Pierre S. Du Pont and the Making of the Modern Corporation

When we hear about the Du Pont Company with think of synthetics and even nylon, but few realize that the Du Pont Company was founded as a maker of explosives - - black powder to be exact and that this firm was founded in 1802.On it's 100th anniversary, the firm was about to go under as its family-owners due to age, illness, or other factors could not find a successor following the death of Du Pont's president and patriarch. Some of the Du Ponts who were involved in the day to day affairs were too old to run the firm and wanted to sell out. But the youngest of them, Alfred, was in his early thirties and he would not hear of his birthright being sold out from under him. In one of the first modern large scale leveraged buyouts, Alfred and his two other young cousins, Coleman du Pont and Pierre du Pont, bought the firm from the family for the stupendous sum, in 1902 dollars, for $12 million.And now the story gets interesting!The three cousins proceed to build the Du Pont company until, some years later as the firm thrived, Coleman decides to step out and in a move on. Coleman's departure (into politics no less) meant Coleman's shares were up for grabs. And in a almost Byzantine set of events, the shares ended up in Pierre's hands. That outcome embittered Alfred until his death and led to a split in the Du Pont family's allegiances with Pierre garnering the lions share of family support. World War One brought a windfall of profits to Du Pont that had expanded far beyond black powder. Adding smokeless powder and dynamite to its products and selling to the powers fighting the war, Du Pont Company soon was, probably unfairly, dubbed "the merchants of death."But the real story here is not of Alfred and Pierre, although this story is well known and documented in other interesting books. Nor is it the story of the explosives business in World war One and the eventual break-up of Du Pont. Like Standard Oil, Du Pont was considered to big and powerful and the firm was split into Du Pont, Hercules, and Atlas. But even that story is prelude to the real story and subject of this interesting book. Bill Gates at Microsoft would do well to think through what happened to some of the large firms in at the turn of the century that seemed to control their markets far too tightly.The key player and genius that Chandler and Salsbury focus on is Pierre Du Pont and how his genius transformed Du Pont from an explosives manufacturing company into one of the most modern industrial giants of the day. Undaunted by the split up of Du Pont, Pierre set sail, so to speak, and acquired Durant's failing automotive manufacturing firm, General Motors.It was Pierre du Pont who hand picked Alfred P. Sloan to serve as President while Pierre was Chairman of the Board of GM. And although not the only story that Chandler covers, it is interesting to see how tight a reign Pierre held over Sloan and how Pierre incentivized the future GM President and others in Pierre cadre of senior managers.A