The world changed in 1921, as much in Detroit as Kronstadt. In that
year the doctrine of the genius of the designer had to cede to the
desire of the consumer. This event happened in a specific place and
industry, that of the nascent automobile industry of the USA, centred
around Detroit. The US nascent US automobile industry had, like the
rest of manufacturing industry, diverted a substantial amount of
production from civilian to military ends during the First World
War. The post-war boom in demand had seen automotive output grow to
its highest levels yet achieved with the number of firms engaged in
car production reaching its all time peak of about 75 firms. However,
the post-war boom was quickly followed, in 1920 and 1921 with a severe
depression. Although short-lived, the depression of 1920-21 saw a more
precipitous fall in prices and employment than the subsequent and
infinitely more famous depression of 1929-33. Within the space of a
year prices fell between 50 and 60% - the most sudden and severe fall
in recorded economic history before or since. Exact unemployment
figures were not recorded at the time but the best estimate from
available figures is that unemployment surged from 2-3% up to about
12%, before returning back to 2-3% the following year. This brief but
savage slump saw awathes of American automobile manufaturers either go
to the wall or be swallowed up in mergers. Within two years a third of
the industry had gone and the after-effects left the industry down
from 75 to 35 players within a few more years. During this period the
sales of nearly all lines of cars declined drastically - all that is,
apart from a small number of makes that had closed bodies.
Evolving from horse-drawn carriages, most automobile bodywork had
retained a carriage-like configuration of open-bodied "touring cars"
with convertible tops such as Ford’s Model T sported. The closed body
carriagework had been first introduced by Cadillac but it’s value was
hotly debated by engineers, not least Ford himself. Prior to 1921 a
consensus had been reached amongst the engineers and manufacturers
that the closed body was a pointless, unnecessarily expensive,
flash-in-the-pan fad. The fact that those manufacturers who had gone
against the consensus to offer closed body cars to the public were the
only ones to see sales grow in the middle of the disastrous slump,
fundamentally changed the automobile industry in the first instance
and was ultimately to transform the whole of capitalist manufacturing
and business. The era of "You can have any colour you want, so long as
it’s black" was definitively over.
Another effect of the crisis of 1921 was to finally confirm the
passing of operational control of General Motors to the man who was to
become Henry Ford’s nemesis and, in many ways, the true father of our
modern era, Alfred Pritchard Sloan.
Unlike Henry Ford, Alfred Sloan was not an engineer or designer of
automobiles. Rather he was a true capitalist, a genius innovator in
the fields of corporate management and governance and marketing. Sloan
had been a director of a bearings manufacturer that had been bought up
by William Durant, the flawed but brilliant deal-maker extraordinare
who initially out General Motors together but was, ultimately unable
to sustainably run the corporate monster he had created. When the du
Ponts bought out Durant to protect their investment, they saw the
skills of Sloan and quickly pushed him to the fore.
Sloan’s inherited a car firm that was an aggregation of different
sites producing different models of cars, in comparison to Ford’s
unitary product and production facilities. Sloan’s innovations, which
were to allow General Motors to overtake Ford in volume of car sales
and become the largest automobile manufacture in the world, were in 3
main areas.
1. What Sloan called "the breaking down of the mass market, into a
mass class market". Rather than allowing the five different vehicle
lines that GM possessed to compete against each other, Sloan
segmented the consumer market and assigned each line a different
section. One for the starting out, young, single driver with no
kids and limited funds, from which the consumer could progress to
the sportier market, having gained a higher wage, then progressing
to the family car as they married and produced kids, and so on, up
to the luxury market with the Cadillac for the well-to-do. In
association with this strategy Sloan introduced segment-specific
targetted, aspirational marketting, with the first use of road-side
bill boards alongside other more traditional advertising outlets.
2. In contrast to Ford’s violent opposition to credit, Sloan
introduced the first provision of consumer credit for consumer
durables - credit for the masses had previously been limited to
land and built property only. Sloan’s consumer credit service
allowed buyers to purchase the Chevrolets or Pontiacs they would
not have been able to buy outright.
Both of which tied into the third innovation:
3. The annual model change. The idea of the annual model change was to
entice the consumers that already had functioning cars to replace
them (with the help of consumer credit) with this years new
model. The logic of the annual model change - enough new features
to make the new model more desireable than the old, but not too
much change to threaten the consumer’s confidence in the new car’s
re-sale value - was all laid out by Sloan.
The point of all of this innovation was to overcome the crisis of
over-production that Ford was rapidly running into. Ford’s Model T had
opened a new mass market of people who had never had cars before,
however by the mid-20s just about everybody in the USA who wanted a
Model T had one. What’s more they didn’t wear out that much and there
were plenty of spares and second-hand models available too. In this
sense Ford must be seen as a transitional figure, corresponding to the
opening up of the market, and Sloan as the mature capitalist,
overcoming the initial limit of the market by selling new cars to
people who already had cars. Sloan renegotiated the relation between
producer and consumer as regards the design or use value of the
car. If the consumers wanted closed body cars then GM (whose Cadillac
subsidiary had first introduced the closed body car in its Model
Thirty) would provide them, regardless of the prevailing consensus
amongst the professional engineers, conviced that they "knew
best". Following Massimo De Angelis thesis that capital overcomes
limits by operations of new enclosures, we could say that this
operation corresponds to the enclosure of some aspects of the
subjectivity of the consumers, in their production of desired use
values.
Ford the dominant figure of the transitional phase of the growth of
the motor industry from a small luxury market to a mass market. As
such, he represents the "heroic" era of the despotism of the engineer
over the intended use value of the product. Ford was absolutely
assured that he knew best, and this for him naturally extended from
the design of cars to the micro-managing of the lifestyles of his
workers and the running of society itself. Hence why this profoundly
sinister, fascistic and ravingly anti-semitic self-publicist became
the hero and idol of all the adherents of social despotism and
totalitarianism from Hitler, Mussolini to Stalin, as well as
fascinating Lenin, Trotsky and Gramsci. But the myopic vision of
political authoritarians, both of the left and the right, have
occluded the extent to which Alfred Sloan, not Henry Ford is the true
father of the modern consumer capitalist social order. In so doing
they have introduced the misleading periodisation of Fordism and
Post-Fordism into left analytical discourse. Look at the tropes of
post-modernism - the continual segmenting of the consumer into
ever-burgeoning and differentiated ideal types for example - is all
this already not present in the innovations of Sloan’s breaking the
mass market into the "mass class market" and associated advertising?
Consider Maurizio Lazzarato’s comments in his piece on "Immaterial
Labour":
"The postindustrial enterprise and economy are founded on the
manipulation of information. Rather than ensuring (as
nineteenth-century enterprises did) the surveillance of the inner
workings of the production process and the supervision of the markets
of raw materials (labor included), business is focused on the terrain
outside of the production process: sales and the relationship with the
consumer. It always leans more toward commercialization and financing
than toward production. Prior to being manufactured, a product must be
sold, even in "heavy" industries such as automobile manufacturing; a
car is put into production only after the sales network orders
it. This strategy is based on the production and consumption of
information. It mobilizes important communication and marketing
strategies in order to gather information (recognizing the tendencies
of the market) and circulate it (constructing a market). In the
Taylorist and Fordist systems of production, by introducing the mass
consumption of standardized commodities, Ford could still say that the
consumer has the choice between one black model T5 and another black
model T5. "Today the standard commodity is no longer the recipe to
success, and the automobile industry itself, which used to be the
champion of the great ‘low price’ series, would want to boast about
having become a neoindustry of singularization"—and quality. For the
majority of businesses, survival involves the permanent search for new
commercial openings that lead to the identification of always more
ample or differentiated product lines. Innovation is no longer
subordinated only to the rationalization of labor, but also to
commercial imperatives. It seems, then, that the postindustrial
commodity is the result of a creative process that involves both the
producer and the consumer."
Is this not simply the description of the development of the regime of
strategies that Sloan introduced in the 1920’s?
