Alfred P. Sloan

Alfred Pritchard Sloan Jr. ( SLOHN; May 23, 1875 – February 17, 1966) was an American business executive in the automotive industry. He was a longtime president, chairman and chief executive officer (CEO) of General Motors (GM). First as a senior executive and later as the head of the company, Sloan presided over the growth of General Motors into one of the largest corporations in the world. During this period, GM spearheaded the adoption of the annual model change, brand architecture, industrial engineering, automotive design (styling), and planned obsolescence within the automobile industry. Such developments forever changed lifestyles as well as the built environment in America and throughout the globe.

Sloan wrote his memoir, My Years with General Motors, in the 1950s. Like Henry Ford, Sloan is remembered with a complex mixture of admiration for his accomplishments, appreciation for his philanthropy, and unease or reproach regarding his attitudes during the interwar period and World War II.

Born in New Haven, Connecticut, Sloan studied electrical engineering initially at Brooklyn Polytechnic Institute, then transferred to and graduated from the Massachusetts Institute of Technology (MIT) in 1895. While attending MIT he joined the Delta Upsilon fraternity. In 1898, Sloan married Irene Jackson of Roxbury, Massachusetts. The couple had no children, but Sloan was very close to his younger half-brother, Raymond.

Sloan became president and owner of Hyatt Roller Bearing, a company that made roller- and ball-bearings, in 1899 when his father and another investor bought out the company from the previous owner. An account stated that Sloan persuaded his father to buy a controlling interest in the company for $5,000 and let him manage it. Oldsmobile was Hyatt's first automotive customer, with many other companies soon following suit. Henry Leland was among his clients. By 1903, he was said to have summoned the young Sloan and castigated him for delivering inconsistent quality of his bearings' tolerances. According to Sloan, this conversation allowed him to gain "a genuine conception of what mass production should really mean." The Ford Model T also used Hyatt bearings and for a time, over half of the company's bearings went to Ford.

In 1916, Hyatt merged with other companies into United Motors Company, which soon became part of General Motors. Sloan became vice-president of GM, then president (1923), and finally chairman of the board (1937). In 1934, he established the philanthropic, nonprofit Alfred P. Sloan Foundation. GM under Sloan became famous for managing diverse operations with financial statistics such as return on investment; these measures were introduced to GM by Donaldson Brown, a protege of GM vice-president John J. Raskob. Raskob came to GM as an advisor to Pierre S. du Pont and the du Pont corporation; the latter was a principal investor in GM whose executives largely ran GM in the 1920s.

Sloan is credited with establishing annual styling changes, from which came the concept of planned obsolescence. He also established a pricing structure in which (from lowest to highest priced) Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac, referred to as the ladder of success, did not compete with each other, and buyers could be kept in the GM "family" as their buying power and preferences changed as they aged. In 1919, he and his corporate deputies created the General Motors Acceptance Corporation, a financing arm that practically invented the auto loan credit system, that allowed car buyers to bypass having to save for years to buy Ford's affordable car. These concepts, along with Ford's resistance to the change in the 1920s, propelled GM to industry-sales leadership by the early 1930s, a position it retained for over 70 years. Under Sloan's direction, GM became the largest industrial enterprise the world had ever known.

In the 1930s GM, long hostile to unionization, confronted its workforce—newly organized and ready for labor rights—in an extended contest for control. Sloan was averse to violence of the sort associated with Henry Ford. He preferred spying, investing in an internal undercover apparatus to gather information and monitor labor union activity. When workers organized the massive Flint sit-down strike in 1936, Sloan found that espionage had little value in the face of such open tactics, and instead the successful strike legitimized the United Auto Workers as the exclusive bargaining representative for GM workers.

In 1934, Sloan organized the Alfred P. Sloan Foundation, a philanthropic nonprofit organization.

Sloan gave extensively to programs in business management. The world's first university-based executive education program, the Sloan Fellows, started in 1931 at MIT under the sponsorship of a Sloan Foundation grant. MIT opened a School of Industrial Management in 1952 with the charge of educating the "ideal manager", and the school was renamed the Alfred P. Sloan School of Management. Additional grants established a Sloan Institute of Hospital Administration in 1955 at Cornell University, a Sloan Fellows Program at Stanford Graduate School of Business in 1957, and at London Business School in 1965. They became degree programs in 1976, awarding the degree of Master of Science in Management.

Sloan's name also lives on in the Sloan-Kettering Institute and Cancer Center in New York. In 1951, Sloan received the Hundred Year Association of New York's Gold Medal Award "in recognition of outstanding contributions to the City of New York".

The Sloan Foundation bankrolled the 1956 Warner Bros. cartoon Yankee Dood It, which promotes mass production. In the late 1940s, the foundation made a grant to Harding College (now Harding University) in Searcy, Arkansas. The foundation wanted to fund the production of a series of short films extolling the virtues of capitalism and the American way of life. This resulted in the production of a series of animated cartoons by John Sutherland that were released on the 16mm non-theatrical market, and also distributed theatrically in 35mm by Metro-Goldwyn-Mayer.

The Sloan Foundation's programs and interests are in the areas of science and technology, standard of living, economic performance, and education and careers in science and technology. For the year ending December 31, 2023, the total assets of the Sloan Foundation had a market value of about $2.38 billion.

As the war drew to an end, most economists and New Deal policy makers assumed that without continued massive government spending, the prewar Great Depression and its huge unemployment would return. The economist Paul Samuelson warned that unless government took immediate action, "there would be ushered in the greatest period of unemployment and industrial dislocation which any economy has faced." Many adhering to the prevailing Keynesian economic wisdom predicted economic disaster when the war ended.

Sloan felt otherwise and predicted a postwar boom. He pointed to workers' savings and pent-up demand, and predicted a huge jump in national income and a rise in standard of living. In line with his predictions, and despite a precipitous cutback in government spending and the wholesale closure of defense plants, the economy boomed. One of the greatest periods of economic expansion in US history resulted.