GM Passes Ford, 1918-1938: Designing the General Motors Performance-Control System Book

The dramatic story of how upstart General Motors got ahead of pioneer Ford—and has stayed ahead—is told here along with an explanation of GM's success. This book argues that GM won the race by designing a successful performance-control system, in harmony with cybernetic principles and systems theory, under the leadership of Alfred Sloan and his expert team. Henry Ford, the passionate individualist, meanwhile established a losing tradition described by the author as anti-team, anti-expert, and anti-system. GM's recent difficulties, according to Dr. Kuhn, are a result of its lapse from early policies.

In 1921 Ford held the largest share of a market ever attained by a single manufacturer, 59%, while GM had slipped from about 20% to 15%. Starting in 1924, GM climbed to over 40% of the market, a share it has held ever since, while Ford fell to about 10%. GM has outperformed Ford even more sharply in return to shareholders. The author, however, does not gloss over GM's weaknesses, especially its "laggard performance" in consumer safety and its "tunnel vision" in product development.

Although the concepts of "steermanship" and "inquiring systems" were not set forth theoretically until after 1938, GM's leaders applied these concepts organizationally during the boom-and-bust 1920s and 1930s. Most of the book describes the affinities and clashes of personality leading to GM's adoption and Ford's rejection of a performance-control system. The final chapters describe GM's generally superior performance but show why GM, in spite of that, has had difficulties in meeting recent challenges. Here is exciting history with a compelling message.