Pierre Samuel du Pont was an American businessman. He also served on the Delaware State Board of Education and donated millions to Delaware's public schools.
Background
Pierre Samuel Du Pont was born on January 15, 1870, at Nemours, the family estate, on the Brandywine Creek near Wilmington, Delaware. The second oldest of the eleven children of Lammot Du Pont and Mary Belin Du Pont, he was named for his great-great-grandfather, a physiocrat who fled revolutionary France in 1799. His father, second in command of the family powder-making firm during the long reign of Henry du Pont, had pioneered in the production of dynamite. On his father's death in an explosion on March 27, 1884, Pierre became head of the family.
Education
After attending Penn Charter School in Philadelphia, Du Pont entered the Massachusetts Institute of Technology, graduating in 1890.
Career
Returning to the family company in Wilmington, Pierre found its technical facilities "deplorable" and its management archaic. He nevertheless enjoyed his experimental work on smokeless powder, the new propellant soon to be used in ammunition of all sorts, but continued to be frustrated by his elders' lack of any enthusiasm for change.
Consequently, in 1899 he left the company to join his cousin T. Coleman Du Pont at the Johnson Company in Lorain, Ohio. He handled the liquidation of the company's assets, which had recently been sold to the Federal Steel Company, and, with the funds received, reorganized and reequipped the street railway system in Dallas, Texas, a task which gave him invaluable experience in the ways of modern finance and technology.
In February 1902, Du Pont was called back to Wilmington. The company's president, Eugene du Pont, had died suddenly. The senior partners were about to sell the family company to its ancient and friendly rival, Laflin and Rand, when a younger partner, Alfred I du Pont, proposed, and his elders agreed, that he and two cousins, Coleman and Pierre, buy the firm for $12 million. After the sale Pierre Du Pont became the company's treasurer, Coleman its president, and Alfred the general manager in charge of operations. Pierre and Coleman du Pont, somewhat reluctantly supported by Alfred, immediately began to reorganize the company and with it the American explosives industry. They formed the E. I. Du Pont de Nemours Powder Company, which quickly obtained, largely through the exchange of stock, Laflin and Rand, Eastern Dynamite, and other leading firms. By 1904 the company controlled about 70 percent of the industry's facilities.
In carrying out this strategy, Coleman Du Pont was the commander and Pierre the adroit and effective subordinate who, with the assistance of his own able lieutenant, John J. Raskob, conducted many of the intricate negotiations and worked out the details of the complex financial contracts. Once the legal and financia larrangements were completed, Pierre and Coleman Du Pont centralized the administration of production under three operating departments - black powder, high explosives (dynamite), and smokeless powder; replaced the older selling agencies by an international network of offices administered by a central sales department; and set up a large buying organization (the essential materials department) that came within a few years to operate its own nitrate beds in Chile and its own extensive shipping and transportation facilities. They also formed a development department to manage new modern research laboratories.
In the years immediately after the consolidation, Pierre du Pont, as head of the financial department, concentrated on devising the accounting and statistical data necessary to manage this new, giant, integrated business enterprise. With Raskob's assistance, he developed new methods of asset accounting, of capital allocation, of financial forecasting, and of determining a rate of return on capital invested that have since become standard procedures in American industry.
In 1909 Pierre Du Pont became acting president of the company. Although he was not officially president until 1915, he remained its top policy maker until he retired in 1919. Both Coleman and Alfred Du Pont increasingly turned their attention to other matters while Pierre Du Pont guided the company's continued growth through internal expansion and vertical integration.
When the company lost an antitrust case in 1911, Du Pont arranged for the formation of two new companies, Atlas and Hercules, in a way that met all the government's requirements and yet retained for his company the best men and facilities in the industry.
In the fall of 1914 Du Pont faced two quite different challenges. One was to provide, in the shortest possible time, the enormous expansion of capacity needed to fill the huge orders of the Allied powers for powder. The company's response was successful and profitable. Smokeless powder capacity rose from 8. 4 million tons in 1913 to 200 million by the end of 1915 and 455 million by April 1917. Because Du Pont had obtained a high price per pound for the initial contracts in order to cover construction costs if the war ended before expansion was completed, the conflict's continuance brought huge profits, even after the unit price was cut in half.
The second challenge came when Coleman Du Pont decided to sell his holdings in the company in order to finance his new ventures in insurance and hotels. Alfred Du Pont blocked the sale of the stock to the company because he thought the price too high, but Pierre du Pont, without informing Alfred and other senior members of the clan, made the purchase, which gave him control of the family firm. Angered, Alfred Du Pont brought suit. Pierre Du Pont eventually won, but the bitter court case, which dragged on until March 1919, split the family into feuding groups for more than a generation.
On his retirement in 1919 Du Pont turned away from business and began to build the magnificent gardens at his Longwood estate and to embark on a campaign to improve public education in Delaware.
In December 1920 he was forced to put these projects aside when he unexpectedly became president of the General Motors Corporation. His first connection with that company had come in 1915, when he agreed to serve as the neutral chairman of its board during the conflict between William C. Durant, its founder, and the bankers who helped to finance it. After Durant gained full control, he asked Du Pont to stay on. In 1917, at Raskob's urging, Pierre convinced the Du Pont company to invest $25 million of its war profits in General Motors. Immediately after the war Raskob joined Durant in Detroit and together they embarked on a massive expansion program, but the sharp postwar recession brought the company close to bankruptcy. At the same time Durant lost more than $30 million attempting to maintain the price of General Motors stock on the New York exchange. These two sudden blows led to Durant's retirement.
As its new president, Du Pont completely reorganized General Motors' operating structure and marketing strategy. In carrying out this work he relied increasingly on Alfred P. Sloan, Jr. , who in 1920 managed the company's parts and accessories division. The two set up a top management office consisting of a number of general executives without day-to-day operating responsibilities and a large financial and advisory staff to evaluate, coordinate, and plan for the operations of the many divisions producing and distributing automobiles, trucks, parts, accessories, and household appliances. Du Pont employed experienced managers from Wilmington to institute the accounting and statistical controls that he and Raskob had earlier perfected. In marketing, Du Pont's strategy was essentially to bracket the market, that is, to have each automobile division sell its products in each major price class. In 1923, as these reforms were being completed, he turned the presidency over to Sloan and once again became chairman of the board.
Partly because of the reorganization Du Pont had instigated and partly because of Henry Ford's disdain of such sophisticated management and marketing methods, General Motors was soon selling more cars than Ford, and its profit record became by far the best in the industry.
With his retirement from the General Motors' board in 1929, Du Pont returned to the Longwood gardens and state education. Between 1920 and 1935 he contributed more than $6 million of his own funds to the latter cause, the largest portion of which went to build schools for blacks. This work brought his appointment in 1925 as State School Tax Commissioner and in 1929 as State Tax Commissioner, a position he held until 1937 and again from 1944 to 1949.
During the depression, du Pont served on President Hoover's Presidential Committee for Relief and the Delaware Employment Relief Committee. In 1933 President Roosevelt appointed him to the Advisory Board of the National Recovery Administration (NRA) and then placed him on the NRA National Labor Board. By 1934 Du Pont, disturbed by government spending and by the attacks on the Du Pont company in Congress for its wartime profits, returned to his long-held Republican affiliation. He helped, again on Raskob's advice, to found and fund the American Liberty League, but he never became an active member. Du Pont died at the Delaware Memorial Hospital of a ruptured main blood vessel.
Achievements
Peirre Du Pont's most important achievements were the Du Pont and General Motors companies, which half a century later are still the largest chemical and automobile producers in the world. From a small family firm and Durant's ramshackle business empire, du Pont built the archetypes of the modern corporation that became the models for many other great industrial enterprises in the United States and abroad.
