Showing posts with label Management. Show all posts
Showing posts with label Management. Show all posts

Friday, January 27, 2023

The fast and incredible rise of Xerox and the subsequent fall in Oct 1966

WHEN THE ORIGINAL mimeograph machine—the first mechanical duplicator of written pages that was practical for office use—was put on the market by the A. B. Dick Company, of Chicago, in 1887, it did not take the country by storm. On the contrary, Mr. Dick—a former lumberman who had become bored with copying his price lists by hand, had tried to invent a duplicating machine himself, and had finally obtained rights to produce the mimeograph from its inventor, Thomas Alva Edison—found himself faced with a formidable marketing problem. “People didn’t want to make lots of copies of office documents,” says his grandson C. Matthews Dick, Jr., currently a vice-president of the A. B. Dick Company, which now manufactures a whole line of office copiers and duplicators, including mimeograph machines. “By and large, the first users of the thing were non-business organizations like churches, schools, and Boy Scout troops. To attract companies and professional men, Grandfather and his associates had to undertake an enormous missionary effort. Office duplicating by machine was a new and unsettling idea that upset long-established office patterns. In 1887, after all, the typewriter had been on the market only a little over a decade and wasn’t yet in widespread use, and neither was carbon paper. If a businessman or a lawyer wanted five copies of a document, he’d have a clerk make five copies—by hand. People would say to Grandfather, ‘Why should I want to have a lot of copies of this and that lying around? Nothing but clutter in the office, a temptation to prying eyes, and a waste of good paper.’”

On another level, the troubles that the elder Mr. Dick encountered were perhaps connected with the generally bad repute that the notion of making copies of graphic material had been held in for a number of centuries—a bad repute reflected in the various overtones of the English noun and verb “copy.” The Oxford English Dictionary makes it clear that during those centuries there was an aura of deceit associated with the word; indeed, from the late sixteenth century until Victorian times “copy” and “counterfeit” were nearly synonymous. (By the middle of the seventeenth century, the medieval use of the noun “copy” in the robust sense of “plenty” or “abundance” had faded out, leaving behind nothing but its adjective form, “copious.”) “The only good copies are those which exhibit the defects of bad originals,” La Rochefoucauld wrote in his “Maxims” in 1665. “Never buy a copy of a picture,” Ruskin pronounced dogmatically in 1857, warning not against chicanery but against debasement. And the copying of written documents was often suspect, too. “Though the attested Copy of a Record be good proof, yet the Copy of a Copy never so well attested … will not be admitted as proof in Judicature,” John Locke wrote in 1690. At about the same time, the printing trade contributed to the language the suggestive expression “foul copy,” and it was a favorite Victorian habit to call one object, or person, a pale copy of another.

Practical necessity arising out of increasing industrialization was doubtless chiefly responsible for a twentieth-century reversal of these attitudes. In any case, office reproduction began to grow very rapidly. (It may seem paradoxical that this growth coincided with the rise of the telephone, but perhaps it isn’t. All the evidence suggests that communication between people by whatever means, far from simply accomplishing its purpose, invariably breeds the need for more.) The typewriter and carbon paper came into common use after 1890, and mimeographing became a standard office procedure soon after 1900. “No office is complete without an Edison Mimeograph,” the Dick Company felt able to boast in 1903. By that time, there were already about a hundred and fifty thousand of the devices in use; by 1910 there were probably over two hundred thousand, and by 1940 almost half a million. The offset printing press—a mettlesome competitor capable of producing work much handsomer than mimeographed output—was successfully adapted for office use in the nineteen- thirties and forties, and is now standard equipment in most large offices. As with the mimeograph machine, though, a special master page must be prepared before reproduction can start—a relatively expensive and time-consuming process—so the offset press is economically useful only when a substantial number of copies are wanted. In office-equipment jargon, the offset press and the mimeograph are “duplicators” rather than “copiers,” the dividing line between duplicating and copying being generally drawn somewhere between ten and twenty copies. Where technology lagged longest was in the development of efficient and economical copiers. Various photographic devices that did not require the making of master pages—of which the most famous was (and still is) the Photostat—began appearing around 1910, but because of their high cost, slowness, and difficulty of operation, their usefulness was largely limited to the copying of architectural and engineering drawings and legal documents. Until after 1950, the only practical machine for making a copy of a business letter or a page of typescript was a typewriter with carbon paper in its platen.
The nineteen-fifties were the raw, pioneering years of mechanized office copying. Within a short time, there suddenly appeared on the market a whole batch of devices capable of reproducing most office papers without the use of a master page, at a cost of only a few cents per copy, and within a time span of a minute or less per copy. Their technology varied—Minnesota Mining & Manufacturing’s Thermo-Fax, introduced in 1950, used heat-sensitive copying paper; American Photocopy’s Dial-A-Matic Autostat (1952) was based on a refinement of ordinary photography;
Eastman Kodak’s Verifax (1953) used a method called dye transfer; and so on—but almost all of them, unlike Mr. Dick’s mimeograph, immediately found a ready market, partly because they filled a genuine need and partly, it now seems clear, because they and their function exercised a powerful psychological fascination on their users. In a society that sociologists are forever characterizing as “mass,” the notion of making one-of-a-kind things into many-of-a-kind things showed signs of becoming a real compulsion. However, all these pioneer copying machines had serious and frustrating inherent defects; for example, Autostat and Verifax were hard to operate and turned out damp copies that had to be dried, while Thermo-Fax copies tended to darken when exposed to too much heat, and all three could make copies only on special treated paper supplied by the manufacturer. What was needed for the compulsion to flower into a mania was a technological breakthrough, and the breakthrough came at the turn of the decade with the advent of a machine that worked on a new principle, known as xerography, and was able to make dry, good-quality, permanent copies on ordinary paper with a minimum of trouble. The effect was immediate. Largely as a result of xerography, the estimated number of copies (as opposed to duplicates) made annually in the United States sprang from some twenty million in the mid-fifties to nine and a half billion in 1964, and to fourteen billion in 1966—not to mention billions more in Europe, Asia, and Latin America. More than that, the attitude of educators toward printed textbooks and of business people toward written communication underwent a discernible change; avant-garde philosophers took to hailing xerography as a revolution comparable in importance to the invention of the wheel; and coin-operated copying machines began turning up in candy stores and beauty parlors. The mania—not as immediately disrupting as the tulip mania in seventeenth-century Holland but probably destined to be considerably farther-reaching—was in full swing.
The company responsible for the great breakthrough and the one on whose machines the majority of these billions of copies were made was, of course, the Xerox Corporation, of Rochester, New York.
As a result, it became the most spectacular big-business success of the nineteen-sixties. In 1959, the year the company—then called Haloid Xerox, Inc.—introduced its first automatic xerographic office copier, its sales were thirty-three million dollars. In 1961, they were sixty-six million, in 1963 a hundred and seventy-six million, and in 1966 over half a billion. As Joseph C. Wilson, the chief executive of the firm, pointed out, this growth rate was such that if maintained for a couple of decades (which, perhaps fortunately for everyone, couldn’t possibly happen), Xerox sales would be larger than the gross national product of the United States. Unplaced in Fortune’s ranking of the five hundred largest American industrial companies in 1961, Xerox by 1964 had attained two-hundred- and-twenty-seventh place, and by 1967 it had climbed to hundred-and-twenty-sixth. Fortune’s ranking is based on annual sales; according to certain other criteria, Xerox placed much higher than hundred-and-seventy-first. For example, early in 1966 it ranked about sixty-third in the country in net profits, probably ninth in ratio of profit to sales, and about fifteenth in terms of the market value of its stock—and in this last respect the young upstart was ahead of such long-established industrial giants as U.S. Steel, Chrysler, Procter & Gamble, and R.C.A. Indeed, the enthusiasm the investing public showed for Xerox made its shares the stock market Golconda of the sixties. Anyone who bought its stock toward the end of 1959 and held on to it until early 1967 would have found his holding worth about sixty-six times its original price, and anyone who was really fore-sighted and bought Haloid in 1955 would have seen his original investment grow—one might almost say miraculously—a hundred and eighty times. Not surprisingly, a covey of “Xerox millionaires” sprang up—several hundred of them all told, most of whom either lived in the Rochester area or had come from there.
The Haloid Company, started in Rochester in 1906, was the grandfather of Xerox, just as one of its founders—Joseph C. Wilson, a sometime pawnbroker and sometime mayor of Rochester—was the grandfather of his namesake, the 1946–1968 boss of Xerox. Haloid manufactured photographic papers, and, like all photographic companies—and especially those in Rochester—it lived in the giant shadow of its neighbor, Eastman Kodak. Even in this subdued light, though, it was effective enough to weather the Depression in modestly good shape. In the years immediately after the Second World War, however, both competition and labor costs increased, sending Haloid on a search for new products. One of the possibilities its scientists hit upon was a copying process that was being worked on at the Battelle Memorial Institute, a large non-profit industrial-research organization in Columbus, Ohio. At this point, the story flashes back to 1938 and a second-floor kitchen above a bar in Astoria, Queens, which was being used as a makeshift laboratory by an obscure thirty-two-year- old inventor named Chester F. Carlson. The son of a barber of Swedish extraction, and a graduate in physics of the California Institute of Technology, Carlson was employed in New York in the patent department of P. R. Mallory & Co., an Indianapolis manufacturer of electrical and electronic components; in quest of fame, fortune, and independence, he was devoting his spare time to trying to invent an office copying machine, and to help him in this endeavor he had hired Otto Kornei, a German refugee physicist. The fruit of the two men’s experiments was a process by which, on October 22, 1938, after using a good deal of clumsy equipment and producing considerable smoke and stench, they were able to transfer from one piece of paper to another the unheroic message “10–22–38 Astoria.” The process, which Carlson called electrophotography, had—and has—five basic steps: sensitizing a photoconductive surface to light by giving it an electrostatic charge (for example, by rubbing it with fur); exposing this surface to a written page to form an electrostatic image; developing the latent image by dusting the surface with a powder that will adhere only to the charged areas; transferring the image to some sort of paper; and fixing the image by the application of heat.
The steps, each of them in itself familiar enough in connection with other technologies, were utterly new in combination—so new, in fact, that the kings and captains of commerce were markedly slow to recognize the potentialities of the process. Applying the knowledge he had picked up in his job downtown, Carlson immediately wove a complicated net of patents around the invention (Kornei shortly left to take a job elsewhere, and thus vanished permanently from the electrophotographic scene) and set about trying to peddle it. Over the next five years, while continuing to work for Mallory, he pursued his moonlighting in a new form, offering rights to the process to every important office-equipment company in the country, only to be turned down every time. Finally, in 1944,
Carlson persuaded Battelle Memorial Institute to undertake further development work on his process in exchange for three-quarters of any royalties that might accrue from its sale or license.
Here the flashback ends and xerography, as such, comes into being. By 1946, Battelle’s work on the Carlson process had come to the attention of various people at Haloid, among them the younger Joseph C. Wilson, who was about to assume the presidency of the company. Wilson communicated his interest to a new friend of his—Sol M. Linowitz, a bright and vigorously public-spirited young lawyer, recently back from service in the Navy, who was then busy organizing a new Rochester radio station that would air liberal views as a counterbalance to the conservative views of the Gannett newspapers. Although Haloid had its own lawyers, Wilson, impressed with Linowitz, asked him to look into the Battelle thing as a “one-shot” job for the company. “We went to Columbus to see a piece of metal rubbed with cat’s fur,” Linowitz has since said. Out of that trip and others came an agreement giving Haloid rights to the Carlson process in exchange for royalties to Carlson and Battelle, and committing it to share with Battelle in the work and the costs of development. Everything else, it seemed, flowed from that agreement. In 1948, in search of a new name for the Carlson process, a Battelle man got together with a professor of classical languages at Ohio State University, and by combining two words from classical Greek they came up with “xerography,” or “dry writing.”
Meanwhile, small teams of scientists at Battelle and Haloid, struggling to develop the process, were encountering baffling and unexpected technical problems one after another; at one point, indeed, the Haloid people became so discouraged that they considered selling most of their xerography rights to International Business Machines. But the deal was finally called off, and as the research went on and the bills for it mounted, Haloid’s commitment to the process gradually became a do-or-die affair. In 1955, a new agreement was drawn up, under which Haloid took over full title to the Carlson patents and the full cost of the development project, in payment for which it issued huge bundles of Haloid shares to Battelle, which, in turn, issued a bundle or two to Carlson. The cost was staggering.
Between 1947 and 1960, Haloid spent about seventy-five million dollars on research in xerography, or about twice what it earned from its regular operations during that period; the balance was raised through borrowing and through the wholesale issuance of common stock to anyone who was kind, reckless, or prescient enough to take it. The University of Rochester, partly out of interest in a struggling local industry, bought an enormous quantity for its endowment fund at a price that subsequently, because of stock splits, amounted to fifty cents a share. “Please don’t be mad at us if we find we have to sell our Haloid stock in a couple of years to cut our losses on it,” a university official nervously warned Wilson. Wilson promised not to be mad. Meanwhile, he and other executives of the company took most of their pay in the form of stock, and some of them went as far as to put up their savings and the mortgages on their houses to help the cause along. (Prominent among the executives by this time was Linowitz, whose association with Haloid had turned out to be anything but a one-shot thing; instead, he became Wilson’s right-hand man, taking charge of the company’s crucial patent arrangements, organizing and guiding its international affiliations, and eventually serving for a time as chairman of its board of directors.) In 1958, after prayerful consideration, the company’s name was changed to Haloid Xerox, even though no xerographic product of major importance was yet on the market. The trademark “XeroX” had been adopted by Haloid several years earlier—a shameless imitation of Eastman’s “Kodak,” as Wilson has admitted. The terminal “X” soon had to be downgraded to lower case, because it was found that nobody would bother to capitalize it, but the near-palindrome, at least as irresistible as Eastman’s, remained. XeroX or Xerox, the trademark,
Wilson has said, was adopted and retained against the vehement advice of many of the firm’s consultants, who feared that the public would find it unpronounceable, or would think it denoted an anti-freeze, or would be put in mind of a word highly discouraging to financial ears—“zero.”
Then, in 1960, the explosion came, and suddenly everything was reversed. Instead of worrying about whether its trade name would be successful, the company was worrying about its becoming too successful, for the new verb “to xerox” began to appear so frequently in conversation and in print that the company’s proprietary rights in the name were threatened, and it had to embark on an elaborate campaign against such usage. (In 1961, the company went the whole hog and changed its name to plain Xerox Corporation.) And instead of worrying about the future of themselves and their families, the Xerox executives were worrying about their reputation with the friends and relatives whom they had prudently advised not to invest in the stock at twenty cents a share. In a word, everybody who held Xerox stock in quantity had got rich or richer—the executives who had scrimped and sacrificed, the University of Rochester, Battelle Memorial Institute, and even, of all people, Chester F. Carlson, who had come out of the various agreements with Xerox stock that at 1968 prices was worth many million dollars, putting him (according to Fortune) among the sixty-six richest people in the country.
THUS baldly outlined, the story of Xerox has an old-fashioned, even a nineteenth-century, ring—the lonely inventor in his crude laboratory, the small, family-oriented company, the initial setbacks , the reliance on the patent system, the resort to classical Greek for a trade name, the eventual triumph gloriously vindicating the free-enterprise system. But there is another dimension to Xerox. In the matter of demonstrating a sense of responsibility to society as a whole, rather than just to its stockholders, employees, and customers, it has shown itself to be the reverse of most nineteenth- century companies—to be, indeed, in the advance guard of twentieth-century companies. “To set high goals, to have almost unattainable aspirations, to imbue people with the belief that they can be achieved—these are as important as the balance sheet, perhaps more so,” Wilson said once, and other Xerox executives have often gone out of their way to emphasize that “the Xerox spirit” is not so much a means to an end as a matter of emphasizing “human values” for their own sake. Such platform rhetoric is far from uncommon in big-business circles, of course, and when it comes from Xerox executives it is just as apt to arouse skepticism—or even, considering the company’s huge profits, irritation. But there is evidence that Xerox means what it says. In 1965, the company donated $1,632,548 to educational and charitable institutions, and $2,246,000 in 1966; both years the biggest recipients were the University of Rochester and the Rochester Community Chest, and in each case the sum represented around one and a half per cent of the company’s net income before taxes. This is markedly higher than the percentage that most large companies set aside for good works; to take a couple of examples from among those often cited for their liberality, R.C.A.’s contributions for 1965 amounted to about seven-tenths of one per cent of pre-tax income, and American Telephone & Telegraph’s to considerably less than one per cent. That Xerox intended to persist in its high-minded ways was indicated by its commitment of itself in 1966 to the “one-per-cent program,” often called the Cleveland Plan—a system inaugurated in that city under which local industries agree to give one per cent of pre-tax income annually to local educational institutions, apart from their other donations —so that if Xerox income continues to soar, the University of Rochester and its sister institutions in the area can face the future with a certain assurance.
In other matters, too, Xerox has taken risks for reasons that have nothing to do with profit. In a 1964 speech, Wilson said, “The corporation cannot refuse to take a stand on public issues of major concern”—a piece of business heresy if there ever was one, since taking a stand on a public issue is the obvious way of alienating customers and potential customers who take the opposite stand. The chief public stand that Xerox has taken is in favor of the United Nations—and, by implication, against its detractors. Early in 1964, the company decided to spend four million dollars—a year’s advertising budget—on underwriting a series of network-television programs dealing with the U.N., the programs to be unaccompanied by commercials or any other identification of Xerox apart from a statement at the beginning and end of each that Xerox had paid for it. That July and August—some three months after the decision had been announced—Xerox suddenly received an avalanche of letters opposing the project and urging the company to abandon it. Numbering almost fifteen thousand, the letters ranged in tone from sweet reasonableness to strident and emotional denunciation. Many of them asserted that the U.N. was an instrument for depriving Americans of their Constitutional rights, that its charter had been written in part by American Communists, and that it was constantly being used to further Communist objectives, and a few letters, from company presidents, bluntly threatened to remove the Xerox machines from their offices unless the series was cancelled. Only a handful of the letter writers mentioned the John Birch Society, and none identified themselves as members of it, but circumstantial evidence suggested that the avalanche represented a carefully planned Birch campaign. For one thing, a recent Birch Society publication had urged that members write to Xerox to protest the U.N. series, pointing out that a flood of letters had succeeded in persuading a major airline to remove the U.N. insigne from its airplanes. Further evidence of a systematic campaign turned up when an analysis, made at Xerox’s instigation, showed that the fifteen thousand letters had been written by only about four thousand persons. In any event, the Xerox offices and directors declined to be persuaded or intimidated; the U.N. series appeared on the American Broadcasting Company network in 1965, to plaudits all around. Wilson later maintained that the series—and the decision to ignore the protest against it—made Xerox many more friends than enemies. In all his public statements on the subject, he insisted on characterizing what many observers considered a rather rare stroke of business idealism, as simply sound business judgment.
In the fall of 1966, Xerox began encountering a measure of adversity for the first time since its introduction of xerography. By that time, there were more than forty companies in the office copier business, many of them producing xerographic devices under license from Xerox. (The only important part of its technology for which Xerox had refused to grant a license was a selenium drum that enables its own machines to make copies on ordinary paper. All competing products still required treated paper.) The great advantage that Xerox had been enjoying was the one that the first to enter a new field always enjoys—the advantage of charging high prices. Now, as Barron’s pointed out in August, it appeared that “this once-fabulous invention may—as all technological advances inevitably must—soon evolve into an accepted commonplace.” Cut-rate latecomers were swarming into copying; one company, in a letter sent to its stockholders in May, foresaw a time when a copier selling for ten or twenty dollars could be marketed “as a toy” (one was actually marketed for about thirty dollars in 1968) and there was even talk of the day when copiers would be given away to promote sales of paper, the way razors have long given away to promote razor blades. For some years, realizing that its cozy little monopoly would eventually pass into the public domain, Xerox had been widening its interests through mergers with companies in other fields, mainly publishing and education; for example, in 1962 it had bought University Microfilms, a library on microfilm of unpublished manuscripts, out-of-print books, doctoral dissertations, periodicals, and newspapers, and in 1965 it had tacked on two other companies—American Education Publications, the country’s largest publisher of educational periodicals for primary- and secondary-school students, and Basic Systems, a manufacturer of teaching machines. But these moves failed to reassure that dogmatic critic the marketplace, and Xerox stock ran into a spell of heavy weather. Between late June, 1966, when it stood at 267¾, and early October, when it dipped to 131⅝, the market value of the company was more than cut in half. In the single business week of October 3rd through October 7th, Xerox dropped 42½ points, and on one particularly alarming day—October 6th—trading in Xerox on the New York Stock Exchange had to be suspended for five hours because there were about twenty-five million dollars’ worth of shares on sale that no one wanted to buy.
I find that companies are inclined to be at their most interesting when they are undergoing a little misfortune, and therefore I chose the fall of 1966 as the time to have a look at Xerox and its people— something I’d had in mind to do for a year or so. I started out by getting acquainted with one of its products. The Xerox line of copiers and related items was by then a comprehensive one. There was, for instance, the 914, a desksize machine that makes black-and-white copies of almost any page— printed, handwritten, typed, or drawn, but not exceeding nine by fourteen inches in size—at a rate of about one copy every six seconds; the 813, a much smaller device, which can stand on top of a desk and is essentially a miniaturized version of the 914 (or, as Xerox technicians like to say, “a 914 with the air left out”); the 2400, a high-speed reproduction machine that looks like a modern kitchen stove and can cook up copies at a rate of forty a minute, or twenty-four hundred an hour; the Copyflo, which is capable of enlarging microfilmed pages into ordinary booksize pages and printing them; the LDX, by which documents can be transmitted over telephone wires, microwave radio, or coaxial cable; and the Telecopier, a non-xerographic device, designed and manufactured by Magnavox but sold by Xerox, which is a sort of junior version of the LDX and is especially interesting to a layman because it consists simply of a small box that, when attached to an ordinary telephone, permits the user to rapidly transmit a small picture (with a good deal of squeaking and clicking, to be sure) to anyone equipped with a telephone and a similar small box. Of all these, the 914, the first automatic xerographic product and the one that constituted the big breakthrough, was still much the most important both to Xerox and to its customers.
It has been suggested that the 914 is the most successful commercial product in history, but the statement cannot be authoritatively confirmed or denied, if only because Xerox does not publish precise revenue figures on its individual products; the company does say, though, that in 1965 the 914 accounted for about sixty-two per cent of its total operating revenues, which works out to something over $243,000,000. In 1966 it could be bought for $27,500, or it could be rented for twenty-five dollars monthly, plus at least forty-nine dollars’ worth of copies at four cents each. These charges were deliberately set up to make renting more attractive than buying, because Xerox ultimately makes more money that way. The 914, which is painted beige and weighs six hundred and fifty pounds, looks a good deal like a modern L-shaped metal desk; the thing to be copied—a flat page, two pages of an open book, or even a small three-dimensional object like a watch or a medal—is placed face down on a glass window in the flat top surface, a button is pushed, and nine seconds later the copy pops into a tray where an “out” basket might be if the 914 actually were a desk. Technologically, the 914 is so complex (more complex, some Xerox salesmen insist, than an automobile) that it has an annoying tendency to go wrong, and consequently Xerox maintains a field staff of thousands of repairmen who are presumably ready to answer a call on short notice. The most common malfunction is a jamming of the supply of copy paper, which is rather picturesquely called a “mispuff,” because each sheet of paper is raised into position to be inscribed by an interior puff of air, and the malfunction occurs when the puff goes wrong. A bad mispuff can occasionally put a piece of the paper in contact with hot parts, igniting it and causing an alarming cloud of white smoke to issue from the machine; in such a case the operator is urged to do nothing, or, at most, to use a small fire extinguisher that is attached to it, since the fire burns itself out comparatively harmlessly if left alone, whereas a bucket of water thrown over a 914 may convey potentially lethal voltages to its metal surface. Apart from malfunctions, the machine requires a good deal of regular attention from its operator, who is almost invariably a woman. (The girls who operated the earliest typewriters were themselves called “typewriters,” but fortunately nobody calls Xerox operators “xeroxes.”) Its supply of copying paper and black electrostatic powder, called “toner,” must be replenished regularly, while its most crucial part, the selenium drum, must be cleaned regularly with a special non-scratchy cotton, and waxed every so often. I spent a couple of afternoons with one 914 and its operator, and observed what seemed to be the closest relationship between a woman and a piece of office equipment that I had ever seen. A girl who uses a typewriter or switchboard has no interest in the equipment, because it holds no mystery, while one who operates a computer is bored with it, because it is utterly incomprehensible. But a 914 has distinct animal traits: it has to be fed and curried; it is intimidating but can be tamed; it is subject to unpredictable bursts of misbehavior; and, generally speaking, it responds in kind to its treatment. “I was frightened of it at first,” the operator I watched told me. “The Xerox men say, ‘If you’re frightened of it, it won’t work,’ and that’s pretty much right. It’s a good scout; I’m fond of it now.”
Xerox salesmen, I learned from talks with some of them, are forever trying to think of new uses for the company’s copiers, but they have found again and again that the public is well ahead of them. One rather odd use of xerography insures that brides get the wedding presents they want. The prospective bride submits her list of preferred presents to a department store; the store sends the list to its bridal- registry counter, which is equipped with a Xerox copier; each friend of the bride, having been tactfully briefed in advance, comes to this counter and is issued a copy of the list, whereupon he does his shopping and then returns the copy with the purchased items checked off, so that the master list may be revised and thus ready for the next donor. (“Hymen, iƶ Hymen, Hymen!”) Again, police departments in New Orleans and various other places, instead of laboriously typing up a receipt for the property removed from people who spend the night in the lockup, now place the property itself— wallet, watch, keys, and such—on the scanning glass of a 914, and in a few seconds have a sort of pictographic receipt. Hospitals use xerography to copy electrocardiograms and laboratory reports, and brokerage firms to get hot tips to customers more quickly. In fact, anybody with any sort of idea that might be advanced by copying can go to one of the many cigar or stationery stores that have a coin-operated copier and indulge himself. (It is interesting to note that Xerox took to producing coin- operated 914s in two configurations—one that works for a dime and one that works for a quarter; the buyer or leaser of the machine could decide which he wanted to charge.) Copying has its abuses, too, and they are clearly serious. The most obvious one is overcopying. A tendency formerly identified with bureaucrats has been spreading—the urge to make two or more copies when one would do, and to make one when none would do; the phrase “in triplicate,” once used to denote bureaucratic waste, has become a gross understatement. The button waiting to be pushed, the whir of action, the neat reproduction dropping into the tray—all this adds up to a heady experience, and the neophyte operator of a copier feels an impulse to copy all the papers in his pockets. And once one has used a copier, one tends to be hooked. Perhaps the chief danger of this addiction is not so much the cluttering up of files and loss of important material through submersion as it is the insidious growth of a negative attitude toward originals—a feeling that nothing can be of importance unless it is copied, or is a copy itself.
A more immediate problem of xerography is the overwhelming temptation it offers to violate the copyright laws. Almost all large public and college libraries—and many high-school libraries as well—are now equipped with copying machines, and teachers and students in need of a few copies of a group of poems from a published book, a certain short story from an anthology, or a certain article from a scholarly journal have developed the habit of simply plucking it from the library’s shelves, taking it to the library’s reproduction department, and having the required number of Xerox copies made. The effect, of course, is to deprive the author and the publisher of income. There are no legal records of such infringements of copyright, since publishers and authors almost never sue educators, if only because they don’t know that the infringements have occurred; furthermore, the educators themselves often have no idea that they have done anything illegal. The likelihood that many copyrights have already been infringed unknowingly through xerography became indirectly apparent a few years ago when a committee of educators sent a circular to teachers from coast to coast informing them explicitly what rights to reproduce copyrighted material they did and did not have, and the almost instant sequel was a marked rise in the number of requests from educators to publishers for permissions. And there was more concrete evidence of the way things were going; for example, in 1965 a staff member of the library school of the University of New Mexico publicly advocated that libraries spend ninety per cent of their budgets on staff, telephones, copying, telefacsimiles, and the like, and only ten per cent—a sort of tithe—on books and journals.
To a certain extent, libraries attempt to police copying on their own. The photographic service of the New York Public Library’s main branch, which fills some fifteen hundred requests a week for copies of library matter, informs patrons that “copyrighted material will not be reproduced beyond ‘fair use’”—that is, the amount and kind of reproduction, generally confined to brief excerpts, that have been established by legal precedent as not constituting infringement. The library goes on, “The applicant assumes all responsibility for any question that may arise in the making of the copy and in the use made thereof.” In the first part of its statement the library seems to assume the responsibility and in the second part to renounce it, and this ambivalence may reflect an uneasiness widely felt among users of library copiers. Outside library walls, there often does not seem to be even this degree of scruple. Business people who are otherwise meticulous in their observance of the law seem to regard copyright infringement about as seriously as they regard jaywalking. A writer I’ve heard about was invited to a seminar of high-level and high-minded industrial leaders and was startled to find that a chapter from his most recent book had been copied and distributed to the participants, to serve as a basis for discussion. When the writer protested, the businessmen were taken aback, and even injured; they had thought the writer would be pleased by their attention to his work, but the flattery, after all, was of the sort shown by a thief who commends a lady’s jewelry by making off with it.In the opinion of some commentators, what has happened so far is only the first phase of a kind of revolution in graphics. “Xerography is bringing a reign of terror into the world of publishing, because it means that every reader can become both author and publisher,” the Canadian sage Marshall McLuhan wrote in the spring, 1966, issue of the American Scholar. “Authorship and readership alike can become production-oriented under xerography.… Xerography is electricity invading the world of typography, and it means a total revolution in this old sphere.” Even allowing for McLuhan’s erratic ebullience (“I change my opinions daily,” he once confessed), he seems to have got his teeth into something here. Various magazine articles have predicted nothing less than the disappearance of the book as it now exists, and pictured the library of the future as a sort of monster computer capable of storing and retrieving the contents of books electronically and xerographically. The “books” in such a library would be tiny chips of computer film—“editions of one.” Everyone agrees that such a library is still some time away. (But not so far away as to preclude a wary reaction from forehanded publishers. Beginning late in 1966, the long-familiar “all rights reserved” rigmarole on the copyright page of all books published by Harcourt, Brace & World was altered to read, a bit spookily, “All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system …” Other publishers quickly followed the example.) One of the nearest approaches to it in the late sixties was the Xerox subsidiary University Microfilms, which could, and did, enlarge its microfilms of out-of-print books and print them as attractive and highly legible paperback volumes, at a cost to the customer of four cents a page; in cases where the book was covered by copyright, the firm paid a royalty to the author on each copy produced. But the time when almost anyone can make his own copy of a published book at lower than the market price is not some years away; it is now. All that the amateur publisher needs is access to a Xerox machine and a small offset printing press. One of the lesser but still important attributes of xerography is its ability to make master copies for use on offset presses, and make them much more cheaply and quickly than was previously possible. According to Irwin Karp, counsel to the Authors League of America, an edition of fifty copies of any printed book could in 1967 be handsomely “published” (minus the binding) by this combination of technologies in a matter of minutes at a cost of about eight-tenths of a cent per page, and less than that if the edition was larger. A teacher wishing to distribute to a class of fifty students the contents of a sixty-four-page book of poetry selling for three dollars and seventy-five cents could do so, if he were disposed to ignore the copyright laws, at a cost of slightly over fifty cents per copy.
The danger in the new technology, authors and publishers have contended, is that in doing away with the book it may do away with them, and thus with writing itself. Herbert S. Bailey, Jr., director of Princeton University Press, wrote in the Saturday Review of a scholar friend of his who has cancelled all his subscriptions to scholarly journals; instead, he now scans their tables of contents at his public library and makes copies of the articles that interest him. Bailey commented, “If all scholars followed [this] practice, there would be no scholarly journals.” Beginning in the middle sixties, Congress has been considering a revision of the copyright laws—the first since 1909. At the hearings, a committee representing the National Education Association and a clutch of other education groups argued firmly and persuasively that if education is to keep up with our national growth, the present copyright law and the fair-use doctrine should be liberalized for scholastic purposes. The authors and publishers, not surprisingly, opposed such liberalization, insisting that any extension of existing rights would tend to deprive them of their livelihoods to some degree now, and to a far greater degree in the uncharted xerographic future. A bill that was approved in 1967 by the House Judiciary Committee seemed to represent a victory for them, since it explicitly set forth the fair-use doctrine and contained no educational-copying exemption. But the final outcome of the struggle was still uncertain late in 1968. McLuhan, for one, was convinced that all efforts to preserve the old forms of author protection represent backward thinking and are doomed to failure (or, anyway, he was convinced the day he wrote his American Scholar article). “There is no possible protection from technology except by technology,” he wrote. “When you create a new environment with one phase of technology, you have to create an anti-environment with the next.” But authors are seldom good at technology, and probably do not flourish in anti-environments.
In dealing with this Pandora’s box that Xerox products have opened, the company seems to have measured up tolerably well to its lofty ideals as set forth by Wilson. Although it has a commercial interest in encouraging—or, at least, not discouraging—more and more copying of just about anything that can be read, it makes more than a token effort to inform the users of its machines of their legal responsibilities; for example, each new machine that is shipped out is accompanied by a cardboard poster giving a long list of things that may not be copied, among them paper money, government bonds, postage stamps, passports, and “copyrighted material of any manner or kind without permission of the copyright owner.” (How many of these posters end up in wastebaskets is another matter.) Moreover, caught in the middle between the contending factions in the fight over revision of copyright law, it resisted the temptation to stand piously aside while raking in the profits, and showed an exemplary sense of social responsibility—at least from the point of view of the authors and publishers. The copying industry in general, by contrast, tended either to remain neutral or to lean to the educators’ side. At a 1963 symposium on copyright revision, an industry spokesman went as far as to argue that machine copying by a scholar is merely a convenient extension of hand copying, which has traditionally been accepted as legitimate. But not Xerox. Instead, in September, 1965,
Wilson wrote to the House Judiciary Committee flatly opposing any kind of special copying exemption in any new law. Of course, in evaluating this seemingly quixotic stand one ought to remember that Xerox is a publishing firm as well as a copying-machine firm; indeed, what with American Education Publications and University Microfilms, it is one of the largest publishing firms in the country. Conventional publishers, I gathered from my researches, sometimes find it a bit bewildering to be confronted by this futuristic giant not merely as an alien threat to their familiar world but as an energetic colleague and competitor within it.
HAVING had a look at some Xerox products and devoted some thought to the social implications of their use, I went to Rochester to scrape up a first-hand acquaintance with the company and to get an idea how its people were reacting to their problems, material and moral. At the time I went, the material problems certainly seemed to be to the fore, since the week of the forty-two-and-a-half-point stock drop was not long past. On the plane en route, I had before me a copy of Xerox’s most recent proxy statement, which listed the number of Xerox shares held by each director as of February, 1966, and I amused myself by calculating some of the directors’ paper losses in that one bad October week, assuming that they had held on to their stock. Chairman Wilson, for example, had held 154,026 common shares in February, so his loss would have been $6,546,105. Linowitz’s holding was 35,166 shares, for a loss of $1,494,555. Dr. John H. Dessauer, executive vice-president in charge of research, had held 73,845 shares and was therefore presumably out $3,138,412.50. Such sums could hardly be considered trivial even by Xerox executives. Would I, then, find their premises pervaded by gloom, or at least by signs of shock? The Xerox executive offices were on the upper floors of Rochester’s Midtown Tower, the ground level of which is occupied by Midtown Plaza, an indoor shopping mall. (Later that year, the company moved its headquarters across the street to Xerox Square, a complex that includes a thirty-story office building, an auditorium for civic as well as company use, and a sunken ice rink.) Before going up to the Xerox offices, I took a turn or two around the mall, and found it to be equipped with all kinds of shops, a cafĆ©, kiosks, pools, trees, and benches that—in spite of an oppressively bland and affluent atmosphere, created mainly, I suspect, by bland piped-in music—were occupied in part by bums, just like the benches in outdoor malls. The trees had a tendency to languish for lack of light and air, but the bums looked O.K. Having ascended by elevator, I met a Xerox public-relations man with whom I had an appointment, and immediately asked him how the company had reacted to the stock drop. “Oh, nobody takes it too seriously,” he replied. “You hear a lot of lighthearted talk about it at the golf clubs. One fellow will say to another, ‘You buy the drinks—I dropped another eighty thousand dollars on Xerox yesterday.’ Joe Wilson did find it a bit traumatic that day they had to suspend trading on the Stock Exchange, but otherwise he took it in stride. In fact, at a party the other day when the stock was way down and a lot of people were clustering around him asking him what it all meant,
I heard him say, ‘Well, you know, it’s very rarely that opportunity knocks twice.’ As for the office, you scarcely hear the subject mentioned at all.” As a matter of fact, I scarcely did hear it mentioned again while I was at Xerox, and this sang-froid turned out to be justified, because within a little more than a month the stock had made up its entire loss, and within a few more months it had moved up to an all-time high.
I spent the rest of that morning calling on three scientific and technical Xerox men and listening to nostalgic tales of the early years of xerographic development. The first of these men was Dr.
Dessauer, the previous week’s three-million-dollar loser, whom I nevertheless found looking tranquil —as I guess I should have expected, in view of the fact that his Xerox stock was still presumably worth more than nine and a half million dollars. (A few months later it was presumably worth not quite twenty million.) Dr. Dessauer, a German-born veteran of the company who had been in charge of its research and engineering ever since 1938 and was then also vice-chairman of its board, was the man who first brought Carlson’s invention to the attention of Joseph Wilson, after he had read an article about it in a technical journal in 1945. Stuck up on his office wall, I noticed, was a greeting card from members of his office staff in which he was hailed as the “Wizard,” and I found him to be a smiling, youthful-looking man with just enough of an accent to pass muster for wizardry.
“You want to hear about the old days, eh?” Dr. Dessauer said. “Well, it was exciting. It was wonderful. It was also terrible. Sometimes I was going out of my mind, more or less literally. Money was the main problem. The company was fortunate in being modestly in the black, but not far enough.
The members of our team were all gambling on the project. I even mortgaged my house—all I had left was my life insurance. My neck was way out. My feeling was that if it didn’t work Wilson and I would be business failures but as far as I was concerned I’d also be a technical failure. Nobody would ever give me a job again. I’d have to give up science and sell insurance or something.” Dr.
Dessauer threw a retrospectively distracted glance at the ceiling and went on, “Hardly anybody was very optimistic in the early years. Various members of our own group would come in and tell me that the damn thing would never work. The biggest risk was that electrostatics would prove to be not feasible in high humidity. Almost all the experts assumed that—they’d say, ‘You’ll never make copies in New Orleans.’ And even if it did work, the marketing people thought we were dealing with a potential market of no more than a few thousand machines. Some advisers told us that we were absolutely crazy to go ahead with the project. Well, as you know, everything worked out all right— the 914 worked, even in New Orleans, and there was a big market for it. Then came the desk-top version, the 813. I stuck my neck way out again on that, holding out for a design that some experts considered too fragile.”
I asked Dr. Dessauer whether his neck was now out on anything in the way of new research, and, if so, whether it is as exciting as xerography was. He replied, “Yes to both questions, but beyond that the subject is privileged knowledge.”
Dr. Harold E. Clark, the next man I saw, had been in direct charge of the xerography-development program under Dr. Dessauer’s supervision, and he gave me more details on how the Carlson invention had been coaxed and nursed into a commercial product. “Chet Carlson was morphological,” began Dr. Clark, a short man with a professorial manner who was, in fact, a professor of physics before he came to Haloid in 1949. I probably looked blank, because Dr. Clark gave a little laugh and went on, “I don’t really know whether ‘morphological’ means anything. I think it means putting one thing together with another thing to get a new thing. Anyway, that’s what Chet was. Xerography had practically no foundation in previous scientific work. Chet put together a rather odd lot of phenomena, each of which was obscure in itself and none of which had previously been related in anyone’s thinking. The result was the biggest thing in imaging since the coming of photography itself. Furthermore, he did it entirely without the help of a favorable scientific climate.
As you know, there are dozens of instances of simultaneous discovery down through scientific history, but no one came anywhere near being simultaneous with Chet. I’m as amazed by his discovery now as I was when I first heard of it. As an invention, it was magnificent. The only trouble was that as a product it wasn’t any good.”
Dr. Clark gave another little laugh and went on to explain that the turning point was reached at the Battelle Memorial Institute, and in a manner fully consonant with the tradition of scientific advances’ occurring more or less by mistake. The main trouble was that Carlson’s photoconductive surface, which was coated with sulphur, lost its qualities after it had made a few copies and became useless.
Acting on a hunch unsupported by scientific theory, the Battelle researchers tried adding to the sulphur a small quantity of selenium, a non-metallic element previously used chiefly in electrical resistors and as a coloring material to redden glass. The selenium-and-sulphur surface worked a little better than the all-sulphur one, so the Battelle men tried adding a little more selenium. More improvement. They gradually kept increasing the percentage until they had a surface consisting entirely of selenium—no sulphur. That one worked best of all, and thus it was found, backhandedly, that selenium and selenium alone could make xerography practical.
“Think of it,” Dr. Clark said, looking thoughtful himself. “A simple thing like selenium—one of the earth’s elements, of which there are hardly more than a hundred altogether, and a common one at that.
It turned out to be the key. Once its effectiveness was discovered, we were around the corner, although we didn’t know it at the time. We still hold patents covering the use of selenium in xerography—almost a patent on one of the elements. Not bad, eh? Nor do we understand exactly how selenium works, even now. We’re mystified, for example, by the fact that it has no memory effects— no traces of previous copies are left on the selenium-coated drum—and that it seems to be theoretically capable of lasting indefinitely. In the lab, a selenium-coated drum will last through a million processes, and we don’t understand why it wears out even then. So, you see, the development of xerography was largely empirical. We were trained scientists, not Yankee tinkers, but we struck a balance between Yankee tinkering and scientific inquiry.”
Next, I talked with Horace W. Becker, the Xerox engineer who was principally responsible for bringing the 914 from the working-model stage to the production line. A Brooklynite with a talent, appropriate to his assignment, for eloquent anguish, he told me of the hair-raising obstacles and hazards that surrounded this progress. When he joined Haloid Xerox in 1958, his laboratory was a loft above a Rochester garden-seed–packaging establishment; something was wrong with the roof, and on hot days drops of molten tar would ooze through it and spatter the engineers and the machines.
The 914 finally came of age in another lab, on Orchard Street, early in 1960. “It was a beat-up old loft building, too, with a creaky elevator and a view of a railroad siding where cars full of pigs kept going by,” Becker told me, “but we had the space we needed, and it didn’t drip tar. It was at Orchard Street that we finally caught fire. Don’t ask me how it happened. We decided it was time to set up an assembly line, and we did. Everybody was keyed up. The union people temporarily forgot their grievances, and the bosses forgot their performance ratings. You couldn’t tell an engineer from an assembler in that place. No one could stay away—you’d sneak in on a Sunday, when the assembly line was shut down, and there would be somebody adjusting something or just puttering around and admiring our work. In other words, the 914 was on its way at last.”
But once the machine was on its way out of the shop and on to showrooms and customers, Becker related, his troubles had only begun, because he was now held responsible for malfunctions and design deficiencies, and when it came to having a spectacular collapse just at the moment when the public spotlight was full on it, the 914 turned out to be a veritable Edsel. Intricate relays declined to work, springs broke, power supplies failed, inexperienced users dropped staples and paper clips into it and fouled the works (necessitating the installation in every machine of a staple-catcher), and the expected difficulties in humid climates developed, along with unanticipated ones at high altitudes.
“All in all,” Becker said, “at that time the machines had a bad habit, when you pressed the button, of doing nothing.” Or if the machines did do something, it was something wrong. At the 914’s first big showing in London, for instance, Wilson himself was on hand to put a ceremonial forefinger to its button; he did so, and not only was no copy made but a giant generator serving the line was blown out. Thus was xerography introduced in Great Britain, and, considering the nature of its dĆ©but, the fact that Britain later become far and away the biggest overseas user of the 914 appears to be a tribute to both Xerox resilience and British patience.
That afternoon, a Xerox guide drove me out to Webster, a farm town near the edge of Lake Ontario, a few miles from Rochester, to see the incongruous successor to Becker’s leaky and drafty lofts—a huge complex of modern industrial buildings, including one of roughly a million square feet where all Xerox copiers are assembled (except those made by the company’s affiliates in Britain and Japan), and another, somewhat smaller but more svelte, where research and development are carried out. As we walked down one of the humming production lines in the manufacturing building, my guide explained that the line operates sixteen hours a day on two shifts, that it and the other lines have been lagging behind demand continuously for several years, that there are now almost two thousand employees working in the building, and that their union is a local of the Amalgamated Clothing Workers of America, this anomaly being due chiefly to the fact that Rochester used to be a center of the clothing business and the Clothing Workers has long been the strongest union in the area.
After my guide had delivered me back to Rochester, I set out on my own to collect some opinions on the community’s attitude toward Xerox and its success. I found them to be ambivalent. “Xerox has been a good thing for Rochester,” said a local businessman. “Eastman Kodak, of course, was the city’s Great White Father for years, and it is still far and away the biggest local business, although Xerox is now second and coming up fast. Facing that kind of challenge doesn’t do Kodak any harm— in fact, it does it a lot of good. Besides, a successful new local company means new money and new jobs. On the other hand, some people around here resent Xerox. Most of the local industries go back to the nineteenth century, and their people aren’t always noted for receptiveness to newcomers. When Xerox was going through its meteoric rise, some thought the bubble would burst—no, they hoped it would burst. On top of that, there’s been a certain amount of feeling against the way Joe Wilson and Sol Linowitz are always talking about human values while making money hand over fist. But, you know—the price of success.”
I went out to the University of Rochester, high on the banks of the Genesee River, and had a talk with its president, W. Allen Wallis. A tall man with red hair, trained as a statistician, Wallis served on the boards of several Rochester companies, including Eastman Kodak, which had always been the university’s Santa Claus and remained its biggest annual benefactor. As for Xerox, the university had several sound reasons for feeling kindly toward it. In the first place, the university was a prize example of a Xerox multimillionaire, since its clear capital gain on the investment amounted to around a hundred million dollars and it had taken out more than ten million in profits. In the second place, Xerox annually comes through with annual cash gifts second only to Kodak’s, and had recently pledged nearly six million dollars to the university’s capital-funds drive. In the third place, Wilson, a University of Rochester graduate himself, had been on the university’s board of trustees since 1949 and its chairman since 1959. “Before I came here, in 1962, I’d never even heard of corporations’ giving universities such sums as Kodak and Xerox give us now,” President Wallis said. “And all they want in return is for us to provide top-quality education—not do their research for them, or anything like that. Oh, there’s a good deal of informal technical consulting between our scientific people and the Xerox people—same thing with Kodak, Bausch & Lomb, and others—but that’s not why they’re supporting the university. They want to make Rochester a place that will be attractive to the people they want here. The university has never invented anything for Xerox, and I guess it never will.”
The next morning, in the Xerox executive offices, I met the three nontechnical Xerox men of the highest magnitude, ending with Wilson himself. The first of these was Linowitz, the lawyer whom Wilson took on “temporarily” in 1946 and kept on permanently as his least dispensable aide. (Since Xerox became famous, the general public tended to think of Linowitz as more than that—as, in fact, the company’s chief executive. Xerox officials were aware of this popular misconception, and were mystified by it, since Wilson, whether he was called president, as he was until May of 1966, or chairman of the board, as he was after that, had been the boss right along.) I caught Linowitz almost literally on the run, since he had just been appointed United States Ambassador to the Organization of American States and was about to leave Rochester and Xerox for Washington and his new duties. A vigorous man in his fifties, he fairly exuded drive, intensity, and sincerity. After apologizing for the fact that he had only a few minutes to spend with me, he said, rapidly, that in his opinion the success of Xerox was proof that the old ideals of free enterprise still held true, and that the qualities that had made for the company’s success were idealism, tenacity, the courage to take risks, and enthusiasm.
With that, he waved goodbye and was off. I was left feeling a little like a whistle-stop voter who has just been briefly addressed by a candidate from the rear platform of a campaign train, but, like many such voters, I was impressed. Linowitz had used those banal words not merely as if he meant them but as if he had invented them, and I had the feeling that Wilson and Xerox were going to miss him.
I found C. Peter McColough, who had been president of the company since Wilson had moved up to chairman, and who was apparently destined eventually to succeed him as boss (as he did in 1968), pacing his office like a caged animal, pausing from time to time at a standup desk, where he would scribble something or bark a few words into a dictating machine. A liberal Democratic lawyer, like Linowitz, but a Canadian by birth, he is a cheerful extrovert who, being in his early forties, was spoken of as representing a new Xerox generation, charged with determining the course that the company would take next. “I face the problems of growth,” he told me after he had abandoned his pacing for a restless perch on the edge of a chair. Future growth on a large scale simply isn’t possible in xerography, he went on—there isn’t room enough left—and the direction that Xerox is taking is toward educational techniques. He mentioned computers and teaching machines, and when he said he could “dream of a system whereby you’d write stuff in Connecticut and within hours reprint it in classrooms all over the country,” I got the feeling that some of Xerox’s educational dreams could easily become nightmares. But then he added, “The danger in ingenious hardware is that it distracts attention from education. What good is a wonderful machine if you don’t know what to put on it?”
McColough said that since he came to Haloid, in 1954, he felt he’d been part of three entirely different companies—until 1959 a small one engaged in a dangerous and exciting gamble; from 1959 to 1964 a growing one enjoying the fruits of victory; and now a huge one branching out in new directions. I asked him which one he liked best, and he thought a long time. “I don’t know,” he said finally. “I used to feel greater freedom, and I used to feel that everyone in the company shared attitudes on specific matters like labor relations. I don’t feel that way so much now. The pressures are greater, and the company is more impersonal. I wouldn’t say that life has become easier, or that it is likely to get easier in the future.”
Of all the surprising things about Joseph C. Wilson, not the least, I thought when I was ushered into his presence, was the fact that his office walls were decorated with old-fashioned flowered wallpaper. A sentimental streak in the man at the head of Xerox seemed the most unlikely of anomalies. But he had a homey, unthreatening bearing to go with the wallpaper; a smallish man in his late fifties, he looked serious—almost grave—during most of my visit, and spoke in a slow, rather hesitant way. I asked him how he had happened to go into his family’s business, and he replied that as a matter of fact he nearly hadn’t. English literature had been his second major at the university, and he had considered either taking up teaching or going into the financial and administrative end of university work. But after graduating he had gone on to the Harvard Business School, where he had been a top student, and somehow or other … In any case, he had joined Haloid the year he left Harvard, and there, he told me with a sudden smile, he was.
The subjects that Wilson seemed to be most keen on discussing were Xerox’s non-profit activities and his theories of corporate responsibility. “There are certain feelings of resentment toward us on this,” he said. “I don’t mean just from stockholders complaining that we’re giving their money away —that point of view is losing ground. I mean in the community. You don’t actually hear it, but you sometimes get a kind of intuitive feeling that people are saying, ‘Who do these young upstarts think they are, anyhow?’”
I asked whether the letter-writing campaign against the U.N. television series had caused any misgivings or downright faintheartedness within the company, and he said, “As an organization, we never wavered. Almost without exception, the people here felt that the attacks only served to call attention to the very point we were trying to make—that world coƶperation is our business, because without it there might be no world and therefore no business. We believe we followed sound business policy in going ahead with the series. At the same time, I won’t maintain that it was only sound business policy. I doubt whether we would have done it if, let’s say, we had all been Birchers ourselves.”
Wilson went on slowly, “The whole matter of committing the company to taking stands on major public issues raises questions that make us examine ourselves all the time. It’s a matter of balance.
You can’t just be bland, or you throw away your influence. But you can’t take a stand on every major issue, either. We don’t think it’s a corporation’s job to take stands on national elections, for example —fortunately, perhaps, since Sol Linowitz is a Democrat and I’m a Republican. Issues like university education, civil rights, and Negro employment clearly are our business. I’d hope that we would have the courage to stand up for a point of view that was unpopular if we thought it was appropriate to do so. So far, we haven’t faced that situation—we haven’t found a conflict between what we consider our civic responsibility and good business. But the time may come. We may have to stand on the firing line yet. For example, we’ve tried, without much fanfare, to equip some Negro youths to take jobs beyond sweeping the floor and so on. The program required complete coƶperation from our union, and we got it. But I’ve learned that, in subtle ways, the honeymoon is over. There’s an undercurrent of opposition. Here’s something started, then, that if it grows could confront us with a real business problem. If it becomes a few hundred objectors instead of a few dozen, things might even come to a strike, and in such a case I hope we and the union leadership would stand up and fight.
But I don’t really know. You can’t honestly predict what you’d do in a case like that. I think I know what we’d do.”
Getting up and walking to a window, Wilson said that, as he saw it, one of the company’s major efforts now, and even more in the future, must be to keep the personal and human quality for which it has come to be known. “Already we see signs of losing it,” he said. “We’re trying to indoctrinate new people, but twenty thousand employees around the Western Hemisphere isn’t like a thousand in Rochester.”
I joined Wilson at the window, preparatory to leaving. It was a dank, dark morning, such as I’m told the city is famous for much of the year, and I asked him whether, on a gloomy day like this, he was ever assailed by doubts that the old quality could be preserved. He nodded briefly and said, “It’s an everlasting battle, which we may or may not win.”

Reference: Chapter 5 from the book by John Brooks "Business Adventures. Twelve Classic Tales from the World of Wall Street-Open Road Media (2014)"
Tags:Book Summary,Management,

Friday, November 4, 2022

Layoffs and Reduction of Infrastructure Cost at Musk's Twitter (Nov 2022)

Musk Orders Twitter To Reduce Infrastructure Costs By $1 Billion: Sources

Elon Musk has directed Twitter Inc’s teams to find up to $1 billion in annual infrastructure cost savings, according to two sources familiar with the matter and an internal Slack message reviewed by Reuters, raising concerns that Twitter could go down during high-traffic events like the U.S. midterm elections. The company is aiming to find between $1.5 million and $3 million a day in savings from servers and cloud services, said the Slack message, which referred to the project as “Deep Cuts Plan." Twitter is currently losing about $3 million a day “with all spending and revenue considered," according to an internal document reviewed by Reuters. Twitter did not immediately respond to a request for comment.

'If On Way To Office, Return Home': Twitter To All Employees As Layoffs Begin

Elon Musk-owned Twitter is going ahead with a massive firing plan globally. Twitter has literally shut its offices and suspended the badges of all employees until a decision is made as to whether an employee is fired or retained. The scale is so massive that employees who are not fired will get “a notification via their Twitter email”. And those who are fired will get an email on their personal email ID. The decision will be made by Friday and all employees will get an email by “9AM PST on Friday Nov. 4th.” Elon Musk is said to be working with close colleagues at Tesla and SpaceX to structure the layoff plans. 3,738 Twitter employees could be laid off. Employees at Twitter were notified in an email seen by The New York Times that layoffs would start on Friday and instructed not to come into work on that day. The overall number of layoffs the corporation was contemplating was not mentioned in the email. Here’s the full letter that was to sent to Twitter employees: Team, In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday. We recognize that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward. Given the nature of our distributed workforce and our desire to inform impacted individuals as quickly as possible, communications for this process will take place via email. By 9AM PST on Friday Nov. 4th, everyone will receive an individual email with the subject line: Your Role at Twitter. Please check your email, including your spam folder. If your employment is not impacted, you will receive a notification via your Twitter email. • If your employment is impacted, you will receive a notification with next steps via your personal email. • If you do not receive an email from twitter-hr@ by 5PM PST on Friday Nov. 4th, please email peoplequestions@twitter.com. To help ensure the safety of each employee as well as Twitter systems and customer data, our offices will be temporarily closed and all badge access will be suspended. If you are in an office or on your way to an office, please return home. We acknowledge this is an incredibly challenging experience to go through, whether or not you are impacted. Thank you for continuing to adhere to Twitter policies that prohibit you from discussing confidential company information on social media, with the press or elsewhere. We are grateful for your contributions to Twitter and for your patience as we move through this process. Thank you. Twitter
Tags: Investment,Management,

Monday, June 27, 2022

The Fate of the Edsel (A Cautionary Tale in Business)

 

RISE AND FLOWERING

IN the calendar of American economic life, 1955 was the Year of the Automobile. That year, American automobile makers sold over seven million passenger cars, or over a million more than they had sold in any previous year. That year, General Motors easily sold the public $325 million worth of new common stock, and the stock market as a whole, led by the motors, gyrated upward so frantically that Congress investigated it. And that year, too, the Ford Motor Company decided to produce a new automobile in what was quaintly called the medium-price range--roughly, from $2,400 to $4,000--and went ahead and designed it more or less in conformity with the fashion of the day, which was for cars that were long, wide, low, lavishly decorated with chrome, liberally supplied with gadgets, and equipped with engines of a power just barely insufficient to send them into orbit. Two years later, in September, 1957, the Ford Company put its new car, the Edsel, on the market, to the accompaniment of more fanfare than had attended the arrival of any other new car since the same company's Model A, brought out thirty years earlier. The total amount spent on the Edsel before the first specimen went on sale was announced as a quarter of a billion dollars; its launching --as Business Week declared and nobody cared to deny--was more costly than that of any other consumer product in history. As a starter toward getting its investment back, Ford counted on selling at least 200,000 Edsels the first year. There may be an aborigine somewhere in a remote rain forest who hasn't yet heard that things failed to turn out that way. To be precise, two years two months and fifteen days later Ford had sold only 109,466 Edsels, and, beyond a doubt, many hundreds, if not several thousands, of those were bought by Ford executives, dealers, salesmen, advertising men, assembly-line workers, and others who had a personal interest in seeing the car succeed. The 109,466 amounted to considerably less than one per cent of the passenger cars sold in the United States during that period, and on November 19, 1959, having lost, according to some outside estimates, around $350 million on the Edsel, the Ford Company permanently discontinued its production. How could this have happened? How could a company so mightily endowed with money, experience, and, presumably, brains have been guilty of such a monumental mistake? Even before the Edsel was dropped, some of the more articulate members of the car-minded public had come forward with an answer--an answer so simple and so seemingly reasonable that, though it was not the only one advanced, it became widely accepted as the truth. The Edsel, these people argued, was designed, named, advertised, and promoted with a slavish adherence to the results of public-opinion polls and of their younger cousin, motivational research, and they concluded that when the public is wooed in an excessively calculated manner, it tends to turn away in favor of some gruffer but more spontaneously attentive suitor. Several years ago, in the face of an understandable reticence on the part of the Ford Motor Company, which enjoys documenting its boners no more than anyone else, I set out to learn what I could about the Edsel debacle, and my investigations have led me to believe that what we have here is less than the whole truth. For, although the Edsel was supposed to be advertised, and otherwise promoted, strictly on the basis of preferences expressed in polls, some old-fashioned snake-oil-selling methods, intuitive rather than scientific, crept in. Although it was supposed to have been named in much the same way, science was curtly discarded at the last minute and the Edsel was named for the father of the company's president, like a nineteenth-century brand of cough drops or saddle soap. As for the design, it was arrived at without even a pretense of consulting the polls, and by the method that has been standard for years in the designing of automobiles--that of simply pooling the hunches of sundry company committees. The common explanation of the Edsel's downfall, then, under scrutiny, turns out to be largely a myth, in the colloquial sense of that term. But the facts of the case may live to become a myth of a symbolic sort--a modern American antisuccess story. THE origins of the Edsel go back to the fall of 1948, seven years before the year of decision, when Henry Ford II, who had been president and undisputed boss of the company since the death of his grandfather, the original Henry, a year earlier, proposed to the company's executive committee, which included Ernest R. Breech, the executive vice-president, that studies be undertaken concerning the wisdom of putting on the market a new and wholly different medium-priced car. The studies were undertaken. There appeared to be good reason for them. It was a well-known practice at the time for low-income owners of Fords, Plymouths, and Chevrolets to turn in their symbols of inferior caste as soon as their earnings rose above five thousand dollars a year, and "trade up" to a medium-priced car. From Ford's point of view, this would have been all well and good except that, for some reason, Ford owners usually traded up not to Mercury, the company's only medium-priced car, but to one or another of the medium-priced cars put out by its big rivals--Oldsmobile, Buick, and Pontiac, among the General Motors products, and, to a lesser extent, Dodge and De Soto, the Chrysler candidates. Lewis D. Crusoe, then a vice-president of the Ford Motor Company, was not overstating the case when he said, "We have been growing customers for General Motors." The outbreak of the Korean War, in 1950, meant that Ford had no choice but to go on growing customers for its competitors, since introducing a new car at such a time was out of the question. The company's executive committee put aside the studies proposed by President Ford, and there matters rested for two years. Late in 1952, however, the end of the war appeared sufficiently imminent for the company to pick up where it had left off, and the studies were energetically resumed by a group called the Forward Product Planning Committee, which turned over much of the detailed work to the Lincoln-Mercury Division, under the direction of Richard Krafve (pronounced Kraffy), the division's assistant general manager. Krafve, a forceful, rather saturnine man with a habitually puzzled look, was then in his middle forties. The son of a printer on a small farm journal in Minnesota, he had been a sales engineer and management consultant before joining Ford, in 1947, and although he could not have known it in 1952, he was to have reason to look puzzled. As the man directly responsible for the Edsel and its fortunes, enjoying its brief glory and attending it in its mortal agonies, he had a rendezvous with destiny. IN December, 1954, after two years' work, the Forward Product Planning Committee submitted to the executive committee a six-volume blockbuster of a report summarizing its findings. Supported by copious statistics, the report predicted the arrival of the American millennium, or something a lot like it, in 1965. By that time, the Forward Product Planning Committee estimated, the gross national product would be $535 billion a year--up more than $135 billion in a decade. (As a matter of fact, this part of the millennium arrived much sooner than the Forward Planners estimated. The G. N. P. passed $535 billion in 1962, and for 1965 was $681 billion.) The number of cars in operation would be seventy million--up twenty million. More than half the families in the nation would have incomes of over five thousand dollars a year, and more than 40 percent of all the cars sold would be in the medium-price range or better. The report's picture of America in 1965, presented in crushing detail, was of a country after Detroit's own heart--its banks oozing money, its streets and highways choked with huge, dazzling medium-priced cars, its newly rich, "upwardly mobile" citizens racked with longings for more of them. The moral was clear. If by that time Ford had not come out with a second medium-priced car--not just a new model, but a new make--and made it a favorite in its field, the company would miss out on its share of the national boodle. On the other hand, the Ford bosses were well aware of the enormous risks connected with putting a new car on the market. They knew, for example, that of the 2,900 American makes that had been introduced since the beginning of the Automobile Age--the Black Crow (1905), the Averageman's Car (1906), the Bug-mobile (1907), the Dan Patch (1911), and the Lone Star (1920) among them-- only about twenty were still around. They knew all about the automotive casualties that had followed the Second World War--among them Crosley, which had given up altogether, and Kaiser Motors, which, though still alive in 1954, was breathing its last. (The members of the Forward Product Planning Committee must have glanced at each other uneasily when, a year later, Henry J. Kaiser wrote, in a valediction to his car business, "We expected to toss fifty million dollars into the automobile pond, but we didn't expect it to disappear without a ripple.") The Ford men also knew that neither of the other members of the industry's powerful and well-heeled Big Three--General Motors and Chrysler--had ventured to bring out a new standard-size make since the former's La Salle in 1927, and the latter's Plymouth, in 1928, and that Ford itself had not attempted to turn the trick since 1938, when it launched the Mercury. Nevertheless, the Ford men felt bullish--so remarkably bullish that they resolved to toss into the automobile pond five times the sum that Kaiser had. In April, 1955, Henry Ford II, Breech, and the other members of the executive committee officially approved the Forward Product Planning Committee's findings, and, to implement them, set up another agency, called the Special Products Division, with the star-crossed Krafve as its head. Thus the company gave its formal sanction to the efforts of its designers, who, having divined the trend of events, had already been doodling for several months on plans for a new car. Since neither they nor the newly organized Krafve outfit, when it took over, had an inkling of what the thing on their drawing boards might be called, it became known to everybody at Ford, and even in the company's press releases, as the E-Car--the "E," it was explained, standing for "Experimental." The man directly in charge of the E-Car's design--or, to use the gruesome trade word, "styling"-- was a Canadian, then not yet forty, named Roy A. Brown, who, before taking on the E-Car (and after studying industrial design at the Detroit Art Academy), had had a hand in the designing of radios, motor cruisers, colored-glass products, Cadillacs, Oldsmobiles, and Lincolns.* Brown recently recalled his aspirations as he went to work on the new project. "Our goal was to create a vehicle which would be unique in the sense that it would be readily recognizable in styling theme from the nineteen other makes of cars on the road at that time," he wrote from England, where at the time of his writing he was employed as chief stylist for the Ford Motor Company, Ltd., manufacturers of trucks, tractors, and small cars. "We went to the extent of making photographic studies from some distance of all nineteen of these cars, and it became obvious that at a distance of a few hundred feet the similarity was so great that it was practically impossible to distinguish one make from the others.... They were all 'peas in a pod.' We decided to select [a style that] would be 'new' in the sense that it was unique, and yet at the same time be familiar." While the E-Car was on the drawing boards in Ford's styling studio--situated, like its administrative offices, in the company's barony of Dearborn, just outside Detroit--work on it progressed under the conditions of melodramatic, if ineffectual, secrecy that invariably attend such operations in the automobile business: locks on the studio doors that could be changed in fifteen minutes if a key should fall into enemy hands; a security force standing round-the-clock guard over the establishment; and a telescope to be trained at intervals on nearby high points of the terrain where peekers might be roosting. (All such precautions, however inspired, are doomed to fail, because none of them provide a defense against Detroit's version of the Trojan horse--the job-jumping stylist, whose cheerful treachery makes it relatively easy for the rival companies to keep tabs on what the competition is up to. No one, of course, is better aware of this than the rivals themselves, but the cloak-and-dagger stuff is thought to pay for itself in publicity value.) Twice a week or so, Krafve-- head down, and sticking to low ground--made the journey to the styling studio, where he would confer with Brown, check up on the work as it proceeded, and offer advice and encouragement. Krafve was not the kind of man to envision his objective in a single revelatory flash; instead, he anatomized the styling of the E-Car into a series of laboriously minute decisions--how to shape the fenders, what pattern to use with the chrome, what kind of door handles to put on, and so on and on. If Michelangelo ever added the number of decisions that went into the execution of, say, his "David," he kept it to himself, but Krafve, an orderly-minded man in an era of orderly-functioning computers, later calculated that in styling the E-Car he and his associates had to make up their minds on no fewer than four thousand occasions. He reasoned at the time that if they arrived at the right yes-or-no choice on every one of those occasions, they ought, in the end, to come up with a stylistically perfect car--or at least a car that would be unique and at the same time familiar. But Krafve concedes today that he found it difficult thus to bend the creative process to the yoke of system, principally because many of the four thousand decisions he made wouldn't stay put. "Once you get a general theme, you begin narrowing down," he says. "You keep modifying, and then modifying your modifications. Finally, you have to settle on something, because there isn't any more time. If it weren't for the deadline you'd probably go on modifying indefinitely." Except for later, minor modifications of the modified modifications, the E-Car had been fully styled by midsummer of 1955. As the world was to learn two years later, its most striking aspect was a novel, horse-collar-shaped radiator grille, set vertically in the center of a conventionally low, wide front end--a blend of the unique and the familiar that was there for all to see, though certainly not for all to admire. In two prominent respects, however, Brown or Krafve, or both, lost sight entirely of the familiar, specifying a unique rear end, marked by widespread horizontal wings that were in bold contrast to the huge longitudinal tail fins then captivating the market, and a unique cluster of automatic-transmission push buttons on the hub of the steering wheel. In a speech to the public delivered a while before the public had its first look at the car, Krafve let fall a hint or two about its styling, which, he said, made it so "distinctive" that, externally, it was "immediately recognizable from front, side, and rear," and, internally, it was "the epitome of the push-button era without wildblue- yonder Buck Rogers concepts." At last came the day when the men in the highest stratum of the Ford Hierarchy were given their first glimpse of the car. It produced an effect that was little short of apocalyptic. On August 15, 1955, in the ceremonial secrecy of the styling center, while Krafve, Brown, and their aides stood by smiling nervously and washing their hands in air, the members of the Forward Product Planning Committee, including Henry Ford II and Breech, watched critically as a curtain was lifted to reveal the first full-size model of the E-Car--a clay one, with tinfoil simulating aluminum and chrome. According to eyewitnesses, the audience sat in utter silence for what seemed like a full minute, and then, as one man, burst into a round of applause. Nothing of the kind had ever happened at an intracompany first showing at Ford since 1896, when old Henry had bolted together his first horseless carriage. ONE of the most persuasive and most frequently cited explanations of the Edsel's failure is that it was a victim of the time lag between the decision to produce it and the act of putting it on the market. It was easy to see a few years later, when smaller and less powerful cars, euphemistically called "compacts," had become so popular as to turn the old automobile status-ladder upside down, that the Edsel was a giant step in the wrong direction, but it was far from easy to see that in fat, tail-finny 1955. American ingenuity--which has produced the electric light, the flying machine, the tin Lizzie, the atomic bomb, and even a tax system that permits a man, under certain circumstances, to clear a profit by making a charitable donation *--has not yet found a way of getting an automobile on the market within a reasonable time after it comes off the drawing board; the making of steel dies, the alerting of retail dealers, the preparation of advertising and promotion campaigns, the gaining of executive approval for each successive move, and the various other gavotte-like routines that are considered as vital as breathing in Detroit and its environs usually consume about two years. Guessing future tastes is hard enough for those charged with planning the customary annual changes in models of established makes; it is far harder to bring out an altogether new creation, like the E-Car, for which several intricate new steps must be worked into the dance pattern, such as endowing the product with a personality and selecting a suitable name for it, to say nothing of consulting various oracles in an effort to determine whether, by the time of the unveiling, the state of the national economy will make bringing out any new car seem like a good idea. Faithfully executing the prescribed routine, the Special Products Division called upon its director of planning for market research, David Wallace, to see what he could do about imparting a personality to the E-Car and giving it a name. Wallace, a lean, craggy-jawed pipe puffer with a soft, slow, thoughtful way of speaking, gave the impression of being the Platonic idea of the college professor--the very steel die from which the breed is cut--although, in point of fact, his background was not strongly academic. Before going to Ford, in 1955, he had worked his way through Westminster College, in Pennsylvania, ridden out the depression as a construction laborer in New York City, and then spent ten years in market research at Time. Still, impressions are what count, and Wallace has admitted that during his tenure with Ford he consciously stressed his professorial air for the sake of the advantage it gave him in dealing with the bluff, practical men of Dearborn. "Our department came to be regarded as a semi-Brain Trust," he says, with a certain satisfaction. He insisted, typically, on living in Ann Arbor, where he could bask in the scholarly aura of the University of Michigan, rather than in Dearborn or Detroit, both of which he declared were intolerable after business hours. Whatever the degree of his success in projecting the image of the E-Car, he seems, by his small eccentricities, to have done splendidly at projecting the image of Wallace. "I don't think Dave's motivation for being at Ford was basically economic," his old boss, Krafve, says. "Dave is the scholarly type, and I think he considered the job an interesting challenge." One could scarcely ask for better evidence of image projection than that. Wallace clearly recalls the reasoning--candid enough--that guided him and his assistants as they sought just the right personality for the E-Car. "We said to ourselves, 'Let's face it--there is no great difference in basic mechanism between a two-thousand-dollar Chevrolet and a six-thousand-dollar Cadillac,'" he says. "'Forget about all the ballyhoo,' we said, 'and you'll see that they are really pretty much the same thing. Nevertheless, there's something--there's got to be something--in the makeup of a certain number of people that gives them a yen for a Cadillac, in spite of its high price, or maybe because of it.' We concluded that cars are the means to a sort of dream fulfillment. There's some irrational factor in people that makes them want one kind of car rather than another--something that has nothing to do with the mechanism at all but with the car's personality, as the customer imagines it. What we wanted to do, naturally, was to give the E-Car the personality that would make the greatest number of people want it. We figured we had a big advantage over the other manufacturers of medium-priced cars, because we didn't have to worry about changing a pre-existent, perhaps somewhat obnoxious personality. All we had to do was create the exact one we wanted-- from scratch." As the first step in determining what the E-Car's exact personality should be, Wallace decided to assess the personalities of the medium-priced cars already on the market, and those of the so-called low-priced cars as well, since the cost of some of the cheap cars' 1955 models had risen well up into the medium-price range. To this end, he engaged the Columbia University Bureau of Applied Social Research to interview eight hundred recent car buyers in Peoria, Illinois, and another eight hundred in San Bernardino, California, on the mental images they had of the various automobile makes concerned. (In undertaking this commercial enterprise, Columbia maintained its academic independence by reserving the right to publish its findings.) "Our idea was to get the reaction in cities, among clusters of people," Wallace says. "We didn't want a cross section. What we wanted was something that would show interpersonal factors. We picked Peoria as a place that is Midwestern, stereotyped, and not loaded with extraneous factors--like a General Motors glass plant, say. We picked San Bernardino because the West Coast is very important in the automobile business, and because the market there is quite different--people tend to buy flashier cars." The questions that the Columbia researchers fared forth to ask in Peoria and San Bernardino dealt exhaustively with practically everything having to do with automobiles except such matters as how much they cost, how safe they were, and whether they ran. In particular, Wallace wanted to know the respondents' impressions of each of the existing makes. Who, in their opinion, would naturally own a Chevrolet or a Buick or whatever? People of what age? Of which sex? Of what social status? From the answers, Wallace found it easy to put together a personality portrait of each make. The image of the Ford came into focus as that of a very fast, strongly masculine car, of no particular social pretensions, that might characteristically be driven by a rancher or an automobile mechanic. In contrast, Chevrolet emerged as older, wiser, slower, a bit less rampantly masculine, and slightly more distinguĆ©--a clergyman's car. Buick jelled into a middle-aged lady--or, at least, more of a lady than Ford, sex in cars having proved to be relative--with a bit of the devil still in her, whose most felicitous mate would be a lawyer, a doctor, or a dance-band leader. As for the Mercury, it came out as virtually a hot rod, best suited to a young-buck racing driver; thus, despite its higher price tag, it was associated with persons having incomes no higher than the average Ford owner's, so no wonder Ford owners had not been trading up to it. This odd discrepancy between image and fact, coupled with the circumstance that, in sober truth all four makes looked very much alike and had almost the same horsepower under their hoods, only served to bear out Wallace's premise that the automobile fancier, like a young man in love, is incapable of sizing up the object of his affections in anything resembling a rational manner. By the time the researchers closed the books on Peoria and San Bernardino, they had elicited replies not only to these questions but to others, several of which, it would appear, only the most abstruse sociological thinker could relate to medium-priced cars. "Frankly, we dabbled," Wallace says. "It was a dragnet operation." Among the odds and ends that the dragnet dredged up were some that, when pieced together, led the researchers to report: By looking at those respondents whose annual incomes range from $4,000 to $11,000, we can make an ... observation. A considerable percentage of these respondents [to a question about their ability to mix cocktails] are in the "somewhat" category on ability to mix cocktails.... Evidently, they do not have much confidence in their cocktail-mixing ability. We may infer that these respondents are aware of the fact that they are in the learning process. They may be able to mix Martinis or Manhattans, but beyond these popular drinks they don't have much of a repertoire. Wallace, dreaming of an ideally lovable E-Car, was delighted as returns like these came pouring into his Dearborn office. But when the time for a final decision drew near, it became clear to him that he must put aside peripheral issues like cocktail-mixing prowess and address himself once more to the old problem of the image. And here, it seemed to him, the greatest pitfall was the temptation to aim, in accordance with what he took to be the trend of the times, for extremes of masculinity, youthfulness, and speed; indeed, the following passage from one of the Columbia reports, as he interpreted it, contained a specific warning against such folly. Offhand we might conjecture that women who drive cars probably work, and are more mobile than non-owners, and get gratifications out of mastering a traditionally male role. But ... there is no doubt that whatever gratifications women get out of their cars, and whatever social imagery they attach to their automobiles, they do want to appear as women. Perhaps more worldly women, but women. Early in 1956, Wallace set about summing up all of his department's findings in a report to his superiors in the Special Products Division. Entitled "The Market and Personality Objectives of the ECar" and weighty with facts and statistics--though generously interspersed with terse sections in italics or capitals from which a hard-pressed executive could get the gist of the thing in a matter of seconds--the report first indulged in some airy, skippable philosophizing and then got down to conclusions: What happens when an owner sees his make as a car which a woman might buy, but is himself a man? Does this apparent inconsistency of car image and the buyer's own characteristics affect his trading plans? The answer quite definitely is Yes. When there is a conflict between owner characteristics and make image, there is greater planning to switch to another make. In other words, when the buyer is a different kind of person from the person he thinks would own his make, he wants to change to a make in which he, inwardly, will be more comfortable. It should be noted that "conflict," as used here, can be of two kinds. Should a make have a strong and well-defined image, it is obvious that an owner with strong opposing characteristics would be in conflict. But conflict also can occur when the make image is diffuse or weakly defined. In this case, the owner is in an equally frustrating position of not being able to get a satisfactory identification from his make. The question, then, was how to steer between the Scylla of a too definite car personality and the Charybdis of a too weak personality. To this the report replied, "Capitalize on imagery weakness of competition," and went on to urge that in the matter of age the E-Car should take an imagery position neither too young nor too old but right alongside that of the middling Olds-mobile; that in the matter of social class, not to mince matters, "the E-Car might well take a status position just below Buick and Oldsmobile"; and that in the delicate matter of sex it should try to straddle the fence, again along with the protean Olds. In sum (and in Wallace typography): The most advantageous personality for the E-Car might well be THE SMART CAR FOR THE YOUNGER EXECUTIVE OR PROFESSIONAL FAMILY ON ITS WAY UP. Smart car: recognition by others of the owner's good style and taste. Younger: appealing to spirited but responsible adventurers. Executive or professional: millions pretend to this status, whether they can attain it or not. Family: not exclusively masculine; a wholesome "good" role. On Its Way Up: "The E-Car has faith in you, son; we'll help you make it!" Before spirited but responsible adventurers could have faith in the E-Car, however, it had to have a name. Very early in its history, Krafve had suggested to members of the Ford family that the new car be named for Edsel Ford, who was the only son of old Henry; the president of the Ford Motor Company from 1918 until his death, in 1943; and the father of the new generation of Fords--Henry II, Benson, and William Clay. The three brothers had let Krafve know that their father might not have cared to have his name spinning on a million hubcaps, and they had consequently suggested that the Special Products Division start looking around for a substitute. This it did, with a zeal no less emphatic than it displayed in the personality crusade. In the late summer and early fall of 1955, Wallace hired the services of several research outfits, which sent interviewers, armed with a list of two thousand possible names, to canvass sidewalk crowds in New York, Chicago, Willow Run, and Ann Arbor. The interviewers did not ask simply what the respondent thought of some such name as Mars, Jupiter, Rover, Ariel, Arrow, Dart, or Ovation. They asked what free associations each name brought to mind, and having got an answer to this one, they asked what word or words was considered the opposite of each name, on the theory that, subliminally speaking, the opposite is as much a part of a name as the tail is of a penny. The results of all this, the Special Products Division eventually decided, were inconclusive. Meanwhile, Krafve and his men held repeated sessions in a darkened room, staring, with the aid of a spotlight, at a series of cardboard signs, each bearing a name, as, one after another, they were flipped over for their consideration. One of the men thus engaged spoke up for the name Phoenix, because of its connotations of ascendancy, and another favored Altair, on the ground that it would lead practically all alphabetical lists of cars and thus enjoy an advantage analogous to that enjoyed in the animal kingdom by the aardvark. At a certain drowsy point in one session, somebody suddenly called a halt to the card-flipping and asked, in an incredulous tone, "Didn't I see 'Buick' go by two or three cards back?" Everybody looked at Wallace, the impresario of the sessions. He puffed on his pipe, smiled an academic smile, and nodded. THE card-flipping sessions proved to be as fruitless as the sidewalk interviews, and it was at this stage of the game that Wallace, resolving to try and wring from genius what the common mind had failed to yield, entered into the celebrated car-naming correspondence with the poet Marianne Moore, which was later published in The New Yorker and still later, in book form, by the Morgan Library. "We should like this name ... to convey, through association or other conjuration, some visceral feeling of elegance, fleetness, advanced features and design," Wallace wrote to Miss Moore, achieving a certain feeling of elegance himself. If it is asked who among the gods of Dearborn had the inspired and inspiriting idea of enlisting Miss Moore's services in this cause, the answer, according to Wallace, is that it was no god but the wife of one of his junior assistants--a young lady who had recently graduated from Mount Holyoke, where she had heard Miss Moore lecture. Had her husband's superiors gone a step further and actually adopted one of Miss Moore's many suggestions --Intelligent Bullet, for instance, or Utopian Turtletop, or Bullet CloisonnĆ©, or Pastelogram, or Mongoose Civique, or Andante con Moto ("Description of a good motor?" Miss Moore queried in regard to this last)--there is no telling to what heights the E-Car might have risen, but the fact is that they didn't. Dissatisfied with both the poet's ideas and their own, the executives in the Special Products Division next called in Foote, Cone & Belding, the advertising agency that had lately been signed up to handle the E-Car account. With characteristic Madison Avenue vigor, Foote, Cone & Belding organized a competition among the employees of its New York, London, and Chicago offices, offering nothing less than one of the brand-new cars as a prize to whoever thought up an acceptable name. In no time at all, Foote, Cone & Belding had eighteen thousand names in hand, including Zoom, Zip, Benson, Henry, and Drof (if in doubt, spell it backward). Suspecting that the bosses of the Special Products Division might regard this list as a trifle unwieldy, the agency got to work and cut it down to six thousand names, which it presented to them in executive session. "There you are," a Foote, Cone man said triumphantly, flopping a sheaf of papers on the table. "Six thousand names, all alphabetized and cross-referenced." A gasp escaped Krafve. "But we don't want six thousand names," he said. "We only want one." The situation was critical, because the making of dies for the new car was about to begin and some of them would have to bear its name. On a Thursday, Foote, Cone & Belding canceled all leaves and instituted what is called a crash program, instructing its New York and Chicago offices to set about independently cutting down the list of six thousand names to ten and to have the job done by the end of the weekend. Before the weekend was over, the two Foote, Cone offices presented their separate lists of ten to the Special Products Division, and by an almost incredible coincidence, which all hands insist was a coincidence, four of the names on the two lists were the same; Corsair, Citation, Pacer, and Ranger had miraculously survived the dual scrutiny. "Corsair seemed to be head and shoulders above everything else," Wallace says. "Along with other factors in its favor, it had done splendidly in the sidewalk interviews. The free associations with Corsair were rather romantic--'pirate,' 'swashbuckler,' things like that. For its opposite, we got 'princess,' or something else attractive on that order. Just what we wanted." Corsair or no Corsair, the E-Car was named the Edsel in the early spring of 1956, though the public was not informed until the following autumn. The epochal decision was reached at a meeting of the Ford executive committee held at a time when, as it happened, all three Ford brothers were away. In President Ford's absence, the meeting was conducted by Breech, who had become chairman of the board in 1955, and his mood that day was brusque, and not one to linger long over swashbucklers and princesses. After hearing the final choices, he said, "I don't like any of them. Let's take another look at some of the others." So they took another look at the favored rejects, among them the name Edsel, which, in spite of the three Ford brothers' expressed interpretation of their father's probable wishes, had been retained as a sort of anchor to windward. Breech led his associates in a patient scrutiny of the list until they came to "Edsel." "Let's call it that," Breech said with calm finality. There were to be four main models of the E-Car, with variations on each one, and Breech soothed some of his colleagues by adding that the magic four--Corsair, Citation, Pacer, and Ranger --might be used, if anybody felt so inclined, as the subnames for the models. A telephone call was put through to Henry II, who was vacationing in Nassau. He said that if Edsel was the choice of the executive committee, he would abide by its decision, provided he could get the approval of the rest of his family. Within a few days, he got it. As Wallace wrote to Miss Moore a while later: "We have chosen a name.... It fails somewhat of the resonance, gaiety, and zest we were seeking. But it has a personal dignity and meaning to many of us here. Our name, dear Miss Moore, is--Edsel. I hope you will understand." IT may be assumed that word of the naming of the E-Car spread a certain amount of despair among the Foote, Cone & Belding backers of more metaphorical names, none of whom won a free car--a despair heightened by the fact that the name "Edsel" had been ruled out of the competition from the first. But their sense of disappointment was as nothing compared to the gloom that enveloped many employees of the Special Products Division. Some felt that the name of a former president of the company, who had sired its current president, bore dynastic connotations that were alien to the American temper; others, who, with Wallace, had put their trust in the quirks of the mass unconscious, believed that "Edsel" was a disastrously unfortunate combination of syllables. What were its free associations? Pretzel, diesel, hard sell. What was its opposite? It didn't seem to have any. Still, the matter was settled, and there was nothing to do but put the best possible face on it. Besides, the anguish in the Special Products Division was by no means unanimous, and Krafve himself, of course, was among those who had no objection to the name. He still has none, declining to go along with those who contend that the decline and fall of the Edsel may be dated from the moment of its christening. Krafve, in fact, was so well pleased with the way matters had turned out that when, at eleven o'clock on the morning of November 19, 1956, after a long summer of thoughtful silence, the Ford Company released to the world the glad tidings that the E-Car had been named the Edsel, he accompanied the announcement with a few dramatic flourishes of his own. On the very stroke of that hour on that day, the telephone operators in Krafve's domain began greeting callers with "Edsel Division" instead of "Special Products Division"; all stationery bearing the obsolete letterhead of the division vanished and was replaced by sheaves of paper headed "Edsel Division"; and outside the building a huge stainless-steel sign reading "EDSEL DIVISION" rose ceremoniously to the rooftop. Krafve himself managed to remain earthbound, though he had his own reasons for feeling buoyant; in recognition of his leadership of the E-Car project up to that point, he was given the august title of Vice-President of the Ford Motor Company and General Manager, Edsel Division. From the administrative point of view, this off-with-the-old-on-with-the-new effect was merely harmless window dressing. In the strict secrecy of the Dearborn test track, vibrant, almost fullfledged Edsels, with their name graven on their superstructures, were already being road-tested; Brown and his fellow stylists were already well along with their designs for the next year's Edsel; recruits were already being signed up for an entirely new organization of retail dealers to sell the Edsel to the public; and Foote, Cone & Belding, having been relieved of the burden of staging crash programs to collect names and crash programs to get rid of them again, was already deep in schemes for advertising the Edsel, under the personal direction of a no less substantial pillar of his trade than Fairfax M. Cone, the agency's head man. In planning his campaign, Cone relied heavily on what had come to be called the "Wallace prescription"; that is, the formula for the Edsel's personality as set forth by Wallace back in the days before the big naming bee--"The smart car for the younger executive or professional family on its way up." So enthusiastic was Cone about the prescription that he accepted it with only one revision--the substitution of "middle-income" family for "younger executive," his hunch being that there were more middle-income families around than young executives, or even people who thought they were young executives. In an expansive mood, possibly induced by his having landed an account that was expected to bring billings of well over ten million dollars a year, Cone described to reporters on several occasions the kind of campaign he was plotting for the Edsel--quiet, self-assured, and avoiding as much as possible the use of the adjective "new," which, though it had an obvious application to the product, he considered rather lacking in cachet. Above all, the campaign was to be classic in its calmness. "We think it would be awful for the advertising to compete with the car," Cone told the press. "We hope that no one will ever ask, 'Say, did you see that Edsel ad?' in any newspaper or magazine or on television, but, instead, that hundreds of thousands of people will say, and say again, 'Man, did you read about that Edsel?' or 'Did you see that car?' This is the difference between advertising and selling." Evidently enough, Cone felt confident about the campaign and the Edsel. Like a chess master who has no doubt that he will win, he could afford to explicate the brilliance of his moves even as he made them. Automobile men still talk, with admiration for the virtuosity displayed and a shudder at the ultimate outcome, of the Edsel Division's drive to round up retail dealers. Ordinarily, an established manufacturer launches a new car through dealers who are already handling his other makes and who, to begin with, take on the upstart as a sort of sideline. Not so in the case of the Edsel; Krafve received authorization from on high to go all out and build up a retail-dealer organization by making raids on dealers who had contracts with other manufacturers, or even with the other Ford Company divisions --Ford and Lincoln-Mercury. (Although the Ford dealers thus corralled were not obliged to cancel their old contracts, all the emphasis was on signing up retail outlets exclusively dedicated to the selling of Edsels.) The goal set for Introduction Day--which, after a great deal of soul-searching, was finally established as September 4, 1957--was twelve hundred Edsel dealers from coast to coast. They were not to be just any dealers, either; Krafve made it clear that Edsel was interested in signing up only dealers whose records showed that they had a marked ability to sell cars without resorting to the high-pressure tricks of borderline legality that had lately been giving the automobile business a bad name. "We simply have to have quality dealers with quality service facilities," Krafve said. "A customer who gets poor service on an established brand blames the dealer. On an Edsel, he will blame the car." The goal of twelve hundred was a high one, for no dealer, quality or not, can afford to switch makes lightly. The average dealer has at least a hundred thousand dollars tied up in his agency, and in large cities the investment is much higher. He must hire salesmen, mechanics, and office help; buy his own tools, technical literature, and signs, the latter costing as much as five thousand dollars a set; and pay the factory spot cash for the cars he receives from it. The man charged with mobilizing an Edsel sales force along these exacting lines was J. C. (Larry) Doyle, who, as general sales-and-marketing manager of the division, ranked second to Krafve himself. A veteran of forty years with the Ford Company, who had started with it as an office boy in Kansas City and had spent the intervening time mainly selling, Doyle was a maverick in his field. On the one hand, he had an air of kindness and consideration that made him the very antithesis of the glib, brash denizens of a thousand automobile rows across the continent, and, on the other, he did not trouble to conceal an old-time salesman's skepticism about such things as analyzing the sex and status of automobiles, a pursuit he characterized by saying, "When I play pool, I like to keep one foot on the floor." Still, he knew how to sell cars, and that was what the Edsel Division needed. Recalling how he and his sales staff brought off the unlikely trick of persuading substantial and reputable men who had already achieved success in one of the toughest of all businesses to tear up profitable franchises in favor of a risky new one, Doyle said not long ago, "As soon as the first few new Edsels came through, early in 1957, we put a couple of them in each of our five regional sales offices. Needless to say, we kept those offices locked and the blinds drawn. Dealers in every make for miles around wanted to see the car, if only out of curiosity, and that gave us the leverage we needed. We let it be known that we would show the car only to dealers who were really interested in coming with us, and then we sent our regional field managers out to surrounding towns to try to line up the No. 1 dealer in each to see the cars. If we couldn't get No. 1, we'd try for No. 2. Anyway, we set things up so that no one got in to see the Edsel without listening to a complete one-hour pitch on the whole situation by a member of our sales force. It worked very well." It worked so well that by midsummer, 1957, it was clear that Edsel was going to have a lot of quality dealers on Introduction Day. (In fact, it missed the goal of twelve hundred by a couple of dozen.) Indeed, some dealers in other makes were apparently so confident of the Edsel's success, or so bemused by the Doyle staff's pitch, that they were entirely willing to sign up after hardly more than a glance at the Edsel itself. Doyle's people urged them to study the car closely, and kept reciting the litany of its virtues, but the prospective Edsel dealers would wave such protestations aside and demand a contract without further ado. In retrospect, it would seem that Doyle could have given lessons to the Pied Piper. Now that the Edsel was no longer the exclusive concern of Dearborn, the Ford Company was irrevocably committed to going ahead. "Until Doyle went into action, the whole program could have been quietly dropped at any time at a word from top management, but once the dealers had been signed up, there was the matter of honoring your contract to put out a car," Krafve has explained. The matter was attended to with dispatch. Early in June, 1957, the company announced that of the $250 million it had set aside to defray the advance costs of the Edsel, $150 million was being spent on basic facilities, including the conversion of various Ford and Mercury plants to the needs of producing the new cars; $50 million on special Edsel tooling; and $50 million on initial advertising and promotion. In June, too, an Edsel destined to be the star of a television commercial for future release was stealthily transported in a closed van to Hollywood, where, on a locked sound stage patrolled by security guards, it was exposed to the cameras in the admiring presence of a few carefully chosen actors who had sworn that their lips would be sealed from then until Introduction Day. For this delicate photographic operation the Edsel Division cannily enlisted the services of Cascade Pictures, which also worked for the Atomic Energy Commission, and, as far as is known, there were no unintentional leaks. "We took all the same precautions we take for our A.E.C. films," a grim Cascade official has since said. Within a few weeks, the Edsel Division had eighteen hundred salaried employees and was rapidly filling some fifteen thousand factory jobs in the newly converted plants. On July 15th, Edsels began rolling off assembly lines at Somerville, Massachusetts; Mahwah, New Jersey; Louisville, Kentucky; and San Jose, California. The same day, Doyle scored an important coup by signing up Charles Kreisler, a Manhattan dealer regarded as one of the country's foremost practitioners in his field, who had represented Oldsmobile--one of Edsel's self-designated rivals--before heeding the siren song from Dearborn. On July 22nd, the first advertisement for the Edsel appeared--in Life. A two-page spread in plain black-and-white, it was impeccably classic and calm, showing a car whooshing down a country highway at such high speed that it was an indistinguishable blur. "Lately, some mysterious automobiles have been seen on the roads," the accompanying text was headed. It went on to say that the blur was an Edsel being road-tested, and concluded with the assurance "The Edsel is on its way." Two weeks later, a second ad appeared in Life, this one showing a ghostly-looking car, covered with a white sheet, standing at the entrance to the Ford styling center. This time the headline read, "A man in your town recently made a decision that will change his life." The decision, it was explained, was to become an Edsel dealer. Whoever wrote the ad cannot have known how truly he spoke. DURING the tense summer of 1957, the man of the hour at Edsel was C. Gayle Warnock, director of public relations, whose duty was not so much to generate public interest in the forthcoming product, there being an abundance of that, as to keep the interest at white heat, and readily convertible into a desire to buy one of the new cars on or after Introduction Day--or, as the company came to call it, Edsel Day. Warnock, a dapper, affable man with a tiny mustache, is a native of Converse, Indiana, who, long before Krafve drafted him from the Ford office in Chicago, did a spot of publicity work for county fairs--a background that has enabled him to spice the honeyed smoothness of the modern public-relations man with a touch of the old carnival pitchman's uninhibited spirit. Recalling his summons to Dearborn, Warnock says, "When Dick Krafve hired me, back in the fall of 1955, he told me, 'I want you to program the E-Car publicity from now to Introduction Day.' I said, 'Frankly, Dick, what do you mean by "program"?' He said he meant to sort of space it out, starting at the end and working backward. This was something new to me--I was used to taking what breaks I could get when I could get them--but I soon found out how right Dick was. It was almost too easy to get publicity for the Edsel. Early in 1956, when it was still called the E-Car, Krafve gave a little talk about it out in Portland, Oregon. We didn't try for anything more than a play in the local press, but the wire services picked the story up and it went out all over the country. Clippings came in by the bushel. Right then I realized the trouble we might be headed for. The public was getting to be hysterical to see our car, figuring it was going to be some kind of dream car--like nothing they'd ever seen. I said to Krafve, 'When they find out it's got four wheels and one engine, just like the next car, they're liable to be disappointed.'" It was agreed that the safest way to tread the tightrope between overplaying and underplaying the Edsel would be to say nothing about the car as a whole but to reveal its individual charms a little at a time--a sort of automotive strip tease (a phrase that Warnock couldn't with proper dignity use himself but was happy to see the New York Times use for him). The policy was later violated now and then, purposely or inadvertently. For one thing, as the pre-Edsel Day summer wore on, reporters prevailed upon Krafve to authorize Warnock to show the Edsel to them, one at a time, on what Warnock called a "peekaboo," or "you've-seen-it-now-forget-it," basis. And, for another, Edsels loaded on vans for delivery to dealers were appearing on the highways in ever-increasing numbers, covered fore and aft with canvas flaps that, as if to whet the desire of the motoring public, were forever blowing loose. That summer, too, was a time of speechmaking by an Edsel foursome consisting of Krafve, Doyle, J. Emmet Judge, who was Edsel's director of merchandise and product planning, and Robert F. G. Copeland, its assistant general sales manager for advertising, sales promotion, and training. Ranging separately up and down and across the nation, the four orators moved around so fast and so tirelessly that Warnock, lest he lose track of them, took to indicating their whereabouts with colored pins on a map in his office. "Let's see, Krafve goes from Atlanta to New Orleans, Doyle from Council Bluffs to Salt Lake City," Warnock would muse of a morning in Dearborn, sipping his second cup of coffee and then getting up to yank the pins out and jab them in again. Although most of Krafve's audiences consisted of bankers and representatives of finance companies who it was hoped would lend money to Edsel dealers, his speeches that summer, far from echoing the general hoopla, were almost statesmanlike in their cautious--even somber--references to the new car's prospects. And well they might have been, for developments in the general economic outlook of the nation were making more sanguine men than Krafve look puzzled. In July, 1957, the stock market went into a nose dive, marking the beginning of what is recalled as the recession of 1958. Then, early in August, a decline in the sales of medium-priced 1957 cars of all makes set in, and the general situation worsened so rapidly that, before the month was out, Automotive News reported that dealers in all makes were ending their season with the second-largest number of unsold new cars in history. If Krafve, on his lonely rounds, ever considered retreating to Dearborn for consolation, he was forced to put that notion out of his mind when, also in August, Mercury, Edsel's own stablemate, served notice that it was going to make things as tough as possible for the newcomer by undertaking a million-dollar, thirty-day advertising drive aimed especially at "price-conscious buyers"--a clear reference to the fact that the 1957 Mercury, which was then being sold at a discount by most dealers, cost less than the new Edsel was expected to. Meanwhile, sales of the Rambler, which was the only American-made small car then in production, were beginning to rise ominously. In the face of all these evil portents, Krafve fell into the habit of ending his speeches with a rather downbeat anecdote about the board chairman of an unsuccessful dog-food company who said to his fellow directors, "Gentlemen, let's face facts--dogs don't like our product." "As far as we're concerned," Krafve added on at least one occasion, driving home the moral with admirable clarity, "a lot will depend on whether people like our car or not." But most of the other Edsel men were unimpressed by Krafve's misgivings. Perhaps the least impressed of all was Judge, who, while doing his bit as an itinerant speaker, specialized in community and civic groups. Undismayed by the limitations of the strip-tease policy, Judge brightened up his lectures by showing such a bewildering array of animated graphs, cartoons, charts, and pictures of parts of the car--all flashed on a CinemaScope screen--that his listeners usually got halfway home before they realized that he hadn't shown them an Edsel. He wandered restlessly around the auditorium as he spoke, shifting the kaleidoscopic images on the screen at will with the aid of an automatic slide changer--a trick made possible by a crew of electricians who laced the place in advance with a maze of wires linking the device to dozens of floor switches, which, scattered about the hall, responded when he kicked them. Each of the "Judge spectaculars," as these performances came to be known, cost the Edsel Division five thousand dollars--a sum that included the pay and expenses of the technical crew, who would arrive on the scene a day or so ahead of time to set up the electrical rig. At the last moment, Judge would descend melodramatically on the town by plane, hasten to the hall, and go into his act. "One of the greatest aspects of this whole Edsel program is the philosophy of product and merchandising behind it," Judge might start off, with a desultory kick at a switch here, a switch there. "All of us who have been a part of it are real proud of this background and we are anxiously awaiting its success when the car is introduced this fall.... Never again will we be associated with anything as gigantic and full of meaning as this particular program.... Here is a glimpse of the car which will be before the American public on September 4, 1957 [at this point, Judge would show a provocative slide of a hubcap or section of fender].... It is a different car in every respect, yet it has an element of conservatism which will give it maximum appeal.... The distinctiveness of the frontal styling integrates with the sculptured patterns of the side treatment...." And on and on Judge would rhapsodize, rolling out such awesome phrases as "sculptured sheet metal," "highlight character," and "graceful, flowing lines." At last would come the ringing peroration. "We are proud of the Edsel!" he would cry, kicking switches right and left. "When it is introduced this fall, it will take its place on the streets and highways of America, bringing new greatness to the Ford Motor Company. This is the Edsel story." THE drum-roll climax of the strip tease was a three-day press preview of the Edsel, undraped from pinched-in snout to flaring rear, that was held in Detroit and Dearborn on August 26th, 27th, and 28th, with 250 reporters from all over the country in attendance. It differed from previous automotive jamborees of its kind in that the journalists were invited to bring their wives along--and many of them did. Before it was over, it had cost the Ford Company ninety thousand dollars. Grand as it was, the conventionality of its setting was a disappointment to Warnock, who had proposed, and seen rejected, three locales that he thought would provide a more offbeat ambiance--a steamer on the Detroit River ("wrong symbolism"); Edsel, Kentucky ("inaccessible by road"); and Haiti ("just turned down flat"). Thus hobbled, Warnock could do no better for the reporters and their wives when they converged on the Detroit scene on Sunday evening, August 25th, than to put them up at the discouragingly named Sheraton-Cadillac Hotel and to arrange for them to spend Monday afternoon hearing and reading about the long-awaited details of the entire crop of Edsels--eighteen varieties available, in four main lines (Corsair, Citation, Pacer, and Ranger), differing mainly in their size, power, and trim. The next morning, specimens of the models themselves were revealed to the reporters in the styling center's rotunda, and Henry II offered a few words of tribute to his father. "The wives were not asked to the unveiling," a Foote, Cone man who helped plan the affair recalls. "It was too solemn and businesslike an event for that. It went over fine. There was excitement even among the hardened newspapermen." (The import of the stories that most of the excited newspapermen filed was that the Edsel seemed to be a good car, though not so radical as its billing had suggested.) In the afternoon, the reporters were whisked out to the test track to see a team of stunt drivers put the Edsel through its paces. This event, calculated to be thrilling, turned out to be hair-raising, and even, for some, a little unstringing. Enjoined not to talk too much about speed and horsepower, since only a few months previously the whole automobile industry had nobly resolved to concentrate on making cars instead of delayed-action bombs, Warnock had decided to emphasize the Edsel's liveliness through deeds rather than words, and to accomplish this he had hired a team of stunt drivers. Edsels ran over two-foot ramps on two wheels, bounced from higher ramps on all four wheels, were driven in crisscross patterns, grazing each other, at sixty or seventy miles per hour, and skidded into complete turns at fifty. For comic relief, there was a clown driver parodying the daredevil stuff. All the while, the voice of Neil L. Blume, Edsel's engineering chief, could be heard on a loudspeaker, purring about "the capabilities, the safety, the ruggedness, the maneuverability and performance of these new cars," and skirting the words "speed" and "horsepower" as delicately as a sandpiper skirts a wave. At one point, when an Edsel leaping a high ramp just missed turning over, Krafve's face took on a ghastly pallor; he later reported that he had not known the daredevil stunts were going to be so extreme, and was concerned both for the good name of the Edsel and the lives of the drivers. Warnock, noticing his boss's distress, went over and asked Krafve if he was enjoying the show. Krafve replied tersely that he would answer when it was over and all hands safe. But everyone else seemed to be having a grand time. The Foote, Cone man said, "You looked over this green Michigan hill, and there were those glorious Edsels, performing gloriously in unison. It was beautiful. It was like the Rockettes. It was exciting. Morale was high." Warnock's high spirits had carried him to even wilder extremes of fancy. The stunt driving, like the unveiling, was considered too rich for the blood of the wives, but the resourceful Warnock was ready for them with a fashion show that he hoped they would find at least equally diverting. He need not have worried. The star of the show, who was introduced by Brown, the Edsel stylist, as a Paris couturiĆØre, both beautiful and talented, turned out at the final curtain to be a female impersonator--a fact of which Warnock, to heighten the verisimilitude of the act, had given Brown no advance warning. Things were never again quite the same since between Brown and Warnock, but the wives were able to give their husbands an extra paragraph or two for their stories. That evening, there was a big gala for one and all at the styling center, which was itself styled as a night club for the occasion, complete with a fountain that danced in time with the music of Ray McKinley's band, whose emblem, the letters "GM"--a holdover from the days of its founder, the late Glenn Miller--was emblazoned, as usual, on the music stand of each musician, very nearly ruining the evening for Warnock. The next morning, at a windup press conference held by Ford officials. Breech declared of the Edsel, "It's a husky youngster, and, like most other new parents, we're proud enough to pop our buttons." Then seventy-one of the reporters took the wheels of as many Edsels and set out for home--not to drive the cars into their garages but to deliver them to the showrooms of their local Edsel dealers. Let Warnock describe the highlights of this final flourish: "There were several unfortunate occurrences. One guy simply miscalculated and cracked up his car running into something. No fault of the Edsel there. One car lost its oil pan, so naturally the motor froze. It can happen to the best of cars. Fortunately, at the time of this malfunction the driver was going through a beautifulsounding town--Paradise, Kansas, I think it was--and that gave the news reports about it a nice little positive touch. The nearest dealer gave the reporter a new Edsel, and he drove on home, climbing Pikes Peak on the way. Then one car crashed through a tollgate when the brakes failed. That was bad. It's funny, but the thing we were most worried about--other drivers being so eager to get a look at the Edsels that they'd crowd our cars off the road--happened only once. That was on the Pennsylvania Turnpike. One of our reporters was tooling along--no problems--when a Plymouth driver pulled up alongside to rubberneck, and edged so close that the Edsel got sideswiped. Minor damage." LATE in 1959, immediately after the demise of the Edsel, Business Week stated that at the big press preview a Ford executive had said to a reporter, "If the company weren't in so deep, we never would have brought it out now." However, since Business Week neglected to publish this patently sensational statement for over two years, and since to this day all the former ranking Edsel executives (Krafve included, notwithstanding his preoccupation with the luckless dog-food company) firmly maintained that right up to Edsel Day and even for a short time thereafter they expected the Edsel to succeed, it would seem that the quotation should be regarded as a highly suspect archaeological find. Indeed, during the period between the press preview and Edsel Day the spirit of everybody associated with the venture seems to have been one of wild optimism. "Oldsmobile, Goodbye!" ran the headline on an ad, in the Detroit Free Press, for an agency that was switching from Olds to Edsel. A dealer in Portland, Oregon, reported that he had already sold two Edsels, sight unseen. Warnock dug up a fireworks company in Japan willing to make him, at nine dollars apiece, five thousand rockets that, exploding in mid-air, would release nine-foot scale-model Edsels made of rice paper that would inflate and descend like parachutes; his head reeling with visions of filling America's skies as well as its highways with Edsels on Edsel Day, Warnock was about to dash off an order when Krafve, looking something more than puzzled, shook his head. On September 3rd--E Day-minus-one--the prices of the various Edsel models were announced; for cars delivered to New York they ran from just under $2,800 to just over $4,100. On E Day, the Edsel arrived. In Cambridge, a band led a gleaming motorcade of the new cars up Massachusetts Avenue; flying out of Richmond, California, a helicopter hired by one of the most jubilant of the dealers lassoed by Doyle spread a giant Edsel sign above San Francisco Bay; and all over the nation, from the Louisiana bayous to the peak of Mount Rainier to the Maine woods, one needed only a radio or a television set to know that the very air, despite Warnock's setback on the rockets, was quivering with the presence of the Edsel. The tone for Edsel Day's blizzard of publicity was set by an ad, published in newspapers all over the country, in which the Edsel shared the spotlight with the Ford Company's President Ford and Chairman Breech. In the ad, Ford looked like a dignified young father, Breech like a dignified gentleman holding a full house against a possible straight, the Edsel just looked like an Edsel. The accompanying text declared that the decision to produce the car had been "based on what we knew, guessed, felt, believed, suspected--about you," and added, "YOU are the reason behind the Edsel." The tone was calm and confident. There did not seem to be much room for doubt about the reality of that full house. Before sundown, it was estimated, 2,850,000 people had seen the new car in dealers' showrooms. Three days later, in North Philadelphia, an Edsel was stolen. It can reasonably be argued that the crime marked the high-water mark of public acceptance of the Edsel; only a few months later, any but the least fastidious of car thieves might not have bothered.

DECLINE AND FALL

THE most striking physical characteristic of the Edsel was, of course, its radiator grille. This, in contrast to the wide and horizontal grilles of all nineteen other American makes of the time, was slender and vertical. Of chromium-plated steel, and shaped something like an egg, it sat in the middle of the car's front end, and was embellished by the word "EDSEL" in aluminum letters running down its length. It was intended to suggest the front end of practically any car of twenty or thirty years ago and of most contemporary European cars, and thus to look at once seasoned and sophisticated. The trouble was that whereas the front ends of the antiques and the European cars were themselves high and narrow--consisting, indeed, of little more than the radiator grilles--the front end of the Edsel was broad and low, just like the front ends of all its American competitors. Consequently, there were wide areas on either side of the grille that had to be filled in with something, and filled in they were --with twin panels of entirely conventional horizontal chrome grillwork. The effect was that of an Oldsmobile with the prow of a Pierce-Arrow implanted in its front end, or, more metaphorically, of the charwoman trying on the duchess' necklace. The attempt at sophistication was so transparent as to be endearing. But if the grille of the Edsel appealed through guilelessness, the rear end was another matter. Here, too, there was a marked departure from the conventional design of the day. Instead of the notorious tail fin, the car had what looked to its fanciers like wings and to others, less ethereal-minded, like eyebrows. The lines of the trunk lid and the rear fenders, swooping upward and outward, did somewhat resemble the wings of a gull in flight, but the resemblance was marred by two long, narrow tail lights, set partly in the trunk lid and partly in the fenders, which followed those lines and created the startling illusion, especially at night, of a slant-eyed grin. From the front, the Edsel seemed, above all, anxious to please, even at the cost of being clownish; from the rear it looked crafty, Oriental, smug, one-up--maybe a little cynical and contemptuous, too. It was as if, somewhere between grille and rear fenders, a sinister personality change had taken place. In other respects, the exterior styling of the Edsel was not far out of the ordinary. Its sides were festooned with a bit less than the average amount of chrome, and distinguished by a gouged-out bulletshaped groove extending forward from the rear fender for about half the length of the car. Midway along this groove, the word "EDSEL" was displayed in chrome letters, and just below the rear window was a small grille-like decoration, on which was spelled out--of all things--"EDSEL." (After all, hadn't Stylist Brown declared his intention to create a vehicle that would be "readily recognizable"?) In its interior, the Edsel strove mightily to live up to the prediction of General Manager Krafve that the car would be "the epitome of the push-button era." The push-button era in medium-priced cars being what it was, Krafve's had been a rash prophecy indeed, but the Edsel rose to it with a devilish assemblage of gadgets such as had seldom, if ever, been seen before. On or near the Edsel's dashboard were a push button that popped the trunk lid open; a lever that popped the hood open; a lever that released the parking brake; a speedometer that glowed red when the driver exceeded his chosen maximum speed; a single-dial control for both heating and cooling; a tachometer, in the best racing-car style; buttons to operate or regulate the lights, the height of the radio antenna, the heaterblower, the windshield wiper, and the cigarette lighter; and a row of eight red lights to wink warnings that the engine was too hot, that it wasn't hot enough, that the generator was on the blink, that the parking brake was on, that a door was open, that the oil pressure was low, that the oil level was low, and that the gasoline level was low, the last of which the skeptical driver could confirm by consulting the gas gauge, mounted a few inches away. Epitomizing this epitome, the automatic-transmission control box--arrestingly situated on top of the steering post, in the center of the wheel--sprouted a galaxy of five push buttons so light to the touch that, as Edsel men could hardly be restrained from demonstrating, they could be depressed with a toothpick. Of the four lines of Edsels, both of the two larger and more expensive ones--the Corsair and the Citation--were 219 inches long, or two inches longer than the biggest of the Oldsmobiles; both were eighty inches wide, or about as wide as passenger cars ever get; and the height of both was only fiftyseven inches, as low as any other medium-priced car. The Ranger and the Pacer, the smaller Edsels, were six inches shorter, an inch narrower, and an inch lower than the Corsair and the Citation. The Corsair and the Citation were equipped with 345-horsepower engines, making them more powerful than any other American car at the time of their debut, and the Ranger and the Pacer were good for 303 horsepower, near the top in their class. At the touch of a toothpick to the "Drive" button, an idling Corsair or Citation sedan (more than two tons of car, in either case) could, if properly skippered, take off with such abruptness that in ten and three-tenths seconds it would be doing a mile a minute, and in seventeen and a half seconds it would be a quarter of a mile down the road. If anything or anybody happened to be in the way when the toothpick touched the push button, so much the worse. WHEN the wraps were taken off the Edsel, it received what is known in the theatrical business as a mixed press. The automotive editors of the daily newspapers stuck mostly to straight descriptions of the car, with only here and there a phrase or two of appraisal, some of it ambiguous ("The difference in style is spectacular," noted Joseph C. Ingraham in the New York Times ) and some of it openly favorable ("A handsome and hard-punching newcomer," said Fred Olmstead, in the Detroit Free Press). Magazine criticism was generally more exhaustive and occasionally more severe. Motor Trend, the largest monthly devoted to ordinary automobiles, as distinct from hot rods, devoted eight pages of its October, 1957, issue to an analysis and critique of the Edsel by Joe H. Wherry, its Detroit editor. Wherry liked the car's appearance, its interior comfort, and its gadgets, although he did not always make it clear just why; in paying his respects to the transmission buttons on the steering post, he wrote, "You need not take your eyes off the road for an instant." He conceded that there were "untold opportunities for more ... unique approaches," but he summed up his opinion in a sentence that fairly peppered the Edsel with honorific adverbs: "The Edsel performs fine, rides well, and handles good." Tom McCahill, of Mechanix Illustrated, generally admired the "bolt bag," as he affectionately called the Edsel, but he had some reservations, which, incidentally, throw some interesting light on an automobile critic's equivalent of an aisle seat. "On ribbed concrete," he reported, "every time I shot the throttle to the floor quickly, the wheels spun like a gone-wild Waring Blendor.... At high speeds, especially through rough corners, I found the suspension a little too horsebacky.... I couldn't help but wonder what this salami would really do if it had enough road adhesion." By far the most downright--and very likely the most damaging--panning that the Edsel got during its first months appeared in the January, 1958, issue of the Consumers Union monthly, Consumer Reports, whose 800,000 subscribers probably included more potential Edsel buyers than have ever turned the pages of Motor Trend or Mechanix Illustrated. After having put a Corsair through a series of road tests, Consumer Reports declared: The Edsel has no important basic advantages over other brands. The car is almost entirely conventional in construction.... The amount of shake present in this Corsair body on rough roads--which wasn't long in making itself heard as squeaks and rattles--went well beyond any acceptable limit.... The Corsair's handling qualities--sluggish, over-slow steering, sway and lean on turns, and a general detachedfrom- the-road feel--are, to put it mildly, without distinction. As a matter of, simple fact, combined with the car's tendency to shake like jelly, Edsel handling represents retrogression rather than progress.... Stepping on the gas in traffic, or in passing cars, or just to feel the pleasurable surge of power, will cause those big cylinders really to lap up fuel.... The center of the steering wheel is not, in CU's opinion, a good pushbutton location.... To look at the Edsel buttons pulls the driver's eyes clear down off the road. [Pace Mr. Wherry.] The "luxury-loaded" Edsel--as one magazine cover described it--will certainly please anyone who confuses gadgetry with true luxury. Three months later, in a roundup of all the 1958-model cars, Consumer Reports went at the Edsel again, calling it "more uselessly overpowered ... more gadget bedecked, more hung with expensive accessories than any car in its price class," and giving the Corsair and the Citation the bottom position in its competitive ratings. Like Krafve, Consumer Reports considered the Edsel an epitome; unlike Krafve, the magazine concluded that the car seemed to "epitomize the many excesses" with which Detroit manufacturers were "repulsing more and more potential car buyers." AND yet, in a way, the Edsel wasn't so bad. It embodied much of the spirit of its time--or at least of the time when it was designed, early in 1955. It was clumsy, powerful, dowdy, gauche, well-meaning --a de Kooning woman. Few people, apart from employees of Foote, Cone & Belding, who were paid to do so, have adequately hymned its ability, at its best, to coax and jolly the harried owner into a sense of well-being. Furthermore, the designers of several rival makes, including Chevrolet, Buick, and Ford, Edsel's own stablemate, later flattered Brown's styling by imitating at least one feature of the car's much reviled lines--the rear-end wing theme. The Edsel was obviously jinxed, but to say that it was jinxed by its design alone would be an oversimplification, as it would be to say that it was jinxed by an excess of motivational research. The fact is that in the short, unhappy life of the Edsel a number of other factors contributed to its commercial downfall. One of these was the scarcely believable circumstance that many of the very first Edsels--those obviously destined for the most glaring public limelight--were dramatically imperfect. By its preliminary program of promotion and advertising, the Ford Company had built up an overwhelming head of public interest in the Edsel, causing its arrival to be anticipated and the car itself to be gawked at with more eagerness than had ever greeted any automobile before it. After all that, it seemed, the car didn't quite work. Within a few weeks after the Edsel was introduced, its pratfalls were the talk of the land. Edsels were delivered with oil leaks, sticking hoods, trunks that wouldn't open, and push buttons that, far from yielding to a toothpick, couldn't be budged with a hammer. An obviously distraught man staggered into a bar up the Hudson River, demanding a double shot without delay and exclaiming that the dashboard of his new Edsel had just burst into flame. Automotive News reported that in general the earliest Edsels suffered from poor paint, inferior sheet metal, and faulty accessories, and quoted the lament of a dealer about one of the first Edsel convertibles he received: "The top was badly set, doors cockeyed, the header bar trimmed at the wrong angle, and the front springs sagged." The Ford Company had the particular bad luck to sell to Consumers Union--which buys its test cars in the open market, as a precaution against being favored with specially doctored samples--an Edsel in which the axle ratio was wrong, an expansion plug in the cooling system blew out, the power-steering pump leaked, the rear-axle gears were noisy, and the heater emitted blasts of hot air when it was turned off. A former executive of the Edsel Division has estimated that only about half of the first Edsels really performed properly. A layman cannot help wondering how the Ford Company, in all its power and glory, could have been guilty of such a Mack Sennett routine of buildup and anticlimax. The wan, hard-working Krafve explains gamely that when a company brings out a new model of any make--even an old and tested one--the first cars often have bugs in them. A more startling theory--though only a theory--is that there may have been sabotage in some of the four plants that assembled the Edsel, all but one of which had previously been, and currently also were, assembling Fords or Mercurys. In marketing the Edsel, the Ford Company took a leaf out of the book of General Motors, which for years had successfully been permitting, and even encouraging, the makers and sellers of its Oldsmobiles, Buicks, Pontiacs, and the higher-priced models of its Chevrolet to fight for customers with no quarter given; faced with the same sort of intramural competition, some members of the Ford and Lincoln-Mercury Divisions of the Ford Company openly hoped from the start for the Edsel's downfall. (Krafve, realizing what might happen, had asked that the Edsel be assembled in plants of its own, but his superiors turned him down.) However, Doyle, speaking with the authority of a veteran of the automobile business as well as with that of Krafve's second-in-command, pooh-poohs the notion that the Edsel was the victim of dirty work at the plants. "Of course the Ford and Lincoln-Mercury Divisions didn't want to see another Ford Company car in the field," he says, "but as far as I know, anything they did at the executive and plant levels was in competitive good taste. On the other hand, at the distribution and dealer level, you got some rough infighting in terms of whispering and propaganda. If I'd been in one of the other divisions, I'd have done the same thing." No proud defeated general of the old school ever spoke more nobly. It is a tribute of sorts to the men who gave the Edsel its big buildup that although cars tending to rattle, balk, and fall apart into shiny heaps of junk kept coming off the assembly lines, things didn't go badly at first. Doyle says that on Edsel Day more than 6,500 Edsels were either ordered by or actually delivered to customers. That was a good showing, but there were isolated signs of resistance. For instance, a New England dealer selling Edsels in one showroom and Buicks in another reported that two prospects walked into the Edsel showroom, took a look at the Edsel, and placed orders for Buicks on the spot. In the next few days, sales dropped sharply, but that was to be expected once the bloom was off. Automobile deliveries to dealers--one of the important indicators in the trade--are customarily measured in ten-day periods, and during the first ten days of September, on only six of which the Edsel was on sale, it racked up 4,095; this was lower than Doyle's first-day figure because many of the initial purchases were of models and color combinations not in stock, which had to be factoryassembled to order. The delivery total for the second ten-day period was off slightly, and that for the third was down to just under 3,600. For the first ten days of October, nine of which were business days, there were only 2,751 deliveries--an average of just over three hundred cars a day. In order to sell the 200,000 cars per year that would make the Edsel operation profitable the Ford Company would have to move an average of between six and seven hundred each business day--a good many more than three hundred a day. On the night of Sunday, October 13th, Ford put on a mammoth television spectacular for Edsel, pre-empting the time ordinarily allotted to the Ed Sullivan show, but though the program cost $400,000 and starred Bing Crosby and Frank Sinatra, it failed to cause any sharp spurt in sales. Now it was obvious that things were not going at all well. Among the former executives of the Edsel Division, opinions differ as to the exact moment when the portents of doom became unmistakable. Krafve feels that the moment did not arrive until sometime late in October. Wallace, in his capacity as Edsel's pipe-smoking semi-Brain Truster, goes a step further by pinning the start of the disaster to a specific date--October 4th, the day the first Soviet sputnik went into orbit, shattering the myth of American technical pre-eminence and precipitating a public revulsion against Detroit's fancier baubles. Public Relations Director Warnock maintains that his barometric sensitivity to the public temper enabled him to call the turn as early as mid-September; contrariwise, Doyle says he maintained his optimism until mid-November, by which time he was about the only man in the division who had not concluded it would take a miracle to save the Edsel. "In November," says Wallace, sociologically, "there was panic, and its concomitant--mob action." The mob action took the form of a concerted tendency to blame the design of the car for the whole debacle; Edsel men who had previously had nothing but lavish praise for the radiator grille and rear end now went around muttering that any fool could see they were ludicrous. The obvious sacrificial victim was Brown, whose stock had gone through the roof at the time of the regally accoladed debut of his design, in August, 1955. Now, without having done anything further, for either better or worse, the poor fellow became the company scapegoat. "Beginning in November, nobody talked to Roy," Wallace says. On November 27th, as if things weren't bad enough, Charles Kreisler, who as the only Edsel dealer in Manhattan provided its prize showcase, announced that he was turning in his franchise because of poor sales, and it was rumored that he added, "The Ford Motor Company has laid an egg." He thereupon signed up with American Motors to sell its Rambler, which, as the only domestic small car then on the market, was already the possessor of a zooming sales curve. Doyle grimly commented that the Edsel Division was "not concerned" about Kreisler's defection. By December, the panic at Edsel had abated to the point where its sponsors could pull themselves together and begin casting about for ways to get sales moving again. Henry Ford II, manifesting himself to Edsel dealers on closed-circuit television, urged them to remain calm, promised that the company would back them to the limit, and said flatly, "The Edsel is here to stay." A million and a half letters went out over Krafve's signature to owners of medium-priced cars, asking them to drop around at their local dealers and test-ride the Edsel; everyone doing so, Krafve promised, would be given an eight-inch plastic scale model of the car, whether he bought a full-size one or not. The Edsel Division picked up the check for the scale models--a symptom of desperation indeed, for under normal circumstances no automobile manufacturer would make even a move to outfumble its dealers for such a tab. (Up to that time, the dealers had paid for everything, as is customary.) The division also began offering its dealers what it called "sales bonuses," which meant that the dealers could knock anything from one hundred to three hundred dollars off the price of each car without reducing their profit margin. Krafve told a reporter that sales up to then were about what he had expected them to be, although not what he had hoped they would be; in his zeal not to seem unpleasantly surprised, he appeared to be saying that he had expected the Edsel to fail. The Edsel's advertising campaign, which had started with studied dignity, began to sound a note of stridency. "Everyone who has seen it knows--with us--that the Edsel is a success," a magazine ad declared, and in a later ad this phrase was twice repeated, like an incantation: "The Edsel is a success. It is a new idea--a YOU idea--on the American Road.... The Edsel is a success." Soon the even less high-toned but more dependable advertising themes of price and social status began to intrude, in such sentences as "They'll know you've arrived when you drive up in an Edsel" and "The one that's really new is the lowest-priced, too!" In the more rarefied sectors of Madison Avenue, a resort to rhymed slogans is usually regarded as an indication of artistic depravity induced by commercial necessity. From the frantic and costly measures the Edsel Division took in December, it garnered one tiny crumb: for the first ten-day period of 1958, it was able to report, sales were up 18.6 percent over those of the last ten days of 1957. The catch, as the Wall Street Journal alertly noted, was that the latter period embraced one more selling day than the earlier one, so, for practical purposes, there had scarcely been a gain at all. In any case, that early-January word of meretricious cheer turned out to be the Edsel Division's last gesture. On January 14, 1958, the Ford Motor Company announced that it was consolidating the Edsel Division with the Lincoln-Mercury Division to form a Mercury-Edsel-Lincoln Division, under the management of James J. Nance, who had been running Lincoln-Mercury. It was the first time that one of the major automobile companies had lumped three divisions into one since General Motors' merger of Buick, Oldsmobile, and Pontiac back in the depression, and to the people of the expunged Edsel Division the meaning of the administrative move was all too clear. "With that much competition in a division, the Edsel wasn't going anywhere," Doyle says. "It became a stepchild." FOR the last year and ten months of its existence, the Edsel was very much a stepchild--generally neglected, little advertised, and kept alive only to avoid publicizing a boner any more than necessary and in the forlorn hope that it might go somewhere after all. What advertising it did get strove quixotically to assure the automobile trade that everything was dandy; in mid-February an ad in Automotive News had Nance saying, Since the formation of the new M-E-L Division at Ford Motor Company, we have analyzed with keen interest the sales progress of the Edsel. We think it is quite significant that during the five months since the Edsel was introduced, Edsel sales have been greater than the first five months' sales for any other new make of car ever introduced on the American Road.... Edsel's steady progress can be a source of satisfaction and a great incentive to all of us. Nance's comparison, however, was almost meaningless, no new make ever having been introduced anything like so grandiosely, and the note of confidence could not help ringing hollow. It is quite possible that Nance's attention was never called to an article by S. I. Hayakawa, the semanticist, that was published in the spring of 1958 in ETC: A Review of General Semantics, a quarterly magazine, under the title, "Why the Edsel Laid an Egg." Hayakawa, who was both the founder and the editor of ETC, explained in an introductory note that he considered the subject within the purview of general semantics because automobiles, like words, are "important ... symbols in American culture," and went on to argue that the Edsel's flop could be attributed to Ford Company executives who had been "listening too long to the motivation-research people" and who, in their efforts to turn out a car that would satisfy customers' sexual fantasies and the like, had failed to supply reasonable and practical transportation, thereby neglecting "the reality principle." "What the motivation researchers failed to tell their clients ... is that only the psychotic and the gravely neurotic act out their irrationalities and their compensatory fantasies," Hayakawa admonished Detroit briskly, and added, "The trouble with selling symbolic gratification via such expensive items as ... the Edsel Hermaphrodite ... is the competition offered by much cheaper forms of symbolic gratification, such as Playboy (fifty cents a copy), Astounding Science Fiction (thirty-five cents a copy), and television (free)." Notwithstanding the competition from Playboy, or possibly because the symbol-motivated public included people who could afford both, the Edsel kept rolling--but just barely. The car moved, as salesmen say, though hardly at the touch of a toothpick. In fact, as a stepchild it sold about as well as it had sold as a favorite son, suggesting that all the hoopla, whether about symbolic gratification or mere horsepower, had had little effect one way or the other. The new Edsels that were registered with the motor-vehicle bureaus of the various states during 1958 numbered 34,481--considerably fewer than new cars of any competing make, and less than one-fifth of the 200,000 a year necessary if the Edsel was to show a profit, but still representing an investment by motorists of over a hundred million dollars. The picture actually brightened in November, 1958, with the advent of the Edsel's second-year models. Shorter by up to eight inches, lighter by up to five hundred pounds, and with engines less potent by as much as 158 horsepower, they had a price range running from five hundred to eight hundred dollars less than that of their predecessors. The vertical grille and the slant-eyed rear end were still there, but the modest power and proportions persuaded Consumer Reports to relent and say, "The Ford Motor Company, after giving last year's initial Edsel model a black eye, has made a respectable and even likable automobile of it." Quite a number of motorists seemed to agree; about two thousand more Edsels were sold in the first half of 1959 than had been sold in the first half of 1958, and by the early summer of 1959 the car was moving at the rate of around four thousand a month. Here, at last, was progress; sales were at almost a quarter of the minimum profitable rate, instead of a mere fifth. On July 1, 1959, there were 83,849 Edsels on the country's roads. The largest number (8,344) were in California, which is perennially beset with far and away the largest number of cars of practically all makes, and the smallest number were in Alaska, Vermont, and Hawaii (122, 119, and 110, respectively). All in all, the Edsel seemed to have found a niche for itself as an amusingly eccentric curiosity. Although the Ford Company, with its stockholders' money still disappearing week after week into the Edsel, and with small cars now clearly the order of the day, could scarcely affect a sentimental approach to the subject, it nonetheless took an outside chance and, in mid-October of 1959, brought out a third series of annual models. The 1960 Edsel appeared a little more than a month after the Falcon, Ford's first--and instantly successful--venture into the small-car field, and was scarcely an Edsel at all; gone were both the vertical grille and the horizontal rear end, and what remained looked like a cross between a Ford Fairlane and a Pontiac. Its initial sales were abysmal; by the middle of November only one plant--in Louisville, Kentucky--was still turning out Edsels, and it was turning out only about twenty a day. On November 19th, the Ford Foundation, which was planning to sell a block of its vast holdings of stock in the Ford Motor Company, issued the prospectus that is required by law under such circumstances, and stated therein, in a footnote to a section describing the company's products, that the Edsel had been "introduced in September 1957 and discontinued in November 1959." The same day, this mumbled admission was confirmed and amplified by a Ford Company spokesman, who did some mumbling of his own. "If we knew the reason people aren't buying the Edsel, we'd probably have done something about it," he said. The final quantitative box score shows that from the beginning right up to November 19th, 110,810 Edsels were produced and 109,466 were sold. (The remaining 1,344, almost all of them 1960 models, were disposed of in short order with the help of drastic price cuts.) All told, only 2,846 of the 1960 Edsels were ever produced, making models of that year a potential collector's item. To be sure, it will be generations before 1960 Edsels are as scarce as the Type 41 Bugatti, of which no more than eleven specimens were made, back in the late twenties, to be sold only to bona-fide kings, and the 1960 Edsel's reasons for being a rarity are not exactly as acceptable, socially or commercially, as the Type 41 Bugatti's. Still, a 1960-Edsel Owners' Club may yet appear. The final fiscal box score on the Edsel fiasco will probably never be known, because the Ford Motor Company's public reports do not include breakdowns of gains and losses within the individual divisions. Financial buffs estimate, however, that the company lost something like $200 million on the Edsel after it appeared; add to this the officially announced expenditure of $250 million before it appeared, subtract about a hundred million invested in plant and equipment that were salvageable for other uses, and the net loss is $350 million. If these estimates are right, every Edsel the company manufactured cost it in lost money about $3,200, or about the price of another one. In other, harsher words, the company would have saved itself money if, back in 1955, it had decided not to produce the Edsel at all but simply to give away 110,810 specimens of its comparably priced car, the Mercury. THE end of the Edsel set off an orgy of hindsight in the press. Time declared, "The Edsel was a classic case of the wrong car for the wrong market at the wrong time. It was also a prime example of the limitations of market research, with its 'depth interviews' and 'motivational' mumbo-jumbo." Business Week, which shortly before the Edsel made its bow had described it with patent solemnity and apparent approval, now pronounced it "a nightmare" and appended a few pointedly critical remarks about Wallace's research, which was rapidly achieving a scapegoat status equal to that of Brown's design. (Jumping up and down on motivational research was, and is, splendid sport, but, of course, the implication that it dictated, or even influenced, the Edsel's design is entirely false, since the research, being intended only to provide a theme for advertising and promotion, was not undertaken until after Brown had completed his design.) The Wall Street Journal's obituary of the Edsel made a point that was probably sounder, and certainly more original. Large corporations are often accused of rigging markets, administering prices, and otherwise dictating to the consumer [it observed]. And yesterday Ford Motor Company announced its two-year experiment with the medium-priced Edsel has come to an end ... for want of buyers. All this is quite a ways from auto makers being able to rig markets or force consumers to take what they want them to take... And the reason, simply, is that there is no accounting for tastes.... When it comes to dictating, the consumer is the dictator without peer. The tone of the piece was friendly and sympathetic; the Ford Company, it seemed, had endeared itself to the Journal by playing the great American situation-comedy role of Daddy the Bungler. As for the post-mortem explanations of the debacle that have been offered by former Edsel executives, they are notable for their reflective tone--something like that of a knocked-out prize fighter opening his eyes to find an announcer's microphone pushed into his face. In fact, Krafve, like many a flattened pugilist, blames his own bad timing; he contends that if he had been able to thwart the apparently immutable mechanics and economics of Detroit, and had somehow been able to bring out the Edsel in 1955, or even 1956, when the stock market and the medium-priced-car market were riding high, the car would have done well and would still be doing well. That is to say, if he had seen the punch coming, he would have ducked. Krafve refuses to go along with a sizable group of laymen who tend to attribute the collapse to the company's decision to call the car the Edsel instead of giving it a brisker, more singable name, reducible to a nickname other than "Ed" or "Eddie," and not freighted with dynastic connotations. As far as he can see, Krafve still says, the Edsel's name did not affect its fortunes one way or the other. Brown agrees with Krafve that bad timing was the chief mistake. "I frankly feel that the styling of the automobile had very little, if anything, to do with its failure," he said later, and his frankness may pretty safely be left unchallenged. "The Edsel program, like any other project planned for future markets, was based on the best information available at the time in which decisions were made. The road to Hell is paved with good intentions!" Doyle, with the born salesman's intensely personal feeling about his customers, talks like a man betrayed by a friend--the American public. "It was a buyers' strike," he says. "People weren't in the mood for the Edsel. Why not is a mystery to me. What they'd been buying for several years encouraged the industry to build exactly this kind of car. We gave it to them, and they wouldn't take it. Well, they shouldn't have acted like that. You can't just wake up somebody one day and say, 'That's enough, you've been running in the wrong direction.' Anyway, why did they do it? Golly, how the industry worked and worked over the years--getting rid of gear-shifting, providing interior comfort, providing plus performance for use in emergencies! And now the public wants these little beetles. I don't get it!" Wallace's sputnik theory provides an answer to Doyle's question about why people weren't in the mood, and, furthermore, it is sufficiently cosmic to befit a semi-Brain Truster. It also leaves Wallace free to defend the validity of his motivational-research studies as of the time when they were conducted. "I don't think we yet know the depths of the psychological effect that that first orbiting had on us all," he says. "Somebody had beaten us to an important gain in technology, and immediately people started writing articles about how crummy Detroit products were, particularly the heavily ornamented and status-symbolic medium-priced cars. In 1958, when none of the small cars were out except the Rambler, Chevy almost ran away with the market, because it had the simplest car. The American people had put themselves on a self-imposed austerity program. Not buying Edsels was their hair shirt." TO any relics of the sink-or-swim nineteenth-century days of American industry, it must seem strange that Wallace can afford to puff on his pipe and analyze the holocaust so amiably. The obvious point of the Edsel's story is the defeat of a giant motor company, but what is just as surprising is that the giant did not come apart, or even get seriously hurt in the fall, and neither did the majority of the people who went down with him. Owing largely to the success of four of its other cars--the Ford, the Thunderbird, and, later on the small Falcon and Comet and then the Mustang--the Ford Company, as an investment, survived gloriously. True, it had a bad time of it in 1958, when, partly because of the Edsel, net income per share of its stock fell from $5.40 to $2.12, dividends per share from $2.40 to $2.00, and the market price of its stock from a 1957 high of about $60 to a 1958 low of under $40. But all these losses were more than recouped in 1959, when net income per share was $8.24, dividends per share were $2.80, and the price of the stock reached a high of around $90. In 1960 and 1961, things went even better. So the 280,000 Ford stockholders listed on the books in 1957 had had little to complain about unless they had sold at the height of the panic. On the other hand, six thousand white-collar workers were squeezed out of their jobs as a result of the Mercury-Edsel-Lincoln consolidation, and the average number of Ford employees fell from 191,759 in 1957 to 142,076 the following year, climbing back to only 159,541 in 1959. And, of course, dealers who gave up profitable franchises in other makes and then went broke trying to sell Edsels weren't likely to be very cheerful about the experience. Under the terms of the consolidation of the Lincoln-Mercury and Edsel Divisions, most of the agencies for the three makes were consolidated, too. In the consolidation, some Edsel dealers were squeezed out, and it can have been small comfort to those of them who went bankrupt to learn later that when the Ford Company finally discontinued making the car, it agreed to pay those of their former colleagues who had weathered the crisis one-half of the original cost of their Edsel signs, and was granting them substantial rebates on all Edsels in stock at the time of discontinuance. Still, automobile dealers, some of whom work on credit margins as slim as those of Miami hotel operators, occasionally go broke with even the most popular cars. And among those who earn their living in the rough-and-tumble world of automobile salesrooms, where Detroit is not always spoken of with affection, many will concede that the Ford Company, once it had found itself stuck with a lemon, did as much as it reasonably could to bolster dealers who had cast their lot with Edsel. A spokesman for the National Automobile Dealers Association has since stated, "So far as we know, the Edsel dealers were generally satisfied with the way they were treated." Foote, Cone & Belding also ended up losing money on the Edsel account, since its advertising commissions did not entirely compensate for the extraordinary expense it had gone to of hiring sixty new people and opening up a posh office in Detroit. But its losses were hardly irreparable; the minute there were no more Edsels to advertise, it was hired to advertise Lincolns, and although that arrangement did not last very long, the firm has happily survived to sing the praises of such clients as General Foods, Lever Brothers, and Trans World Airways. A rather touching symbol of the loyalty that the agency's employees have for its former client is the fact that for several years after 1959, on every workday its private parking lot in Chicago was still dotted with Edsels. These faithful drivers, incidentally, are not unique. If Edsel owners have not found the means to a dream fulfillment, and if some of them for a while had to put up with harrowing mechanical disorders, many of them more than a decade later cherish their cars as if they were Confederate bills, and on Used Car Row the Edsel is a high-premium item, with few cars being offered. By and large, the former Edsel executives did not just land on their feet, they landed in clover. Certainly no one can accuse the Ford Company of giving vent to its chagrin in the old-fashioned way, by vulgarly causing heads to roll. Krafve was assigned to assist Robert S. McNamara, at that time a Ford divisional vice-president (and later, of course, Secretary of Defense), for a couple of months, and then he moved to a staff job in company headquarters, stayed there for about a year, and left to become a vice-president of the Raytheon Company, of Waltham, Massachusetts, a leading electronics firm. In April, 1960, he was made its president. In the middle sixties he left to become a high-priced management consultant on the West Coast. Doyle, too, was offered a staff job with Ford, but after taking a trip abroad to think it over he decided to retire. "It was a question of my relationship to my dealers," he explains. "I had assured them that the company was fully behind the Edsel for keeps, and I didn't feel that I was the fellow to tell them now that it wasn't." After his retirement, Doyle remained about as busy as ever, keeping an eye on various businesses in which he has set up various friends and relatives, and conducting a consulting business of his own in Detroit. About a month before Edsel's consolidation with Mercury and Lincoln, Warnock, the publicity man, left the division to become director of news services for the International Telephone & Telegraph Corp., in New York --a position he left in June, 1960, to become vice-president of Communications Counselors, the public-relations arm of McCann-Erickson. From there he went back to Ford, as Eastern promotion chief for Lincoln-Mercury--a case of a head that had not rolled but had instead been anointed. Brown, the embattled stylist, stayed on in Detroit for a while as chief stylist of Ford commercial vehicles and then went with the Ford Motor Company, Ltd., of England, where, again as chief stylist, he was assigned to direct the design of Consuls, Anglias, trucks, and tractors. He insisted that this post didn't represent the Ford version of Siberia. "I have found it to be a most satisfying experience, and one of the best steps I have ever taken in my ... career," he stated firmly in a letter from England. "We are building a styling office and a styling team second to none in Europe." Wallace, the semi- Brain Truster, was asked to continue semi-Brain Trusting for Ford, and, since he still didn't like living in Detroit, or near it, was permitted to move to New York and to spend only two days a week at headquarters. ("They didn't seem to care any more where I operated from," he says modestly.) At the end of 1958, he left Ford, and he has since finally achieved his heart's desire--to become a fulltime scholar and teacher. He set about getting a doctorate in sociology at Columbia, writing his thesis on social change in Westport, Connecticut, which he investigated by busily quizzing its inhabitants; meanwhile, he taught a course on "The Dynamics of Social Behavior" at the New School for Social Research, in Greenwich Village. "I'm through with industry," he was heard to declare one day, with evident satisfaction, as he boarded a train for Westport, a bundle of questionnaires under his arm. Early in 1962, he became Dr. Wallace. The subsequent euphoria of these former Edsel men did not stem entirely from the fact of their economic survival; they appear to have been enriched spiritually. They are inclined to speak of their Edsel experience--except for those still with Ford, who are inclined to speak of it as little as possible--with the verve and garrulity of old comrades-in-arms hashing over their most thrilling campaign. Doyle is perhaps the most passionate reminiscer in the group. "It was more fun than I've ever had before or since," he told a caller in 1960. "I suppose that's because I worked the hardest ever. We all did. It was a good crew. The people who came with Edsel knew they were taking a chance, and I like people who'll take chances. Yes, it was a wonderful experience, in spite of the unfortunate thing that happened. And we were on the right track, too! When I went to Europe just before retiring, I saw how it is there--nothing but compact cars, yet they've still got traffic jams over there, they've still got parking problems, they've still got accidents. Just try getting in and out of those low taxicabs without hitting your head, or try not to get clipped while you're walking around the Arc de Triomphe. This small-car thing won't last forever. I can't see American drivers being satisfied for long with manual gear-shifting and limited performance. The pendulum will swing back." Warnock, like many a public-relations man before him, claims that his job gave him an ulcer--his second. "But I got over it," he says. "That great Edsel team--I'd just like to see what it could have done if it had had the right product at the right time. It could have made millions, that's what! The whole thing was two years out of my life that I'll never forget. It was history in the making. Doesn't it all tell you something about America in the fifties--high hopes, and less than complete fulfillment of them?" Krafve, the boss of the great team manquƩ, is entirely prepared to testify that there is more to his former subordinates' talk than just the romantic vaporings of old soldiers. "It was a wonderful group to work with," he said not long ago. "They really put their hearts and guts into the job. I'm interested in a crew that's strongly motivated, and that one was. When things went bad, the Edsel boys could have cried about how they'd given up wonderful opportunities to come with us, but if anybody did, I never heard about it. I'm not surprised that they've mostly come out all right. In industry, you take a bump now and then, but you bounce back as long as you don't get defeated inside. I like to get together with somebody once in a while--Gayle Warnock or one of the others--and go over the humorous incidents, the tragic incidents...." Whether the nostalgia of the Edsel boys for the Edsel runs to the humorous or to the tragic, it is a thought-provoking phenomenon. Maybe it means merely that they miss the limelight they first basked in and later squirmed in, or maybe it means that a time has come when--as in Elizabethan drama but seldom before in American business--failure can have a certain grandeur that success never knows.
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