Biography: Alfred Sloan

Alfred P. Sloan, Jr., was born May 23, 1875 in New Haven, Connecticut, the oldest of five children. His father operated a wholesale tea, coffee and tobacco business, which he moved to New York City in 1885, settling the family in Brooklyn.

A fine student, Alfred, Jr. graduated from Massachusetts Institute of Technology at age 20. Sloan’s first professional position was as the general assistant in the tiny Hyatt Roller Bearing Company of Newark, New Jersey. Frustrated by Hyatt’s chronic failure to develop as a business, Sloan left to work for two years for one of the first companies attempting to perfect electrical refrigeration, determining eventually that the technology did not yet exist to successfully develop the product.

Hyatt in the meantime had lost its underwriter, and Alfred Sloan, Sr. arranged a $5,000 dollar investment in the firm on the understanding that Alfred, Jr. would assume control and see if he could put it in the black. Within six months, Sloan had managed a $12,000 profit. The following year, he began to target the infant automobile business, including Henry Ford.

Hyatt grew along with the automobile industry, becoming an important supplier. When Henry Leland rejected Hyatt bearings for his Cadillac cars, Sloan undertook to upgrade the Hyatt product to Leland’s standards. Precise Hyatt roller bearings became the standard of the industry, and the main source for Weston-Mott Company, which was acquired by General Motors in 1909. As a supplier, Sloan was well-acquainted with Buick General Manager Walter Chrysler, GM President Charles Nash and other auto industry pioneers.

In 1916, Billy Durant purchased Hyatt Roller Bearing Company for $13.5 million as a cornerstone of the United Motors Corporation, which was to manufacture various automobile components and accessories. Sloan was appointed the President of the diversified company, which he ran successfully.

In 1918 United Motors became a part of General Motors, and Sloan joined GM as a director and vice president. His “Organization Study,” written in 1919, became the blueprint for General Motors’ reorganization under Pierre S. du Pont following the crisis of 1920-21. Sloan organized GM according to his principle of “decentralized operations with coordinated control.” A revolutionary concept at the time, it became – and remains – the standard organizational model for large enterprise worldwide.

During the 1920s Sloan also spearheaded the innovative financial and marketing techniques that gave GM an advantage over other auto manufacturers. He is attributed with the aphorism “a car for every purse and purpose” that describes GM’s integrated, multi-brand marketing strategy.

Sloan was nominated as GM president and chief executive officer in 1923 and was elected board chairman in 1937. From 1956, he continued to play an important role at GM as honorary Chairman.
In 1963 Sloan published My Years with General Motors, an New York Times bestseller for 22 weeks. It is considered one of the small handful of classic business texts, and been continuously in print since its original publication.

In 1934, Sloan founded and endowed the Alfred P. Sloan Foundation. In 1948, he co-founded the Sloan-Kettering Institute for Cancer Research, and established the MIT Sloan School of Management in 1950.

Alfred P. Sloan, Jr. died on February 17, 1966 in New York City at age 90.