In the 1950s, GE's initially vague promise of progress would be embodied in products. GE jet engines would power airplanes, GE reentry systems would bring rocket payloads safely down to earth. GE nuclear power plants would generate electricity, and GE digital computers would serve banks and stand poised to serve laboratories, offices and schools. Supporting this wide range of businesses, GE would radically change its structure by decentralization. It would replace a unified bureaucratic structure run by committees with a federation of Business Departments, each run by its Department Manager with only limited direction from the corporate office.
All this progress, however, would have an anticlimactic ending. In 1960 an old nemesis would rise up and bite GE. Its source was not the icons of the new age, such as nuclear reactors, rockets or computers. Instead its source was GE's old electrical equipment manufacturing businesses. Its symbol was a human gesture: a wink.
This chapter addresses three questions. How did GE's vague 1954 concept of progress get embodied in specific products? How did GE's decentralization compare to the structural changes of other giants? What's with that wink?
In embodying progress in products, the most straightforward evolution was in aerospace technology. Aeronautics for GE before 1940 had been focused on its pioneering but struggling turbosupercharger effort. This had influenced the Army Air Force's choice of GE in 1941 to build a U.S. version of the British Whittle jet. By 1946, GE had designed and built, on its own, two entirely new aircraft engines. The two illustrated a business dilemma. One was a turbojet. It employed improvements pioneered in Germany and developed at the government's NACA laboratories, such as an axial compressor, and a multiple can combustor. GE's own contributions included high temperature resistant alloys and improved combustion chambers. All this doubled the power of the Whittle jet. That paid off in the higher speed the Air Force wanted — but at the cost of very low fuel efficiency. Concentrating on turbojets might earn GE steady income from military cost-plus contracts. The low efficiency, however, might sacrifice the potential of serving the emerging and potentially much more profitable civilian airline industry.
The other new GE design addressed that efficiency issue. It was a turboprop, a gas turbine that drove a propellor. This gained efficiency but sacrificed speed. GE engineers and many others had by 1950 guessed the ultimate civilian airliner answer: combine turboprop and turbojet to get the best mix of speed and efficiency. The first effort to do this had been straightforward. On a 1940s experimental airplane, the XF 81 Orion, a 2000 hp. GE turboprop drove a propeller on a plane's nose, while a 500 hp. GE turbojet blasted hot gas out the tail. It flew, but proved no improvement on conventional piston engines. Only after 1960 would the right turbojet-turboprop combination be perfected. (455)
In the 1950s, GE's engine successes were a pair of military turbojets. The first, the J47, enabled U.S. Sabre Jets to fight on equal terms with the previously superior Russian MiGs in the skies over Korea. The next GE engine, the J79, powered U.S. fighters and bombers of the 1950s to world speed records. This performance enabled GE to outlast many aircraft engine rivals. Some were prewar engine makers, such as Curtis Wright. Others, such as electrical turbine-generator rivals Westinghouse and Allis Chalmers, had been, like GE, brought in on the turbo jet opportunity during World War II by the Army Air Force. By 1960 GE had outperformed all but one of its U.S. aircraft engine competitors. It had even gained overall leadership in some smaller markets, such as corporate jets. It was however, far behind the leader, Pratt and Whitney. GE had put its main 1950s civilian engine efforts into powering two ultimately unsuccessful Convair airliners. Meanwhile Pratt and Whitney had extended its lead by jet-powering the planes that made Boeing the world's leading airframe maker, first the military B-52, then the civilian 707.
Without government sales and support, GE Aircraft Engines would not have survived the 1950s. Without a larger role in the growing civilian airline market, GE Aircraft Engines' post-1960 future was very much in doubt.
In the "space" part of aerospace, the 1946 GE effort on V-2 rockets had led in 1948 to the company's development of an air to air missile under government contract. In the early 1950s the company briefly considered buying the Hughes Aircraft Company and using it to follow up on those early missile efforts. By 1954, however, GE had decided not to be a missile maker. "The missile was really an aircraft type product," said Herbert Slate, a participant in the GE project," and aircraft companies had that capability." (456)
Then, in 1955, a Missile Crisis emerged. The Soviet Union appeared to be developing rockets capable of delivering H-bombs to North America. This caused the Air Force to come to GE with a $100 million opportunity.It involved not sending rockets up, but bringing their payloads down. These "re-entry vehicles" faced extreme technical demands. Falling from the near vacuum of space into the denser atmosphere generated heating of up to 12,000 degrees F. This was hotter than the surface of the sun. That atmosphere also slammed on the brakes. The deceleration was the equivalent of stopping a 60 mph car within a distance in of 2 feet. It had to be done without diverting the vehicle from its intended trajectory, or disturbing its delicate electronics. These stiff demands helped GE get the contract. It could immediately divert dozens of engineers and scientists already on hand to meeting the challenges. This helped it beat out smaller companies and startups, who would have had to build such capabilities from scratch.
The urgency of the challenge was well understood at the Pentagon. It did not reach the general public, however, until 1957, when the USSR's Sputnik soared into orbit, while the U.S. answer, the Vanguard, fizzled on the launch pad. Talk of a "Missile Gap" filled the media. Less publicized were the U.S. military successes. In December 1956 an instrumented GE-built re-entry vehicle flew successfully on an experimental Air Force missile. In the Sputnik year of 1957, the first two U.S. long range missiles, Thor and Atlas, achieved successful flights of thousands of miles. The head of the Air Force missile program later pronounced the 6000 mile flight of the Atlas in December 1957 as the turning point in the Missile Crisis. By June, 1958, the Air Force officer in charge of the re-entry vehicle contract was able to make a pronouncement that combined technological pride with a chilling intimation of apocalypse. "The re-entry problem had been overcome" he proclaimed. "We could safely deliver and detonate a 'live' warhead on target". That live warhead would carry the recently perfected hydrogen bomb.
In 1960, a secret U.S. satellite above the USSR snapped its first spy-in-the-sky photographs. A secret GE project helped safely recover them by catching in mid-air a film capsule dropped from the satellite. The pictures showed that the USSR did not have the feared large number of operational ICBMs. The U.S. was already taking the lead. (457)
That re-entry vehicle success was only one of a wide range of GE government funded aerospace projects in the 1950s and 1960s. These included guidance systems for submarine launched Polaris missiles, a rapid-fire airborne machine gun, torpedoes that delivered at last on Edison's 1886 initiative, various radar systems, space satellites for navigation, communication and photography, and, in the most ambitious, though unsuccessful, effort, attempted development of a nuclear powered airplane.
GE rose in the 1950s to the nation's second place in defense contract dollars, behind only General Dynamics. Defense work held many attractions. For example, the cost plus fixed fee arrangement assured profitability. Government defense contracts also offered "progress payments". That is, the government paid while the work was going on, rather than waiting for the final product. "One factor that has been most helpful in eliminating the need for outside borrowing," said CEO Ralph Cordiner in 1954,
has been a contribution by those involved in defense activities. At present, 79% of our inventories and accounts receivable for defense production are covered by progress collection that amounts to $400 million. (458)
The Government also helped GE acquire new facilities, often at bargain prices. Most notable was a surplus wartime plant of Wright Aeronautical near Cincinnati OH, which became the main location of GE Aircraft Engines. Despite these attractions, GE announced in 1955 an intention to reduce the defense share of its total sales, from 25% down to 20%. This was not due to regret about being a merchant of death. Rather, it was because the defense industry seemed insufficiently profitable.The fixed fees amounted to a low profit rate. Claims of "spin offs" from defense into useful and profitable civilian products proved exaggerated. Missile re-entry vehicles, for example, achieved their high performance under highly demanding conditions by using materials and designs too expensive for civilian applications. Temperatures of 12,000° F. were unlikely to be encountered in the kitchen. (459)
The intended defense reduction did not, however, immediately happen. Government demands due to that Missile Crisis accelerated rather than decelerated GE defense efforts. Meanwhile, non-defense sales grew more slowly than expected. As a result, rather than shrinking to 20%, by 1960 the defense share of total GE sales rose to 26%.
In nuclear power, hopes for peaceful spinoffs from weaponry seemed brighter. The entry fee for GE was, as mentioned earlier, yet another military contract. This was for operating the massive secret effort at Hanford. WA that produced plutonium for nuclear bombs. In portraying its Hanford effort in 1950, GE painted an optimistic picture. This was misleading. The best history of the U.S. Atomic Energy Commission (AEC) reports the initial GE effort at Hanford as being characterized at the time as "inadequate", "precarious," "dreadfully inefficient" and "deplorable". (460)
Serious as those surface problems at Hanford were, vastly more serious problems came to lurk literally beneath the surface. Over the decades after 1945 Hanford became a contender for the title of "most polluted place in the Western hemisphere", perhaps missing out for the world title only because the USSR did even worse with its nuclear waste. At Hanford 177 underground tanks, some decaying dangerously over the years, came to hold some 54 million gallons of nuclear waste, the residue from the production of the plutonium used in 60,000 nuclear weapons. To fully clean up this mess and safely enclose the remains was estimated in 2023 as a decades-long project that would cost more than half a trillon dollars. Immediate health effects have so far proved less dire. A study of Hanford workers from 1945- 1981, which includes the years of GE's involvement, found that "Hanford workers continued to exhibit a strong healthy worker effect with death rates substantially below those of the general U.S. population" and that
comparisons by level of radiation exposure within the Hanford worker population provided no evidence of a positive correlation of radiation exposure and mortality from all cancers combined or of mortality from leukemia. (461)
Compared to Hanford's complex production of plutonium, the peaceful nuclear effort had a simpler goal: to boil water. Steam thus produced would, in the conventional way, turn a steam turbine generator to make electricity. Whether that nuclear boiler could ever compete economically with a conventional coal-fired boiler was very much in doubt in the early 1950s. By then, however, economics was not the driving force. The Eisenhower administration, the AEC, and Congress' Joint Committee on Atomic Energy, were determined to show the world that the U.S. could beat the USSR in the race to the peaceful atom. Hiroshima and Nagasaki might thus be justified, and Communist technology might be outclassed. "The United States knows," said President Eisenhower to the United Nations in December, 1953
that if the fearful trend of atomic military build-up can be reversed, this greatest of destructive forces can be developed into a great boon, for the benefit of all mankind. (462)
In 1947, the AEC had begun funding multi-million dollar peaceful atom efforts at 13 major labs from Brookhaven, NY to Berkeley, CA. GE's Knolls Atomic Power Laboratory (KAPL), near Schenectady, was a major participant. GE set out to develop a nuclear reactor that could run on the plentiful uranium isotope U-238, and produce both power and the bomb ingredient plutonium. Sale of that plutonium to the government could help meet defense needs, reduce power costs, and stretch out the domestic uranium supply. That GE's candidate for a civilian reactor design was called an Intermediate Breeder Reactor (IBR). The name referred to the breeding of plutonium using an intermediate level of kinetic energy of the neutrons that performed the atom-splitting breeding process. The GE design also sought to make the whole process more efficient by the use of molten sodium instead of water to carry the reactor's heat. Sodium, though a better heat-carrier than water, was also far more hazardous. The GE researchers believed, however, that sodium's added efficiency outweighed its serious but manageable dangers. In 1948, this dual-use (power and breeding) IBR concept was extended to a third purpose. At the request of the Navy's Hyman Rickover, GE agreed to also explore the use of a sodium cooled reactor to power a submarine.
Almost immediately, a key part of this ambitious effort ran into trouble. In 1948-1949, tests at KAPL and Hanford indicated that the Intermediate Breeder Reactor would not breed enough plutonium to be of practical use. GE dropped the breeding, but pushed on at exploring the sodium reactor for civilian power and for military submarines. Then, by 1950, Rickover convinced the AEC to focus the GE reactor effort entirely on submarine propulsion. In this hijacking of the GE Knolls Atomic Power Laboratory effort, the GE sodium cooled approach became only a backup. Rickover had already enlisted rival Westinghouse to develop a simpler reactor also aimed at submarine use. Its coolant was water, not sodium. Water, unlike sodium, would not burst into flame if leaked into the substance in which a submarine was immersed. (463)
It was this Westinghouse pressurized water reactor (PWR) that in 1954 successfully powered the world's first nuclear submarine, the U.S.S. Nautilus. Two years later the U.S.S. Seawolf, the first and only U.S. sub powered by a GE sodium cooled reactor, limped to completion. It quickly encountered problems that made it obsolete. The Seawolf is now remembered mainly for one of its officers, Lieutenant Jimmy Carter.
GE put its best face on the situation. A test version of the sodium cooled reactor was installed in 1953 just a few miles north of Schenectady, at West Milton, NY. On July 18, 1955, it generated what GE proclaimed to be "the free world's first commercial atomic-electric power". Visitors posed for pictures in front of the reactor's iconic spherical pressure vessel. Some then ate "the first hamburgers cooked by atomic-electric power." (464)
After the hoopla, this already obsolete GE sodium reactor at West Milton was quietly replaced with a Westinghouse PWR. Its use would not be to provide power to the people but to train future Naval submariners. GE's KAPL was assigned henceforth to work only on PWRs for naval vessels, in competition with Westinghouse's Pittsburgh, PA Bettis Lab. This cooperative competition continues to this day, though GE has not managed KAPL since the 1990s.
Back in that same year of 1955, Westinghouse held at Shippingsport, PA a more realistic public peaceful atom ceremony. Westinghouse immediately set out adapting the PWR to civilian power use. Support for this industrial effort narrowly won out in Congress in 1954 over a rival proposal for the AEC to build six full scale nuclear plants as a fully governmental program. Instead, Westinghouse's Shippingsport PWR became in 1955 the first effort of the Atomic Energy Commission's private industry led Power Reactor Demonstration Program. (465)
In retrospect, it might have been wise for GE in 1955 to have come over to the PWR for civilian as well as military uses. It could then have waged with Westinghouse the same kind of competitive cooperation (or cooperative competition) that served society so well in such technologies as electric railways, turbines, jet engines and (post-Seawolf) nuclear submarines. GE's top nuclear expert, Karl Cohen, advocated this approach in the 1950s, but was overruled. Instead in 1954-1957 a GE working group composed of experts in reactor design, chemistry, metallurgy and electric power engineering went looking for other nuclear reactor concepts. (466)
This led to visits to the AEC's Idaho test site where experiments were being carried out on a range of such ideas. From that collection of concepts, GE chose the Boiling Water Reactor (BWR). It had originally been proposed by Harold Urey, a University of Chicago physical chemist, Manhattan Project participant and Nobel laureate. It had been proved feasible in tests led by a government mechanical engineer Samuel Untermyer, whom GE then hired. Like the PWR, the BWR's coolant was water. The difference was in the plumbing. The PWR used two separated loops of water. One carried heat out of the nuclear reactor. Then, in a heat exchanger, that reactor water heated a separate water loop that made steam for the turbine. The BWR used one loop to do both functions. This made it conceptually simpler, but also introduced drawbacks in materials performance. (467)
Whether one of these types is superior to the other is still being argued in the 21st century. The fact that there were, in 2023, significantly more PWRs than BWRs in the U.S., 63 to 21, suggests that the advantage may lie with the PWR. An internal GE 1978 study supported that suspicion, identifying a persisting performance differential in favor of the PWR. GE technology analyst John Fisher wrote to GE Power Systems technology manager Thomas Lee in 1978 that the study
examines the possibility that the BWR/PWR performance differential may be diminishing as a result of evolving nuclear design. Unfortunately there is no evidence of such a trend over the ten-year period ending 12/31/77. (468)
Looking beyond that corporate debate, many 21st century experts think neither of these "light water" reactors was ever the best choice. Some view other less-tried options as potentially superior. These include Canada's "heavy water" reactor, the gas-cooled reactor, and the thorium fueled molten salt reactor.
GE placed its bet on the BWR. In 1958, GE's Annual Report announced a two phase program to accelerate the commercial use of BWR based nuclear power. Phase 1, Operation Sunrise, called for an accelerated development program to achieve economically competitive nuclear power within a decade. The first experimental unit, a small scale 50 MW unit for Pacific Gas & Electric in California, was already under construction. Meanwhile, Phase 2, carried out in parallel, aimed at gaining experience on operating other experimental reactors at the GE Nuclear Department's Vallecitos, CA headquarters. Both phases aimed toward the 1960 operation of the first full scale BWR. This would be a 180 MW reactor at Dresden, IL. It was funded jointly by GE and Commonwealth Edison (the same electric utility that had, under Samuel Insull in 1903, bought GE's first full scale steam turbine). The project got only a relatively small ($20 million) government subsidy. Further plans called for fully privately funded, economically competitive, nuclear electricity by 1965. (469)
Operation Sunrise was controversial. Some GE nuclear technologists thought it moved too fast. That 1965 target required building each next generation reactor before operating the previous generation's model. Better to learn fully about the limitations of each reactor generation, fix the likely to be encountered dislocations of scale, and develop cost-saving production improvements, before moving on to the next level. For example, GE Power Systems executive Glen Warren wrote in 1957 that
It is unfortunate that political, international, and other non-economic considerations are forcing the technological development of such [nuclear] plants, with resultant high costs and risks at a rate much in excess of the real needs or normal rate of technical advance. (470)
In parallel with this choice of a reactor type, GE carried out an intensive study of nuclear hazards. "The possible magnitude of public liability arising from nuclear accidents is one of the major problems confronting industrial atomic power development," that study's 1956 report concluded. In part that problem was addressed politically. In 1957 the federal government passed the Price Anderson Act. It put an upper limit of $60 million on the amount that industry might have to pay in the event of a nuclear accident. For damages beyond that limit, the government would pick up the tab, up to a total of $500 million, a sum described as "high enough to convince, not so high as to scare." As for the cause of such damages, the GE study concluded that "serious damages will be due to the spread of released radioactivity and not to explosive effects." It estimated the probability of such an accident as follows:
If 1000 reactors are in operation, one of these may be expected to fail so severely as to cause a disaster.
To further reduce that disaster expectation the study added that
If a reasonable additional expenditure is made to house the reactor in a special building to contain the radioactivity released in a reactor accident, we conclude that the probability of disastrous spread of fission products will be reduced by a factor of 100.
GE adopted the recommendation. The GE experts estimated that this decision reduced the probability of an accident releasing a significant amount of fission products to the atmosphere to somewhere between 1 in 10,000 and one in a million reactor-years. Other U.S. nuclear reactor makers made the same design choice. The containment vessels' iconic spheres, domes, or cubes became the outer structures of all U.S.commercial nuclear reactors. This contrasts with the Soviet Union RMBK type reactor which did not have a containment structure. Due to that lack of containment, the 1986 disaster at Chernobyl, Ukraine, led to the release and scattering over a large area of such radioactive elements as plutonium, iodine, strontium and caesium. (471)
While pushing nuclear toward that 1965 commercialization target, GE also explored a more speculative nuclear future. From 1955-1965, it carried out at its new Research Lab a program experimentally exploring nuclear fusion, the energy source that powers the sun and other stars. This resulted in a GE fusion demonstration at GE's "Progressland" exhibit at the 1964 World's Fair. By then, however, it was clear that GE's "theta pinch" technology, like everyone else's 1950s fusion proposals, was far from practicality. Fusion subsequently receded further into the distance. Indeed, commercial fusion seems further away in the 21st century than it had seemed in the 20th. (472)
In summary, for all its public optimism regarding nuclear technology, GE was in an uncomfortable position by 1960. It seemed to be promising practical, safe, economic nuclear powered electricity in just five years, without further government subsidy. Yet it had no evidence that this challenging and costly goal was actually within reach.
The third major embodiment of GE's 1950s brand of progress was electronics. This held both short range and long range promise. The short range was television. The years 1950-1955 marked TV's rocket-like ascent from luxury to necessity. GE, under its nationally respected electronics czar W. R. G. Baker, followed fast behind TV leader RCA. Baker shifted the GE focus from living room TVs encased in fancy furniture to smaller and more affordable sets movable throughout the house. This helped GE to be one of the dozen or so survivors of the 140 companies that entered television manufacturing after World War II. GE increased its market share to 16% by the middle of the 1950s. Baker also championed the next innovation, color TV. In 1956, however, as part of the company's decentralization initiative, Baker, his health failing, was replaced by a numbers-focused professional manager. When RCA launched its major color TV initiative in 1956, GE's corporate strategists demurred. That color product, they concluded, was doomed to failure due to its high price, lack of prime time programming, and technical complexity. Initially, this judgment seemed confirmed. The color displayed on RCA's initial 1956 models was unconvincing. The sets frequently went out of adjustment. GE CEO Ralph Cordiner remarked that a purchaser of an RCA color TV needed also to hire a full time engineer. Time Magazine joined in, labeling color TV 1956's "flop of the year." (473)
That apparent flop turned out to be only a pause. RCA's color soon took off, leaving GE with what a manager of the GE television department described as an "uphill battle". As its market share fell due to its tardy entry into color, cutthroat competitive pricing on small black and white sets slashed profits, well before the Japanese came in to administer the coup de grace. (474)
Computers in 1950 stood where TVs had stood in 1930. They worked, but only for dozens of specialists, not for millions of customers. To operate a 1950 computer required thousands of fragile and frequently failing vacuum tubes, encased in a collection of cabinets that filled a room. It offered an tiny fraction of the computing power that today can be put on a fingernail sized chip. The computer's scientific uses were highly specialized, its business machine possibilities barely glimpsed, its general consumer use still science fiction. UNIVAC and IBM had been the first movers. GE was one of the first companies to apply a computer to everyday business use, putting a UNIVAC in its Louisville, KY appliance plant. As one of the dozen or so U.S. companies with sufficient electronics expertise and available capital to manufacture these complex devices, GE timidly tested the waters. (475)
In 1950 the Schenectady Works built for the company's Aeronautics and Ordnance Systems Department the first GE digital computer. In 1952, Baker's Syracuse electronics department delivered a second to the Air Force. Baker then sent subordinate George Metcalf on the road to explore possible further computer sales to insurance companies. Metcalf immediately received summonses to appear at the offices of two CEOs. IBM's Thomas Watson told Metcalf to stop poaching on his territory. GE's Cordiner concurred. Apparently good relations with equipment customer IBM outweighed GE's slender computer sales prospects. Metcalf was then invited by GE corporate in 1954 to lead a study of electronics futures. The study enthusiastically recommended that GE launch a computer business immediately. The recommendation was rejected. A slight loophole, however, was left open. GE could pursue computation that helped it sell control systems to its industrial customers. (476)
Once again, as so often in GE's history, external events trumped corporate level strategizing. Anticipating a back room overload crisis in the handling of personal checks, the Bank of America sought automation. It hired the Stanford Research Institute, which invented an automatic magnetic method of reading and processing checks. In 1955, the bank sought a manufacturer for this "ERMA" (Electronic Recording Machine, Accounting) system. IBM could have had the contract. It sought, however, more control over the technology than Bank of America was willing to relinquish. This opened the door for lesser contenders, such as GE and RCA.
The GE internal entrepreneur was a relatively low level manager at the Syracuse electronics operation. Homer "Barney" Oldfield was an MIT trained aeronautical engineer. As a marketing manager, he had helped sell that first GE computer to the Air Force. While running a Microwave Lab in Baker's electronics empire, he heard about the ERMA opportunity and went after it. He used two arguments to sell the idea to the skeptical corporate office. One was the large size of the contract, $31 million. The other was that corporate loophole. ERMA was an industrial control system, Oldfield claimed, not a general purpose computer. This was a deception. The Oldfield-Baker intention all along was to enter the general computer business. GE's electronics division won the ERMA contract, executed it successfully, and gained extremely favorable publicity for GE. That, as well as the general market takeoff of the computer industry, brought the corporate office on board. By 1957, GE had created a Computer Department under Oldfield's management. At the department's Phoenix, AZ location, a team led by computer engineer Arnold Spielberg (father of future movie director Stephen) developed and put into operation by 1960 the GE-225, GE's first commercial general purpose computer.
So in 1960, GE stood committed to three new industries that had not even existed in 1940: jet engines, nuclear power, and computers. Each industry seemed launched on an exponential growth trajectory. Each appeared likely to someday rival or surpass electrical manufacturing in annual sales. In none of them had GE entry been strategized by the corporate office. GE was pulled into jet engines and nuclear by the military, and pushed into computers by enthusiasm at its own lower levels.
By 1960, each was demanding massive investment in order to even glimpse significant profitability. On which of the three should GE push in more chips and bet its future? Meanwhile, there arose a business no one associated with GE. In a 1959 Time Magazine cover story on GE there was not a single mention of the company's new business that had already reached profitability; the business of selling advanced materials to industry. (477)
GE's need for electrical insulating materials had spawned a chemicals business by the 1920s. It was insignificant in the 1930s when GE's research lab got involved. That lab had been pretty quiet on the innovation front since the ca. 1910 patents of Langmuir and Coolidge had protected the profitability of the light bulb business. Then, in the 1930s, Research Lab chemist Eugene Rochow invented a better way to make silicones, a then obscure family of materials in the new category called polymers. This, and subsequent wartime government support for work on high temperature electrical insulation for bombers and submarines, gave GE an entry against the dominant silicone maker, Dow Chemical. Quietly, that GE Silicones Business built up a series of niche products that propelled it slowly to 1957 profitability. This included waterproofed films, bathtub sealants, caulkings for window frames, and an expensive but high-performance type of rubber. In the 1960s, boots soled with GE silicone rubber trod on the moon. GE also, however, sold off for a song the rights to its most memorable silicone invention, silly putty. Silicones were a mere drop in GE's sales bucket. Their greater importance was to sell GE on the idea that there was money to be made from advanced materials. With this realization, more successes followed. (478)
In 1950 GE Research Lab scientists had also begun following up on the earlier discussed promising but unsuccessful wartime diamond making project of Harvard Nobel Laureate Percy Bridgman. Two recently hired chemists, Tracy Hall and Bob Wentdorf, and two recently hired physicists, Francis Bundy and Herb Strong, were put to work in a basement lab of the new GE Research Lab.
GE would later portray this ultimately successful four year quest as a model of scientific teamwork. For most of the project's four years, that description was correct. The last month or so, however, produced a frenzied dash to the finish line. It turned out that one of the physicists, Herb Strong, had developed the right chemistry for the process. One of the chemists, Tracy Hall had built the right apparatus for applying the needed high pressure. Each kept the details of his finding to himself in the race to be first over that finish line.
Those two partial solutions were brought together by accident. Strong accidentally and unwittingly contaminated his apparatus with a tiny seed diamond used in earlier research. Finding that tiny seed diamond when he examined the result of a test run, he incorrectly (but honestly) believed he had made diamond. This got everyone's attention, including Hall. He now saw the chemistry he should use in his better pressure vessel. Almost immediately he started making small diamond crystals in a process that was reproducible. Meanwhile. Strong could never reproduce his apparent success. Not wanting to air these details, GE management credited the success to a team effort. This led to Hall, his claims to being the inventor denied, to resign and accept a professorship. His request that GE let him use his own invention was denied. He proceeded to invent a second way to make diamond and set up his own business. There was material here for a TV drama — and indeed Hall's story was later used as an object lesson in the curse of bigness in an episode of the TV series Breaking Bad.
In 1954 GE publicly introduced its process for making industrial diamond, completing a quest at which generations of scientists and engineers had failed for centuries. Unsurprisingly, the success provided a publicity bonanza. More surprisingly, it was rapidly commercialized and soon became profitable business. (479)
A less glamorous and more slowly exploited chemical success ultimately produced far more profit. In 1953 chemist Dan Fox, while experimenting with normally soft polymer type called polyester, accidentally and surprisingly made an exceptionally tough plastic. For some time, "Dan Fox's lollipop" was dismissed as a curiosity. When it was recognized as a potential product, GE learned that Fox had been barely beaten out for the key patent by a German chemist. The GE work was good enough, however, to secure a lucrative cross licensing agreement. The GE version, called Lexan®, got ultimately used on everything from bulletproof glass to compact video disks. It became GE's biggest materials money maker ever. More high performance plastics followed. By 1980, GE sales of advanced materials would be $3 billion a year, equal to GE's total sales in 1959. (480)
Riding the wave of that plastics success was a young Ph.D. chemical engineer working at GE'S Pittsfield, MA works. He had nearly quit GE in his first year there, 1960, when he heard that another new hire had gotten a bigger raise than he had. It took a late night session with his GE management mentor to convince Jack Welch to give GE another chance.
Within a decade, he would not only have moved from engineering to management, but would be widely recognized as the most successful young manager in the company. After leading two polymer innovations to profitable business success, he rose meteorically to the top spot of the plastic business, and soon far beyond.
To organize all those diverse business bets, GE had bet its future on a radical internal change. In 1946 Charlie Wilson had ordered GE to decentralize. He left it to his then assistant, and 1951 successor, Ralph Cordiner, to work out the details.
Cordiner had spent a short 1939-1942 stint running the Schick Razor Company. That had been the immediate source of his GE nickname, Razor Ralph. But it was the perfect fit that made the name stick. The image of a compact, sharply honed blade, combining high performance and threat, fit the man. Many respected, but more feared, Ralph Cordiner.
He was born in 1900 on a 1200 acre wheat farm in the state of Washington. After graduating from Whittier College, he first sold washing machines, then, in 1923, joined GE. In the 1930s he became assistant to the GE Bridgeport Works top manufacturing man, Charlie Wilson. In that assistant role, except for that brief Schick stint, he followed Wilson to the top (then pulled the ladder up behind him by subsequently banning use of the title assistant in GE). He had contempt for what he saw as GE's disorganized corporate culture, which he described as a "sinecure for mediocrity". Though himself a PYM and Elfun he was not much attracted to the forced camaraderie of Association Island. In 1959 he would give it, Sacred Elm and all, to the YMCA. He especially missed the existence of a GE organization chart, with its implied clear assignment of responsibility. He would tell how he was once appointed to a key consumer products management post, only to run into a colleague who, under a different title, had been assigned the identical set of responsibilities. As Wilson's assistant, Cordiner had planned how to change all this. From 1951 on, as Wilson's successor, he instituted the changes.
The full decentralization, unveiled in 1953, was in many ways the standard Chandler-style Multidivisional form (M-form). GE decentralization pushed day to day management down the hierarchy to the operating level. GE's many hundreds of products were parcelled out among some 100 Business Departments (initially 70, but gradually increasing, by the 1960s to as many as 170 before being cut back). The post of Business Department Manager, formerly nonexistent or insignificant, suddenly became the keystone of the new GE. (481)
That Department Manager now had responsibilities similar to those he would have had if he owned the business. He commanded all the needed specialties: manufacturing, engineering, marketing, finance, legal, and labor and community relations. He had his own factory in his own location. He could make capital expenditures of up to $500,000 without higher level approval. This post of Department Manager suddenly became the grail for ambitious young GE professionals. As one of them, Don Craig, put it: "What he [Cordiner] was talking about — decentralization, one man responsibility, double your pay — all this appealed to a young guy." (482)
To a large degree, Cordiner's program delivered on its promise. Illustrating that success was GE's industrial controls business. It included everything from tiny switches in small factories to giant control panels for running a steel mill or opening and closing the lock gates of the Panama Canal. The control business' organization had mirrored GE's haphazard evolution. Responsibility was diffused, and often conflicting. One organization, under a Vice President of Engineering, designed controls. Another completely separate one under a Vice President of Sales, sold them. A third, under a Works Manager, manufactured them. The salesmen might promise something the engineers could not design, or the manufacturers could not make. By 1950, about as many people worked on controls at the Schenectady Works as made turbine generators. Hundreds of different controls were designed, sold and made. Some were unique designs, customized for a single sale. All were produced in a manner nobody fully understood. They were shuttled, in various states of incompletion, from location to location among the many buildings of the Schenectady Works, followed by a train of complex, often lost or incomplete, paperwork. As a result of this chaos, GE controls, though well designed, in great demand from industry, and manufactured with good quality, consistently lost money.
Rather than trying to untangle the chaos, Cordiner decentralized it. One vaguely defined business became four sharply defined Business Departments at new GE locations: Appliance Contols at Morris, IL, Industry Control at Roanoke, VA, Specialty Control at Waynesboro, VA, and General Purpose Control at Bloomington, IL. By 1960, all of these departments, run by capable and enthusiastic young managers, were still making well designed, eagerly demanded, and good quality controls. They were also, however, all now making money. (483)
By 1956, Cordiner could review his decentralization program and declare it a success. GE was expected to grow in the 1950s more than twice as fast as as the U.S. GDP, which Cordiner expected to increase 40% in the decade 1956-1966. This fast growth GE would now be fully decentralized, with 21 divisions, each headed by a Vice President. Those VPs only lightly supervised the level where the real responsibility lay: the 100 product departments, each headed by a Department Manager.
GE was also high tech, with one out of every 13 of its 250,000 U.S. employees a scientist or engineer. It would still be overwhelmingly a U.S. company, with only 29,000 overseas employees. Its 200,000 products would be distributed over the entire U.S. economy: 35% consumer, 20% utility, 20% industrial components & materials, 25% user products for industry, 20% defense. Its 138 plants in 107 U.S. cities in 28 states produced in 1956 sales of $3 billion and earnings of $200 million. Its payroll of $1.2 billion meant an average of $4800 per worker.
In Cordiner's view, the biggest challenges the company faced were not technological, or managerial, but government and labor related: "excessively high taxes" … "growing unchecked union power" … "a fantastically growing federal government" and "the latent suspicion of big business," a suspicion that provided "a tempting target for demagogues." That a challenge of similar proportions might lurk within GE management ranks was not among Cordiner's suspicions. (484)
Decentralization was widely regarded within GE as long overdue. The undercurrent of opposition that rose up against it was not due to the idea, but to how it was done. It was done by creating the cult of the professional manager.
Cordiner assigned the task of creating that cult to a scholarly MIT trained engineer named Harold Smiddy. Smiddy had served in management at several electric utility related companies, including GE's former financial arm, Electric Bond and Share. Coming to GE in 1948, he briefly managed, with much effectiveness, GE's chemical and air conditioning businesses. In 1953, Cordiner called him to corporate headquarters as chief management consultant. There Smiddy turned Cordiner's vague vision into rigid doctrine.
To implant this new doctrine, GE Department Managers were, from 1956 on, sent back to school. They had to take a three month course at GE's new management institute, created by Smiddy at Crotonville, NY. The initial Crotonville course featured lectures not only by by Cordiner and Smiddy, but also by such management experts as Dr. Lillian Gilbreth, Peter Drucker, and Gerard Swope. For homework, each Crotonville attendee received a five volume set of GE "Blue Books", written by Smiddy. They were heavy going. Merely defining the word "manager" required plodding through a swamp of platitudes. A professional manager managed "by blending thought and action… through planning organizing, integrating and measuring… in the balanced use of human and material resources… with due understanding of the skills and knowledge required to manage… with best pace, synchronized flow, timing and turnover", and so on through many tiresome pages. (485)
Fortunately, an astute student could sum it all up in a few short sentences. One was: "Manage by Objectives". This edict is often credited to Crotonville lecturer Peter Drucker. He was born in Austria and came in the U.S. in the 1940s. He gained a plum assignment as an embedded researcher at the corporate headquarters of General Motors. The result, though rejected by GM, provided the basis for his best selling book The Concept of the Corporation. [free PDF viewer required] Cordiner and Smiddy hired him as their chief consultant. This in turn led to his long reign as top U.S business guru. He was still going strong in the 1980s, advising, among others, GE's Jack Welch. Back in the 1950s Drucker and Smiddy were such close collaborators that Management by Objectives might be attributed to both.
That concept is simple to the point of obviousness. Provide managers with a clear set of objectives that are measurable. Evaluate managers' performance by the measurements they record. The management objectives set by GE in the 1950s were 1. Profitability 2. Market position 3. Productivity 4. Product leadership 5. Personnel development 6. Employee attitudes 7. Public Responsibility 8. Balance between short range and long range goals. GE provided this numerical order without explicitly labeling it a priority order. Almost certainly, however, it was one. Professor Ronald Greenwood, a Smiddy acolyte who wrote the leading book on GE decentralization, took great pains and eight pages to deny that profitability was the only thing that mattered. He further explained that profitability was much too complicated a concept to measure by such primitive ratios as profits as a percentage of sales, or profits as a percentage of investment. (486)
In actuality, a GE manager's life was much simpler. He had one main objective that far overpowered the others. This was gaining membership in the "Seven Twenty Club". The seven was the required percentage of profits to sales. The twenty was the required percentage of profits to investment. (487)
By contrast to that #1 objective profitability, Greenwood dispensed with #7 objective, the "Public Responsibility" in a single page. The GE Blue Book was even more concise. Public Responsibility was "simply… The obligation of the corporation to act as a good citizen within society." Greenwood noted only one numerical measurement of Public Responsibility: the 16 antitrust cases brought against GE from 1940 to 1960. The last of these, he notes, "gave American business as a whole its worst public relations of the century, perhaps of any century." (More on that case will follow).
The second key element of the Cordiner-Smiddy dogma was that a professional manager could manage anything. "When we become students of these principles and these disciplines of Professional Managing," Cordiner told the first graduating class at Crotonville, "it will be entirely possible to change people in diverse areas without in any sense of losing the temper of the operation at any point." This was reduced by Crotonville graduates to more succinct phrasing: a Professional manager could run anything from a pickle factory to a research laboratory. (488)
Reality proved unkind to this assertion. In such businesses as computers and nuclear power, putting management responsibility in the hands of professional managers lacking knowledge of the business and its key technologies proved a mistake. By contrast, success was more often achieved by keeping experts in the business and its key technologies in top management slots.
For example, George Metcalf was among the older of the new Department Managers. He had joined GE back in 1928 after graduating as an engineer from Purdue. He has been mentioned as an early GE champion of computers. Under decentralization he achieved a notable string of management successes. He was one of the four department managers leading a decentralized control businesses. His was perhaps the most difficult one, the miscellaneous category left over after the more identifiable areas had been assigned, but he led it to profitability. After that, he managed the highly successful and nationally crucial Re-Entry Vehicle Department.
In attributing credit for his management methods, he was tepid in his approval of the Cordiner-Smiddy management gospel. For example, though a Crotonville graduate, the portion of it he dwells on in his memoir is not the classroom or lecture hall. Instead, it is the students' nightly poker games. These, he said, enabled each aspiring executive to assess the judgment of the people they would soon be competing against for those choice management positions. More generally, Metcalf gave more credit to management mentors from an older generation, such as W. R. G. Baker and Aerospace Division Manager Jim LaPierre. They kept to the spirit more than the letter of decentralization, allowing Metcalf considerable independence. In doing so he drew more on his accumulated experiences in electronics and aerospace than on the gospel of professional management. (489)
A second major management success was Charlie Reed. After getting his Ph.D. in chemical engineering from MIT at 24, Reed spent five years on the faculty, then moved on in 1942 to the GE Research Lab. The Chemical Department quickly commandeered his skills to turn that Rochow silicone invention into a production process. Managing construction of GE's first silicone plant, Reed boldly doubled plant size to reduce future costs. This appeared at first an overreach. Then, however, under early decentralization in 1952, Reed was made Manager of a new Silicones Department. There he focused successfully on finding those earlier mentioned silicone market niches. He stuck with it for five years, bringing the business into the black in 1957. It proved the model for future Reed-managed GE Chemical Business successes. He was no rebel, conforming sufficiently to ascend to a Vice Presidency. He did not, however, embrace the professional management cult, with its narrow focus on this year's numbers. As he put it, "don't let the bean counters set your strategy." Nor did he believe in the mythical professional manager who could manage anything. He stuck to areas where his chemical engineering training paid off, seeking the technological edge. (490)
Successful managers in the 1950s did not have to be young, or brought up in new businesses. Glenn Warren was the heir to leadership in the steam turbine business, succeeding, W. L. R. Emmet and Oscar Junggren. Warren was born in Missouri in 1899, the son of the editor of a small-town socialist newspaper. "I never became a socialist myself," he later wrote. Instead he tried to incorporate "the best socialist ideas" into the "capitalistic system." They included public works projects at times of high unemployment and social security for all citizens. As an engineering student at the University of Wisconsin in 1915-1919 he thought he could invent a gas turbine which would be superior to the then existing steam turbine. He could not. The talents honed by trying, however, earned him a job in 1919 with the GE Steam Turbine Department. His success as a design engineer led Schenectady Works Manager Charles Eveleth to appoint him as a "coach" of the turbine department, the sort of undefined Steinmetz-like "Supreme Court" role that decentralization would eliminate. Holding that role under various job titles from 1922 to 1947 prepared him to become in the 1950s the Turbine Division's top manager. (491)
He recognized the merits of the Cordiner program, writing
I have had a growing enthusiasm for, and now complete acceptance of our basic concepts and establishment of decentralization.
He had, however, reservations about the specific details.
Particularly in the areas of marketing and engineering… we might suffer some disadvantages.
The main disadvantages involved the abolition of division staff. These veteran engineers embodied the collective wisdom of the turbine generator business, as Warren himself had done on his way from designer to "coach" to top manager. The department manager could not be expected "to assemble all the expertise he needs", said Warren. Nor could he expect to get the needed turbine-generator related wisdom from the generalist corporate staff. The current decentralization edicts about staff, Warren wrote, subjected new turbine generator department managers to "the old theory that the best way to teach a young person to swim is to throw him into water over his head." Warren's Manager refused to pass this memo on to Cordiner. Revisiting the memo eight years later, Warren concluded that his concerns had been "borne out." The absence of division staff had weakened the technological capabilities of that core GE business. (492)
Lou Rader had joined GE on 1938 with a Ph.D. in electrical engineering from Caltech. He alternated management positions at GE with jobs in academia and other companies. Denied the manager job in the new GE Computer Department in favor of a non-technical professional manager, Rader had taken the top spot at the UNIVAC Division of Sperry Rand. There he did so well that in 1964 GE hired him back as Vice President of its Industrial Electronics Division, overseeing the GE Computer effort. There he gained the confidence of the technical team, and led some of the most successful thrusts of that troubled business, including the early time sharing triumphs, and the ultimately successful development of the GE 600. While doing this Rader found his efforts complicated by his GE superior, Corporate VP Hershner Cross, a man without knowledge of computer business or technology. Cross ordered frequent reorganizations, and overruled Rader by filling key Computer Department positions with people without computer knowledge. Cross's management style was, wrote Homer Oldfield in his GE Computer history, "a stunning demonstration of the GE philosophy at the time that a professional manager with Crotonville credentials could manage anything." Eventually Rader was moved over to run GE Information Systems, a rare GE Computer success. It would be a marketing expert and believer in the Cordiner professional management creed who would preside over the Computer Department's demise. Rader would return to academia, becoming one of the nation's leading authorities at the intersection of technology, education and social change. (493)
GE Aircraft Engines' best manager also defied the bean counters and management science dogma. Even before he arrived at GE, Gerhard Neumann's life story was remarkable. He grew up a Jew in Nazi Germany. He apprenticed at 16 as a motor mechanic, then graduated from technical school.
With war just five months away, in April, 1939, he took a job maintaining aircraft engines in China. There, though officially an an enemy alien, he would provide such valuable service to the Allied side that he was made an American citizen by special Act of Congress. After the war, he drove a jeep from Vietnam to Iran. Soon afterward, he mailed in a job application to a company with which he was barely familiar, called General Electric. (494)
Sent to GE's Lynn, MA works, he quickly proved his worth by leading a challenging effort to install a facility for testing jet engine compressors. In 1950, when airflow problems hampered the efficiency of a GE turbojet, he devised a fix called the variable stator. It was a mechanical means of adjusting the angle of previously stationary blades at the engine's input. This solved the problem, won him a major aviation award, and sent him on a rapid rise up the management ladder. In discussing his leadership on the experimental engine applying that variable stator concept, he described management somewhat differently than did the Cordiner-Smiddy Blue Books. "During the assembly of the 12,000 parts that make up a jet engine," he wrote, "all of us were one team: workers, managers, foremen, and engineers, The designers had as many black fingernails and bruised knuckles as the union workers standing next to them." (495)
When made manager of the Jet Engine Department in 1955, he took pride in the fact that he had risen, he said, "without the of Crotonville rules of management education." When named the Manager of the GE Flight Propulsion Division in 1961, one of his first actions was, in his words, to "recentralize the division counter to GE's publicly declared philosophy at the time". As part of that recentralization, he would gather employees, a thousand or more at a time, under a rented circus tent for "Herman the German's camp meetings." Despite his unique background and accent, his frankness and spontaneity ensured he was understood. Indeed, he turned his uniqueness to advantage, encouraging semi-mythical tales. (496)
In one such story he was called on by a corporate boss to use his native tongue to deliver a sales pitch to a German customer. The customer came to the GE boss afterward and complained that he had not understood a word. "Neumann," the boss barked. "I knew you couldn't speak English. I didn't know you couldn't speak German either!"
That appealing Neumann legend was not, however, the whole story. Brian Rowe, an admirer, and a successor as manager of GE Aircraft Engines, later provided some balance.
Although Gerhard had a great innate sense for leading and motivating people, he never built any close relationships with members of his leadership team. Surprisingly, the ones he seemed not to get along with were the ones who seemed to perform best for him… [he was] a militaristic leader, but he had an amazing personality that enticed people to work for him even if they did not appreciate his style… He had a sign on his office wall reading "feel insecure"… He had a bit of the old up-from-the-ranks bull-of-the-woods foreman-to-manager style. Sometimes he pitted members of his staff against each other. (497)
As Neumann took command in 1960, GE Aircraft Engines was a long way from competing strongly in the important airline engine market. He was however, the right man to finish that crucial job.
As those examples suggest, some of GE's best managers of the 1960s stuck to the fields they knew best, rejected the Crotonville good-manager-can-manage-anything eclecticism, and defied the bean counters. They placed personal leadership and solid growth ahead of meeting the numbers at all costs.
Also resisting the Cordiner cult was the Schenectady Works. It had reached its all time highest employment of 45,000 in 1945. After a post-war reduction, the Korean war had brought that number back up to 40,000. (498) It operated on three shifts, turning out perhaps the most diverse set of products as any single location in the world. As the control business story indicated, however, Cordiner's decentralization aimed to move many of those businesses out. Those moves ranged from sending the Research Laboratory five miles down the Mohawk River to moving the civilian nuclear power business across the country to California.
A prime destination for these moves was, increasingly, the Southeastern U.S. Some 60 new GE plant locations were added from 1946-1956. In 1946-1951 one-sixth of these new plants were in Southern or border states. Between 1952 and 1955, that fraction rose to more than one half. "We looked at the Middle South and found the economic climate right for the operation of a General Electric plant," said Cordiner. (499)
A big part of that right climate was local anti-union sentiment. The CIO's post-war effort to organize unions at the new southern plants, which lasted from 1946 to 1953, was largely a failure. GE did provide a few exceptions. The large GE Appliance Park in Louisville, KY and the transformer plant in Rome, GA were both unionized. Most GE southern plants, however, began and stayed non-union. By 1960 GE had some 35 non union plants. In the 1960s this would double. (500)
The older fully unionized plants became prime targets for Cordiner decentralization. He expressed an intent to shrink GE employment in Schenectady from 40,000 to 25,000 or less. He put this tactfully to the Schenectady Chamber of Commerce in 1953, calling the Schenectady Works the "seedbed for future products and industry." That was a nice way of saying that as the seeds sprouted, they would be transplanted, grown and harvested elsewhere. Blue collar jobs would follow those transplants. Left in Schenectady would be, increasingly, white collar employees such as researchers, engineers, salesmen and systems specialists. (501)
GE's white collar labor relations policies were featured in a 1950s best seller, William H. Whyte's The Organization Man. GE's corps of recruiters, Whyte explained, delivers 1000-1500 college graduates, mostly engineers, to the company's Schenectady headquarters. "The most noteworthy feature of the General Electric approach", Whyte wrote," is the emphasis on the professional manager." New white collar hires are taught "how our business system operates", "effective presentation," and "How to get people to do what you want them to do." White concluded regarding the aspiring manager that "to get ahead he must cooperate with the others, but he must cooperate better than they do." (502)
As new white collar hires arrived in Schenectady, businesses departed. A. C. Stevens, now manager of the GE Schenectady Relations Department, detailed the long history of business departures from the Schenectady Works: wiring supplies, switchboard and electric locomotives in the 1920s, radio receivers in the 1930s, electronics, refrigerators, and aeronautics and ordnance in the 1940s. (503)
One obvious reason for shrinking Schenectady was the strong union presence. Was, in fact Schenectady a hotbed of anti-company sentiment? How did Schenectady Workers balance union loyalty and company loyalty? Did they maintain union solidarity forever? Did they pragmatically adapt? Or were they Boulwarized into obedience?
Lacking data-based answers, a tentative and imperfect experiment had been tried. The legacy voice of those 1940s and 1950s workers does appear in at least one place that was not stage managed by either union or company. That is in the information their families supplied for their obituaries. The question asked concerned the listing of organizations to which the deceased belonged. These ranged from St. Adalbert's's Church to the Pop Warner Football Program to the Order of Odd Fellows to the Polish National Alliance. In this list, did the families list more often union membership, or membership in the GE Quarter Century Club?
The sample picked was obituaries of former GE workers appearing in the Schenectady Gazette in May of 1960, 1970 and 1980. In this collection of 47 obituaries, the GE Quarter Century Club appeared 16 times. A reference of any kind to any union appeared only once. That one appearance was in the obituary of an important IUE union member, its one time Vice-President Bill Hodges. It read "one of the founders of the defunct GE Workers Council, now Local 301, he was a member of the GE QCC."
In summary, this small exploratory study suggests that any idea that GE workers were radicals, or hostile to the company is at best unsupported by evidence. A more plausible view would look for more a more mixed story. Radicalism occurred in short and only occasional bursts, not as a mainstream attitude.
What did become mainstream for workers' families was upward social mobility. This was illustrated by the families this book has followed. Most had, in the 1920s and 1930s, six or or more extended family members employed at the GE Schenectady Works. By the 1950s, this had gone down to one or two family members. Examples in the 1950s were Adella Clune, a computer operator for the GE Telecommunications Operation. Joseph Gabriele and Jacob J. Nigriny, sons of semiskilled workers but themselves apprentice program graduates; Vincent Sarnacki, a planner in the Apparatus Department; Joe Mangino, bargaining agent of IUE Local 301; Esther Schwenker, like Kurt Vonnegut a GE technical writer at the Works; and Elbert J. Weller who had carried the family tradition of skilled apprenticeship into a third generation and worked in the GE General Engineering Lab.
Many of those just listed were the last of their family to work for GE. The fading out of these families from the GE roster was not, however, a case of the families themselves fading away. Instead, the younger generation was moving on beyond GE. Some moved into such professions as journalist, or physician. Some launched independent local busineses. The names of the families would appear in the decades ahead on such New York Capital Region businesses as a car dealership, a restaurant, a grocery store, and an electrical supply company. Meanwhile others would move on to similar carrers as professionals or small business owners in other parts of the country. (504)
In this climate of upward mobility that mixed company loyalty with union organization, at least one GE business was too deeply anchored at Schenectady to move out. That was the turbine generator business. Cordiner viewed it as exhibiting all the evils of the pre-war GE, such as centralization, disorganization and complacency. In his negative verdict of its performance, however, he was not supported by the experts. GE had hired a consulting firm to compare Schenectady to GE's newer single-product factories. The 1952 study of the Schenectady Works' turbine generator business found it "as efficient as any other General Electric plant" in spite of its "lack of system" and "slightly peculiar" style of operation. The consultants did complain, however that "top management, is just too proud of the fact that some employees feel free to chat informally." (505)
GE's steam turbine generator business did have a problem. It was a technological constraint. Since GE had entered the business at the turn of the 20th century, it had played a leading role in raising turbine efficiency. That efficiency had tripled, from 10% or less in 1900 to just over 30% in 1950.
This had been achieved by steadily increasing the temperature and pressure of the steam. In the process many dislocations of scale were overcome. It was becoming apparent, however, that the conditions of operation of 1950, just over 1000° F temperature and 2400 pounds per square inch pressure were about as high as these numbers would ever get. Nor would increasing the output of a single unit to above one Gigawatt (1000 Megawatts) achieve further cost reductions by economy of scale. "We began to reach diminishing returns," said engineering manager Charlie Elston. "The cost of the boiler and piping overwhelmed the economics." (506)
So it was not lack of professional management, but technological limits, that limited Steam Turbine improvement. Still, Cordiner interpreted the stasis as Schenectady's resistance to decentralization. Schenectady's managers had not been converted to Cordiner's views. As A. C. Stevens, the last Schenectady Works Manager, put it tactfully, "the Schenectady Works probably had the greatest difficulty of any works in the company to adapt itself to the changing philosophy that Mr. Cordiner brought to the company." Stevens' predecessor Louis Male — a former blacksmith, 1911 Socialist, and piecework rate setter — had been less tactful. There was nothing wrong with decentralization, Male said, that a good Depression wouldn't fix. (507)
In another business remaining at the Schenectady Works, technical leaders also had reservations. Philip Alger, was nicknamed "Mr. Induction Motor" for his leadership in that technical area. He was also a political activist who had given Schenectady its city manager form of government. He believed that just as city governments needed to access expert advice, GE's varied electric motor businesses needed to share common technical principles, as they had done since the days of Steinmetz. His efforts to do this in defiance of the decentralization edict against committees earned the following tribute from his induction motor colleagues.
With a fine disregard for the rules of organization as expounded at the time but with a fervent wish to accomplish things needed to be done, he preserved the distinctive features of the technical coordinating committee on AC machine development. (508)
Despite such localized resistance, at corporate headquarters GE's decade 1950-1960 seemed to be ending on a high note. For example, although Lemuel Boulware had retired by 1960, his policy scored in that year its greatest ever victory. In negotiations for a new contract in 1960, GE put forth an attractive offer. It included a new Savings and Security program supplementing existing pensions. IUE President Philip Carey sought more. He was quoted as saying that he "owed GE a strike." (He would claim misquotation).
In a vote on strike authorization in September, 1960, Schenectady local 301 overwhelmingly voted no. Leo Jandreau and local president John Shambo took this result to the national union's meeting in New York City. There they were outvoted by the other locals. Taking the national verdict home, Jandreau and Shambo put aside their local opposition to the strike in favor of national solidarity. They convinced IUE 301 to go along. In December, 1960, Schenectady and the rest of GE's union locations went on strike.
The strike ended quickly. Faced with opposition both within and outside the local, after a week Jandreau called the strike at Schenectady off. A nationwide collapse soon followed. From his role as consultant, Boulware could watch his approach vindicated as GE's single and unchanged offer was accepted.
So Ralph Cordiner could point by 1960 to success of both his key policies, Boulwarism and decentralization. In 1959, Cordiner appeared on the cover of Time Magazine, alongside the now familiar symbol of the atom. The story praised GE's leadership in nuclear power and jet engines. It described Cordiner as "a power packed man with restless eyes that are always fixed on the future." Cordiner was judged to have already delivered on the progress that GE had proclaimed five years earlier to be its most important product. (509)
The public face of that progress slogan was Ronald Reagan. He had joined GE in 1952 to host the televised GE Theater. He led it to Sunday evening ratings success. He soon added the second role of Boulwarist-style job salesman. He carried in person the company message to GE locations nationwide.
Did that experience convert him from a New Deal Democrat and union president (of the Screen Actors Guild) to a union busting, big government bashing, Republican? One book credits the direct influence of Boulware and Cordiner. Other interpretations credit the influence of his second marriage, or the big bite taken out of his then $150,000 GE salary by big government income taxes, or to Reagan's dislike of flying, leaving him plenty of time on transcontinental train trips to read economics books and think things out for himself.
Boulware and Cordiner certainly were both, by the 1960s, conservative Republicans. In 1964, Cordiner would be Finance Chairman for the Presidential campaign of Barry Goldwater. For that cause, Ronald Reagan would give a speech, in a style honed before those hundreds of GE audiences, that marked his transformation from fading movie actor to rising conservative icon. There is little solid evidence, however, that Boulware and Cordiner specifically groomed Reagan for that new political role. Boulware retired in the 1950s. Reagan had little contact with Cordiner. The one notable occasion they met in person was after Reagan inserted in his GE speeches criticism of the Tennessee Valley Authority. Cordiner called in Reagan and got him to remove criticism of that major GE customer from future remarks. In 1962, when the western drama Bonanza beat out GE Theater in the Sunday night TV ratings, GE let Reagan go in a not altogether friendly manner. (510)
In 1960 GE basked in favorable publicity from Cordiner's Time-cover celebrity. This was matched by the reality of the company's first major nuclear plant and first general purpose computer. Even GE's Appliances shared in the excitement, co-starring in the 1959 Moscow "kitchen debate" between Richard Nixon and Nikita Khrushchev. (511)
Actually all was not so well. Quietly at first, and then loudly, a long buried secret was surfacing. The secret's essence would later be captured in the 1961 congressional testimony of GE's sixth president, Robert Paxton. He described to Senator Estes Kefauver a 1948 conversation he had with Bill Ginn, a fast-rising GE subordinate.
MR PAXTON: I had a question from one of my sales managers present who asked if I really meant that they were to have no dealings with competitors… I believe the question came from Mr. Ginn, and he expressed it in a way that I believe I will always remember.
He said: "I didn't see you wink." (512)
The wink, Paxton explained was part of what he called a "code of communication." It meant that you were free to ignore GE Policy 20.5, forbidding meeting with competitors to fix prices.
In 1935, Paxton, as a young engineer, had been the recipient of such a wink. In 1948, he surprised Ginn by not winking. Ginn had been regularly winked at by Paxton's predecessor. Paxton was now trying to stamp out a practice he knew to be well established. He did not succeed.
Ginn went on in 1954 to become General Manager of the Turbine Department. In that post, he tried in his turn to convey a newfound allegiance to the company's antitrust policy to his subordinates. He presented the policy in earnest, without a wink. But, as he later conceded, "I didn't sell the thing to the boys well enough, because several of them still went off the reservation, even after my instructions."
The secret behind the wink emerged in 1959. The Tennessee Valley Authority complained to the Justice Department that it was getting identical bids from different companies on transformers and other equipment. Cordiner had just finished telling a Congressional Committee that GE strictly adhered to the antitrust laws. He assigned both an internal counsel, Gerard Swope, Jr., and an external law firm, to investigate the situation. Were GE employees meeting with competitors to fix prices? The two investigations reported no wrongdoing.
They were mistaken. Actually, GE marketers had indeed been meeting in secret with their counterparts from Westinghouse and other competitors to fix prices. Elaborate codes were used. The goal was to provide each conspirator with prices for bidding on utility contracts. Adherence to those price instructions would parcel out orders among the conspirators. Price fixing was not continuous. It occurred in episodes, punctuated by periods of legitimate competition or even "white sales" — episodes of viciously competitive price cutting that assured that nobody made any money. Even when the conspiracy was operating, misreading the codes could lead to mistakes. In all, the effort was as much a comedy of errors as a skillful conspiracy. It was, however, unquestionably a willful and criminal violation of the Sherman Antitrust Act.
In September, 1959, a Grand Jury convened in Philadelphia. A manager of a small company that made electrical insulators was the first to admit that he had participated in a price fixing cartel. With that confession, the floodgates opened. By November, 1959, one GE Vice President had confessed to price fixing and accused a second. GE was now an alleged participant in four cartels, ranging from switches to steam turbines. By February, 1960, multiple grand juries had indicted 40 companies and 18 individuals for conspiring to fix the prices on 17 products. Whole companies, such as I-T-E Circuit Breakers and Allis Chalmers had chosen to cooperate with the government. GE's corporate not guilty plea was, in the words of a careful student of the story, "trampled to death under a parade of grand jury witnesses." GE ultimately pled guilty to the major charges against it. Its fine of $475,000 was the largest of any of the 29 companies convicted. Three GE executives, including Bill Ginn, went to jail for 30 days each. The utility customers then sued GE for about a billion dollars. Charlie Wilson came out of retirement to argue that down to the lower hundreds of millions. (513)
Robert Paxton, who had become GE's President in 1958, took leave on grounds of health and never returned. Another Executive Committee member, Arthur Vinson, had been indicted for participation in the conspiracy, but the charges were dropped. Prosecutors had considered also indicting Cordiner, but decided against it. He would retain his CEO role until his 1963 retirement.
The details of this "great price fixing conspiracy" fill several books and thousands of pages of courtroom and congressional testimony. Here concern focuses on just a few main issues. First, how long had price fixing been going on? Price fixing in the electrical manufacturing industry had preceded both the passage of the Sherman Antitrust Act in 1890 and the creation of General Electric in 1892. Secret market sharing agreements between electric railway equipment companies Thomson-Houston and Edison GE were just the sort of cartels that the Sherman Act had made illegal.
GE had, as mentioned, been created to stabilize competition. Over the company's first generation various means, some of uncertain legality, were explored. These included the GE-Westinghouse Board of Patent Control, Electric Bond and Share, and the secret 1900-1911 light bulb cartel.
Those other tactics had been discontinued by 1925, either due to Federal prosecution or anticipation of it. Not so for price fixing. In a legal deposition, the President of th I-T-E Circuit Breaker Company testified that at least since the 1930s
General Electric and Westinghouse, and frequently Allis Chalmers have acted uniformly and cooperated with each other to the disadvantage of their smaller customers on innumerable occasions over many years.
Price fixing, he said, was not "a few sharp isolated events" but
a mosaic of incidents stretching in time throughout virtually the entire history of the electrical manufacturing industry and across many product lines.
He went on to detail examples he was familiar with dating back to the 1920s, as well as evidence from his company's corporate records showing how GE used the Board of Patent Control to eliminate competition back in 1905-1909. (514)
Only a few hints of price fixing appear in surviving GE papers. In June 1929, for example, Swope was told that the purchasing manager of Ford complained of getting six identical bids from electric motor manufacturers. Asking, "if that did not indicate a combine" the Ford man said that his boss Henry Ford was "highly displeased." Swope himself then met with the Ford purchasing manager and, apparently, smoothed out matters. Other instances were in the public record. For example, in 1937, GE and Westinghouse accepted a consent decree to stop fixing prices on turbine generators. (515)
Why did well paid, generally successful, not previously criminally inclined, employees feel the need to break the law? Their explanations boiled down to the belief that the conditions of their industry made it necessary. Those condition were the feast-or-famine nature of demand, the high capital requirements, and manufacturing overcapacity. That feast-or-famine nature of demand made it difficult to maintain a stable labor force, one sufficient to meet the feast of orders and also keep workers profitably occupied during the famine. Unlike light bulbs, such machines as turbine generators were tailored to a particular customers' demands. They could not, the price-fixers argued, be produced at a constant level and stockpiled until needed.
The high capital requirements sometimes drove the weaker companies to operate at a loss rather than passing up orders in difficult times. The resulting income was needed to pay fixed costs and avoid bankruptcy. This led to severe price cutting in tough times. The overcapacity that especially developed after 1945 meant increased frequency of those price-cutting white sales during which nobody made money.
One way to solve these problems, was to break the law. There were, however, alternatives. One had been presented in 1947 by veteran GE turbine generator engineer and manager A. R. Smith. He noted that the turbine generator business at Schenectady was about to move into a brand new building. Covering an area of 16 football fields, Building 273 would be the largest such manufacturing area in the world. It would be for the Schenectady Works the ultimate and last "big shop". It would quadruple steam turbine generator manufacturing capacity from 3 GW to 12 GW. That move offered Turbine-Generator, said Smith, a chance to shake off the "barnacles of tradition." Regarding orders, he said,
We have always had a feast or famine. When we had a feast we were too busy to do these things. When we had a famine we were too poor.
"Times are now different," he argued. Contrary to past practice, it should now be possible to level out the entire business system. Innovations could be systematically incorporated, rather than being added in an ad hoc manner that made every design unique. Those designs could be standardized around a few basic models. In downturns, production could continue, avoiding the layoff of skilled workers. Those machines not immediately ordered could be put in stock. In an experiment with such stock machines, Smith noted that "we have always disposed of them to advantage." (516)
Though the new building was built and occupied, no such systematic procedure was installed in it. To have done so, patience was required. The Cordiner ethic centered on annual profit measurements did not encourage such patience. It was easier to stick to business as usual, and then do whatever else it took, to stay in business. If that whatever else was violating the letter of the law, so be it. A repeated refrain of the participants was that they were only violating that letter, not the law's spirit. They were acting illegally but not immorally. They were not price gouging. They were merely keeping prices at the level needed for them to go on supplying valuable products, and for them and their competitors to live and let live.
This position was expressed most thoroughly by a GE engineering leader and manager not implicated in the conspiracy. Glen Warren accepted the Antitrust Laws as "correctly established to protect the public against the excessive profits and monopolization of markets which might follow restrictive agreements". However, he said "the present situation differs." GE did not gain excessive profits from price fixing. Instead, in his experience, it sought only to lessen the burdens under which a highly productive turbine industry labors. Those burdens included over capacity, a recent slowing of the growth in demand, and especially the extreme volatility of the order rate, with annual orders varying by a factor of five over a six year order cycle. This in turn had caused employment fluctuations of more that two to one. These pressures made it very difficult for even the biggest firms to operate. For the smaller ones, survival without market-sharing was perhaps impossible. So price fixing by the large companies, the ones who had "the least to gain" was not profiteering. It was an exercise in survival. The antitrust laws should distinguish between efforts at excess profiteering by monopolization and efforts "to stabilize the market so as to live and let live". (517)
What was the impact of this law breaking on the public? The hundreds of millions dollars extra in the prices electric utilities paid for equipment showed up as higher prices on consumers' utility bills. The impact should not, however, be overrated. In a detailed economic study of "Pricing in the Electrical Oligopoly" electricity utility economics expert Ralph Sultan concluded that "the conspiracy was impotent." The prices utilities paid for electrical equipment were not much different than they would have been in the absence of the conspiracy. (518)
The price fixing era was also an era of steady improvement in the efficiency of steam turbine generators. This was not due to dramatic breakthroughs. Instead it was due to a steady stream of small improvement. Thanks to that effort, efficiency rose from about 10% in 1900 to over 30% in 1960. This translated directly into falling real cost per kilowatt-hour of electricity produced. Many of those cost reductions were passed on to the consumer. In the decade 1950-1960, for example, electricity costs to the consumer fell by 25%. It would only be after 1960, when steam turbines had reached their efficiency limit, that electricity prices would begin to rise.That past record of falling consumer electricity price was in large part due to the engineering excellence of the price fixing companies. The Great Electrical Conspiracy is more noteworthy for its exhibit of plutocratic privilege and giant corporation arrogance than for causing actual consumer hardship.
The above downplaying of consumer harm sounds like corporate special pleading. There were, however, economists with no apparent axe to grind who gave theoretical reasons for minimizing the consumer effects of collusion. Concluded economists Chaim Fershtman and Ariel Poles: "In a market that supports only a small number of firms, we may well be better off encouraging collusion than deterring it. (519)
How about at the headquarters of that plutocratic privilege? What did Ralph Cordiner and his Executive Committee know, and when did they know it? Officially, the prosecution explicitly exonerated Cordiner and his Executive Committee from any knowledge. Unofficially, however, the reporter who most thoroughly covered the trials expressed skepticism. His account strongly suggests that at least one member of the Executive Committee, Arthur Vinson, participated in the conspiracy and successfully covered up his participation. He adds that the prosecution also considered indicting Cordiner. Its decision not to do so was pragmatic. The prosecutors wanted a quick clean verdict based on guilty pleas. They did not want a long battle over the ambiguous evidence that may or may not have convicted Vinson and Cordiner. (520)
At least one pre-1959 GE whistleblower had tried to contact Ralph Cordiner to expose price fixing. Jerry Page was an employee of GE's Switchgear business in 1957 when he sent Cordiner a letter correctly claiming that the GE Switchgear business had fixed prices. Page's management was, however, able to convince Cordiner that the evidence Page sent had a different and innocent explanation, and that Page suffered from psychological problems. The issue was dropped. (521)
Finally, what does the incident say about the Old GE as corporate citizen? It exposed company arrogance, entitlement, and a corporate culture that allowed managers to believe they were above the law. The arrogance operated on two levels. At the operating level, it was the arrogance of treating a clear violation of a major Federal law as if it was on the level of jaywalking. One might argue, as a historical alternative, that the U.S. should have legalized cartelization and price fixing, as some European countries did. A counterfactual retrospective case for a different law is not, however, an excuse for breaking the actual law.
At the top company level, the arrogance was a lack of due diligence regarding pricing. Cordiner was not alone in this. No GE CEO before him seems to have investigated energetically the possibility of price-fixing. Cordiner was however, on the job when the long-held secret was revealed, The champion of the science of professional management was caught professionally mismanaging.
Critics proposed two alternatives. If Cordiner knew that price fixing was going on, he should have been fired for a cover up. If he did not know, he should have been fired for incompetence. GE's stockholders avoided both of these alternatives. In 1961 they voted, by a 98% majority, to re-elect Cordiner to the GE Board of Directors. The Board proceeded to re-appoint him as its Chairman and the company's CEO. The April, 1961 GE Stockholders Annual Meeting at Syracuse NY was a Cordiner celebration. His expression of willingness to continue as CEO was greeted with wild approval. Speakers expressing disapproval of management were hooted down by shouts of "shut him up!" or "throw him out!". (522)
In celebrating Cordiner, that meeting said little about GE's business performance during Cordiner's first decade. By past standards it was mediocre. 1960 GE sales and earnings were only about 30% higher than in 1950. This contrasted with the company's previous average of more than 100% sales and earnings growth per decade. So ended a decade that had begun with a doubling down on diversification and progress. To answer the questions with which this chapter began.
How did GE's vague 1954 concept of progress get embodied in specific products? The new initiatives of the 1960s that made GE perhaps the world's most diversified company were not the result of strategizing by its top managers. The initiatives that gave meaning to the progress slogan were adaptations to a world of hot war, cold war and big government. GE was pulled into jet engines, nuclear power, and aerospace by the government. It was pushed into computers and advanced materials by its own lower level internal entrepreneurs. In all these areas GE was once again a fast follower, participating in innovation based on ideas brought to it from outside, and adapting to the events and trends of the world at large.
How did GE's decentralization compare to the structural changes of other giant companies? Here too, GE was a follower. Like Du Pont and General Motors before it, GE converted a unified bureaucracy into a collection of decentralized Departments. Everyday decision making was pushed down to the operating level, leaving the top corporate management free to focus on company-wide issues. In this decentralization, GE differed from others in its more rigid definition of professional management. The definition's voluminous rhetoric boiled down to two ideas. One was management by objective. The other was the claim that a manager who had absorbed the GE dogma could manage anything. The rigid definition proved problematic. The most successful GE managers of the decade achieved good results not because of, but in spite of, that rigid definition.
Meanwhile, the role of corporate headquarters came into question. If it was not strategizing the company's future, or providing useful consulting, or assuring good corporate citizenship, what good was it? Perhaps the only corporate function that emerged from the 1960s with demonstrable value was corporate research, creator of those profitable advanced materials businesses. As for the CEO and his Advisory Committee they had done well to decentralize the company. They had, however, marred that achievement by burdening it with the cult of professional management.
Finally, what was with that wink? It symbolized GE's most embarassing ever episode of bad corporate citizenship. Price fixing was not a single incident, but a long term pattern of behavior. It was both illegal behavior by individuals, and a failure by top management to detect and end that pattern of behavior. The particular characteristics of the electrical manufacturing industry may in part explain that pattern of behavior. Those characteristics do not, however, excuse it.
In conclusion, by 1961 GE's image was seriously tarnished. Its structure, however, was sound, and its prospects were unimpaired. Electricity use was still doubling every decade, and electrical manufacturing was still GE's core business. The possibility of getting back on the company's historical path of doubling its sales and profits in the coming still looked promising. To get back on that path, however, GE had a daunting task. It had to turn big progress — now publicly embodied in aircraft engines, nuclear reactors, computers, and contributions to national defense — into big profits.
Notes
- Sources for the description of GE's 1950s aircraft engines efforts include Schoenberger A. et al. 1979. Seven Decades of Progress. Aero Publishers. Garvin, Robert B. 1993. Starting Something Big: How GE Got into the Aircraft Engine Business. American Institute of Aeronautics and Astronautics. Rowe, Brian H. The Power to Fly. Pen and Sword. 2005. Bruce Buckland Oral History. 25 Feb 1980. General Electric Hall of Electrical History Collection, MiSci.
- Metcalf, George. 1992. Making Waves in the Information and Space Age. Binford and Mort. p. 91. Interview with Herbert Slate. 27 Nov 1981. General Electric Hall of Electrical History Collection, MiSci.
- Neufeld, Jacob, et al. eds. 1997. Technology and the Air Force. [free PDF viewer required] Air Force History and Museum Program. Day, Dwayne A. et al. 1998. Eye in the Sky. Smithsonian. pp. 117, 216-218.
- Cordiner to GE Management Conference. 27 Jan 1954. MiSci.
- Annual Report 1955.
- Hewlett, Richard and Anderson, Oscar. 1972. The New World. History of the Atomic Energy Commission Vol. 1. [free PDF viewer required] U.S. AEC. pp 39, 43, 63, 85. General Electric. 1950. Four Years at Hanford. (Online).
- Gallucci, Maria. 2023. A Glass Nightmare. IEEE Spectrum Online. Vartabedian, Ralph. 2023. A Poisonous Cold War Legacy. New York Times. 31 May 2023. Gilbert, E. S. et al. 1989. Mortality of workers at the Hanford site: 1945-1981. Health Physics 56.1-25. U.S. Government Accountability Office (GAO). 2020. Hanford Cleanup. GAO Highlights. Jan 2020.
- Address by Mr. Dwight D. Eisenhower, President of the United States of America, to the 470th Plenary Meeting of the United Nations General Assembly Tuesday, 8 December 1953 [free PDF viewer required].
- Cohen, Karl. 1953. Atomic Power as a Risk Venture. Bull. Atomic Scientists. Oct 1953. 305-308. Hewlett, Richard and Anderson, Oscar. 1972. The New World. History of the Atomic Energy Commission Vol. 1. [free PDF viewer required] U.S. AEC. pp. 192, 213, 217, 473.
- GE Monogram August 1955. Karl Cohen Oral History 17 Oct 1986. General Electric Hall of Electrical History Collection, MiSci.
- Bupp, Irwin and Derrian, Jean-Claude. 1978. Light Water. Basic Books. Pp. 35-38.
- J. B. McClure. Oral History. 30 Dec 1980. General Electric Hall of Electrical History Collection, MiSci.
- Mahaffey, James. 2009. Atomic Awakening. Pegasus. pp. 261-264.
- Fisher to T. H. Lee 4/21/78. John Fisher Papers. 2018-012. MiSci.
- Cohen, K; Zebroski, E. 1959. Operation Sunrise. Nucleonics. Vol. 17 (now on Internet).
- G. B. Warren to Robert Paxton 31 Jan 1957. Glen Warren Papers. 94.78.285. MiSci.
- Weinberg, Alvin. 1994. The First Nuclear Era. Springer. p. 174. J. C. Fisher et al. 1956. Nuclear Reactor Hazards. Project Analysis Memo PA-56-4. John C. Fisher Papers Box 2018004. MiSci. International Atomic Energy Agency. Frequently Asked Chernobyl Questions. On Line. 2023. Wellock, Thomas R. 2017. A Figure of Merit. Technology and Culture. 58. 678-721, with the probability estimate referenced above on p. 688.
- Interview with Willem Westendorp 4/7/76. General Electric Hall of Electrical History Collection, MiSci.
- Fisher, David and Marshall. 1996 Tube: The Invention of Television [free PDF viewer required]. Counterpoint. p. 328.
- Walter A. Peterson Oral History. Sept 1979. General Electric Hall of Electrical History Collection, MiSci.
- The origin of the GE computer business is described in Oldfield, Homer. 1996. King of the Seven Dwarfs. IEEE Computer Society. supplemented by Sniveley, George. 2007. Tall Tales from the Early Days of the Computer Business. Southwest Museum of Electronics and Computers. Sources for its subsequent history include "Computers: a Case History of Publicizing a New Company Business". Press Relations Seminar 18 Jan 1964. MiSci. Rader, Louis T. Vision for the Business. The Computer Business 1965. Frontiers of Progress. GE Computer Department 1961. and Something to THINK About. Barron's Magazine. 8 July 1963.
- Metcalf, George. 1992. Making Waves in the Information and Space Age. Binford and Mort.
- Time Magazine. 1959. Atomic Energy: the Powerhouse. 12 Jan 1959.
- The history of GE's entry into the silicones and polymer businesses has been told by two GE witness / participants, Liebhafsky, Herman. 1978. Silicones under the Monogram, Wiley, and Coe, Jerome. 2000. Unlikely Victory. American Institute of Chemical Engineers.
- Hazen, Robert. 1999. The Diamond Makers. Cambridge contains the details of this story as well as other episodes in a centuries long history of diamond making failure, error, fraud, intrigue, disappointment, and ultimately success (achieved independently and at about the same time as at GE by the Swedish company ASEA).
- The Lexan® story is detailed in Wise, George. 1985. Research and Results, on file at Special Collections, Union College Library, Schenectady, NY.
- Cordiner, Ralph. 1956. New Frontiers for Professional Managers. McGraw Hill.
- Interview with Donald Craig 31 July 1985. General Electric Hall of Electrical History Collection, MiSci.
- The control story is told in W. W. Beardslee, interview 15 Feb 1983. General Electric Hall of Electrical History Collection, MiSci.
- Cordiner, Ralph. 1956. New Frontiers for Professional Managers. McGraw Hill, especially pp. 21, 24, 37, 41 61, 117.
- Zimet, Melvin and Greenwood, Ronald G. 1979. The Evolving Science of Management. American Management Assn. pp. 188-190.
- Greenwood, Ronald G. 1974. Managerial Decentralization. D. C. Heath. pp. 61-68.
- Olaf Vea Oral History 24 Oct 1978. General Electric Hall of Electrical History Collection, MiSci. Rothschild, William. 2007. The Secret of GE's Success. McGraw Hill. p. 87.
- Cordiner, Ralph. 1956. The Challenge to General Electric. 3 Jan 1956. Address to Advanced Management Course. Crotonville, NY.
- Metcalf, George. 1992. Making Waves in the Information and Space Age. Binford and Mort. pp. 83-85.
- Reed's story is taken largely from Interview with C. E. Reed, 11 July 1986. Center for the History of Chemistry. Philadelphia, PA, and Banholzer, William. 2010. "Charles E. Reed" in National Academy of Engineering Memorial Tributes Vol. 13. pp. 205-209.
- Warren, Glen. 1945. Some Thoughts of an Engineer. 95.78.3; Glen Warren to Clarence Linder. 12 Oct 1955. Glen Warren Papers, MiSci.
- Warren, G. B. Statement with Respect to Division Organization. 12/31/1953. Glen Warren Papers, MiSci. Warren, Glen to Prof. Frank Bradshaw. 14 Nov 1961, Warren Papers, MiSci.
- Oldfield, Homer. 1996. King of the Seven Dwarfs. IEEE. pp. 168-76, 209-211.
- Neumann's story is in Neumann, Gerhard. 1974. Herman the German. Morrow. and Neumann, Gerhard. A Personal History. Recorded 1975. General Electric Hall of Electrical History Collection, MiSci.
- Neumann, Gerhard. 1974. Herman the German. Morrow. p. 214.
- Neumann, Gerhard. A Personal History. Recorded 1975. General Electric Hall of Electrical History Collection, MiSci. Neumann, Gerhard. 1974. Herman the German. Morrow. p. 229.
- Rowe, Brian H. The Power to Fly. Pen and Sword. 2005. pp. 86-87.
- The 45,000 figure was given by Works Manager J. M. Howell. Works News. 29 June 1945. p. 1.
- 1959 GE Annual Report. Cordiner quote is in Fones-Wolf, Elizabeth and Ken. 2011. Religion, Human Relations and Union Avoidance. Enterprise and Society. 13. 154-185. p. 162
- Kochan, Thomas. 1986. The Transformation of American Industrial Relations. Basic Books. p. 46. Fones-Wolf, Elizabeth and Ken. 2011. Religion, Human Relations and Union Avoidance. Enterprise and Society. 13. 154-185.
- Cordiner, Ralph. 1953. Speech to Schenectady Chamber of Commerce, 6 Oct 1953.
- Whyte, William H. The Organization Man. 1956 (2002 edition). Simon & Schuster (U. PA.) p. 120-125.
- Works News 25 June 1954, p. 1; 9 July 1954 p. 11.
- The family stories have been pieced together from the Schenectady County Historical Society Family Files [free PDF viewer required], Schenectady Occupational Directories, U.S. Census records, and the GE Works News.
- Richardson, Beltous and Henry Co. Inc. 1953. "Field Studies of Employee Relations Atmosphere in Six Plants". MiSci.
- Charles Elston. Interview 19 July 1984. YoU Collection. MiSci.
- Interview with A. C. Stevens, who quoted the Male remark. 26 Feb 1975 General Electric Hall of Electrical History Collection, MiSci.
- Philip Alger File, General Electric Hall of Electrical History Oral History Collection, MiSci.
- Time Magazine. 1959. Atomic Energy: the Powerhouse. 12 Jan 1959.
- Evans, Thomas W. 2006. The Education of Ronald Reagan. [free PDF viewer required] Columbia U. makes the strongest claim of GE influence on Reagan's politics. Cannon, Lou. 1982. Reagan. G. M. Putnam Sons. pp. 91-97 and Diggins, John Patrick. 2007. Ronald Reagan. Norton. p. 86 are more typical assessments that put far less emphasis on direct Boulware or Cordiner influence.
- Safire, William. 2009. The Cold War's Hot Kitchen. New York Times. 23 July 2009.
- P. 17218 Administered Prices. Hearings of the Subcommittee on Antitrust and Monopoly of the Committee of Judiciary of the U.S. Senate. Hearing no. 27 Price Fixing and Bid Rigging in the Electrical Manufacturing Industry. 1961. U.S. GPO.
- Smith, Richard Austin. 1973. Corporations in Crisis. Doubleday. p. 131.
- Pp. 2-3, 9-36. Testimony of W. M. Scott, President of I-T-E Circuit Breaker Company in the United States District Court for the Eastern District of Pennsylvania Civil Action No. 29379. 1959. MiSci.
- W. D. Cameron to Swope. 5 June 1929. Swope Papers. MiSci. Temporary National Economic Commission. 1939. Investigation of Cncentration of Economic Power. U.S. GPO. pp. 1736-1737. Federal Trade Commission Annual Report, 1937. p. 59. New York Times 5 April, 1937, p. 29.
- Smith, A. R. 1947. Recommendations. Turbine Generator Dinner 14 Feb 1947. Glen B. Warren Papers. 95.73.265., MiSci. On plans for Building 273, see GE 55th annual report 1946.
- Warren, Glen B. 1961. "A Rational Point of View With Respect to the Antitrust Law. 16 Feb 1951. Glen B. Warren Papers. 95.78.329. MiSci.
- Sultan, Ralph. 1975. Pricing in the Electrical Oligopoly. Vol. 2. Harvard.
- Fershtman, Chaim and Poles, Ariel. 2000. A Dynamic Oligopoly with Collusion and Price Wars. RAND Journal of Commerce. 31. 207-236.
- Smith, Richard Austin. 1963. Corporations in Crisis. Doubleday.
- P. 16892-4 Administered Prices. Hearings of the Subcommittee on Antitrust and Monopoly of the Committee of Judiciary of the U.S. Senate. Hearing no. 27 Price Fixing and Bid Rigging in the Electrical Manufacturing Industry. 1961. U.S. GPO.
- Glen B. Warren Papers 95.78.329(6) Misc Related to Antitrust. MiSci. New York Times 30 April 1961.