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INTRODUCTION
Homer R. “Barney” Oldfield’s book, KING
of the SEVEN DWARFS, was written in the genre of a historical novel.
Unfortunately, there is a conflict in this genre between the
novelist’s requirements and historical accuracy.
Barney could not avoid this conflict and had to make many
concessions to historical accuracy to maintain the fascinating flow of his
tale. What I hope to
do, without distracting from the tremendous effort and considerable
insights represented by Barney’s book, is to set the historical record
straight. I had
extensive correspondence with Barney during the writing of the book –
some of it the minutia that historians applaud and novelists abhor – but
understood that Barney was primarily writing a novel and an apology, not a
history. While Barney
expresses many opinions on GE’s management and their attitudes with
which I disagree, I will attempt to limit my corrections to the facts.
Barney had two conflicting objectives in writing the book.
One was to correct my statement that he had been fired
and the other was to criticize GE’s management. He wanted it to be known that he had resigned for
“personal reasons” but then castigated GE’s management like a
“damsel spurned”. He
should have been proud of what he created rather than critical of it and
GE’s management.
Barney “bootlegged” the GE computer business and was fired when
GE’s Chairman, Ralph Cordiner – who had consistently rejected
proposals for GE to enter the business - learned of it.
Barney, in order to refute the statement that he had been fired as
a result of “bootlegging” GE into the business, concocted a tale about
Dr. George Haller, the General Manager of GE’s Electronics Laboratories
Department, coming to visit him in Palo Alto with word that Dr. Baker, the
General Manager of GE’s Electronics Division, wanted Barney to bid on
the Bank of America ERMA system.
This tale does not stand up under scrutiny for a number of reasons.
First and foremost, Barney was the manager of the
Microwave Laboratory and the Laboratories Department, of which it was a
part, had no authority to bid directly on any projects or programs.
All such business was obtained through the auspices of one or
another of the operating departments.
The Technical Equipment Department, which had just recently
prepared a business plan to enter the computer business (fathered by Clair
Lasher and in which I participated) would have been the logical
organization to pursue the ERMA project.
Secondly, had Dr. Baker, for some very unusual
reason, given the assignment to the Electronics Laboratories Department,
Dr. Haller would certainly not have assigned it to the Microwave
Laboratory as:
·
The
Electronics Laboratory, which reported to Haller, had recently completed
the ORAC computer (a logistics computer for the Air Force) and had a
section of experienced computer engineers, headed by Charlie Wayne.
ORAC was completed and the personnel were available.
·
Dr.
Haller had discussed building a computer laboratory at Penn State, where
he had been Dean of Chemistry and Physics.
He had hired Dr. Robert Johnson in anticipation of this laboratory.
ERMA would have been an ideal project to use to implement this
plan.
·
A
new Industrial Electronics Laboratory, reporting to Dr. Haller, and which
included Don Garr’s Computer Section from the General Engineering
Laboratory in Schenectady, NY, had just been announced.
(It later formed the nucleus of the Industrial Computer Section’s
engineering function) and had far more capability to handle such a program
than did the Microwave Laboratory.
It
just doesn’t make sense that Dr. Haller would have assigned the ERMA
project to the Microwave Laboratory, which had no computer experience or
expertise. As it was, Barney
needed to call on Bob Johnson, Dave Zhaeb and Jay Levinthal from the
Electronics Laboratories Department and George Jacobi, from the General
Engineering Laboratory, for help
Barney also engineered the clandestine move to Phoenix.
Apparently not willing to admit it, he refers in numerous places to
appropriation requests to build facilities in Phoenix as an indication
that he had authorization for the move.
Barney always carried several appropriation requests in his
“pocket”, (often to ratify actions he’d already taken) most of which
were never submitted, waiting for an appropriate opportunity to present
one or another of them.
In view of the above, Homer R. “Barney”
Oldfield’s exploits in “bootlegging” the ERMA project and putting GE
into the computer business are all the more remarkable.
His audacity and courage were admired by those of us who were
watching and it is too bad that he didn’t want to take the credit for
his ability to make it happen in the face of considerable opposition and
without authority to do so.
CORRECTION
OF FACTS
Chapter 2: Pre-Proposal Activities
Page 9, next to last paragraph:
“As of now, Connie Krehoff is the executive secretary of the
Industrial Computer Section of the Electronics Division.
The only other employee besides myself is George Trotter...”
Fact: There was not yet an Industrial Computer Section and
these people were on the payroll of the Microwave Laboratory.
The Industrial Computer Section was not formed until after the
receipt of the letter of intent for ERMA from the Bank of America.
It was then when Ken McCombs established the bank account and set
up the payroll with himself as the first employee.
(This action, which Ken took on his own initiative by calling
Banking Services in New York as the new Manager-Finance of the “Computer
Department” and requesting that a bank account be set up, effectively
established the Computer Department.)
Second on the payroll was Owen Lindley as National Sales Manager.
I was the third person as Manager-Budgets and Measurements. Barney was put on the payroll of the Technical Equipment
Department as none of his superiors were aware of the existence of a
“Computer Department” payroll account and it was a number of months
before he was added to it.
Page 16, last paragraph: “Okay, Barney, go to it.
You’ve got fifty thousand bucks and two months to bring home the
bacon”
Fact: Barney
made the proposal and “brought home the bacon” without being funded.
Once GE had accepted the bank’s letter of intent, Doctor Baker
authorized $50,000 to turn the letter of intent into a firm contract.
Chapter 3: The
Proposal Team is Formed
Page 19, last paragraph:
“And so the ERMA proposal team was created: one engineer turned
entrepreneur, one digital computer engineer, one analog computer expert,
one accountant with a technical education, and one radar salesman.”
Fact: I,
“the accountant with a technical education”, was not a member of the
proposal team. I did not join the organization until several months after
the acceptance of the letter of intent.
Chapter 4:
The Competition is Joined
Page 21, next to last paragraph:
“That sounds great, Chuck.
I have to go into Syracuse in a couple of weeks to go over our cost
figures with George Snively. I’ll
give you a call when I know my schedule.”
In a number of places, Barney skillfully wove my name into his
narrative in a flattering manner – I assume to blunt my criticism.
Fact: Until
Barney later asked Ken McCombs to hire me, he carefully kept all numbers
away from me. Barney always had two sets of plans: one to use as a
decoy to divert the attention of the likes of me, and one the “real”
plan which he may have already implemented!
Chapter 6:
Down to Earth
Page 38, Paragraph beginning “The Oldfield family…left Los
Altos…by mid-afternoon of the second day…
They limped into Phoenix… went
to dinner at the Green Gables, a restaurant on Camelback Road…”
This story, which the Phoenix media always printed when writing
about the selection of Phoenix
by the Computer Department, does not make sense – particularly in a non
air-conditioned car. The
direct route from Los Altos, California to Syracuse, New York would have
been Route 30 via Salt Lake City and Chicago.
If, for some reason they had taken the southern route (400 miles
longer – which was a long day’s drive in the days before freeways),
they would have transversed Arizona on route 66 and would have stopped in
Flagstaff - not Phoenix. To
have swung further south to go through Phoenix, would have added over 200
more miles. It would have taken nearly three days – not a day and
a half – to get to Phoenix in those days.
Fact: The
Green Gables Restaurant was on East Thomas Road at 24th Street
– not Camelback Road.
Chapter 7:
The Exodus to Phoenix
Page 52, first paragraph:
“By mid-1956 the Oldfield family was on the road…(to)
Phoenix…”
Second paragraph:
“…Oldfield made a beeline for the KTAR television building
where Barclay’s people had rented fourteen thousand square feet of
office space…”
Fact: The site
selection had not been made “By mid-1956…”.
The first Phoenix site, occupied in November 1956, was not the KTAR
building. We moved into the First National Bank of Arizona’s
new headquarters at 401 North Central
Avenue (one block north of Van Buren at Polk Street)
at the same time as the bank’s people – they on the ground floor and
GE on the fifth floor.
This was a big media event, amply reported by the Arizona Republic
newspaper. Yet, when on
later occasions the same newspaper recounts the history of GE’s Computer
Department in Phoenix
– they also have us initially occupying the KTAR building.
It was actually about six months later that we moved into the KTAR
building.
Page 53, second paragraph – last sentence: “Jacobs was one of the most important people in
Arizona, and Oldfield was somewhat in awe of him as he approached the
meeting at the Stock Yards Restaurant.”
Third paragraph: “John
Jacobs, it turned out, was as casual as an old shoe.”
Fact: John
Jacobs owned approximately 2/3rds of the 1000 acres that we had under
option, at an above market price, on Black Canyon Highway at Thunderbird
Road and for which GE had paid John Jacobs a generous option fee.
I don’t know if Barney was aware of this, but John had
every reason to treat Barney with respect. However, John was always a fine gentleman and, as
Barney put it, “as casual as an old shoe”.
(Barney seems to have been in awe of individuals with personal
wealth as evidenced by several places in the book where he makes
derogatory comments about Clair Lasher’s wealth and social status.)
The next to last paragraph: “‘in
addition,’ continued Oldfield, ‘we have a plan to include a computer
center … If the college can
furnish us with a building…’”
Fact: Months before Barney supposedly had this conversation
with John Jacobs, Dr. Herbert R. J. Grosch had already made a deal with
the Arizona State College (not yet University) and installed an IBM 702
computer, with a military priority, which he had diverted from GE’s Jet
Engine Department in Evendale, Ohio.
Page 55. The caption under the clipping from the Arizona Republic
with the headline “G.E. WILL COME TO PHOENIX” reads “…September 2,
1956”.
Fact: The
dateline on the clipping reads “Phoenix, Arizona, Friday, November 2,
1956.” Barney’s
narrative often mixes events with incorrect dates and presents them out of
sequence, which is the novelist’s prerogative.
Chapter
8: The New
Boss
(Chapter 7 had us in Phoenix, but this chapter
backtracks to Syracuse without so indicating it.)
Page 58, first paragraph: “…in mid-September, 1956 Oldfield was holding the
regular Monday staff meeting… They
were putting the finishing touches on the appropriation request covering
the purchase of land and the architectural design of the first permanent
facility to be erected in Phoenix.
The site…consisted of 160 acres on Black Canyon Highway…”
Fact: GE’s
policy at the time was to acquire 1000 acres for any contemplated plant
site. This was the
result of GE finding a number of their plants hemmed in by expensive land
(whose high value they had created) when they tried to expand.
Consequently we had options on 1000 acres.
However, it would be several years (not mid-September 1956) before
we would prepare an appropriation request to build on the Black Canyon
site – at which time GE had experienced a cash crunch and we only
exercised the option on 160 acres.
Page 58, next to last paragraph:
“…as a means of implementing Harold Smiddy’s concept of a
professional manager.”
Fact: It
was Peter Drucker’s concept – not Harold Smiddy’s, and by this time
Cordiner’s reorganization of GE in line with these concepts was
essentially complete.
Page 60, paragraph beginning “I’m calling a staff
meeting…” and ending “Incidentally, I’ve approved the
appropriation request for temporary space, which came from Snively.”
Fact: It
was mid-November (not mid-September) when Barney hand carried the
appropriation to Harold Strickland waiting for the proper moment to
present it to him. Several
days earlier he had sent the manufacturing people (Earl Kittle, Stan Brown
and Bob Bentley) on the road to Phoenix - to acquire and set up space -
with orders to call in every night for instructions about whether or not
to keep going. This
small ($5,000) appropriation request was written to cover a “sales
office” in Phoenix for liaison with the Bank of America.
When Strickland signed it Barney ordered everyone involved to get
out of Syracuse and Schenectady and told to head to Phoenix and to not
answer the phone after he hung up.
He was to be unavailable for two weeks.
Page 61, paragraph beginning “The relationship
between GE and IBM was the subject of much speculation within GE.”
Fact: Such
speculation didn’t begin until a number of years later when it became
generally known that Cordiner had had a long standing objection to GE
entering the computer business.
Note: In mid-1956, I was asked to make an
analysis of IBM as a possible acquisition by GE as a way to enter the
computer business and to support the ERMA effort.
At that time, as measured by the comparative revenues and net worth
of GE and IBM, it would have been a modest acquisition.
However, GE’s management was incredulous about the market value
for the stock of a company with minimum earnings, heavily in debt and
which didn’t pay a dividend. (The “new economy”, “hi-tech”
company of this time.)
Chapter 9:
Complications of Early Growth
Page 66, paragraph 7: “This
is Fred MacFee, Mr. Oldfield. It’s
been suggested I contact you about a personnel matter relating to one of
our employees, Mr. Herb Grosch.
Perhaps you know him?”
“Sorry, I don’t recognize the name.”
This was a “cheap shot” by Barney, who disliked Herb’s
penchant for personal publicity and self-promotion.
(Throughout the book Barney reports events, often out of historical
sequence, in such a manner as to discredit Herb Grosch.)
Fact: Months
before the date of this presumed call, Grosch had set up the computer
center at Arizona State College (not yet University).
The tale that Barney sets forth on pages 68 and 69 is essentially
true –except that it took place before the move to Phoenix by others,
and without Barney’s knowledge, approval or his participation.
Herb made the trip to Phoenix and broke the news of GE’s
selection of Phoenix to the Arizona Republic
prior to Strickland’s signing of the $5,000 appropriation request and
before the rest of us had begun the exodus to Phoenix.
Fact: Herb
Grosch made a presentation at the June 28, 1956 Computer
Symposium sponsored by the Industrial Computer Section that was held
at Electronics Park. (Long before the selection of, and the move to
Phoenix.) I don’t know if Barney had ever met Herb prior to
this meeting, but at the cocktail party following the meeting they were
observed closeting themselves in a private meeting.
Pages 69, next to last paragraph.
“… Oldfield, acting on John Jacobs’ advice, decided to visit
William Douglas in Tucson…” and fist two paragraphs on page 70.
Fact: William
Douglas was also on the board of the General Electric Company –
something that Barney apparently was unaware of.
(Following Herb Grosch’s premature announcement and during the
hiatus while everyone was moving to Phoenix, Douglas tried to get hold of
Cordiner to divert the Computer Department away from Phoenix and to Tucson
where he controlled the banks. However, Cordiner was secluded with his general managers
in his annual planning meeting and was unavailable. Barney, being out of contact during this period, must
not have been aware of this activity.)
Chapter
10:
The Visit of the New Boss
Page 72, first paragraph: “It
was an especially hot day in early October, 1956, as Oldfield watched the
huge TWA Constellation settle down on the ten-thousand-foot runway of the
Phoenix Municipal Airport…”
Fact: Strickland
signed the $5,000 appropriation request for the Phoenix office space on
November 20 1956,
after which, Barney was to be unavailable for two weeks.
The earliest that this meeting could have taken place was on
December 4, 1956.
Fact: The
Phoenix airport was called “Sky Harbor”.
Page 73, third paragraph:
“They turned right at the next light, ’We’re now on South
Central Avenue…’”
Fact: It
was North Central Avenue.
Page 73, seventh paragraph: The temporary offices of the Industrial
Computer Section were on the second floor of the KTAR Radio and Television
building.”
Fact: The first
temporary offices were on the fifth floor of the First National Bank of
Arizona’s building at 401 North Central Avenue.
Page 77, third paragraph:
“The plan tomorrow is for Ray Barclay to pick you up after
breakfast and take you for a tour of the leased factory building on Peoria
Avenue…”
Fact: It
would be nearly a year from this time before the Peoria Avenue plant would
be built.
Chapter
11:
The Product Charter
Battle
Page 82, second paragraph:
“…During one of those trips he met Arnold Spielberg.”
Contradiction: The
above is under “1957 activities” and contradicts the third paragraph
on page 76 reporting on the October 1956 meeting “…we hired a senior
engineer from RCA’s Bizmac project…”
Page 85, first paragraph. “’Okay,’
said Oldfield, ’Let’s go after the Jones & Laughlin job and see
what happens. We may end up having a Product Charter fight with
Industry Control, but the best way to win it will be to have a detailed
technical proposal completed and costed out as soon as possible.
I’ll start probing the Product Charter procedure…’”
Comment: Barney’s
“modus operandi” was to ask for far more than he anticipated
receiving. Knowing that
he was going to have to initiate a Product Scope discussion with the
Industry Control Department he opened the procedure wide up by claiming
scope over all of the GE products which incorporated or used computers.
This encompassed military computers (including tactical systems,
missile guidance, fire control, etc.), plus the military research and
development contracts. Barney
wrote a letter,
with copies to the General Managers of the businesses involved, staking
his claim to their turf. This
letter elicited prompt and extremely forcible responses, particularly from
the Heavy Military Equipment Department and the Light Military Equipment
Department. The
crescending uproar resulted in Harold Smiddy calling for a comprehensive
product scope meeting in Phoenix.
Uncharacteristically, Barney does not appear to have recognized the
significance of this meeting that brought together many people and General
Managers from a number of diverse GE businesses – many of whom were
unaware of the existence of a “Computer Department”.
This three day very comprehensive meeting ended by providing us
with legitimacy by approving the charter for a “Computer Department”.
Chapter
13:
Problems at Palo Alto and at Home
Page 91, third paragraph:
“We’ve just finished a routine audit of Herb Grosch’s expense
account… They’re way out of line, as George Snively suspected,…”
Fact: I
was Manager-Budgets and Measurements and not in the “expense account”
loop. Herb reported to
Barney who would have personally approved Herb’s expense accounts before
they were ever submitted to accounting.
Page 91, last paragraph:
“Informed that the job was filled, he (Grosch) settled for the
position of manager of the planned GE Computer Center at Arizona State
University (College).”
Fact: There
was no such center planned. Herb
Grosch implemented it without Barney’s knowledge.
Chapter
15:
The Change in Management
Comment: Several
times I asked Barney to have Lasher
review the manuscript for his comments, corrections, etc. as being as
knowledgeable of events as either of us, but he never did.
Probably because, except for the reference to Barney’ wife’s
(Sofia) illness, the first six paragraphs of this chapter are fiction.
I can understand why Barney was not very complimentary of Herb
Grosch throughout the book, but I don’t understand his many unflattering
comments about Lasher.
The story he relates beginning with the second paragraph on page
102 is what happened after he was fired, except for the fourth paragraph
on page 102: “Okay, we’ll appoint Lasher acting General Manager so we
can evaluate him for a six month period before making a firm
appointment.”
Fact: It
was contrary to GE’s management philosophy to appoint someone
“acting” for “evaluation.”
When Lasher was appointed “acting” General Manager it was
because (a) Barney’s leaving was abrupt and someone had to be holding
things together until a replacement could be selected and (b) he was given
a specific assignment to downsize the business to a strictly process
computer business – which then might be too small for his talents.
Chapter
16:
Planning for the Future
Page 108, third paragraph: “The
recommendation concerning the computer business was rejected by President
Ralph Cordiner…”
Page 108, fourth paragraph:
“Despite the turn-down from Cordiner, Clair Lasher was given an
OK to spend much of 1956 developing a business plan aimed at launching GE
into the computer business. This
proposal was submitted to Mr. Cordiner at about the same time that Barney
Oldfield was authorized by Baker to bid on the ERMA program”
Fact: The
Metcalf Report was a market study and did not make “recommendations”.
It was Lasher’s business plan, in which I participated, that was
rejected by Cordiner.
Page 108, parenthetical statement beginning in the second line from
the bottom “(Some years later, when Oldfield wrote Cordiner for a letter
of recommendation, he discovered that Cordiner had a long memory.
He received a blistering reply…)”
Comment: This
response of Cordiner’s would seem to confirm that Cordiner had fired him
– such a response would not be anticipated if Barney had resigned for
personal reasons and had left GE in good standing.
Comment: It
is my belief that the events related on pages 109 and 110 are fiction.
Page 111, second paragraph:
“When Lasher returned to Phoenix he convened a weekend planning
session to be attended by his key section heads, and top technical people.
He chose the quietly sumptuous Camelback Inn for the meeting, a
rather rich setting for a fledgling organization… Each attendee had a
private room for Saturday night, and all meals and drinks would be on the
house”
Comment: I
don’t believe that such a meeting ever took place.
If it did, it was following the events noted in Chapter 18.
He is critical of “the rather rich setting” – but he must
have forgotten that these are the very same arrangements that he had made
for the Product Scope meeting, held when the organization was even more of
a “fledgling”.
Page 112,-second paragraph:
“George Snively, manager of credits and collections, sat at the
foot of the conference table…”
Fact: If
such a meeting did take place, I was not in attendance as stated.
Fact: At
that time I was Manger-Budgets & Measurements, not credit and
collections.
Chapter
18:
ERMA’s Public Debut.
Page 122, paragraph beginning, “Briefly, George the dedication
was a big success and the demonstrations were flawless, but Cordiner out
foxed us. Instead of
giving an implied commitment to the expanded marketing plan, he recognized
that the ERMA computer and its various peripherals constituted a
‘business machine’. He was in a towering rage…”
Fact: Barney
references my letter of June 26, 1994 to him as the source for the content
of this meeting – but he neglected to include the part of the meeting
where I was told that Cordiner had fired Barney and appointed Lasher as
acting General Manger.
Chapter 19: IBM’s Dark Shadow
Page 124, end of first paragraph: “…the Computer
Department was becoming a social club.”
Comment: I
disagree with this characterization which Barney makes from time to time.
We were all way too busy to do much socializing.
Second paragraph: “The
cocktail parties grew more frequent as the 1959 Christmas season
approached. The
Christmas dinner was a must-dress occasion. … and invitations had gone
out to all employees.”
Fact: My
invitation must have been lost in the mail.
Fact: There
was a Phoenix Chapter of the GE ELFUN Society, which embraced all of the
GE employees in the Phoenix area – not just the Computer Department - at
or above a certain management level.
They usually held a formal Christmas dinner dance.
The Computer Department employees made up about 60% of this group
which included employees from the Apparatus Sales Division, Industrial
Controls, GE Credit Corporation, the Appliance Division, etc. most of whom
had longer service dates then the Computer Department people and ran this
organization. Barney may have been thinking of this dinner.
Chapter
20:
The GE 225 Computer is Conceived
No comments or corrections
Chapter
21:
The “Big Look” is Approved, Sort of
Comment: I
don’t understand Barney’s appending the “Sort of” to the chapter
title.
Fact according to Barney:
The fourth paragraph on page 134 reads, “Turning to Strickland, Cordiner
said, “Harold, the business plan of the Computer Department is approved.
Get with it!’” This
doesn’t sound like a “sort of” to me.
Barney apparently wanted to give Lasher only grudging credit for
accomplishing something that Barney couldn’t.
Epilogue: It
turned out that Cordiner was correct in that GE had no problem financing
the cash requirements of the computer business.
However, even the “Big Look” did not plan for the surprising
success and growth of the computer business and GE’s participation
therein which led, as a result of the rental business, to much larger
“paper” losses than forecast.
Chapter
22:
Pow Wow at Apache Junction
Shortly before this meeting, I was appointed
Manager- Credit & Collections.
I then began spending the majority of my time on the road visiting
prospects and customers in an effort to convince them to finance their GE
computer acquisitions on some other basis than the standard month to month
rental. This effort was vital
as the greater than planned growth of the business was generating more
“tax shelter” from the rental business than GE could comfortably
absorb to offset profits from other GE businesses.
Converting customers to full pay-out leases or purchase greatly
mitigated this problem.
From this point onward I was not close to what was happening in
Phoenix. However,
Barney had any number of verifiable sources, many of whom are still
living, for the events related from this point forward and who can make
corrections if they so desire.
I
have two further corrections:
Page 179,-second paragraph:
“He knew GE’s conservative accounting system would never
countenance a monthly rental-use agreement for a computer of this
magnitude…”
Fact: The
monthly rental-use agreement was the standard agreement under which GE
computers were quoted, regardless of the magnitude of the order,
and was the manner in which 75% of the customers contracted for the
equipment.
Page 194, third paragraph:
“Solheim’s GE career…
His garage could no longer contain the flourishing side business,
and, in 1963, he decided to leave GE and strike out on his own.”
Fact: Van
Aken, after seeing Karsten on TV demonstrating his putter at a golf
tournament, requested to see Karsten’s past expense accounts.
The correlation of Karsten’s “business” trips, where he
remained over a weekend, to places where there were golf tournaments was
too great for Van Aken, who had been a traveling auditor for GE.
Karsten was fired.
FINAL COMMENTS
I recognize that the critic’s job is many orders of magnitude
easier than that of the writer and Barney needs to be commended for the
tremendous energy and effort he put into writing King
of the Seven Dwarfs. He
has provided a valuable and interesting story of GE’s computer business
and, if nothing else, it’s a scaffold for others to use to flesh out
with additional facts.
I believe that it is
important to correct the factual record.
History, even when historians base their interpretation on facts,
ultimately metamorphoses into myth.
It happens even faster when it is based largely on hearsay.
G. E. Snively, “General
Electric Enters the Computer Business,” Annals
of the History of Computing, vol.10, no. 1, pp. 74-78,
1988.
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