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Archie McArdell


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Archie McArdell may not have been one of the heroes of IH history, but he certainly was significant. He died last Friday.

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A second obit from the NY Times is below:

Archie McCardell, Harvester Chief Who Clashed With Union, Dies at 81

By DOUGLAS MARTIN

Published: July 16, 2008

Archie R. McCardell, whose gruff, bottom-line approach as the new chief of the International Harvester Company in the late 1970s drew praise from Wall Street but the enmity of labor, culminating in a bitter five-and-a-half-month strike, died Friday in Casper, Wyo., where he lived. He was 81.

The cause was complications of heart failure, said his grandson, Scott Arcenas.

Mr. McCardell knew success early, as senior class president in high school and the first in his family to attend college. After earning an M.B.A., he rose to director of finance for the Ford Motor Company in Germany, then moved to Xerox, where he was promoted to president.

He joined Harvester, based in Chicago, in August 1977 as president and chief operating officer, explaining that he thought he would have a better chance of being the top executive there than at Xerox. He became chief executive the following January and chairman in June 1979.

Upon his arrival Mr. McCardell began an aggressive program to cut costs and engineered a profit increase in his first year, to $370 million from $203.7 million.

But Harvester’s margins were only a little more than half those of its competitors Caterpillar Inc. and Deere & Company. This had resulted in part from past concessions to labor and a tradition of paying out most earnings as dividends rather than reinvesting them.

When the United Auto Workers contract expired on Nov. 1, 1979, Mr. McCardell saw an opportunity to improve efficiency by persuading the union to give up rights it had won in past negotiations, particularly on overtime.

The union went on strike for nearly six months and eventually retained most of the work rights Mr. McCardell had sought to take away. Harvester had lost $479.4 million during the strike and $397.3 million in its 1980 fiscal year.

Union members complained that Mr. McCardell and his lieutenants only heightened tensions by acting arrogant and aloof during the strike, in one instance, they said, sending armed guards to watch dismissed workers clean out their lockers, The New York Times reported in 1982.

Another flash point was Mr. McCardell’s compensation package, which included a $1.5 million signing bonus and a $450,000 annual salary — astronomical figures for executive compensation then but modest ones by today’s standards. Workers as well as shareholders were also furious when the company forgave a $1.8 million loan to Mr. McCardell.

The labor problems only added to the company’s woes. Climbing interest rates, weak markets and high-cost plants had helped push Harvester’s debt to $4.5 billion. Only through an agreement with 200 lenders in 1981 did Harvester escape bankruptcy.

Mr. McCardell resigned in May 1982, although Time magazine and other publications suggested that his departure was really a firing. “The real wonder was that McCardell had not been ousted much earlier,” Time said.

International Harvester did not recover, and in 1985 it sold its farm equipment division, which had started with Cyrus McCormick’s reaper factory. Its crimson tractors and combines had long been a familiar feature of the American heartland. The remainder of the company, its truck and engines division, became the Navistar International Corporation in 1986.

Archie Richard McCardell was born in Hazel Park, Mich., on Aug. 29, 1926. He served in the Army Air Forces, then used the G.I. Bill to earn undergraduate and M.B.A. degrees from the University of Michigan. He joined Ford as a financial analyst. In 1960, he was appointed secretary-treasurer of Ford of Australia, and three years later became director of finance for Ford of Germany.

In 1966, he joined Xerox as group vice president for corporate services, rising to president in 1971. At Xerox, he helped set up a program for employees to get paid leave in order to serve their communities.

His ability to cut costs and shepherd technological innovation attracted the attention of Booz Allen Hamilton, which was helping revamp Harvester. Booz Allen recruited him for the Harvester job.

Mr. McCardell later worked in real estate development, scuba-diving expeditions and other business ventures.

He is survived by his wife, the former Margaret Edith Martin; three children, Sandra, Laurie and Clay, all of whom have the last name McCardell and all of whom live in Casper; two brothers, Allan, of Milford, Mich., and Arnold, of Perry, Mich.; one sister, JoAnne Iwanicki, of Warren, Mich.; and four grandchildren in addition to Mr. Arcenas.

Six months after Mr. McCardell left Harvester, he spoke to a group at Harvard Business School. He said he had two regrets: the controversial nature of his compensation deal, and not getting to know union people better before the strike.

Asked to grade himself, Mr. McCardell nonetheless replied, “I think I rate myself superb.”

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Thanks for the information.

when I finished reading "A Corporate Tragedy" I realized that this book was written over 20 years ago and wondered what the principle characters were doing in the aftermath of the IH story.

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Here's the original Time article which said that "the real wonder was that McCardell had not been ousted much earlier" -

http://www.time.com/time/magazine/article/...,921221,00.html

He was brought aboard to breathe vigor into a venerable but increasingly sleepy-eyed old Midwest industrial firm. Instead, the five-year tenure of Archie R. McCardell, 55, first as president and then as chairman and chief executive officer of International Harvester Corp. (1981 sales: $7 billion), has taken the ailing truck and farm-equipment manufacturer to the edge of financial ruin.

:wacko::(

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Archie lives on in todays world, there are more like him running things (into the ground) than ever before. :(

The line about rating himself "superb" really does it. :angry:

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I remember when Archie was at the helm when the strike was going on and my dad & I had some discussions at that time. My dad was a union worker in a factory and the thing that galled him the most was the signing bonus and salary Archie was getting at the time and his behavior in dealing with the union.

Archie was out to break up the union but he eventually broke up the company instead. I really think if it wasn't for that costly strike the IH ag division would have lasted a little longer and maybe the outcome would have been a little different.

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My take on it was that McArdell was brought in to make changes in the company to avoid what many financial people saw as the upcoming failure of the company. I've heard that Brooks retired early to make room for Archie because he realized he wasn't the man for the job. I think that even the tough stance with the union had to have had the board's approval, but as we know, you don't reverse 75 years of precedents in labor relations overnight, especially with brute force. I've read where the big bonus he got as he left was in his contract--do certain things which he did and you get the bonus. Perhaps the contract should have said "Succeed in doing these things......"

If he had succeeded in turning around IH, he would have been regarded as a second Lee Iacocca, or if Iacocca had not saved Chrysler, he'd be regarded as another Archie!

The strike did bring the financial crisis to a head. If it had not happened, IH would have floundered along for several more years, but I don't think it would have survived, perhaps not even the International Trucks & Engine part that did survive. Who knows?

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Where in the world is Irving Aal at?????? :wacko:

What was his connection? Ag Division? The name sounds familiar, but I don't remember him.

------------------------------------------------------------------------------------------

Warren Hayford:

BWAY Corp. appears to be a holding company in the packaging industry.

The following are our directors for BWAY Holding Company and BWAY Corporation:

Directors Committee Composition

>

>

>

>

--------------------------------------------------------------------------------

Warren J. Hayford

Mr. Hayford became the non-executive vice-chairman of our board in December 1999. From 1989 until December 1999, Mr. Hayford served as our chief executive officer and our board’s chairman.

Mr. Hayford has held a number of senior positions within the packaging industry over the past 35 years including president and chief operating officer of Gaylord Container Corporation, 1986 to 1988, and vice chairman of Gaylord Container, 1988 through 1992.

Prior to Gaylord Container, Mr. Hayford served as president and a director of Gencorp, Inc., president and a director of Navistar International Corporation and executive vice president and a director of the Continental Group, Inc.

Board committee membership:

Compensation (Chairman)

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Irving Aal......was the last president of the IH Ag division. He was booted when Tenneco took over. He then moved on to be the last President of STEIGER before Tenneco bought them.....

Whatever company he is president of now is probably the next merger partner for CNH.....

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My take on it was that McArdell was brought in to make changes in the company to avoid what many financial people saw as the upcoming failure of the company. I've heard that Brooks retired early to make room for Archie because he realized he wasn't the man for the job. I think that even the tough stance with the union had to have had the board's approval, but as we know, you don't reverse 75 years of precedents in labor relations overnight, especially with brute force. I've read where the big bonus he got as he left was in his contract--do certain things which he did and you get the bonus. Perhaps the contract should have said "Succeed in doing these things......"

That is the way I read it.

The fact that Brooks didn't feel he was the right man for the job shows he may have been the wiser of the two.............and maybe the one humble enough to have known/done what needed done.

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Where in the world is Irving Aal at?????? :wacko:

What was his connection? Ag Division? The name sounds familiar, but I don't remember him.

------------------------------------------------------------------------------------------

Warren Hayford:

BWAY Corp. appears to be a holding company in the packaging industry.

The following are our directors for BWAY Holding Company and BWAY Corporation:

Directors Committee Composition

>

>

>

>

--------------------------------------------------------------------------------

Warren J. Hayford

Mr. Hayford became the non-executive vice-chairman of our board in December 1999. From 1989 until December 1999, Mr. Hayford served as our chief executive officer and our board’s chairman.

Mr. Hayford has held a number of senior positions within the packaging industry over the past 35 years including president and chief operating officer of Gaylord Container Corporation, 1986 to 1988, and vice chairman of Gaylord Container, 1988 through 1992.

Prior to Gaylord Container, Mr. Hayford served as president and a director of Gencorp, Inc., president and a director of Navistar International Corporation and executive vice president and a director of the Continental Group, Inc.

Board committee membership:

Compensation (Chairman)

Do you think Hayford used Navistar as a cover instead of International Harvester ? Hayford was and probably still is a jerk in my humble opinion . Didn't he increase inventory by running shifts at full tilt and flooding the company with inventory ?

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