(Some believe this is the man who killed the Scout Program.)
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 Harvesters 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. McCardells 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
todays 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 companys woes. Climbing interest
rates, weak markets and high-cost plants had helped push Harvesters 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 McCormicks 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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