Archie McCardell

{{short description|American business leader}} {{Infobox person | name = Archie R. McCardell | image = | image_size = | caption = | birth_date = {{birth date|1926|08|29}} | birth_place = Hazel Park, Michigan, U.S. | death_date = {{death date and age|2008|07|10|1926|08|29}} | death_place = Casper, Wyoming, U.S. |alma_mater=University of Michigan | occupation = Corporate executive at Ford Motor Company, Xerox, International Harvester | spouse = Margaret Martin McCardell | parents = | children = Sandra McCardell, Laurie McCardell, Clay McCardell | networth = }}

'''Archie R. McCardell''' (August 29, 1926 &ndash; July 10, 2008) was an American business leader. He was best known for his tenure as chief executive officer, president, and chairman of the board at the International Harvester farm and heavy equipment manufacturing concern from 1977 to 1982.<ref name="Ring">Ring, "McCardell's Reign as IH Boss Wasn't Dull," ''Quad Cities Dispatch,'' July 16, 2008.</ref> Although Harvester was the nation's fourth-largest company at the time he assumed control,<ref name="Zimmerman">Zimmerman, ''The Turnaround Experience: Real-World Lessons in Revitalizing Corporations,'' 1991.</ref> McCardell triggered a strike by unionized employees which ended disastrously for the company and led to its eventual demise.<ref name="Goodbye">"Goodbye, Archie," ''Time'', May 17, 1982.</ref><ref name="Loomis">Loomis, "The Strike That Rained on Archie McCardell's Parade," ''Fortune'', May 19, 1980.</ref><ref>Williams, "Long Strike Is Called Key McCardell Error," ''The New York Times'', May 4, 1982.</ref>

==Early life== Archie McCardell was born in Hazel Park, Michigan in August 1926.<ref name="Obit">Martin, "Archie McCardell, Harvester Chief Who Clashed With Union, Dies at 81," ''The New York Times'', July 16, 2008.</ref> He served in the United States Army Air Forces in World War II.<ref name="Obit"/> Following his time in the service, he attended the University of Michigan (he was the first person in his family to attend college), where he earned a bachelor's degree and a Master of Business Administration.<ref name="Obit"/>

==Business career== After leaving school in 1949, McCardell became a financial analyst at the Ford Motor Company, and was appointed secretary-treasurer of Ford's operation in Australia and later director of finance for Ford's division in Cologne.<ref name="Obit"/><ref name="Group">"Xerox Corp. Chooses Group Vice President," ''The New York Times'', June 10, 1966.</ref>

===Xerox=== McCardell became group president for corporate services at Xerox in 1966.<ref name="Group"/> The post of executive vice president for operations was created for him in 1968,<ref>"Xerox Names an Operations Officer," ''The New York Times'', February 14, 1968.</ref> and he was named president of the company in 1971.<ref>"Xerox Appoints Chairman and President," ''The New York Times'', December 14, 1971.</ref> During his tenure, Xerox introduced its first color copier.<ref>Smith, "Xerox Planning to Market Color Copier Next Year," ''The New York Times'', May 19, 1972.</ref>

During McCardell's reign at Xerox, the company announced record revenues, earnings and profits in 1973, 1974, and 1975.<ref name="Record1973">Smith, "Xerox Foresees Profit Record in 1973," ''The New York Times'', May 25, 1973.</ref><ref>Reckert, "Xerox Earnings Set Record," ''The New York Times'', July 17, 1974; Reckert, "Xerox Earnings Up 5.4% to Record," ''The New York Times'', April 16, 1975.</ref> Although these accomplishments were lauded by the press as a sign of McCardell's management expertise, the company had been setting records in key financial indicators for 20 years.<ref name="Record1973"/> More troubling were signs that the company was actually stumbling financially: The cost of new products was zooming out of control,<ref>Reckert, "Copier Maker's Costs on New Products May Slow Income Rise," ''The New York Times'', October 17, 1972.</ref> most of the company's growth was coming from overseas operations rather than the large American domestic market,<ref>Reckert, "Foreign Revenue Factor," ''The New York Times'', July 18, 1973.</ref> and Xerox seemed to have no clear strategic vision.<ref>Kilborn, "Can Xerox Copy Itself?", ''The New York Times'', December 1, 1974.</ref>

McCardell departed Xerox for International Harvester in August 1977, just as the company's profits began dropping.<ref>Smith, "Xerox Sees 'Little, If Any' Profit Rise," ''The New York Times'', May 16, 1975.</ref>

===International Harvester=== McCardell was appointed president and chief operating officer of International Harvester on August 3, 1977.<ref>"Chief Xerox Officer Quits to Take Top International Harvester Post," ''Associated Press'', August 4, 1977.</ref> He received a then-exorbitant salary of $460,000 (making him one of the highest-paid CEOs in the country),<ref name="Zimmerman"/> a $1.5 million signing bonus and a $1.8 million loan at 6 percent interest.<ref name="HardTimes">"Hard Times at Harvester," ''Time'', May 25, 1981.</ref><ref>The loan was to be used to buy Harvester stock. The company promised to forgive the loan if McCardell increased International Harvester's financial performance beyond the average of its six main competitors. "Hard Times at Harvester," ''Time'', May 25, 1981.</ref> He was named chief executive officer in January 1978.<ref>Jones, "McCardell, Harvester President, Is Also Elected Chief Executive," January 20, 1978.</ref>

He instituted an aggressive cost-cutting program which immediately cut spending by $640 million and a modernization program which poured $879 million over three years into the company's plants.<ref name="HardTimes"/><ref>Robbins, "A Tough New Tack at Harvester," ''The New York Times'', November 12, 1978.</ref> His actions boosted market share, and led to record sales of $8.4 billion and record profits of $370 million (up from $203 million).<ref name="Obit"/><ref name="HardTimes"/> Despite McCardell's actions, IH's profit margins were still only half those of competitors like Caterpillar Inc. and Deere & Company.<ref name="Obit"/><ref name="StrikeHurts">"International Harvester: The Strike Hurts," ''The Economist'', March 8, 1980.</ref>

In the fall of 1979, rather than undertake more traditional cost-cutting measures, McCardell pressed for concessions from the United Auto Workers (a trade union which had represented Harvester's workers since the early 1950s).<ref name="Zimmerman"/> McCardell's inexperience at labor relations, his rigid bargaining stance, misjudgments about the union's ability to withstand a long strike, and other factors triggered a 172-day strike which began on November 1, 1979, and ended on April 20, 1980.<ref>Friedman, "Interaction Norms as Carriers of Organizational Culture: A Study of Labor Negotiations at International Harvester," ''Journal of Contemporary Ethnography'', April 1989.</ref><ref name="Flamholtz">Flamholtz and Randle, ''Changing the Game: Organizational Transformations of the First, Second, and Third Kinds'', 1998.</ref> The strike was the longest ever at International Harvester, and as of August 2008 is still the fourth-longest strike in United Auto Worker history.<ref>Morath, "Axle Strike Mirrors Pain of 1970 Walkout at GM," ''Detroit News'', May 3, 2008.</ref> When a final agreement came, the union retained nearly everything McCardell had sought to change,<ref name="Obit"/> and International Harvester had lost $479.4 million during the strike and $397.3 million in the next fiscal year.<ref name="Obit"/>

The strike severely impacted the company's financial status. International Harvester lost $257.2 million in the second quarter, for a total of $479.4 million in the first half of the year, while sales slid 47.3 percent.<ref name="HardTimes"/><ref name="257MillionLoss">"International Harvester Reports $257 Million Loss," ''Associated Press'', May 15, 1980.</ref> The company put its utility vehicle division up for sale to help cover the losses,<ref name="257MillionLoss"/> and by the end of April 1980 was forced to take out loans which increased its short-term debt from $442 million to a staggering $1 billion.<ref name="HardTimes"/><ref>"Harvester and A Unit Arrange $420 Million In Bank Credit Lines," ''The Wall Street Journal'', April 28, 1980.</ref> But International Harvester never recovered from the strike.<ref name="HardTimes"/> In November 1981, IH asked the UAW for $100 million in wage and benefit concessions.<ref name="Ring"/> Rising interest rates, demand weakened by the early 1980s recession, and high manufacturing costs pushed the company's total debt to a whopping $4.5 billion.<ref name="Obit"/> On December 23, 1981, the company reached an agreement with 200 of its lenders to refinance $4.15 billion of its debt in a bid to avoid bankruptcy.<ref name="Ring"/><ref name="Obit"/> McCardell announced $200 million in more cuts.<ref>"Harvester to Make $200 Million In Cuts," ''Associated Press'', January 12, 1982.</ref> On January 20, 1982, the UAW rejected Harvester's request for concessions because McCardell had just given $6 million in bonuses to salaried employees.<ref name="Ring"/> But with the firm's financial condition rapidly worsening, the UAW reopened negotiations in March 1982.<ref name="Ring"/><ref>Williams, "Harvester: The Crisis Grows," ''The New York Times'', April 7, 1982.</ref> Negotiators reached a tentative agreement nearly two years to the day after the 1979&ndash;1980 strike ended, giving Harvester $200 million in wage, benefit, pension, and other savings over three years.<ref name="Ring"/>

International Harvester was also sued over McCardell's $1.8 million forgiven loan, and was unable to have the suit dismissed.<ref>"Harvester Sued About Loans," ''Associated Press'', June 25, 1981; "Harvester Loses Bid to Dismiss Suit," ''The New York Times'', May 8, 1982.</ref>

On May 3, 1982, one day after the UAW ratified the concessionary contract, Archie McCardell was fired by International Harvester.<ref name="Ring"/> Although McCardell asserted he had resigned, industry and press observers said that he was fired.<ref name="Obit"/><ref name="Flamholtz"/> ''Time'' reported that the company's 16-member board of directors met in a two-hour meeting over the weekend.<ref name="Goodbye"/> Pushed by the company's debtor banks, the board finally agreed to fire McCardell.<ref name="Goodbye"/> "The real wonder was that McCardell had not been ousted much earlier," ''Time'' said.<ref name="Goodbye"/> He was replaced as chairman and CEO by Louis W. Menk and president Warren J. Hayford was replaced by Donald D. Lennox.<ref>Williams, "Harvester Board Asks Fast Action," ''The New York Times'', May 24, 1982.</ref><ref>[https://www.nytimes.com/1982/11/10/business/business-people-harvester-chooses-new-chief-officer.html ''New York Times'',"Harvester Chooses New Chief Officer" November 10, 1982]</ref>

The company's downward financial spiral continued. For fiscal year 1980, 1981, and 1982, International Harvester incurred a combined three-year loss of $2.4 billion—the largest such three-year loss for any American company in history at the time.<ref>Gilson, ''Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups'', 2001.</ref> International Harvester sold its farm equipment division to Tenneco in 1985, and changed its name in 1986 to Navistar International.<ref name="Obit"/>

Speaking to a group at Harvard Business School six months after leaving Harvester, McCardell was asked his assessment of his performance; he said that despite some regrets, "I think I rate myself superb."<ref name="Obit" /> In 1986, McCardell told UPI, "I feel very good about my years at Harvester. We had a few good years. I don’t think we made any one major mistake. In retrospect, I think we could have done some things differently. None of us was smart enough – myself included – to realize the depth of the problem."<ref name=UPI>{{Cite web|last=Kreiter|first=Marcella S.|date=1986-01-13|title=Archie McCardell misses the excitement: From tractors to real estate – McCardell turns developer and consultant|url=https://www.upi.com/Archives/1986/01/13/Archie-McCardell-misses-the-excitementNEWLNFrom-tractors-to-real-estateNEWLNMcCardell-turns-developer-and-consultant/5230505976400/|accessdate=8 April 2021|website=UPI.com}}</ref> Discussing his remuneration, he said he thought, in retrospect, that he was "underpaid".<ref name=UPI />

==Later career== McCardell moved to Fairfield, Connecticut, where he purchased the original Pepperidge Farm, the {{convert|320|acre|ha|adj=on}} farm owned by Margaret Rudkin which had lent its name to the baking company Pepperidge Farm.<ref name="APlan">Brooks, "A Plan for Developing Pepperidge Farm," ''The New York Times'', October 7, 1984.</ref> McCardell began developing the farm into an affluent subdivision known as The Ridge.<ref name="APlan"/><ref>Brooks, "Glowing Guidelines Vs. Reality," ''The New York Times'', March 11, 1990.</ref>

He was elected to the board of directors of Computer Communications Inc. in 1984, but the company later folded.<ref>"Executive Changes," ''The New York Times'', February 22, 1984.</ref> He also ran a company which took tourists on scuba diving trips, and owned several other small businesses.<ref name="Obit"/>

==Personal life== McCardell was married to Margaret (née Martin). The couple had children.{{cn|date=March 2025}}

He died at his home in Casper, Wyoming on July 10, 2008, of complications from heart failure.;<ref name="Obit"/> His children and two brothers and a sister survived him.<ref name="Obit"/>

==See also== {{Portal|Biography}}

==Notes== {{Reflist}}

==References== *Brooks, Andree. [https://www.nytimes.com/1984/10/07/realestate/a-plan-for-developing-pepperidge-farm.html "A Plan for Developing Pepperidge Farm."] ''New York Times''. October 7, 1984. *Brooks, Andree. "Glowing Guidelines Vs. Reality." ''The New York Times''. March 11, 1990. *"Chief Xerox Officer Quits to Take Top International Harvester Post." ''Associated Press''. August 4, 1977. *"Executive Changes." ''The New York Times''. February 22, 1984. *Flamholtz, Eric and Randle, Yvonne. ''Changing the Game: Organizational Transformations of the First, Second, and Third Kinds''. Cambridge, Mass.: Oxford University Press, 1998. {{ISBN|0-19-511764-6}} *Friedman, Raymond A. [https://journals.sagepub.com/doi/abs/10.1177/089124189018001001 "Interaction Norms as Carriers of Organizational Culture: A Study of Labor Negotiations at International Harvester."] ''Journal of Contemporary Ethnography''. 18:1 (April 1989). *Gilson, Stuart C. ''Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups''. Hoboken, N.J.: John Wiley and Sons, 2001. {{ISBN|0-471-40559-0}} *[http://content.time.com/time/magazine/article/0,9171,921221,00.html "Goodbye, Archie."] ''Time''. May 17, 1982. *[http://content.time.com/time/magazine/article/0,9171,924766,00.html "Hard Times at Harvester."] ''Time''. May 25, 1981. *"Harvester and A Unit Arrange $420 Million In Bank Credit Lines." ''The Wall Street Journal''. April 28, 1980. *"Harvester Loses Bid to Dismiss Suit." ''The New York Times''. May 8, 1982. *"Harvester Sued About Loans." ''Associated Press''. June 25, 1981. *"Harvester to Make $200 Million In Cuts." ''Associated Press''. January 12, 1982. *"International Harvester: The Strike Hurts." ''The Economist''. March 8, 1980. *"International Harvester Reports $257 Million Loss." ''Associated Press''. May 15, 1980. *Jones, Brendan. "McCardell, Harvester President, Is Also Elected Chief Executive." January 20, 1978. *Kilborn, Peter. "Can Xerox Copy Itself?" ''The New York Times''. December 1, 1974. *Loomis, Carol J. "The Strike That Rained on Archie McCardell's Parade." ''Fortune''. May 19, 1980. *Martin, Douglas. [https://www.nytimes.com/2008/07/16/business/16mccardell.html "Archie McCardell, Harvester Chief Who Clashed With Union, Dies at 81."] ''The New York Times''. July 16, 2008. *Morath, Eric. "Axle Strike Mirrors Pain of 1970 Walkout at GM." ''Detroit News''. May 3, 2008. *Reckert, Claire M. "Copier Maker's Costs on New Products May Slow Income Rise." ''The New York Times''. October 17, 1972. *Reckert, Claire M. "Foreign Revenue Factor." ''The New York Times''. July 18, 1973. *Reckert, Claire M. [https://www.nytimes.com/1974/07/17/archives/xerox-earnings-set-record-revenues-also-surpassed-any-prior-period.html "Xerox Earnings Set Record."] ''The New York Times''. July 17, 1974. *Reckert, Claire M. "Xerox Earnings Up 5.4% to Record." ''The New York Times''. April 16, 1975. *Ring, Trudy. "McCardell's Reign as IH Boss Wasn't Dull." ''Quad Cities Dispatch''. July 16, 2008. *Robbins, William. [https://www.nytimes.com/1978/11/12/archives/spotlight-a-tough-new-tack-at-harvester-at-a-glance-international.html "A Tough New Tack at Harvester."] ''The New York Times''. November 12, 1978. *Smith, Gene. [https://www.nytimes.com/1972/05/19/archives/xerox-planning-to-market-color-copier-next-year-cost-of-sheets-put.html "Xerox Planning to Market Color Copier Next Year."] ''The New York Times''. May 19, 1972. *Williams, Winston. [https://www.nytimes.com/1982/05/04/business/long-strike-is-called-key-mccardell-error.html"Long Strike Is Called Key McCardell Error."] ''The New York Times''. May 4, 1982. *Smith, Gene. [https://www.nytimes.com/1975/05/16/archives/xerox-sees-little-if-any-profit-rise.html "Xerox Sees 'Little, If Any' Profit Rise."] ''The New York Times''. May 16, 1975. *Smith, William D. [https://www.nytimes.com/1973/05/25/archives/xerox-foresees-profit-record-in-1973to.html "Xerox Foresees Profit Record in 1973."] ''The New York Times''. May 25, 1973. *Williams, Winston. [https://www.nytimes.com/1982/04/07/business/harvester-the-crisis-grows.html "Harvester: The Crisis Grows."] ''The New York Times''. April 7, 1982. *Williams, Winston. "Harvester Board Asks Fast Action." ''The New York Times''. May 24, 1982. *[https://www.nytimes.com/1971/12/14/archives/xerox-appoints-chairman-and-president.html "Xerox Appoints Chairman and President."] ''The New York Times''. December 14, 1971. *[https://www.nytimes.com/1966/06/10/archives/xerox-corp-chooses-group-vice-president.html "Xerox Corp. Chooses Group Vice President."] ''The New York Times''. June 10, 1966. *[https://www.nytimes.com/1968/02/14/archives/xerox-names-an-operations-officer.html "Xerox Names an Operations Officer."] ''The New York Times''. February 14, 1968. *Zimmerman, Frederick M. ''The Turnaround Experience: Real-World Lessons in Revitalizing Corporations''. New York: McGraw-Hill, 1991. {{ISBN|0-07-072899-2}}

{{S-start}} {{S-bus}} {{S-bef|before=C. Peter McColough}} {{S-ttl|title=Chairman of Xerox Corporation|years=December 13, 1971 – 1977}} {{S-aft|after=David T. Kearns}} {{S-vac|last=Frank W. Jenks}} {{S-ttl|title=CEO of International Harvester|years=August 3, 1977 – May 3, 1982}} {{S-aft|after=Louis W. Menk}} {{End}}

{{DEFAULTSORT:McCardell, Archie}} Category:1926 births Category:2008 deaths Category:American chief executives in the manufacturing industry Category:Ford executives Category:United States Army personnel of World War II Category:People from Hazel Park, Michigan Category:People from Casper, Wyoming Category:Xerox people Category:United States Army Air Forces soldiers Category:People from Fairfield, Connecticut Category:Ross School of Business alumni Category:International Harvester people