On 6/9/2004, the Fort Worth Star-Telegram produced this article on Lester "Tex" Colbert, the president/CEO of Chrysler in 1959.
Last Texan standing?
By Ed Wallace
Special to the Star-Telegram
In Oakwood, Texas, 145 miles southeast of Fort Worth, there still lives the tale of how, once upon a time in America, a poor country boy could grow up and make something of himself. Lester Lum Colbert, born June 13th, 1905, was the only son of a once poor East Texas cotton farmer; in time, Lester would run one of America's most respected car companies. In fact, his only real mistake was in reaching the pinnacle of his career at exactly the wrong time and place. And things still might have turned out differently if the 56-year-old Texan hadn't gone to fist city with the former president of Chrysler, in the men's room of the Detroit Country Club.
Nose to the Grindstone
Colbert was never known as anything less than a hard worker. As a boy in grade school he took work at the pharmacy in town. By the time he was 13 he was helping with his father's cotton buying business, and he had became a broker himself by his 16th birthday.
Maybe it was because there was nothing to do in Oakwood, or maybe he was too busy working to blow the money he had earned, but Lester Colbert, now known as Tex, saved enough money to put himself through the University of Texas. He graduated in only three years, in 1925 - with $5,000 left in his savings account, at a time when the average Texas family was living on a tenth of that amount.
Tex gained admission to Harvard Law School, not necessarily intending to practice law, but wanting the knowledge to bring back home and further his cotton brokering business. However, upon his graduation in 1929, with the Great Depression settling in, our 25-year-old found that there wasn't much of a future in cotton. So, to begin the practice of law - which promised a steady income to provide for his lifelong girlfriend and new wife, Daisy - he accepted Nicholas Kelley's invitation to join his New York City firm, Larkin, Rathbone and Perry.
Working for that law firm didn't pay off nearly as well as being interviewed by Kelley, who was also the legal advisor and director of Chrysler Corporation. Within four years, Tex had impressed Chrysler's future legendary chairman, K. T. Keller, so much that he was invited to move to Detroit to be the senior attorney for Dodge. When he got there, Tex obeyed Keller's instructions: He started night classes to learn mechanical engineering and drafting. Graduating from his third education, Tex Colbert reminded himself that he had never wanted to be a practicing attorney anyhow. His new career must have reminded him of his youth in the cotton fields, where you could roll up your sleeves and get some real work done.
No Hill for a Stepper
By 1935 Colbert had risen to the vice presidency of Dodge. In 1942 he volunteered to move to Chicago and take over the construction and operation of the Dodge factory that would build the engines for Boeing's B-29 bomber. When rain threatened to make finishing the plant on time almost impossible, Tex scoured Chicago for horses, then taught his supervisors how to ride: The factory opened on schedule. Furthermore, though Boeing changed that radial engine's specs almost monthly to meet the military's increasing demands for its capabilities, Tex Colbert built a record 18,413 engines in the new plant, ahead of schedule. He also slashed the amount each engine cost the taxpayer - from $26,000 each to just $12,000.
Once the war was over, Colbert was made president of Dodge, and that's when the suitors started showing up on his doorstep; the most impressive of those wanting his services was Henry Ford II. Colbert, loyal to the man who had raised him in the business, declined Ford's and all other offers.
The final chapter in his business career also marked the beginning of Chrysler's fall from its position as America's #2 car company and the loss of its preeminence in the industry's engineering ranks. On November 3, 1950, K. T. Keller was asked to take over as head of our guided missile program, tasked with finding a way to get the program on track and fix the problems that had plagued our early work. (The public believes that our only rocket genius was the German defector, Werner Von Braun. But in fact Keller and the many brilliant Chrysler engineers, as much as anyone, saved our guided missile and rocket programs. Chrysler's last rocket took our astronauts to the Apollo-Soyuz meeting in space in 1975.)
Keller's decision to move into aerospace put Tex in the presidency of Chrysler. On the surface, things looked good as the fifties rolled in. In the first nine months of Tex's administration, Chrysler earned $105 million, and its automotive market share was 23% - higher than Ford's is today. Six months later Colbert would host 4,000 journalists, astonishing everyone by knowing most of their first names, to show off what would be the next year's models, including Chrysler's newest V-8 engine, the Firepower. It would forever be known by its nickname, the Hemi.
Cruisin' for a Bruisin'
However, at that same meeting came the realization that Chrysler's styling was dated - visibly out of tune with the lower, sleeker and finned models coming out of Ford or GM. Seven years later, Chrysler would watch its sales fall to where only one out of every 10 new car buyers chose Chrysler automobiles. Half of its business was gone. Worse, the company's vaunted engineering reputation was disappearing. Because the men who had been Chrysler's best engineers were now trying to perfect our Redstone rockets to put Americans safely into space.
The first real sign of problems, at least financial ones, came in 1954, when Tex had to go hat in hand to Prudential Insurance for a $250 million loan, scheduled for a 100-year payback. Then he made his next mistake; Colbert hired McKinsey and Company to develop a plan for a massive reorganization of the company.
McKinsey's first recommendation was to emulate GM's decentralized system for divisional empowerment. Tex would have loved to have done that, but by then Chrysler's bureaucratic system wouldn't stand for it. McKinsey and Company then suggested that Chrysler go international, like GM and Ford. Colbert tried to buy Rolls-Royce, then Volkswagen; he finally had to settle for owning 25% of the rightly maligned Simca of France.
But Colbert knew what the real problem was: In a decade known for automotive success, Chrysler's cars evoked no real passion in the American car buyer. So Colbert went outside the corporation and hired one of the finest automotive stylists in this country, Virgil Exner, best known for his stunning work for Studebaker (starting with its 1947 model). Exner delivered the goods for the 1955 model year, and Chrysler's "Forward Look," reborn in the nineties as Cab Forward, was introduced. While that vehicle was a hit, overall it didn't help Chrysler's market share. It did have an effect, though: That car and later variations were why GM dropped its tail fins in 1959, moving into the early sixties in lower and sleeker automobiles.
Hey, Good Buddy
Then came Tex Colbert's last mistake. In April of 1960, now chairman of the corporation, he installed his good friend William Newberg as president. Shortly thereafter, however, it was discovered that Newberg hadn't fully disclosed his finances; in fact, Newberg owned a part of some suppliers to Chrysler Corporation, which was a serious conflict of interest. Of course, for many large corporations today that wouldn't be a problem at all, but in 1960 Americans still demanded and admired integrity in their corporate leaders.
Needless to say, Newberg was canned; he blamed his friend Tex Colbert for betraying him, and that led to their chance meeting in the Detroit Country Club's men's room and the infamous showdown at Detroit's version of the OK Corral. It is believed that our boy from the East Texas cotton patches prevailed, but he shouldn't have turned his back on Newberg. At the next shareholder's meeting, one of Newberg's friends stood up to read a letter from Tex's bloodied opponent. Part of that letter read, "Chrysler will never be strong again as long as it remains under the czarist rule of Mr. Colbert." Chrysler's board of directors concurred, and three months later Lester Lum "Tex" Colbert was removed as Chairman.
In blaming him for Chrysler's downfall, history hasn't been fair to Tex. After all, he introduced the Hemi engine and the Cab Forward design. True, he took bad advice from McKinsey and Company and bought a French car company, but what really hurt Chrysler was losing its best and brightest engineers to our missile programs during the Cold War. That happened just at the time of the greatest change in automobile design, one that reflected our new society. It should be noted with great irony that Chrysler's rockets took us to the moon at a time when no one would drive a Dart to the corner store.
Tex left a strong impact in another way: A poor kid from an East Texas cotton patch worked hard and grew up to become chairman of a major American corporation. When that can't happen anymore, his story tells us, something's seriously wrong in our society.
His rise from humble roots is the best part of his legacy, the part I'd like to see revived. It's not the car but the drive that's the real American Dream.
Ed Wallace reviews new cars every Friday morning at 7:15 on Fox Four's Good Day and hosts the talk show Wheels Saturdays from 8:00 to 1:00 on 570 KLIF. E-mail:
ed-wallace@charter.net