This article originally appeared in Automotive News courtesy of David Phillips
Arjay Miller, a longtime confidant of Henry Ford II who helped modernize Ford Motor Co.’s management and financial controls, rising to president of the company in the 1960s, died on Nov. 3, at his home in Woodside, Calif. He was 101.
His death was announced by the Stanford University Graduate School of Business, where Miller was dean through most of the 1970s. Miller, reared on a Nebraska farm and educated at UCLA and later Harvard University, was the last surviving member of the so-called Whiz Kids, a group of ten young men who famously persuaded Henry Ford II to hire them in the late 1940s from the Ivy League school, where they mastered statistical analysis for the U.S. military during World War II.
The team — 26-34 years old and initially dubbed the “quiz kids” because they cajoled Ford colleagues with so many questions early on — included Robert McNamara, who also became Ford president, though briefly, before serving as secretary of defense under Presidents John F. Kennedy and Lyndon B. Johnson. Miller and the other Whiz Kids stewarded the company, mismanaged for years by founder Henry Ford, back to profitability. The automaker was reorganized along some 15 profit centers, each with professional and semiautonomous management. The new operating structure, with a focus on cost controls, robust forecasting and planning, eventually allowed Ford to become a publicly held company for the first time, on Jan. 17, 1956.
“It’s in a failing or difficult situation where talent can express itself,” Miller told Forbes in 1984. “Stars are born in turnarounds and startups.”
Bill Ford, executive chairman of Ford and the great-grandson of company founder Henry Ford, called Miller “an extraordinary leader” who had a profound impact on the competitiveness and resurgence of Ford Motor Co. at a key juncture.
“If there’s anything I feel good about, it’s the fact that Ford hired so many people while I was there. We lost some good people because he [Henry Ford II] would fall out of love with them and move them out.” –Arjay Miller in a March 1988 interview with historian David Lewis for the Ford Motor Co. archives
“During his time as president and a member of the board of directors, Arjay’s guidance and leadership played an important role in the company’s turnaround after World War II and through the changing times of the 1960s,” Bill Ford said in a statement Wednesday.
Ford, buoyed by new models such as the Mustang and Maverick, strict cost oversight and a growing global footprint, posted record revenue and earnings during Miller’s time as president.
“I probably had the most influence on the international side,” Miller told Automotive News in 2003. “In the early days of Ford, the overseas [administration] was separate from the U.S. It was run out of New York. It was duplication and very costly. I … thought that we ought to get rid of the overseas staff and do everything through a single staff in Dearborn. That was really a big decision, but Henry Ford backed me up and we did that.”
‘A nice cover’
Miller created Ford’s first annual report — complete with financial tables, charts and footnotes and what he described as “a nice cover.”
“I sent it out and had 100 copies made,” Miller recalled. “When it was finished, I went proudly in to see Mr. Ford. He looked at it and said, ‘I like it. I need five more. My two brothers, my sister, my mother and my grandmother.’ I didn’t tell him I had 94 copies left.”
When Congress began pressing Detroit automakers to do more to prevent automobile accidents, Miller and Ford acknowledged that the auto industry was slow to embrace safety and pledged to support federal efforts to enhance occupant protection.
The trigger was the publication of Unsafe at Any Speed, Ralph Nader’s 1965 groundbreaking book that exposed the American auto industry’s lax safety practices.
“We were just lost — out of our element. We were whipsawed,” Miller recalled when the presidents of Detroit’s three auto companies were summoned to testify before Congress after the book was released.
In the mid-1960s, Miller was driving home from his Dearborn, Mich., office in a Lincoln Continental when another car struck him from behind. The Continental spun around and burst into flames. Because he was wearing a shoulder-strap seat belt, Miller was unharmed in the accident, and because the doors of the car didn’t jam, he escaped the flaming wreckage. But memories of the crash stayed with him for years.
Several months later, on July 15, 1965, Miller recalled the incident before a U.S. Senate subcommittee looking at sweeping auto safety legislation.
“I still have burning in my mind the image of that gas tank on fire,” he told the panel.
Miller was also one of the first auto industry executives to recognize and pursue partnerships among business, government and communities.
Some of society’s most pressing challenges — “safety, water pollution, urban problems, housing” — have to be solved by what he called “a partnership between the private and public sectors.”
American society no longer permits the business community to limit itself to production, sales and the accounting columns, Miller told The New York Times in July 1978.
“All we need to stay in business and grow,” he said, “is to have more people and higher incomes.”
When riots rocked Detroit in 1967, Miller and Ford responded by opening offices in the city to recruit minorities. Miller also helped found the Economic Development Corp. of Greater Detroit to nurture small businesses owned and operated by African-Americans. President Johnson tapped him to become the first president of the Urban Institute, a think tank launched to address the nation’s growing urban problems.
“I found out the mayor of Detroit had a tougher problem than I had as president of Ford,” Miller said in a 1998 interview. “He was short of money, short of time and short of qualified people. We really didn’t know how to help him.”
Arjay Ray Miller was born on March 4, 1916, in Shelby, Neb., a small farming town west of Omaha. He was the youngest of eight children and named after his father’s first initials — Rawley John Miller.
“I always thought it was some help coming from a rural situation,” Miller told The New York Times in 1966. “You aren’t so perplexed about the world: Milk came from a cow, not from the grocery store. Eggs came from a chicken.”
Miller wielded an encyclopedic mind beginning with his childhood, when he dismantled a classic Model T. With unbound curiosity, he simply wanted to explore Henry Ford’s mass-produced invention that put the world behind wheels.
“Somebody stopped by the farm with an old Model T, a junker, and just left it in our yard,” Miller told Hemmings Classic Car in 2007. “I gave him 10 dollars and took it all apart to see how it worked.”
In 1937, he graduated with a Bachelor of Science degree in finance and banking from the University of California, Los Angeles. Miller became a teaching fellow and graduate student at the University of California, Berkeley, and finished all the requirements for a doctorate except a dissertation. He then spent a short time as an economist at the Federal Reserve Bank of San Francisco.
He attempted to enlist in the U.S. military during World War II but was rejected because of poor eyesight, The New York Times reported. Miller was later drafted into the Army Air Forces, where he taught fledgling pilots on a flight simulator and then enrolled in a statistical program for officers at Harvard.
The Office of Statistical Control kept track of the logistics of all air operations — pilots, airplanes and bombs — as well as training, without the assistance of spreadsheets or a computer. When the war ended, Miller and the other nine members of the group pitched themselves as a package deal to some 100 U.S. companies. Only one company, the Alleghany Corp., responded. Miller had no interest when the group considered the Illinois Central Railroad, but when the search shifted to Ford, he abandoned plans to return to banking and a pursue a Ph.D. in San Francisco. Miller had spotted a Life magazine article about Henry Ford II’s search for fresh executive talent to help oversee the company, which had racked up losses for 15 straight years and was reportedly losing a million dollars a day at the time.
The group’s leader, Col. Charles “Tex” Thornton, an aide to Robert Lovett, Assistant Secretary of War for Air, sent a telegram on Oct. 19, 1945 to Ford requesting a meeting about “a matter of management importance” and were quickly invited to Dearborn by Henry Ford II. While he was not yet 30, Henry Ford II, Henry Ford’s grandson, was fully in command of the automaker but needed help to steer Ford in a booming, postwar civilian economy.
“I am green” Ford famously said at the time, “and searching for answers.”
Thornton told Ford the young men could improve cost efficiency at the company just as they had in the Air Force. The meeting gave Miller an early preview of the some of lax cost controls at Ford.
“Before we left, Henry said, ‘I want to hire all of you. Just put your name down and how much money you want,” Miller recalled in 2003.
“In my early days at Ford we copied GM with respect to decentralization and financial controls. Afterwards, we didn’t copy anybody.”
Miller began his Ford career in 1945 in the Ford finance department’s analysis unit. His first task: Compile a profit forecast for the next month.
When he visited the company’s finance department, he was shocked to discover old-school bookkeepers tracking piles and piles of bills divided into categories: A, B, C and D. The mostly older men couldn’t keep up with the bills and were simply estimating how many millions of dollars were represented per foot of paper.
Ford’s bookkeeping at the time was “truly a never-never land,” David Halberstam wrote later in The Reckoning, a landmark book that chronicled the ills of America’s auto industry.
“Probably no major industrial company in America’s history was ever run so poorly for so long,” Halberstam said of Ford. “Only its sheer size saved it, that and, in the war, the government’s dependence upon it for military production.”
“It was unbelievable,” Miller recalled of his first months at Ford in the 2003 interview with Automotive News. “During World War II they lost money on cost-plus contracts. Now that takes some skill, to lose money on a cost-plus contract.”
Many of Ford’s operating problems were solved by adopting simpler practices, Miller said. Ford, for instance, paid workers in cash — a cumbersome task — because Henry Ford once spotted workers going into bars to cash paychecks and didn’t approve.
Theft of materials was common. The company paid suppliers by check rather than wire transfer.
“It was just elementary,” Miller said of the many accounting and finance controls he helped implement through the years. “It was like shooting fish in a barrel.”
Climbing the finance ladder
Miller was named assistant treasurer in 1947, assistant controller in 1953 and corporate controller later that year.
“If you get in trouble with your line boss, you get transferred,” he often told the company’s controllers. “But if you get in trouble with me, you get fired! Their job was to blow the whistle if they thought something was wrong.”
After he was named vice president for finance in January 1961, Miller once complained about the cost of operating Ford’s executive dining room, where senior management paid $2 each for lunch.
“We really shouldn’t have to pay for these lunches,” Miller once said, according to former Ford President Lee Iacocca’s 1984 autobiography. “Feeding employees is deductible for the company. A lot of companies feed their people without charging them at all. But if we pay for it ourselves, it’s after tax-money.”
Miller was named vice president in charge of Ford’s staffs group in February 1962 and became Ford’s seventh president in May 1963, succeeding John Dykstra.
From Dearborn to dean
A difference in strategy and priorities with Miller prompted Henry Ford II in 1968 to abruptly name a new president, William “Bunkie” Knudsen, who had just been passed over for the president’s post at General Motors. Miller became vice chairman of Ford — a new post created for him — and a dean at Stanford. He left Ford’s management ranks a year later but stayed on the company’s board until 1986.
Still, he had joined a famous fraternity — the long list of men such as Ernie Breech, Dykstra, Knudsen and later, Iacocca — who rose to the president’s post at Ford only to be pushed aside by a mercurial Henry Ford II.
“Henry Ford II’s personal dominance of the company gave it a different character, certainly different from other publicly owned companies in the automobile game,” Miller said in 2003. “GM and Chrysler were not that way. You knew who the boss was. There were no palace politics with anyone trying to take over.”
Miller was the dean of the Graduate School of Business at Stanford University, in Palo Alto, Calif., from 1969 to 1979. He was inducted into the Automotive Hall of Fame in 2006.
“We’re lucky in the auto business,” Miller told The Boston Globe in 1966, according to The New York Times. “So many businesses have to work hard to create a demand. But for us, the minute a kid hits 16 he automatically wants a car.”
At Stanford, he recruited star faculty and significantly increased the number of minority and female students.
Alan Gilmour, retired vice chairman and CFO at Ford, who was mentored by the Whiz Kids early in his career, credits Miller as well as fellow Whiz Kid Ed Lundy for placing a priority on personnel management at the company.
“The weakest function in American business is human relations,” Gilmour said in a 1999 interview with Automotive News. “The good companies make personnel a strategy. That was an Ed Lundy/Arjay Miller legacy. They were thinking about that long before most companies were.”
Miller often resisted the temptation to label himself and his fellow Whiz Kids as just zealous bean counters at a pivotal period in Ford history.
“We weren’t a bunch of accountants,” he told Automotive News in 2003. “We knew the importance of people.”