Tackling Ford's problems
The Whiz Kids found many problems at Ford. Here are some examples.Henry Ford II leapt at chance to hire Whiz Kids
Unconventional group hiring helped turn around an antiquated company
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Arjay Miller, who later became Ford's president, recalls that Henry Ford II moved quickly to hire the 10 young statistical control specialists who had imposed efficient management techniques on the Army Air Force during World War II.
"Before we left, Henry said, 'I want to hire all of you. Just put your name down and how much money you want,' " Miller said.
Clearly the group would be joining an organization far different from the military. But if Henry Ford II's decision to hire the Whiz Kids was impetuous - and his compensation-setting cavalier - those moves reflected the automotive heir's urgent need to revive the company.
When he hired the Whiz Kids, Henry Ford II was buying into the future, rolling the dice to see if the brash bunch of twentysomethings could modernize a sadly antiquated company.
Ford wanted managers to suit the crisp, confident postwar America emerging into global leadership and unprecedented prosperity. And that's what he got.
The Whiz Kids crunched numbers, codified procedures, churned out briefing books and drew up organizational charts. In many ways, Ford Motor Co. became the exemplar of the modern American corporation peopled by analytical, ambitious organization men.
In time, that management style created its own set of problems. But it was what Ford needed in 1945.
'Shooting fish'
Henry Ford II was battling to undo years of erratic, out-of-touch leadership by his grandfather. Henry Ford, the man who made the automobile a mass-market product, had by the end of World War II brought the company to the brink of collapse.
It would be a gross overstatement to say that the Whiz Kids - who entered the company with no automotive experience - saved Ford. In fact, Henry Ford II installed Ernest Breech, whom he lured away from General Motors, above them. Breech, in turn, appointed other senior executives to supervise the Whiz Kids.
Breech's cadre of experienced auto executives took key steps to stanch Ford's bleeding. University of Michigan historian David Lewis says that Henry Ford II wanted to emulate GM, so Breech and his group adopted many of GM's procedures. In Lewis' words, "They just got the GM manuals and substituted the word 'Ford' for 'GM.' "
But Ford's dire situation provided plenty of work for the Whiz Kids. Bob Casey, curator of transportation at the Henry Ford Museum in Dearborn, Mich., says Henry Ford stubbornly had refused to adopt industry innovations such as independent suspensions and hydraulic brakes.
In addition, Henry Ford's suspicion of outside auditors and internal bookkeepers had ruined the company's financial controls, Casey says.
"At one time, Ford knew the price of every part on a Model T down to a fraction of a penny," he said. "After World War II, they were lucky to know the cost of a car. Their systems were a mess."
The disarray was stunning, Miller says.
"It was unbelievable," he told Automotive News in a recent interview. "During World War II they lost money on cost-plus contracts. Now that takes some skill, to lose money on a cost-plus contract."
But the Whiz Kids had seen it all before. Ford's chaos paralleled the confusion and spotty record keeping they attacked at the Army Air Force to create an efficient fighting machine.
Many of Ford's problems could be solved by basic measures, Miller said. Ford, for instance, paid workers in cash - an enormously cumbersome practice - because Henry Ford had seen workers going into bars to cash paychecks and didn't approve.
Theft of materials was common. Clerks estimated accounts payable by weighing batches of invoices. Ford paid suppliers by check rather than wire transfer.
"It was just elementary," Miller said. "It was like shooting fish in a barrel."
Separate paths
The Whiz Kids' career paths diverged quickly. Andy Andreson quit within the first year, unhappy with the corporate environment and Detroit winters. At the other extreme, Edward Lundy spent his career at Ford, retiring in 1979 as executive vice president of finance - and one of the company's supreme power brokers.
"He built the best financial staff in the country, no doubt about it," Lewis said. "He made a long and positive impact."
Two of the group - Miller and Robert S. McNamara - rose to president of Ford, and several others were vice presidents. But several left Ford. The group's wartime leader, Charles "Tex" Thornton, bridled under Breech's authority and was fired in 1948.
With Thornton's departure, McNamara gained informal leadership of the group. His power, as well as Lundy's, grew, making Ford more and more a numbers-driven company.
Decades later, when the crisis of the late 1940s was a distant memory, the dominance of the company's finance people irked the car guys in manufacturing and product-development.
In The Reckoning, David Halberstam writes: "The growing power of the finance people made the creative people more vulnerable than ever. For the creative people always, no matter how good they were, made mistakes. ... By contrast, the finance men were careful. They were never identified with a particular product. They never had to create anything."
Other critics say the Whiz Kids created a cost-conscious, risk-averse culture that let quality slip and led, eventually, to the rise of import automakers.
Miller chafes at such criticism. Ford's sophisticated finance department was a strong competitive asset, he says. And casting the Whiz Kids as one-dimensional bean counters misrepresents them, in his view.
 Among these Ford executives are the Whiz Kids. In front, from left, are: Arjay Miller, Jack Reith, George Moore, James Wright, Tex Thornton, Andy Andreson, Charles Bosworth, Ben Mills, Edward Lundy and Robert S. McNamara. |
"That always sort of bothered me," Miller said. "We weren't a bunch of accountants. We knew the importance of people."
Casey draws two lessons from the Whiz Kids. They never fully grasped what he calls "the nonquantifiable aspects of the auto business" - styling, for instance, or the complexities of running unionized factories.
Cost was king
Probably the most troubling instances came when the numbers-crunching mentality conflicted with quality. In his book, The Whiz Kids, John Byrne recounts one instance in which the company refused to replace error-prone mechanical voltage regulators with electronic units. More reliable electronic regulators would have added $4 to the cost of a vehicle.
"Shaving a nickel or a dime off the cost of a part was a victory. ... Adding to the cost of a car, even to address key quality concerns - became verboten," Byrne wrote.
Certainly that tension between the car guys and the corporate leadership echoed through the Jacques Nasser era at Ford. Under Nasser, vehicle quality slipped as Ford pursued higher margins in other ventures.
Casey argues that the Whiz Kids era shows that any management philosophy, taken to its extreme, can become a liability.
"The trick - and it's really hard to do - is to see that a particular course of action you've chosen has run its course and it's time to move on," he said. "You could say that these guys pushed a good idea too far."
You can reach Dave Guilford at dguilford@crain.com. -- Follow Dave on 
