On the surface, Kaiser looks like a character from an Ayn Rand novel, but Herman demonstrates that he was also a shrewd political operator with a team of slick lobbyists and an instrumental affection for the New Deal and its influence-peddling architects. He believed in and succeeded through the free-enterprise system, to be sure, but he was also well aware of the benefits of having friends in Washington.
William Knudsen, whom Herman affectionately refers to as “the Big Dane” throughout the book, was in many ways Kaiser’s complement. An immigrant who earned a reputation as a bare-knuckle boxer in turn-of-the-century New York City, Knudsen was a maker of bicycles who caught the attention of Henry Ford. He worked for — and clashed with — Ford during the Model T era, inventing vast swaths of the science of industrial management in the process. In the 1920s, he left Ford for Chevrolet and engineered — both literally and figuratively — its dethroning of the Model T as the bestselling car in America. By 1940, when President Roosevelt called Knudsen to Washington to lead the country into war production, Knudsen sat atop General Motors and the automotive world, his reputation second not even to that of Ford himself. But Knudsen nevertheless resigned his position unceremoniously (to the chagrin of his America First–supporting chairman at GM, Alfred P. Sloan) and left for Washington. America had been good to him, Knudsen reasoned, and he owed her.
While Kaiser’s is an impressive story of American ambition, what Knudsen managed to accomplish in a number of largely thankless government roles — unpaid, unchartered, unloved, and with little more than the (fleeting) good wishes of the president of the United States — was nothing short of astonishing. Leveraging his personal stature and his relationships in Detroit and elsewhere, along with his innate production genius and intimate knowledge of America’s manufacturing base, he personally distributed billions in government contracts to those companies best suited to deliver — even if it meant focusing on the large auto corporations (thus drawing ire from the likes of Senator Harry Truman) he well knew had the dedicated engineering staffs required to make massive plants turn on a dime for war production. Herman does the sums:
In the end, American automakers would produce 50 percent of all aircraft engines, 35 percent of aircraft propellers, 47 percent of all machine guns, 87 percent of all aerial bombs, 80 percent of tanks and tank parts, one-half [of] the diesel engines for ships, submarines, and other naval craft; not to mention 100 percent of U.S. Army trucks, half-tracks, and other vehicles.
Knudsen was more than just a glorified appropriator. Herman details the myriad ways in which he helped improve everything from airplane-assembly orders to military-contracting procedures during a seemingly never-ending cross-country inspection tour of America’s “arsenal of democracy” (a phrase Knudsen coined and FDR borrowed). A representative tidbit recounted by Herman is Knudsen’s realization that the country’s tax laws, which included a 15-year amortization schedule for deducting physical capital as a business expense, would make the private-sector investment required for a speedy military buildup impossible. (Hitler’s Germany had a seven-year schedule.) Knudsen finally prevailed upon Roosevelt to change the law — but first he had to get FDR’s friend, glass tycoon John Biggers, to explain to the president and his cabinet what “amortization” meant.
Indeed, the proximate villains in Herman’s story are not the Nazis or the Japanese, but the ideology and often, as above, the ignorance of the progressive New Dealers and labor unions. Union strikes, especially those spearheaded by the Communist-tainted CIO, stymied Knudsen’s efforts and crippled production in the critical months before Pearl Harbor. Nor did the date of infamy change much: Workers at a Consolidated B-24 plant in San Diego struck a week after Pearl Harbor. In all, 1941 would have 3,500 strikes, costing 23 million man-days of labor. Roosevelt’s refusal to check the unions meant the strike menace would persist through the war, although it would reach a turning point in 1943, when public outrage over a coal-miners’ strike allowed Republicans in Congress to pass (over FDR’s veto) the War Labor Disputes Act, which curtailed unions’ ability to walk out.