#128 Henry Leland Cadillac

Summary Notes


In the early 20th century, Henry Leland emerged as a pivotal figure in shaping the American automobile industry, establishing manufacturing standards that rivaled and influenced contemporaries like William Durant, Henry Ford, and Alfred Sloan. Leland's meticulous craftsmanship led to the founding of both Cadillac and Lincoln, setting the bar for quality in automotive production. Despite facing adversity, including the eventual loss of Lincoln to Ford and a legal battle to uphold promises made to shareholders, Leland's unwavering commitment to precision, quality, and integrity left an indelible mark on the industry. His approach to business, rooted in a strong moral compass and a belief in the power of self-improvement and education, set him apart as both a master craftsman and a respected leader until his death in 1932.

Summary Notes

Podcast Introduction

  • Speaker A informs listeners about the change of COVID art back to the original in the podcast player.
  • The "misfit feed" is mentioned as the exclusive source for full-length podcast episodes.
  • The podcast will cover the book "Master of Precision" and delve into the early days of the American automobile industry.

"Just a quick note before today's podcast, I changed the COVID art that appears in your podcast player back to the original one that says founders. I just think it looks better than the previous one."

This quote indicates a minor update regarding the podcast's visual branding, which the host believes improves the podcast's appearance in podcast players.

Henry Leland's Influence on American Industry

  • Henry Leland is recognized for establishing effective manufacturing procedures and leadership in the automobile industry.
  • Leland's contemporaries included William Durant, Henry Ford, and Alfred Sloan, each contributing differently to the industry.
  • Leland's eminence in the industry spanned from 1908 to 1922.

"Henry Leland laid the foundation for the future American industry. He had established manufacturing procedures never previously so effectively employed and took a position of leadership."

This quote highlights Leland's pivotal role in shaping American manufacturing standards and his leadership in the industry.

Henry Leland's Contributions to the Motor Car Development

  • Leland's contribution was the establishment of high manufacturing standards.
  • Ford introduced the moving assembly line for affordable cars, recognizing Leland's influence.
  • Durant founded General Motors and contributed as a promoter and head of an organization offering various cars and parts supply companies.
  • Sloan reorganized General Motors with a system of financial controls.
  • The Dodge brothers and Walter P. Chrysler are also noted as significant figures in the industry.

"In comparing Leland with Durant and Ford, it should be pointed out that Leland's contribution to the development of the motor car was the establishment of high standards of manufacturing."

This quote emphasizes Leland's specific contribution to the automobile industry, focusing on high manufacturing standards.

Henry Leland's Background and Early Life

  • Leland's family were farmers, reflecting the broader cultural transition from farming to factory work in America.
  • Leland inherited a trustful disposition from his father and a commitment to doing things the right way from his mother.
  • Leland's family moved to New England to escape poverty and to seek opportunities in manufacturing.
  • Leland learned the value of reading and education, which influenced his later career.

"The transition that happens on an individual basis in his life, from farmer to somebody working in factories, is not only taking place in his life, but in American culture at large."

This quote contextualizes Leland's personal transition as part of a larger cultural shift in America from agriculture to industrial work.

Leland's Early Work Experience and Apprenticeship

  • Leland began working in factories as a young boy, contributing to the family's income.
  • He became an apprentice machinist, learning the trade while dealing with the long hours and low pay.
  • Leland faced skepticism from English coworkers about American craftsmanship, which motivated him to improve his skills.

"He's a teenager at this time, that he's very competent, so he gets the opportunity to become an apprentice."

This quote shows Leland's early recognition as a competent worker, leading to his apprenticeship and further career development.

Leland's Patriotic Service and Career Development

  • Leland's patriotism, influenced by his admiration for Abraham Lincoln, led him to contribute to the Civil War effort by making weapons.
  • After the Civil War, Leland worked at the Colt revolver factory but struggled with the lack of autonomy in factory life.
  • Leland's varied experiences, including farming, studying law, and volunteering, reflect his search for purpose.

"His reading and his feeling of the necessity to defend his country had made him deeply patriotic."

This quote captures Leland's patriotic drive, which later influenced his decisions during World War I and the naming of the Lincoln Motor Company.

Leland's Commitment to Precision Manufacturing

  • Leland decided to commit to factory work and sought to learn from the best in the industry.
  • He joined the most precise factory he could find to prepare for eventually starting his own business.
  • Leland's commitment to precision and order was a defining characteristic of his work ethic.

"Accordingly, he decided to go into the best factory he could find and learn all there was to be learned there."

This quote marks a turning point in Leland's life, where he commits to mastering the craft of precision manufacturing, setting the stage for his future contributions to the automobile industry.

Early Career and Confidence in Craft

  • The individual discussed in the transcript worked for Brown and Sharp, a company known for high-quality work.
  • He faced a situation where screws he made were rejected for not meeting quality standards, which he disagreed with.
  • Upon investigation, he found that the inspection gauges were worn and inaccurate, and his screws did meet specifications.
  • This incident marked the first time he felt thrilled with his work and led him to propose improvements in the factory's processes.

"The inspector who checked the output rejected thousands of screws, which Leland thought fully met specifications."

The quote demonstrates the individual's confidence in his work and his disagreement with the quality assessment, leading to his discovery of inaccuracies in the inspection gauges.

Factory Productivity and Innovation

  • The individual noticed inefficiencies in the factory's production methods and suggested using screw machines over lathes for certain parts, increasing productivity.
  • His suggestions were successful, leading to his supervision of 60 machines, up from the initial six.
  • He invented the first pair of electric hair clippers, facing resistance from company leaders but ultimately achieving great success.

"He noted that a number of parts were being made on lathes, which he felt could be turned out better and cheaper on the screw machines."

The quote highlights the individual's initiative to improve manufacturing processes, emphasizing his approach to efficiency and cost-effectiveness.

Sales Approach and Industry Influence

  • The individual was a skilled salesperson, not through traditional methods, but by providing customers with useful advice and improving their operations.
  • His honest and helpful approach to sales, including recommending a competitor's machine when appropriate, earned him trust and led to larger sales opportunities.
  • His interactions with successful founders and industrialists taught him the financial methods to start his own business.

"When he found a tool or machine not being used in the most advantageous manner, he would stop and give proper instructions."

This quote illustrates the individual's consultative sales approach, focusing on educating customers and optimizing their use of machinery.

Transition to Entrepreneurship

  • Henry Leland, the individual in question, decided to move from being an employee to a founder after realizing he needed control to implement his ideas.
  • Despite limited savings, he was inspired by the financial strategies of industrialists he met while selling for Brown and Sharp.
  • He moved to Detroit, partnered with Faulkner, and started a company called Leland and Faulkner, initially producing parts for bicycles among other things.

"With a background of experience and only a little money as a nucleus, each had organized a company, and by selling stock, secured the further capital needed."

The quote reflects Leland's realization that he could use his experience and a small amount of capital as a foundation to start his own business through selling stock.

Dedication to Precision and Quality

  • Leland was a staunch advocate for precision and high-quality standards, which he instilled in his coworkers.
  • He trained Horace Dodge, who went on to have a significant impact on the automobile industry.
  • Leland's commitment to quality was evident in his personal inspection of foundry outputs and his willingness to reject parts that did not meet his high standards.

"There always was and there always will be conflict between good and good enough."

This quote captures Leland's philosophy on workmanship and quality, emphasizing his uncompromising stance on producing superior products.

Impact on the Automobile Industry

  • Leland was instrumental in the development of the automobile industry, influencing figures like Henry Ford and Alfred Sloan.
  • His focus on quality led to a reputation that even competitors respected, with people choosing Cadillac for its high standards.
  • Despite financial struggles, Leland's investment in quality materials and equipment paid off, with customers willing to pay a premium for his products.

"We appeal for business only to those who want the best. We do not attempt to compete with the average foundry on concerns of price."

This advertisement quote from Leland's foundry underscores his business strategy of targeting customers who value quality over cost.

Founding of Cadillac

  • Leland was brought in to appraise the equipment of the failed Henry Ford company, which led to the birth of Cadillac.
  • He convinced the company's financiers to not liquidate by showcasing an improved motor he had developed.
  • His pitch emphasized the future of the motor car industry and the potential of his high-powered, reliable motor.

"I have done what you asked me to do. But, gentlemen, I believe you are making a great mistake in going out of business."

This quote reflects Leland's pivotal moment in convincing the company's financiers to pivot from liquidation to reorganization, which ultimately led to the creation of Cadillac.

Early Success of Cadillac

  • Cadillac was known for its reliable motor, similar to the reputation of Rolls Royce.
  • Cadillac's reliability was advertised with the promise of a round trip without breakdowns, which was a significant selling point at the time.
  • Henry Leland founded Cadillac at nearly 60 years old and played a crucial role in the success of Detroit's first financially successful automobile company.
  • Cadillac was profitable, making about $2 million a year in profit, and was sold to Billy Durant for $4.5 million.
  • Cadillac and Buick were the primary profit generators for General Motors, especially during financial difficulties.

"With a Cadillac, you could [make a round trip without breakdowns]. Now, it's also really important to understand that Henry Leland, when he founds Cadillac, he's almost 60 years old."

This quote emphasizes Cadillac's reliability and the late age at which Henry Leland founded the company, highlighting the significance of his achievement.

Henry Leland's Role and Philosophy

  • Henry Leland was initially reluctant to enter the automobile industry but was convinced by directors due to his expertise.
  • Leland valued precision, efficiency, and the individual contributions of workers, contrasting with Henry Ford's approach.
  • Leland's insistence on precision and quality changed the negative perception of American mass manufacturing internationally.
  • Leland was known for demanding excellence and precision from suppliers, which contributed to Cadillac's reputation for quality.

"So Henry's level of quality was so high that he changed the perception. So other countries at this time thought American mass manufacturing... They called it nasty. And so Leland's dedication to quality actually changed that impression."

This quote illustrates how Leland's commitment to quality in manufacturing improved the international reputation of American-made products.

Leland's Educational Contributions and Personal Values

  • Henry Leland created one of the first schools to teach mechanics, sharing his knowledge and improving the skill set in the industry.
  • Leland's religious beliefs influenced his insistence on accuracy in manufacturing, which he considered a moral obligation.
  • Leland's dedication to self-improvement and mastery was a core component of his success.
  • Despite his success with Cadillac, Leland was willing to leave the company to contribute to the war effort by manufacturing airplane engines.

"Henry Leland always wanted to share with others some of the good things he had found in life... He labored to teach his workmen, his suppliers, his stockholders, and even his customers."

This quote highlights Leland's commitment to education and his belief in sharing knowledge and skills for the betterment of others.

Financial Challenges and Sale to General Motors

  • Despite Cadillac's profitability, financial backing was limited, leading to the sale to General Motors.
  • The early automobile industry allowed for significant profits with small initial investments, as demonstrated by the success of Oldsmobile and Ford.
  • Leland sold Cadillac to GM for a combination of cash relief from financial anxiety and the prospect of larger financial resources from GM.

"Despite their present success, the principal stockholders thought it would be a relief to be quit of the worry in connection with the business they had built up after so many years of anxiety and uncertainty, and they were willing to sell it if they could liquidate their investment with some profit."

This quote explains the motivation behind the sale of Cadillac to General Motors, highlighting the desire for financial security and relief from the stress of running the business.

Leland's Departure from Cadillac and Founding of Lincoln

  • Henry Leland and his son resigned from Cadillac after Billy Durant refused to allow them to make airplane engines for the war effort.
  • The Lelands founded Lincoln to contribute to the war effort, despite the uncertainty and lack of a clear plan.
  • Leland's decision to leave Cadillac was driven by his ideals and patriotism, not by financial considerations.

"They decided to send in their resignations to Durant and General Motors and find a way to help the war effort independently... But the Lelands had a way of following their ideals, and in this case, they delayed not one moment to count the cost."

This quote captures the Lelands' willingness to sacrifice their successful business for the sake of contributing to the war effort, showcasing their strong principles and patriotism.

The Launch of Lincoln and Economic Challenges

  • The Lincoln car was launched during an economic depression, making it difficult to sell an expensive luxury car.
  • Henry Leland was 77 years old when he founded Lincoln, highlighting his continued drive and ambition despite his age.
  • The economic downturn led to order cancellations and financial strain for Lincoln, which had invested heavily in inventory.

"It was a most unprosperous time to launch an expensive car, no matter how great its virtues."

This quote reflects the unfortunate timing of Lincoln's launch, which coincided with an economic depression that dampened demand for luxury vehicles.

Founding of Lincoln Car Company

  • Henry Leland starts the Lincoln Car Company at 77 years old, venturing into a new role with significant personal financial risk.
  • Leland and his son had experience in design, creation, organization, production, and management, but not in financial sponsorship of a business.
  • They had previously relied on financial backing from others, such as Mr. Falconer for L.F., Murphy and Bowen for Cadillac, and the U.S. government for the Liberty motor project during the war.

"Between them, father and son, they had designed, created, organized, produced, and managed, but they'd never before been the major financial sponsors of a great business venture."

The quote highlights the new challenge faced by the Lelands, as they had not previously been the primary financial backers of their business ventures.

Financial Struggles and Board Split

  • The Lelands face financial difficulties and accrue debt with the Lincoln Car Company.
  • Henry Leland and his partners, who are also advanced in age, are convinced by younger family members to stop investing in the company due to financial losses.
  • The company enters receivership, and the board members feel they have betrayed their lifelong friend Henry by not continuing funding.

"They're losing money. They have a lot of debt, and they're all in."

This quote encapsulates the dire financial situation of the Leland's company, which is exacerbated by a split in the board and the influence of younger family members.

Henry Ford's Acquisition of Lincoln

  • Henry Ford buys Lincoln out of receivership, portraying the acquisition as a charitable act, despite his jealousy of others receiving credit and his refusal to compromise.
  • The Lelands believe they have a complete understanding with Ford to reimburse creditors and stockholders and retain Leland management.
  • Ford's public relation spins the narrative to suggest the acquisition is a benevolent act inspired by Mrs. Ford's kindness.

"Wilfred left the Fords convinced that the understanding between the parties were complete on all the important points."

The quote reflects the Lelands' belief that they had a clear agreement with Ford, which included specific terms beneficial to all parties involved.

Lelands' Management Style Clash with Ford

  • Henry Leland begins working with Ford in a cooperative mood but soon faces contempt and undermining of his authority.
  • Ford's management style is aggressive and dismissive, which clashes with Leland's more collaborative and quality-focused approach.
  • The Lelands' management style, which involves harmonious and competent teamwork, is seen as slow and cumbersome by Ford's standards.

"Henry Leland began his employment with Henry Ford in a cooperative mood, understandingly eager for success in this last chance to save Lincoln and end his career on a successful note."

This quote shows Leland's initial willingness to work with Ford, despite the eventual clash in management philosophies and approaches.

Henry Ford's Dismissal of the Lelands

  • Henry Ford uses indirect methods to dismiss the Lelands, avoiding confrontation by ordering a lieutenant to fire Wilfred Leland, knowing Henry Leland would also leave.
  • The Lelands hope for a settlement with Ford but only receive two weeks' advanced salary as terminal pay and never speak to the Fords again.
  • The Lelands' reputation for personal integrity and responsibility remains intact despite the lawsuit and the failure to obtain justice for their shareholders.

"For a time after their dismissal, the Lelands hoped to have some discussion and settlement with Henry Ford."

This quote reflects the Lelands' desire for a fair resolution following their dismissal, which unfortunately never materializes.

Henry Leland's Final Years and Legacy

  • Henry Leland fights for years to get Ford to honor his word to reimburse the shareholders but is unsuccessful.
  • Leland's final letter to shareholders at 88 years old expresses his lifelong faith in humanity and his disappointment in Ford's failure to fulfill the agreement.
  • Leland dies at 89, retaining his personal integrity but unable to secure justice for the shareholders.

"I am 88 years of age on the threshold of the exit from life ready to meet my maker. And I am unwilling that this case be ended without my putting myself on the record."

This quote from Henry Leland's last letter to shareholders conveys his commitment to justice and integrity until the end of his life, despite the legal battle's outcome.

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