 years ago, epitomized them both, Charles E. Wilson.
In 1955, the Defense Department ran by far the most powerful military operation in the world. But that power came at a fearful cost to the American taxpayer. The Pentagon consumed nearly 60 percent of the federal budget and one dollar out of every eight of gross national product. Today, the Pentagon still commands unparalleled military power, but defense is only 20 percent of the budget and consumes one dollar of every twenty of GNP.
General Motors, meanwhile, was America’s largest industrial corporation. It dominated the American business with a market share of almost 50 percent and therefore dominated American business. Moreover, it was the very model of how a vast economic enterprise should be run.
Today, it remains America’s largest company, but its market share of the automobile business is down to around 33 percent. And no one today would look to General Motors as a corporate exemplar.
Charles E. Wilson connects these two mighty organizations. From 1941 to 1953, he was president of General Motors and brought it to the peak of its economic power and reputation. From 1953 to 1957, he was Secretary of Defense and began the long, hard, bitterly fought campaign to get “a bigger bang for a buck” out of the military.
Wilson was born in Minerva, Ohio, in 1890. According to him his father had been a toolmaker, had organized a union local, and was a dedicated socialist. In college Wilson followed his family’s socialist traditions and supported Eugene V. Debs for President. He graduated from the Carnegie Institute of Technology (now Carnegie-Mellon University) when he was only eighteen, with a degree in electrical engineering, but because of his youthful political adventures, he had trouble getting a job as an engineer. For a while he worked as a patternmaker and became the business agent for the patternmakers’ local in Pittsburgh. (In later years he would keep his framed union card on his desk at General Motors. When he moved to the Pentagon, it was the only thing from his old office, other than family photographs, that he took with him.)
He soon went to work for Westinghouse, however, designed the company’s first starter motor and four years later was in charge of all Westinghouse automotive electrical products.
After World War I, Wilson moved to the Remy Electric Company, a General Motors subsidiary, and soon became general manager. In 1926, Remy merged with Delco, another GM subsidiary that produced electrical automotive equipment, and Wilson became the new company’s president.
By restructuring the merged companies, Wilson was able to save five million dollars a year, no small sum in the 1920s. But effecting the reorganization immediately would have cost five thousand jobs in Dayton, where Delco was located.