#121 Billy Durant and Alfred Sloan (General Motors)

**David Senra** (0:00)
I want to tell you about a one-time only limited event that I don't think you're going to want to miss. I am doing a live show with Patrick O'Shaughnessy from the Invest Like the Best podcast in New York City on October 19th. Patrick has interviewed over 300 of the world's best investors and founders for his podcast. I've read over 300 biographies of history's greatest entrepreneurs for my podcast. We'll be talking about what we learned from seven years of podcasting, sharing our favorite ideas and stories and doing a live Q&A. There will also be special event-only swag. If you live in New York City, I think it's a no-brainer. But if not, I think it's a great excuse to fly in. I've already heard from a bunch of people that bought tickets, they're flying in from other cities. Some people are flying in from other countries. That's setting the bar really high, so I will have at least four shots of espresso or four energy drinks before or during the show so we can make it a night that you'll never forget. If you're interested in attending this unique live event, I will leave a link down below. I highly recommend you get your tickets today and I hope I get to see you in New York on October 19th. They were oil and water in all respects. Billy Durant, the high school dropout, was the flamboyant dreamer and gambler focused on personal relationships and risk. Alfred Sloan, the MIT engineer, was the stern organizer and manager focused on data, logic and profit. Billy managed to create General Motors in bold defiance of the industrial and financial powers of his day. Alfred went on to transform it into the largest and most successful enterprise the world has ever seen.
Today, executives and employees all over the globe and all kinds of businesses are dealing with the effects of precedents set in motion by what these two men wrought in the first half of the 20th century. Their business legacies, like their lives, are studies in contrast. Billy was done in by his own wizardry and expanding his empire through financial manipulation and speculation. Alfred mastered both the art of corporate vision and the science of nuts and bolts management. Yet his tragic failure to understand the changing nature of their relationships between employees, company and government left a legacy of resentment and mistrust that remains unresolved today.
Okay, so that is an excerpt from the book that I'm gonna talk to you about today, which is Billy, Alfred and General Motors, the stories of two unique men, a legendary company and a remarkable time in American history and as written by William Pelfrey. Okay, so this is an ongoing series that I'm doing right now, where we're trying to learn from the wild personalities of the early automobile founders. So last week I did a biography of Billy Durant, the week before that, I covered the Dodge brothers and the week before that I covered Henry Ford. So back on founders number 73, 74 and 75, I did a three part series about Andrew Carnegie and Henry Clay Frick. And they were partners and their lives were so intertwined that it's hard to understand the career of one without analyzing the career of the other. And so as I was studying last week, studying Billy Durant, I realized how large a part that Alfred Sloan played in his own life story. So Billy's the founder gets kicked out and Alfred, like the author just said is oil to his water, is the one that actually transformed GM into the company, the wildly successful company that it became in the three decades that he ran it after. I realized you can't really study Billy Durant if you don't also study the life and career of Alfred Sloan. So this book compares and contrasts both of them. Next week, I'm going to analyze and review the autobiography of Alfred Sloan. Okay, so I wanna start at the very end and I wanna compare and contrast the way that they're remembered when they died. This is the end of Billy's life. And it says, apart from creating General Motors and losing control of it not once but twice, he had amassed and lost several personal fortunes. So no, I'm gonna try to avoid recovering the things that I already talked about in Billy Durant's career last week. Okay, so last week's podcast ended with him getting kicked out of GM. This paragraph I'm about to read you now is he still had another 20 or so years left in his life from there. And so this is a continuation of that. So he says, when he finally declared bankruptcy after losing all his money in the Stark Market crash of 1929 and the Great Depression, he listed his total assets at $250. That was the value of the clothes on his back. Remember, in 1920, about a decade before he declares bankruptcy, he was worth at least $90 million in $1920. Billy's obituaries, not surprisingly, focused on his spectacular fall rather than what he had contributed to the auto industry. And so now we have the author trying to restore a little bit of that balance. Says the New York Times mentioned only that he had been responsible for the building up of General Motors, when in fact, he had created the company single-handedly. That's a hell of a statement. Now listen to the difference in how Alfred Sloan was utilized. When Alfred died, all of the obituaries focused on how he had led General Motors to such heights. Under his leadership, the company share of the US automobile market had risen from 12% to 52%.