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The Ika Story THE IKA STORY James F. McCloud The IKA Story © 1995, James F. McCloud © 2015, Spanish First Edition, Kimball McCloud, James McCloud Jr. y Mark McCloud © 2015, Spanish First Edition, Lenguaje claro Editora © 2020, Anniversary Edition, Kimball McCloud, James McCloud Jr. y Mark McCloud © 2020, Anniversary Edition, MotorLibros MotorLibros is an imprint of Lenguaje claro Editora Portugal 2951, (B1606EFA) Carapachay, provincia de Buenos Aires, Argentina www.lenguajeclaro.com [email protected] Layout: Diana González Cover: Miur Nagur, based on the original edition McCloud, James The IKA Story / James McCloud. - 2a ed. - Carapachay: MotorLibros, 2020. 254 p. ; 23 x 15 cm. ISBN 978-987-47650-2-4 1. Empresas Industriales. 2. Automóviles Clásicos. 3. Memoria Autobiográfica. I. Título. CDD 388.3409 Se terminó de imprimir en el mes de noviembre de 2020. La reproducción total o parcial de este libro viola derechos reser- vados. TABLE OF CONTENTS Introduction ....................................................................................... 11 CHAPTER I | 1954 ............................................................................... 13 International House of New Orleans — original concept. Preparations for H.J. Kaiser tour of South America. Development of Definitive Proposal to Argentina. Survey of vendor potential in Argentina. October Agreement in Principle. Mixed Valuation Commission activities. New York agreement on final equipment valuations. CHAPTER II | 1955 .............................................................................. 55 Córdoba plant site finalized. Articles of Incorporation and Presidential Decree of Approval. IKA public share issue — IMIM. Initial organization. Construction start-up. 1000 imported Kaiser Manhattans. Industrial Bank problems. General Matthew B. Ridgway. June aborted revolution. September overthrow of Peron government. Investigation of IKA. Initial vertical integration studies — gears. Academia Argüello. Bruzzone Commission. CHAPTER III | 1956 ............................................................................ 80 Interdiction of IKA. Renegotiation of original IAME-Kaiser contract. Construction progress. April 27 — First Jeep. Initial quality problems. JA2 — Jeep pickup developed. Retail credit problems and other sales restrictions. CHAPTER IV | 1957 ............................................................................ 90 Vianini acquisition — transmission gear equipment. Set-up of differential axle manufacturing. January — IKA first prof- itable month. First Dealer Convention. Estanciera production. 7 8 THE IKA STORY Advertising — Telenoches IKA. Second public share issue. Small car planning. CHAPTER V | 1958 ............................................................................. 98 Kaiser Carabela production. Vendor quality and pricing prob- lems. Investigations into tractor production. Labor conflicts. CHAPTER VI | 1959 .......................................................................... 106 Forge plant start up. Frondizi Automotive Decree. Ken Flood’s passing. Organization changes. Plant expansion — tool and die making. IKACOR organized. Industrial Products Division organized. Baqueano pickup and Furgon panel delivery production. CHAPTER VII | 1960 .......................................................................... 117 First full year production under Automotive Decree. Permanente S. A. organized. Bergantin production. Adlai Stevenson. Renault Dauphine production. President Charles de Gaulle. ICKSA organized. Sesquicentennial celebration. IKA Art Salons — Bienal Americana de Arte. CHAPTER VIII | 1961 ....................................................................... 154 100,000 vehicle produced. Aviones Lockheed Kaiser — First CL402 production. H. J. Kaiser, Jr., passing. “Power Plant for Peace” — Uruguay. ADEFA organized. CHAPTER IX | 1962 .......................................................................... 164 Rambler line production. George Havas passing. IKA Technical Institute. Gordini production. Chrome plating plant production start. September 2, Industry Day Celebrations. CHAPTER X | 1963 ............................................................................ 177 Transax organized. ILASA organized. Metalúrgica Tandil investment. New Rambler line production. Renault R4L and Gladiator Pickup production. TABLE OF CONTENTS 9 CHAPTER XI | 1964 .......................................................................... 185 Inflation — market drop. Commercial Division. Volvo study. Peugeot potential merger. CHAPTER XII | 1965 ......................................................................... 194 Tornado engine production. Operation Di Tella — SIAM Automotores. Tool and Die Division organization (DPM). CHAPTER XIII | 1966 ........................................................................ 213 IKA and Subsidiaries — consolidated statistics. Torino — development and production. CHAPTER XIV | 1967 ....................................................................... 225 Industries divestment decision. Ford Motor Co. negotiations. Renault — TRANSAX divestment decision. General Motors — tool order and interest in IKA. Position paper to General Motors. Excerpts from Commonwealth Club address. Index ................................................................................................ 239 About the Author ........................................................................... 251 Introduction This is the story of the early beginnings of a company that aspired to be something more than just a profitable commercial opera- tion. We wanted to prove, and did, that the capabilities of the manufacturing sector of Argentina could cope not only with the integral production of vehicles but with their development as well. Building the infrastructure of human capabilities that was the back- bone of our company probably inspired us more than any other single element. Each new venture was a challenge that taxed the limits of our resources and required innovative ideas and decisions to bring it to a satisfactory conclusion. When mistakes were made we would insist they be recognized so that we could do something about them. The prime requisite for any discussion in my office was, “put it all on top of the table,” and with the resiliency we had we always managed to recuperate and land back on our feet. I don’t have any reason for writing this book other than the enjoyment of recalling the milestones that occurred during IKA’s formative stages and the subsequent years that I had the privilege of participating in its management. I would suspect, moreover, that there are a lot of my former colleagues who will find some of the reminiscences amusing, and my sons will get an insight into the reason Dad was away from home so much. My years in Argentina were the most fruitful and enjoyable of any I have experienced in my professional life. IKA was a contin- uous expansion program and one that never lacked for surprises that would blow in from the least suspected quarter. As Henry Kaiser said, “Problems are opportunities in work clothes.” Using this criterion, I can assure you we had our share of challenges. JAMES F. MCCLOUD Est. Huinca-Lu Traful, Neuquen Argentina 11 Chapter I | Pre-Incorporation — Most of 1954 In the early 1950s, Kaiser-Frazer went through a major restructur- ing. Willys Motors, Inc. was acquired, the Willow-Run plant was sold to General Motors and the new company that had emerged, Kaiser Motors Corporation, made its headquarters in Toledo, Ohio, the location of Willys’ main plant and principal offices. The restructuring also involved the withdrawal from passenger car production and concentration on the Jeep Four Wheel Drive utility vehicle line. At this point in time, the major facilities owned and operated by Kaiser Motors consisted of the main assembly, machining and press plants in Toledo, the Detroit Engine Division, the Dowagiac, Michigan, foundry and the Shadyside, Ohio, press plant. The latter three facilities were suppliers for Willow-Run vehicle assembly and, with the decision taken to produce the Jeep line only, would eventually become redundant. The Detroit Engine Division not only manufactured auto- motive engines for the Kaiser and Frazer automobiles but was also engaged, during the Korean War, in the manufacture of the R-1300 Aircraft engine under license to the Wright Aeronautical Corporation. As the Korean conflict drew to a close, aircraft engine contracts, which had been very profitable, would be completed and the Engine Division, which also included the Dowagiac foundry, would be faced with a shut-down. This was foreseeable in 1953, and various studies were undertaken to find products that would fit the Division’s managerial and manufac- turing capabilities. Not the least of the problems, and probably the paramount consideration, would be the development of a flexible enough labor agreement with Local 280 of the UAW-CIO to permit the diversity of product that would be required. As General Manager of the Division, it became apparent to me that, for various reasons 13 14 THE IKA STORY — the specialized equipment and tooling we had, the inflexibility of our labor contracts, plant location, lack of specialized marketing capabilities and the like — it was highly improbable a new prod- uct venture would prove feasible. We had studied everything from manufacturing pin-setting machines for bowling alleys to agricul- tural equipment. The Engine Division did have some diversifica- tion during this period,
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