Archie R. McCardell (August 29, 1926 – 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. Although Harvester was the nation's fourth-largest company at the time he assumed control, McCardell triggered a strike by unionized employees which ended disastrously for the company and led to its eventual demise.
Early life
Archie McCardell was born in Hazel Park, Michigan in August 1926. He served in the United States Army Air Forces in World War II. 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.
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 West Germany.
Xerox
McCardell became group president for corporate services at Xerox in 1966. The post of executive vice president for operations was created for him in 1968, and he was named president of the company in 1971. During his tenure, Xerox introduced its first color copier.
During McCardell's reign at Xerox, the company announced record revenues, earnings and profits in 1973, 1974, and 1975. 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. More troubling were signs that the company was actually stumbling financially: The cost of new products was zooming out of control, most of the company's growth was coming from overseas operations rather than the large American domestic market, and Xerox seemed to have no clear strategic vision.
McCardell departed Xerox for International Harvester in August 1977, just as the company's profits began dropping.
International Harvester
McCardell was appointed president and chief operating officer of International Harvester on August 3, 1977. He received a then-exorbitant salary of $460,000 (making him one of the highest-paid CEOs in the country), a $1.5 million signing bonus and a $1.8 million loan at 6 percent interest. He was named chief executive officer in January 1978.
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. His actions boosted market share, and led to record sales of $8.4 billion and record profits of $370 million (up from $203 million). Despite McCardell's actions, IH's profit margins were still only half those of competitors like Caterpillar Inc. and Deere & Company.
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). 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. 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. When a final agreement came, the union retained nearly everything McCardell had sought to change, and International Harvester had lost $479.4 million during the strike and $397.3 million in the next fiscal year.