Kaiser-Frazer and the Culture of Consumption
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When Production Wasn't Enough' Kaiser-Frazer and the Culture of Consumption Steve Adams JohnsHopMns University The growing literature of American consumerhistory offers new perspectivesfor exploringissues of cultureand power,including corporate cultureand the power exerdsedby business.Consumers are depictedin manyways, from disenfranchisedvictims of an elite group'sdomination, to autonomousactors assigning meanings to goods[6, 9, 18, 24]. Industrialists and entrepreneurs,when they appear, are presentedin narrow terms: implicitlypulling stringsin the backgroundor wieldingclout in the open, businessfigures are consistentlydeemed the conductors,or at least the benefidariesof the emergingculture of consumption.Yet my ownresearch suggeststhat manytop business"leaders" struggled just to keep up with an evolvingconsumer culture, "scurrying where they appearedto stalk"[27, p. 18]. Suchwas the casewith Henry J. Kaiser and his experiencein the automotiveindustry. Kaiser created an empire embracinga "culture of production," reflectinghis personalwork ethic and composedof a seriesof enterprises devotedto filling basicneeds. A Californiaconstruction man in the 1920s and 1930s, Kaiser had branched into cement, shipbuilding,and steel productionby 1942. When Kaiser enteredthe automobileindustry in 1945, however,proven production skills would not suffice: the automobilehad already been the subjectof a cultural revolutionin the 1920s. Auto companieswere no longerconcerned just with practicaltransportation but had becomepurveyors of style and power,subjects of intenseconsumer marketing. Inexperiencein consumermarketing would severelyhandicap Kaiser'sfirst consumerproducts venture. His failure to make a successful transition to this new culture contributed to the demise of his automotive venture. Kaiser and the Culture of Production Many view the period from 1880 to 1920 as one involvinga crudal transitionfrom a culturalemphasis on scarcity,production, and the work ethic to one of abundance,consumption, and leisurepursuits. Consistent with that interpretationis the fact that decadeslater Henry Kaiser's obsessionwith work and productionwould seem old-fashioned: John Gunther wrote that Kaiser could be "your grandfather" [7, p. 64]. BUSINESS AND ECONOMIC HISTORY, SecondSeries, Volume Nineteen, 1990. Copyright(c) 1990by the BusinessHistory Conference.ISSN 0849-6825. 255 256 "Productionas the Fifth Freedom" was Kaiser's rallying cry, and his November1942 speechwith that title would have been right at home in 1892America. Accordingto Kaiserredistribution of wealthand government interferencewere unnecessary: "The whole concept of humanwelfare, which means security,opportunities, the standardof living . are today dependenton the productionand conservationof wealth." Productionand conservationwere the "spiritualattributes of the AmericanWay" [14]. As timeschanged, both Kaiserand his organizationevolved, yet this businessmannever altered his attitudetowards work. Kaiserwould joyfully work twenty-hourdays, and his organizationoften stayedahead by simply outworkingthe competition[4, p. 235]. Longafter establishinga reputation for progressivelabor relationsand demonstratingconcern for the working man, Kaiserwould reject one of the centralfeatures of consumerculture, the shrinkingwork week [6, p. 103]. When Walter Reutherof the United Auto Workers proposeda 32-hour work week, Kaiser contendedthat, economicrealities and competitivenessaside, people wanted to work at least 40 hours[22]! It was not just Kaiser'spersonal values that were responsiblefor a seeminglyanachronistic company culture. Thirtyyears of experiencein the WestCoast's economically undeveloped infrastructure had deeplyreinforced his attitudesregarding scarcity. Rapid regionalpopulation growth in the 1930shad not been accompaniedby equivalenteconomic growth in basic industries.This gap createdtremendous opportunities in constructionand extractiveindustries, among others. Kaiser joined a WestCoast consortium called"The Six Companies"in buildingroads, pipelines, and dams,all of which were critical to Western economicdevelopment in the areas of transportation,oil and gas, and hydroelectricpower [19, p. 205]. The Westernenvironment rewarded the same production/scarcityculture that had prevailedin the East at the turn of the century. Kaiser'sintricate relationships with the U.S. governmentwere easily accommodatedin his cultureof production.A healthyrelationship with the governmentallowed Kaiser to ignoremarketing and publicrelations, which meantlittle to an organizationso relianton one customer.Instead, Kaiser becamea one-manspecial interest whose methods of persuasionranged from telegram"bombardment" to "personalflattery" aimed at government officials[5, p. 4]. MeanwhileKaiser's people mastered the art of material arrangingand handlingduring the constructionof Boulder,Bonneville, and GrandCoulee Dams, contributing to the completionof eachproject at least a year aheadof schedule.It wasthe organization'ssubsequent efforts in shipbuilding,however, that allowedKaiser both to demonstratehis firm's constructionacumen and to providehis peoplewith an introductionto mass productionindustry. When more experiencedshipbuilders could not keep up with the needsof the U.S. Maritime Commission,Kaiser seized the opportunityfor his men to learn assembly-lineskills. He formeda partnershipwith John Reilly of Todd Shipyards,a relationshipwhich would last abouta year [4, pp. 69-71]. At the outset,Kaiser dismissed those who were skepticalabout his inexperienced"sandhogs" learning shipbuilding from Reilly's"seadogs" [16, p. 464]. He assertedthat his organizationhad lessbuilt-in resistance 257 to adoptingnew methodsthan establishedfirms [16, p. 464]. Kaiser sent Clay Bedford,manager of the Richmond(California) shipyards, to observe the operationof a Ford plant in Detroit, where assemblersonly needed two days of training. Assemblyline principles,when applied to shipbuilding, allowedfor "jobbreakdown," where a craftsman'sjob--involving mastery of 40-70 operations--wassplit into a seriesof specializedtasks [16, pp. 237- 239]. Successfulemployment of suchinnovative methods allowed this novice to constructone-third of the nation'smerchant ships during World War II. Along the way, Kaiser became an internationalhero. His spectacular successin shipbuildinghelped convincehim that he could compete in anothermass production industry after the war. Though Kaiser's men had achievedbrilliance in mass production, entry into the auto industrywould require other skills the organizationhad not developed. An aide recognizedthe situationwhen in December 1944 he wrote: "Our real handicapis in the lack of marketingorganization with its essentialcorollaries, advertising and public relations"[12]. Kaiser was quite persuasivedealing face-to-facewith governmentofficials, but his organi?ationhad never done any advertising.This organizationwas the "lengthenedshadow of one man,"and that leader would fmd it painfully difficult to translate his personal magnetisminto effective consumer marketing. Kaiser Meets the Culture of Consumption During the same decadesthat the Kaiser organi?ationhad been honing its culture of production, the automotive industry had been experiencinga culturalrevolution. By the 1920s,Detroit was no longer devotedsimply to supplyingtransportation. Instead, cars had become"the mostsymbolically charged social emblem the averageconsumer was to buy" [6, p. 185]. Auto print advertisingevolved during this period from "presentationof technicaldetails" to the promiseof "style,status, or escape to an exotic'real life' far from the reader'sordinary experience" [6, p. 27]. Automotivedemand had leveledoff in 1927, encouragingGeneral Motors to establishnew industryinstitutions. Introduction of full "lines"of carsafforded buyers the opportunityto experienceupward mobility without changingauto companies.Also, the introductionof annualmodel changes establishedthe phenomenonof systematicobsolescence before dysfunction [2, p. 21]. By the late 1920s,production skills, a la Ford, couldnot insure successin the auto industry.This remainedtrue throughthe end of World War II. The war briefly restoreda "seller'smarket," with auto demandonce more exceedingsupply, returning pure productionskills to the critical positionthey had occupiedduring the heydayof the Model T. The "Big Three" automakershad ceasedproduction for four years, assistingthe nation'swar effortsinstead. Consequently,the numberof automobileson American roads declinedfrom twenty-ninemillion in 1942 to twenty-two million in 1945 [3, p. 232]. As the war ended,eager buyers were readyto gobbleup virtuallyanything on four wheels. An opportunityexisted for a newcomerwho couldact quickly. 258 True to his organization'sculture of production,Kaiser emphasized basic transportationwhen first hinting he would enter the automobile industry. During the war, he promisedto build a lightweight,small, $400 "workingman'scar," to be distributedat gas stations[21, p. 28]. Kaiser intendedto createan assemblyoperation, believing he coulddo so more efficientlythan the Big Three [1]. Just weeksbefore V-J Day, Henry Kaiser movedaggressively to achievehis new goal. He establisheda partnershipwith JosephFrazer, presidentof the tinyGraham-Paige Motor Company.Frazer was considered one of Detroit's top salesmen,having compiled an impressiverecord at Chryslerin the late 1920'sand early 1930's. In additionto his sales experienceand automotivebackground, Frazer would bring his 2000 Graham-Paigedealers to the venture [17,