Conversations in Management: Acme Motors

A guarantee may mean much or little—a great deal depends on the guarantee and who makes it.

H. M. Sternbergh

AcmeThe who was Herbert Sternbergh, President of the Acme Motor Company, and the guarantee was a “perpetual,” “unqualified” guarantee during the life of every Acme car. Described as loop-hole free, it covered each car, “in every particular.” The company pledged to, “replace any part which may break caused by either flaw in material or workmanship.” Now that’s a guarantee! Sternbergh felt confident making the claim, because Acme cars were very well made. Advertisements noted their use of Krupp chrome nickel steel, manganese bronze bearings and “bodies of the best wood.” They also added an intangible element. In a notice to attract new dealers, Acme pointed out that, “with each part, each screw, we combine intelligence.” Sternbergh added, “You cannot skimp the materials or the work and have the product right.”

The Acme Motor Company began as the Acme Bicycle Company under the proprietorship of James Reber in 1898. Reber was caught up in the enthusiasm for motor cars then sweeping the country.  It seems anyone with even modest mechanical abilities wanted to try their hand at building a car. Some did it for the love of it. Others, perhaps of a more entrepreneurial bent, wanted to make their fortunes. But where money is to be made, speculators are legion. By the time Reber had his namesake car ready for sale, the company was owned by two investors and Reber was involved in name only. Four years later it was purchased by Sternbergh and Acme’s golden age had begun. The car quickly developed a reputation for quality and soon the plant was producing 35-40 hand-assembled vehicles a month. Reincorporated as S.G.V. in 1911, it continued to gain prestige among the wealthy as well as popularity on the racing circuit. The company changed hands again in 1916 and began production as the Phianna Motor Company. The custom-made Phianna’s were arguably the finest cars ever built in America and enjoyed global acclaim. The fact that Phianna continued to honor the perpetual guarantee promised to Acme and S.V.G. purchasers, endeared it to new buyers as well. Sadly, Phianna was a victim of the depression of 1921 and the collapse of the market for hand-built cars. That was also the end of the “perpetual guarantee.”

There are all sorts of guarantees in our world today though you’d be hard pressed to find one of the “perpetual” variety. Most product guarantees are couched as warranties and cover everything that doesn’t break. What’s more, everything from your iPhone to your Ford offers an additional warranty—for a price—that covers everything else that doesn’t break. Universities offer promises about the value of their degrees. Employers offer promises about your benefits. The problem isn’t that the world is filled with charlatans and crooks. Most promises are made in good faith, but things change. Let’s face it; if the vaunted magnesium bronze bearings on your 1908 Acme went out today, there’d be no company to honor the perpetual guarantee. But in a world of changing circumstances, there’s one constant—you. You can offer your own personal perpetual guarantee. It’s simply a matter of being as good as your word, delivering on what you promise and never promising what you can’t deliver. And if you break something—fix it. No questions asked. Your word can be the counterpoint to a chaotic world and provide stability in a tempest of change. It’s a guarantee only you can make and one you can always honor.  —Ebert

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