CADILLAC by Peter F. Drucker

“Dreystadt was Cadillac’s service manager when the Depression hit, and likely to stay forever in middle management. . . . Cadillac could not sell its high-priced cars at all and was about to be liquidated.

The only question was whether it would be abandoned altogether or whether the nameplate should be kept alive, with the majority of the GM executive committee, including Alfred Sloan and Donaldson Brown, in favor of giving up.

It was then that Nick Dreystadt—whom none of the members had ever met—gate-crashed the meeting of the executive committee, pleaded to be given ten minutes, and presented a plan for making Cadillac profitable again within eighteen months. And he did so by marketing it as a ‘status symbol.’

In charge of Cadillac service throughout the country, Dreystadt had come to realize that the Cadillac was the most popular car in the very small community of wealthy [African Americans]. An amazing number of big new Cadillacs brought in for service were owned by black entertainers, black boxers, black doctors, black realtors.

It was company policy not to sell Cadillacs to [African Americans]—the Cadillac salesman aimed at the ‘white prestige’ market. But the wealthy [black man] wanted a Cadillac so badly that he paid a substantial premium to a white man to front for him in buying one.

Dreystadt had investigated this unexpected phenomenon and found that a Cadillac was the only success symbol the affluent black could buy; he had no access to good housing, to luxury resorts, or to any other of the outward signs of worldly success. And so Dreystadt in the depths of the Depression, set out to save Cadillac by developing the [African American] market—and sold enough cars to make the Cadillac division break even by 1934.

Then he went on to make Cadillac into a moneymaker. Cadillac had sold a great many cars before the Depression, and at high prices, but it had never been profitable. It made luxury cars but made them by a luxury process, by hand, one at a time, and with high labor costs.

Dreystadt saw no reason why the high quality of the car could not be maintained under mass production. ‘Quality is designed and tooling, inspection and service,’ he said; ‘it’s not inefficiency.’ Within three years Cadillac had become GM’s most profitable car, and the market grew steadily.

Dreystadt spent money on design, more money on tools, and the most money on quality control and service. But he did not spend a penny more on production than was spent on the low-priced Chevrolet.

‘Mass production,’ Dreystadt once said to me, ‘is not what Mr. Ford meant. It isn’t the assembly line; that’s a tool. Mass production is using one’s brain and working smarter.’

What made Dreystadt, stand out was his attitude toward ‘persons;’ ‘Don’t say people,’ he would object, ‘say men and women.’ Under the union contract, a new employee was on probation for ninety days; unless rejected for cause he then became a permanent employee.

By the mid-forties, Cadillac was a huge business employing at least 8,000 people. Yet no foreman at Cadillac was allowed to reject a new employee except with Dreystadt’s approval.

Again and again foremen would come up and say: ‘Mr. Dreystadt, this man doesn’t come up to our output standards.’

‘How does he treat his tools? And his fellow workers? And you?’ And when the foreman said, ‘He’s all right, but he can’t do the job,’ Dreystadt would say, ‘We don’t hire men for ninety days here; we hire them for thirty years. During these thirty years he’ll surely get up to the job standards if he has self-respect and respect for the tools and his fellow workers.’ ”