By on February 11, 2008

ph1_rencen-large.jpgDetroit is a strange place, far away from the great cultural cities of New York and San Francisco. The men who run the city’s car companies are local men. They’ve risen to the top of GM, Ford and Chrysler after years of hard, intense work; clawing their way to the top of a huge, Byzantine bureaucracy. Backed-up by minions and and subalterns, these auto execs live in splendid isolation from the rest of the nation. They are out of sight and out of touch.

Unlike most moguls, car executives must have a profound understanding of their customers’ psychological needs. While selling tires or TV sets or erectile dysfunction drugs has little to do with the responsible corporation’s “identity,” automobile buyers form a deep, fundamental attachment to “their” carmaker. If a car exec does not truly understand his customers’ emotional drivers, his customers will drive someone else’s car.

The Big Three’s bosses work is unlike that of any other boss of a major manufacturing operation. In a sense, they must function more like television or movie executives. They must link with their audiences’ daily lives– and dreams– or lose business. They must be one with their sales people– and the “real” people. 

And yet, the geography of the business and its “show biz” component makes the men who run Detroit's car companies a culture unto themselves. They live in fancy houses well away from inner city squalor; their private clubs are among the finest in the world. Their social set links them with each other, and connects the major companies like Europe’s nobility linked eighteenth century nation states. They are seldom fired, downgraded or even moved laterally. They are stars in their own little universe. but this universe is distant, and finite.

You could even say these execs live cloistered lives. The Motor City’s Princes and Kings have more privilege and perks than other major executives, yet remain behind closed doors. They make millions from but rarely deal with the Union men who actually build the cars upon which their livelihoods depend. PR flacks protect them from the snooping media. And they seldom deal with the public– beyond an occasional visit to a motor show or a speech written by their media men delivered to some fawning special interest group.

In the world of powerful men, here or in Europe, few live within such a bizarre combination of privilege and insulation.

Like many bosses in industries under assault from "barbarians," Detroit’s isolated auto execs work tirelessly to maintain the status quo. Safe in their gilded cages, they continue to ignore their customers' changing needs. And they continue to build the same products over and over: the same damn automobiles that their fathers and grandfathers built.

Go back 40 years, when I scribbled a story that put me on the Motor City hit list: “The Grosse Pointe Myopians.” The sub-title pretty much outlined the premise: “Accustomed to silver-lined visions, the auto elite refused to see any gray clouds.

“Detroit can fire scattershot numbers to justify practically anything, including slumping sales.  However two vivid facts remain after all the ledgers have been shuffled; the domestic automobile industry is not growing as rapidly as expected and imports are making shocking inroads into the American market.”

Remember now, those words were written close to a half-century ago. Nothing, not a damn thing, has changed. Sales continue to slump as the Europeans take more of the upscale market and the Japanese and Koreans (and soon, the Chinese) chisel away at the center and bottom of the market.

More importantly, the “Myopian” component of the domestic car business remains. Leading the near-sighted non-charge: Ford’s Alan Mulally, GM’s Rick Wagoner and Chrysler’s Bob Nardelli. Not one of them has what used to be called “the common touch.” None of them restlessly prowls the dealerships, motor shows or parking lots, away from their minions, trying to get a feel for what their customers really, really want. 

During the Civil War, Abraham Lincoln spent more time away from the White House than in it. Not so Detroit’s CEOs. They and their executive staff are bunkered. And blind. In fact, Detroit’s leadership hasn’t changed in the slightest way since The Grosse Point Myopians was written at the start of what we might now call the domestic automobile’s “dark ages”.

A radical change in the Big Three’s power structure must take place, and quickly. If not, we could see Motown go away, as the imported cars and trucks seize the total market. Yeah, it’s hard to believe, but the world moves on, and very little in this rapidly shifting world can remain the same. 

What’s it going to take to get the “Gross Pointe Myopians” to finally take off their glasses and face cold, hard reality? Do you really want to know? 

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103 Comments on “Brock Yates: Grosse Pointe Blank...”


  • avatar
    chaparral

    One specific problem this causes is that since Michigan is flat, execs never learn that the chassis tuning is off. Bob Lutz said in an interview that he only had one decent driving road in southeast Michigan – and looking at it, that road would be unexceptional in Massachusetts or Vermont.

  • avatar
    Detroit-X

    Brock,
    Hey, I must logically request: Let’s see a reprint of “The Grosse Point Myopians.”

    If you drive south toward the RenCen, one shocking thing new visitors will notice about Grosse Point (and it’s adjacent Grosse Point Park burb to the south) is the utter, shocking contrast from well manicured suburbs, to the immediate presence of the crack-whore streets of Detroit. I’ve turned my car around on the first E-W street south of the Gross Points, rather then risk it on such an Iraq-like, crap-hole road.

  • avatar

    My limited experience with GM taught me one thing: the organization is energetic about stamping down any kind of feedback from “below” that could be construed as criticism of the decisions passed down from on high.

    This sentence from the editorial rang a bell:
    Not one of them has what used to be called “the common touch.” None of them restlessly prowls the dealerships, motor shows or parking lots, away from their minions, trying to get a feel for what their customers really, really want.

    I have also had the experience of working with the IKEA brand. Its founder has always taken a direct, hands-on approach to every facet of the company; it is completely self-financed from the first to the last store; it is now a world wide mega outlet of anything you might require in the home — and throughout that entire, quite miraculous journey, the founder has been on the floor, providing inspiration and whip, as needed.

    You’ll think it’s just a pr-opportunity, but he thinks nothing of going out on the floor to help customers pick out products, or working in the cafe serving food. The man is a megabillionaire and built that fortune realizing that value is created with good products, at an attractive price, fit to customers’ needs. It’s not a magic formula, it’s common sense.
    And Mr Ivar Kamprad knows exactly what the customers want, because he’s heard it from them; and he knows exactly what the supply chain needs to deliver the quality he needs, because he made it a point to know every single one of them, as he was building the business, and he helped them grow as he grew.

    Contrast that with Detroit, where they spend megabillions, while not showing a profit, year after year after year — hoping for gas to go back to 50c/gallon, while squeezing suppliers dry and ignoring their customers’ wants. That’s trusting in magic.

    • 0 avatar
      Robert.Walter

      “I have also had the experience of working with the IKEA brand. Its founder has always taken a direct, hands-on approach to every facet of the company; it is completely self-financed from the first to the last store…”

      Self-financed because the old Nazi (actually the Swedish branch called the New Sweden Movement) who owns it has the whole compay set up in a complex and non-transparant series of foundations and shells, the sole purpose of which is believed to be tax-evasion.

  • avatar
    olddavid

    I am quick to bitch, so when you’re right, I will be equally adept at praise. I have only been a visitor to those halls, but the sense of isolation from everything borders on lunacy, like the artificial quiet in the library. I was once invited to lunch with the CEO of little tiny AMC- in their halcyon days of the early 60’s- and the opulence shocked my semi-rural sensibilities. But, I will also admit that the business has paid me very well for many years, and hopefully, for a few more, so I can’t help but root for the home team. My family taught me loyalty, but the jackasses haven’t earned it since 1965.

  • avatar

    I couldn’t agree more that myopia in Detroit is extraordinary; their products achieved mediocrity in the early 70’s and have shown only sparks of vitality in the intervening years. You allege however: Unlike most moguls, car executives must have a profound understanding of their customers’ psychological needs.

    This “profound understanding” is nothing more than common sense. If I buy a product as mundane as a cup of coffee, a meal or a light switch, I will prize product quality, consistency, reliability and reasonable value when it is offered. It is apparent to most of us that no amount of hucksterism can replace these basic traits, even though we might be momentarily swayed by such ad nonsense as “all new” or “extra value”. The functional quality of an automobile, its purchase and its service is not masked for long, hence Lincoln’s words: “You can fool some of the people all of the time and all of the people some of the time, but you cannot fool all of the people all of the time.”

    For more than 40 years, the American car manufacturers have been working to do just that. They wanted the public to pretend, along with them, that there was actually a difference between a Chevrolet and a Cadillac, or a Ford and a Lincoln. At times, some people were fooled. But here and there, friends and neighbors discovered that there was nothing special behind the curtain. The same crap switches in the Chevrolet appeared in the Cadillac costing twice as much. The “dealer experience” we hated at the Ford store was no different at the Lincoln dealership.

    Detroits overpaid princes were told about this over and over again, yet shoveled out the same old same old year in and year out, convinced that they could actually fool all of the people all of the time.

    Even though it is difficult in America to both satisfy myopic stockholders and a reasonably discerning public, there are scores of American companies who do so. Their executives base their performance not on quarterly fluctuations of the stock market, but on the long term strategic viability of their products. Toyota, Honda, Porsche, BMW and others have done the same thing in the automobile business. And despite occasional missteps, the vision showed in their products.

    The need to connect with one’s customer is not limited to the automobile business. Success stories in business have over and over again showed that quality and value are key issues which are recognized with consumers, despite the fleeting examples of “pet rocks” which manage to flash momentary profits from nothing.

    Leadership in Detroit has varied from incompetence to malfeasance for at least 50 years, and sheer momentum has caught up with them. They don’t need a “a profound understanding of their customers’ psychological needs”, but actually need something far more simple: they need to actually give a damn how the product works and how it compares in the marketplace.

  • avatar
    kovachian

    Perhaps this multi-faceted isolation plays a part in why VW is packing their bags and leaving Detroit for Virginia. Wouldn’t surprise me one bit, and strangely enough I hope that other manufacturers will follow suit. As an IT student who’d LOVE to score a job in the auto industry, (especially for Audi/BMW/Merc), the last place I’d want to move is to the frozen war-torn wasteland of Detroit.

  • avatar
    jerry weber

    Why do we think all of this is abnormal? This is not just Detroit this is the modern “global” management system. Take three months ago, the biggest banks in the Country were losing billions. So, the top execs of a few walked the plank. But, they took golden parachutes of tens of millions with them. This was In the event they never work again, there would be no let down in their life styles. This has been a mantra of all management of large corporations. I’ll only come with a huge salary and perk package, but if I fail, I need a golden parachute. After all my repuation depends on it. Only if Detroit hired people who were not World class managers in the Wall Street mold, will they get people who still remember starting out and life in the real World. Further, it is these types who might drive themselves to a plant alone unannounced and meet the people. (managers and workers) Same goes for the car dealerships. While they were doing this, they might take out a few of their latest products and drive themselves through America and see what the experience is for the buying public. If they were really ambitious, they would stop at a competing dealer and drive his merchandise. Then when they sat at a meeting to approve product for the future, they could say “bullshit” this is not as good as the competition has out already. Only if this happens, will we see any meaningful change in Detroit. By the way, don’t count on it.

  • avatar
    drifter

    During the Civil War, Abraham Lincoln spent more time away from the White House than in it.
    So did George W Bush during Iraq war. Your point being?

  • avatar
    KatiePuckrik

    It’s no coincidence that Detroit have lost focus. All three were (or still are) run by accountants who don’t care if they sell rickshaws as long as they make money. There doesn’t seem to be much in the way of pride in the products. Naturally, there are some exceptions (Cadillac CTS/CTS-V, Ford Mondeo, Ford Focus Cabriolet), but accountants don’t care too much for pride. They haven’t figured out that people form a bond with a particular marque (Like I do with Toyota) and if you abuse that bond, it will break.

    Another problem Detroit have is their inability to recognise the important and value of organic growth. They’d rather acquire companies to achieve growth. The net result of this is a bloated portfolio with a lot of dealers to keep happy. One only has to look at GM and Ford for evidence of this. Toyota and Honda, managed to keep there brands to a minimum, which, in the long run, gives their brands more value and a valuble brand is worth its weight in gold.

    But Detroit aren’t the only ones guilty of this. Nissan are slowly turning that way. Mr Ghosn did a wonderful job of turning Nissan around, but under his continual leadership, Nissan’s reliability is in tatters and Nissan has dropped to Japan’s number three with Honda leapfrogging them.

    Maybe the reason for all of Detroit’s woes is ego? A CEO will come to power and want to revolutionise the company so their legacy is a good one. Their vision only extends as far as their tenure. Without a long term vision (like the one Mr Ghosn laid out for Nissan and soon Renault) Detroit will carry on bumbling through without doing anything meaningful to secure the company’s future……

    Disclaimer: Before any starts, yes I know Toyota and Honda are interested in making money, you’d be an idiot to think otherwise. But I’ll quote you some excerpts from Toyota’s production system which highlights the difference in attitudes between Tokyo and Detroit:

    “Base your management decisions on a long-term philosophy, even at the expense of short-term goals”

    “Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others”

    “Respect your extended network of partners and suppliers by challenging them and helping them improve”

    “Build a culture of stopping to fix problems, to get quality right the first time”

    All these quotes follow the same principle: “long term, not short”.

  • avatar
    daro31

    From 1969 until into the 1990's I worked for Ford here in Canada from the line to several rungs up the management level. One of the things you learn very early is that upper management does not really want to know what is going on. As a production supervisor you learn how to fudge production numbers on an hourly level, so that the General Foreman and then the superintendant do not have to explain any production down time in morning meeting. Any part which is damaged on the line through difficult installation, sabatoge or mishandling is always a supplier problem and you learn how to hide any additional manpower for rework or repair as a supplier defect related cost. I used to wonder if upper management had any idea at all what went on in thier factories or with the product. One year our plant was competing with 2 others plants to get the new Escort program, our first front wheel drive car. The day the big shots where coming in in the middle of July for a plant tour our area was in the middel of our July hot spelll and all of the lawns around the plant were crispy brown. They painted the lawns with green dye, so that it would look nice when the helicopter landed. I used to wonder just how such stupid people could be come so successful. There is a reason they used to say it is "Ford Country". They operated like the king with no clothes in the world of their own ignorance and making. And of course as I have stated here before, they promote like minded people not people with new ideas, (disenters to them) and the cycle continues. "Ford Has A Better Idea", but their saving it cause it's the last one.

  • avatar

    drifter: During the Civil War, Abraham Lincoln spent more time away from the White House than in it.
    So did George W Bush during Iraq war. Your point being?

    Probably that Bush, as a “modern” and highly detached manager, did little to understand what the hell was actually happening, while Lincoln, who was vitally concerned with the health of the republic, listened to both his enemies and his supporters in his attempt to do the right thing. This is no doubt what Brock meant…

  • avatar
    mikey

    I,ve allways believed that the blame for GMs misfortunes rested at the unions,the dealers and the upper managements feet.
    The unions have been beat up kicked around and put in thier rightfull place.{I am a long time UAW/CAW member.
    The dealers, that are surviving are doing every thing possible to rectify past mistakes.Its about time!Yeah theres bad ones still alive,but not for long.Right now there is still room for improvement.From what I read on the net the import dealers have a lot of room for improvement also.Its not just a big 3 issue.
    So whats upper management done to change things?
    I think Mr Yates has covered that quite well.
    “Detroits overpaid princes” says it all.

  • avatar

    @edgett and drifter

    drifter: During the Civil War, Abraham Lincoln spent more time away from the White House than in it.
    So did George W Bush during Iraq war. Your point being?

    That the Civil War is over … ? :-)

  • avatar
    JJ

    especially for Audi/BMW/Merc

    As a car enthousiast, you are not allowed to like all three. Or actually, you’re not allowed to like both BMW and Mercedes at the same time.

    It’s just plain wrong.

    Now if you like BMW and you go work for Mercedes to do some company espionage and destroy them from the inside out that could be condoned.

    Maybe in the US things are different.

  • avatar
    AKM

    If I buy a product as mundane as a cup of coffee, a meal or a light switch, I will prize product quality, consistency, reliability and reasonable value when it is offered. It is apparent to most of us that no amount of hucksterism can replace these basic traits[…]

    Edgett: Ever been to a Starbucks? ;-)

    While I would like to agree with this, perception still rules our world, and it’s nowhere near as true as in the car business. But the trick is that hucksterism needs to be linked with actual qualities: no matter that the suburban soccer mom will always drive under the speed limit, she knows, by buying her BMW X5, that she is indeed at the helm of a “ultimate driving machine, because BMW has relentlessly worked for that: in advertisements, but also in engineering.

  • avatar
    L47_V8

    Detroit-X :
    February 11th, 2008 at 8:12 am

    Brock,
    Hey, I must logically request: Let’s see a reprint of “The Grosse Point Myopians.”

    If you drive south toward the RenCen, one shocking thing new visitors will notice about Grosse Point (and it’s adjacent Grosse Point Park burb to the south) is the utter, shocking contrast from well manicured suburbs, to the immediate presence of the crack-whore streets of Detroit. I’ve turned my car around on the first E-W street south of the Gross Points, rather then risk it on such an Iraq-like, crap-hole road.

    Not sure if you live there or are just a fan, but I’ve been a fan of Detroit’s history for some time (not just the automotive history, either). It seems to me you miss some of the gems of Detroit by staying away from the “bad sections,” thus why we steered our rental Cobalt into the Hamtramck area, onto Mack Avenue to catch a glimpse of the old Ford plant, and spent hours searching for a way to get closer to the old Fisher Body plant off the freeway (75, is it?). This year, we didn’t have enough time to explore thoroughly, although we did get up to Lansing and enjoyed the Oldsmobilia there. We also were afraid our ’07 Camry SE rental was a bit more conspicuous than our ’06 wheelcover-special Cobalt.

    Anyway, my feelings on this are simple: Detroiters generally support the home team, far moreso than any other region in the US, due to many of their livelihoods or families’ livelihoods being built upon the Detroit 3. This necessarily creates a culture of insulation: the execs don’t spend enough time out of the Detroit area to get a sense of what it’s like in the real world, and even when they are out of the office, they see acres and acres of domestic vehicles. I have to laugh at the rows of unsold Mitsubishis and Hondas, and across the street, Mazdas, along Michigan Avenue in Dearborn, about a half mile from Ford world headquarters. It’s a unique culture even within America – I plan to live there sometime in the after-college years – and one that causes this myopia, in my opinion.

    • 0 avatar
      Robert.Walter

      If you didn’t make a pass by the Packard plant then you really missed something… (that will make you think and think about rise to pinnacle, irrelevance, and complete dissolution all within 50 years…

  • avatar
    KixStart

    AKM, Is Starbucks “hucksterism” or is it something else?

    You can get pretty good coffee at McDonald’s for less money. However, I find Starbucks to be better coffee, albeit at a higher price. I’m willing to pay the difference.

    But a bigger difference is the environment. Starbucks expects, demands, that their people work to personalize the experience for you. When you go into the shop you are surrounded by all things coffee and the staff is actually trained in a wide variety of things related to coffee. The snacks and sandwiches are tasty and interesting.

    At McDonald’s, the staff knows the basic formula, they slap it into your hand quickly enough, it’s hot enough and it’s tasty enough but it’s not the high touch experience you get at Starbucks.

    Going inside McDonald’s is bad enough but worse still is to go to the drive-through. That’s no way to buy something that’s intended to relax and refresh you. Starbucks provides an alternative.

    Starbucks still manages to do it with pretty good value; I rarely encounter an independent coffee shop with better prices, the atmosphere is usually not as pleasant and the staff is never as well trained. Refills are very inexpensive.

    What would a Big 2.8 auto dealership be like, if they were run like Starbucks?

  • avatar
    SherbornSean

    Mr. Yates’ words 40 years ago were quiet prescient.

    That said, today’s editorial might have more power if 2 out of 3 examples of in-bred, myopic Detroit insiders hadn’t just arrived from outside the auto business.

  • avatar
    jurisb

    I wouldn`t blame CEOs only. It`s alltogether that has ruined us manufacturing. How come that every single CEO of any US based precision manufacturing business is an asshole, while service oriented or primitive stamping manufacturers always succeeed even in Europe. Ralston-Purina, Mars, Cocoa-Cola, Levi`s, Gillette. All of them somehow have got great CEOs , and coincidentally none of them represent precision manufacturing of mechanisms. So I believe that it is rather a US inability to sustain high precision complex manufacturing due to lack of demanding customers within the continent and lack of engineering organization. America has shown ability to organize simple production paradigms like chop meat remains and add soy and pack it nicely as kitten meow or whatever, or sell triple -mega turbo razor with not a single rotating part. ( probably, electric actuator inside a gillette shaver would be beyond their abilities), sell pampers ?yes, sell trucks to europe? No! DHL? yes, Double-decker planes? No., etc. So I wouldn`t blame executives, I would blame the engineering and manufacturing threshold. You can`t jump higher than your ass, Shakespeare would say:)

  • avatar
    Zarba

    A twofer! A great article named after one of my favorite movies!

    Nardelli was famously insulated from the Home Depot sales floor and its customers. He was despised from top to bottom at HD headquarters, and the customers wer completely ignored in his relentless cost-cutting.

    He did manage to make HD more profitable in the short-term, but the stock continued to languish. After destroying HD’s reputation for customer service, ruining the value of the stock, and killing a vibrant corporate culture, Bob golden-parachuted out with $212 million.

    And this is the guy Cerberus turned to to revive a company that is absolutely dependent on customer satisfaction? To Bob, it’s all just widgets. At least Alan Mullaly seems to get the idea that cars are aspirational products.

  • avatar
    NickR

    but this universe is distant, and finite

    You forgot ‘shrinking’.

  • avatar
    lewissalem

    I agree with L47_V8.

    As a Detroit native who has worked short stints at two of the big 2.8, I must say that Detroiters are home team fans. To people outside, they must think that we’re crazy. My Dad still suggests, “what about an Edge?” even though I haven’t driven domestic since 1995. He still brings up criticisms of Japanese cars from the 70’s. He doesn’t think Chinese cars will ever sell well here.

    The homerism is charming, until you realize that it is slowly killing our market share. By blindly accepting these cars, we would actually be hurting them by allowing the mediocrity to continue.

  • avatar
    ttac2000

    I think it’d be wise for one of the Big 3 to move their HQ staff out of Detroit. A few years in LA, Atlanta, Miami, Dallas or wherever would drastically change their viewpoint. Force the execs to live amongst the millions of consumers who repeatedly choose Honda, Toyota etc over the domestic alternatives. I can imagine that living in Detroit creates something of an echo chamber for the big 3 execs, given the disproportionate # of domestic makes on the roads there.

    I actually saw some Buick Terrazas and non-rental Grand Prixs in the wild last time I was in Michigan. Crazy

  • avatar
    geeber

    Interesting article, and as accurate as the original one from 40 years ago. But is this problem limited to the automobile industry? From what I see, insular, out-of-touch management isn’t just a problem with GM, Ford and Chrysler. It seems to be the curse of established companies, regardless of the product or service.

  • avatar
    nonce

    Every time I see the word “cloistered,” I still think about going to school in Grosse Pointe. What a freaking inbred community.

  • avatar
    craigefa

    I actually saw some Buick Terrazas and non-rental Grand Prixs in the wild last time I was in Michigan. Crazy.

    I’m always amazed too by the number of Buicks and Pontiacs on the roads here in Flint. I played poker with some friends a couple of weeks ago and one was talking about how happy he was with the used 2004 Grand Prix he just bought. He bought it because the engine on his Lumina siezed up.

  • avatar
    umterp85

    TTAC2000: Conversely, I would challenge several on this site to actually visit Detroit and see first hand what bad management, greedy unions, and corrupt government can do to a once vibrant city. It is just friggin sad.

    The overall industrial decline in this country is what is really alarming—-I don’t care what anyone says—if you stop making stuff—you just “stop” and are forced into financial schemes (see recent credit crisis) to show growth. Want to see a modern day Detroit—-visit some neighborhoods in California and Florida where the number of vacant foreclosed homes outnumbers those with occupants….absolute ghost towns. Prettier and newer ghost-towns than some parts of Detroit—-but same result.

  • avatar
    Wheatridger

    Five years ago I visited the Detroit City Museum. They had a large “display on how a car is made.” For its dramatic high point, the body of an ’80s Impala swoops down from the ceiling to land atop a ladder frame, just like they made cars in the good ‘ol days.

    My father-in-law, an ex-Chrysler exec, tells how Detroit is built atop massive salt deposits. There’s so much salt on the roads in winter that no car was ever expected to last more than five years, he said. Planned Obsolescence was a geological imperative here…

  • avatar
    Turbo G

    As a Detroit native, I can remember being stopped at a traffic light at a busy intersection and often not seeing one “foreign” car out of the whole pack waiting at the light. We are such homers that we even still pull for the Lions! (who are also a Ford product!)

  • avatar
    jkross22

    This is how most large corporations operate at the executive level, not just the Big 3. The US auto makers are likely worse than most due to their consistently poor performance.

    The guys at the top aren’t paid to care – they’re paid to tell half truths and use smoke and mirrors to describe the company’s future and present financial status for one purpose: increase the stock price TODAY. That’s it.

    Shareholders ought to demand more, but it won’t be until the value of these companies has become so beaten down that a shareholder revolt will occur. Not to worry if you’re at the top, though: Your golden parachute is bullet proof.

  • avatar
    detroit1701

    Another facet of the myopia problem is that the rest of the country seems to care less if the United States had a domestic car industry at all. The domestic automakers get very little help from Washington, and the only candidate who recognized Michigan’s problems was Romney. (McCain prob lost in a landslide with his depresso comment at the Detroit Auto Show that “your jobs aren’t coming back”).

    Michigan has been its own little society for decades now. Since the state was built on a single industry (including the supplier jobs, don’t forget), our economy rides a different wave than say Illinois, Ohio, or Wisconsin.

    Japan and Germany assist their auto manufacturers in very big ways (trade policies, tariffs, universal health care). Furthermore, a foreign company is barred from owning more than a 1/3 of a Japanese company, and the EU would never let a foreign company buy a chunk of BMW or Mercedes (Nissan is fine, though, because it is a partnership and a European runs the company). China also supports its native industry.

    I think, as a nation, we have to decide whether we are going to retain an auto industry, or whether like consumer electronics, we will cede it abroad. Hurry up and make up your mind, America, because a fast death is better than this.

  • avatar
    John B

    Great column Mr. Yates, I’ve saved in Word format for future reference. As I recall from The Reckoning by David Halberstam, a sure fire career killer in Detroit was to be an engineer. All of the top management were finance or marketing types.
    http://www.amazon.com/Reckoning-David-Halberstam/dp/0688048382

  • avatar
    DaPope

    @ detroit1701

    “Another facet of the myopia problem is that the rest of the country seems to care less if the United States had a domestic car industry at all. The domestic automakers get very little help from Washington…”

    That’s a PERFECT example of the myopia I believe Mr. Yates was lamenting – blaming everyone else, now including the federal government, for the Big 3’s inability to acquire perspective and ‘begin’ building competitive automobiles. As well, it’s not up to the gummint to provide Universal Healthcare – for ANYONE; what would this actually do to assist in the production of cars people would like to drive? Nothing.

    The crappy lineup of the Big 3 is their own doing – not Washington’s. Domestic automakers remaining such SHOULD be a priority – of the domestic automakers, themselves. Washington does absolutely NOTHING efficiently, or well, and should not even consider getting into the sink-hole of salvaging these automakers.

  • avatar
    KatiePuckrik

    detroit1701

    Furthermore, a foreign company is barred from owning more than a 1/3 of a Japanese company

    That can’t be right. Renault own 44.4% of Nissan. Maybe this is offsetted by the 15% of Renault that Nissan own?

  • avatar

    Graet article, my only disagreement is that in my opinion Alan Mulally is not in the same mold as the others. After all he actually compared and chose a Lexus over a Cadillac or a Lincoln. So he knows first hand why people choose imports over domestics.

  • avatar
    ttac2000

    Another facet of the myopia problem is that the rest of the country seems to care less if the United States had a domestic car industry at all. The domestic automakers get very little help from Washington, and the only candidate who recognized Michigan’s problems was Romney. (McCain prob lost in a landslide with his depresso comment at the Detroit Auto Show that “your jobs aren’t coming back”).

    The domestic car industry is booming. Feel free to visit Spartanburg SC, Tuscaloosa or Mongomery Alabama if you don’t believe it. Hell BMW is shutting down the X3 line in Austria and moving production to South Carolina.

    The Big 3’s problems are of their own making. Washington has helped them in the past (Chrysler bailout anyone?) and it just delayed the inevitable. Corporate welfare is not the answer

  • avatar
    Gardiner Westbound

    Detroit-3 executives talk the talk, but don’t walk the walk.

    If they had to endure the bullshit buying a new Belchfire, sweat the payments for three or four years, fight for warranty repairs, and keep the POS running paying repairs out of pocket they would produce superior products.

    Chrysler’s Tom LaSorda started a 2006 program in that briefly required Chrysler executives to drive used cars. Some are still in therapy.

  • avatar

    This from a source who wishes to remain anonymous:

    I work at a Chrysler dealership. Last weekend, we had a big Chrysler pow wow of dealership people and Chrysler executives.

    Twice, during the weekend, a group of them came to our showroom. None of them spoke to the sales staff who were readily available standing a few feet away on the sales floor.

    If they had bothered we could have told them why we had new cars stacked up and why we aren’t making any money and what the customers that we still get are saying about their cars….

    But they did not join us in conversation. A couple of them gave us a head nod as they exited.

  • avatar

    detroit1701 “the rest of the country seems to care less if the United States had a domestic car industry at all. The domestic automakers get very little help from Washington…….Japan and Germany assist their auto manufacturers in very big ways (trade policies, tariffs, universal health care).”

    Why should those of us who have good healthcare be forced to take crappy governmental health care just so the domestic auto industry has lower health care costs. The Toyota workers in the US have insurance and lower costs but they don’t give retirees a gold plated health plan. All the big three have to to do is force their retiress to take medicare when they retire, but they don’t want medicare. Detroit doesn’t want a government health plan for themselves only for the rest of us.

  • avatar
    50merc

    Detroit is the victim of its own success. The giant automobile enterprises that survived the first half of the 20th century spun off so much wealth, for so long, for so many, fundamentally changing their habits and business model became unthinkable.

    It’s a sad sight for those of us who appreciate the incredible history and effect of this industry. There is a website dedicated to the “fabulous ruins of Detroit”:
    http://detroityes.com/industry/index.html
    that includes a fascinating record of architecture associated with the rise and decline of Ford, GM, Packard, etc.

  • avatar
    umterp85

    TTAC2000: “The domestic car industry is booming. Feel free to visit Spartanburg SC, Tuscaloosa or Mongomery Alabama if you don’t believe it. Hell BMW is shutting down the X3 line in Austria and moving production to South Carolina. The Big 3’s problems are of their own making. Washington has helped them in the past (Chrysler bailout anyone?) and it just delayed the inevitable. Corporate welfare is not the answer”

    Well—-you are right corporate welfare is not the answer. The reality is though that corporate welfare is EXACTLY how Spartenburg, Tuscaloosa, and all other of the Southern cities got BMW, Mercedes, and Hyundai to locate there. Don’t let the lower Southern labor rate fool you. It was the massive government subsidies (read welfare) that got them there !

  • avatar
    geeber

    Now that I’ve had time to reflect on this article, I would like Mr. Yates to answer a few questions:

    1. Is it fair to treat these companies as one entity? It seems to me that, with the events of the past decade, we are dealing with three different corporate cultures, and that each company is in a different place in regards to the market and any potential recovery.

    2. What does Mr. Yates think of the effort to bring in people from outside the industry and install them in leadership positions (Mullaly and Nardelli)?

    3. Is it fair to put Mr. Mullaly in this group, given that he has a proven track record of real success at another company (Boeing), when he shopped for a car on his own, he bought a Lexus (which suggests he understands the appeal of the foreign nameplates), and has openly expressed admiration for Toyota’s method of operation?

  • avatar
    geeber

    umterp85: Don’t let the lower Southern labor rate fool you. It was the massive government subsidies (read welfare) that got them there !

    It was my understanding that those were state, not federal, subsidies.

  • avatar
    50merc

    Amen, Westbound and that anonymous Chrysler salesman. The executives are cosseted.

  • avatar
    SWA737

    “What would a Big 2.8 auto dealership be like, if they were run like Starbucks?”

    Probably a lot like an Acura-Lexus-Infiniti dealership?

  • avatar
    detroit1701

    I feel like I need to respond/clarify a bit here.

    Some of the largest complaints coming from the domestic automakers are unbalanced trade policies and lack of response from efforts to obtain government r&d money. This is not just a “get over it and make better products” problem — that is a very naive and simplistic view. The bottom line is that the U.S. chooses not to encourage the industry.

    (1) Japanese, German, Korean manufacturers do not open plants in the United States out of charity, or goodness of their heart, or whatever. Currency exchange rates, importing costs, transportation costs are the reason. Believe me, these foreign auto manufacturers would prefer in an ideal world to build their cars in the home countries. But economics dictate otherwise for the moment.

    (2) Domestics have a perception problem. Granted. It is not “cool” to drive an American car for young people in many coastal parts of the country. For the upperwardly mobile folks, owning a German luxury brand is a social status statement. In other words, it is intangible. BMW and Audi sales are very strong, despite a perceived lessening of quality. German automaker margins are huge, and the Japanese have a problem pushing product above invoice.

    (3) The oil lobby has controlled the White House under Bush. It gets what it wants (wars, subsidies for the price of gasoline, no mandate or real timeline for developing alternative systems, etc., etc.), while the Big Three execs were totally brushed aside by W. In November 2006, after making them wait for a year to get a meeting. Three of the largest employers in the nation representing some of the best ENGINEERING TALENT of the country — ignored by the president. The president then gives them a fraction of the R&D money requested for alternative propulsion.

    (4) Free trade deals just make foreign cars cheaper and cheaper. NAFTA, Clinton’s China lobby deals, and now a free trade agreement with South Korea — is also another nail in the coffin. However, at the same time: (a) China forces U.S. carmakers to “partner” with a native industry — so that one day it can jettison foreign partners; (b) Japan has effectively out import-taxed any U.S. car; (c) people in the EU like to buy their own cars, out of national pride almost, even though rank and file Euro cars are flimsy and overpriced (even GM in Europe is “Opel” — and plays up its German character, and not American). The bottom line is that the U.S. has a hard time competing in countries that are increasingly owning our market — through government policies. The U.S. does not return the favor to its own.

    You are right, though — it is about products and it will take some time for the new products to sink in. However, it is crucial to understand that there is some legitimacy to the Big Three’s complaints. The hostility of some in this country to the automakers is astounding.

  • avatar

    Those were state subsidies but unfortunately for the Detroit three you can’t get Alabama or South Carolina to pay their state money for building a factory in Detroit.

  • avatar

    “The hostility of some in this country to the automakers is astounding.”

    No its not. Thats what happens if people repeatedly feel cheated, gyped or ripped off after spending the money on their largest monetary purchase (after a house).

    Most people work hard for their money. The haughty F you attitude from detroit is now being paid back to them.

  • avatar
    greystone

    Excellent!

    Yates, give us more details of lifestyles of heads of three blind mice, however I was annoyed when you compared them Abe Lincoln, there is no comparison there, Abe was thinking about the nation and its people.

    The three blind mice deserve to be attacked and slaughtered [so they can lose those priviliges] by the barbarians, add a new barbarian the indian who sales a car for $2,500. I will buy 10 of them so I can annoy the meter maid.

  • avatar
    mikey

    50 Merc thanks for the link in a word its moving.
    I’ve got first hand experience at the arogance that the the anonymous Chrysler salesman experienced.
    I’ve had upper management come within 5ft of me and not acknowledge my precence.Degraded and insulted are too mild of terms to describe how it feels to be looked at like a lower form of life.
    Management wonders why so many of us bitter and resentfull.Just viewing the link that 50 merc posted gave this old autoworker pause, and left me with a lump in my throat.

    I’m taking a break for a while
    Bye for now Michael

  • avatar
    Mud

    “The hostility of some in this country to the automakers is astounding.”

    Damn right.

    I want a company that will BACK UP its products.

    I want to see proactive acknowledgement of things like GM 3.1 liter engine crappy intake gaskets or Ford 4.6 and 5.4 engines that like to spit out spark plugs. Those are design defects that are just left to the customer after the warranty expires or in many cases, it’s a battle to get fixed even under warranty. “Warranty’s up so who cares – it’s their vehicle now” as opposed to “let’s treat our customers like we want them to come back”.

    They get what they deserve.

  • avatar
    william442

    I once went to a cocktail party in Grosse Pointe. The women were dull, and the booze was cheap, and everyone drove Buicks.

  • avatar
    ZoomZoom

    Luckily, I found this article…I am still reading through the article and the responses, but before I forget, I’ve got a question that’s been gnawing at me since Mr. Yates’ first article.

    Why do these show up under “reviews?”

    I consider them editorials, not reviews. The reason I’m making a fuss is because I don’t read the reviews. I only come here for the editorials, deathwatches, birthwatches, suicide watches, birdwatches, and UFO watches.

    I often just skip past the “reviews” section. Because of that, Mr. Yates’ articles won’t show up on my reading list in a timely manner.

    Thanks for your attention on this…

  • avatar
    umterp85

    Geeber & Shermin Lin: A government handout is a government handout—-I could care less if it happens at the local, state, or federal level.

    Bidding (read extorting) one state against another for a bigger portion taxpayer money (which is what ALL of the auto mfg transplant have done)is still a handout no matter what way you look at it. The taxpayer loses—the foreign company gains.

  • avatar
    windswords

    TTAC2000: “The domestic car industry is booming. Feel free to visit Spartanburg SC, Tuscaloosa or Mongomery Alabama if you don’t believe it. Hell BMW is shutting down the X3 line in Austria and moving production to South Carolina. The Big 3’s problems are of their own making. Washington has helped them in the past (Chrysler bailout anyone?) and it just delayed the inevitable. Corporate welfare is not the answer”

    umterp85: “Well—-you are right corporate welfare is not the answer. The reality is though that corporate welfare is EXACTLY how Spartenburg, Tuscaloosa, and all other of the Southern cities got BMW, Mercedes, and Hyundai to locate there. Don’t let the lower Southern labor rate fool you. It was the massive government subsidies (read welfare) that got them there!”

    Chrysler was not a bailout (a direct transfer of taxpayes funds to a corp.). The loans from private banks were guaranteed against default. Since default did not happen the principal and interest (profit) were paid back to the banks. The taxpayer was not involved. Saying this is bailout is like saying student loans are a bailout for big education. Umterp85 is correct. All the state money for roads, infrastructure, etc. to lure a car factory (import as well asdomestic – like Spring Hill for Saturn or Jefferson North for Chrysler) is a direct transfer of the citizens money from the state coffers to support a private business enterprise. I would prefer the state just guarantee the bank loans and leave me out of it.

  • avatar
    DaPope

    @ detroit1701
    1) Agreed.

    2) Agreed, and it’s the fault of the home-team automakers, too. There was an era when the coming of age envied their friend’s American Iron, although by the ’80’s much of that was beginning to be ‘dated/classic’ iron as the builders had already lost site of the ball. Every now and then there was something new that got the ‘kids’ excited – the last perfect example I remember was when the Baretta came out while I was in college. Scores of these cars were cruising around the campus and the ‘rich-kid’ apartment complex where I managed to live. They LOVED the ‘cool’ factor of this car, but it wasn’t even a year and most were selling them off as they were already becoming unreliable pieces of junk – very vocal they were, and that’s the last time I remember an American car really striking a chord with the youth vote. They may have been young, shallow, and spending Dad’s money, but they weren’t stupid.

    3) It is my opinion that the government is not in the business of propping up these automakers with taxpayer dollars. Brushed aside is EXACTLY what should have happened. The best engineering talent should be able to pull off these spectacular feats without federal money. As well, the engineers might be savvy, but who would be guiding the boat? The same suits already generations deep into building junk? It wouldn’t bode well for the gummint to have given hundreds of millions of dollars for alternative R&D and the press releases STILL say “The Volt looks to be released in 20XX”.

    4) I’m not so sure, but I believe the demand for the cars, as well as the reduction of the tariffs, came from the auto buyers who tired of the junk coming out of Detroit and clamored for better products at pricing more in line with less government intervention. Tariffs are a poor idea if you are supporting a vastly less superior product. I do agree, however, that the countries you site for hard-line tactics are true. But, if they opened up their markets do you think the locals would pony up to buy the current Big 3 offerings? I think not, which makes the argument largely symbolic.

    I’m sorry that I can’t agree with you, but the bottom line? It IS a “get over it and make better products”. As for the necessary money for alternative energy R&D? Golden parachutes, office-monuments built to please the suits, huge salaries, a lack of foresight re: the market, and the conscious/unconscious decision to build an inferior product that no one buys ate up the monies that could have been available in-house to work on such options.

    I’m not so sure that the Big 3 (singularly or collectively) have the time, or ability, to get themselves back in the game – the original point of Mr. Yates article.

  • avatar
    P.J. McCombs

    I’d love to read an account of a talented automotive engineer working within the Big 2.8. There’s surely no shortage of them.

    It’s been an education to watch my non-enthusiast parents and in-laws progress from “GM people” and “Chrysler people” to going ga-ga over their Miatas, Camrys, and Lexuses. The sad part is that, even if/when Detroit accepts their need to compete on the product level, the problem is now more complicated than that. In NY and CA (arguably the “opinion-leader” regions of the US), domestic makes are quickly becoming associated with lower incomes, lower education, provincialism, and jingoism. Detroit has long counted on American consumers to “root for the home team,” but that window of opportunity is closing.

    I only hope that GM, Ford, and (maybe) Chrysler can adopt a lean-and-hungry mindset once the loans dry up and there is absolutely, positively no alternative to facing the music. The Big 2.8 make a handful of lovely cars with rich histories. I’d be sad to see them go.

  • avatar
    nonce

    Chrysler was not a bailout (a direct transfer of taxpayes funds to a corp.). The loans from private banks were guaranteed against default.

    That’s a pretty obvious transfer of taxpayer funds. It may not have been applied in a direct fashion of having USA writing a check payable to Chevrolet, but it’s still a direct financial benefit.

    Maybe it was the right thing to do, but it was still a bailout. “Insuring against a risk that ended up not happening” doesn’t take away the value of the insurance. If it did, I’m going to have a significant beef with Amica.

  • avatar
    L47_V8

    Sherman Lin :
    February 11th, 2008 at 1:58 pm

    “The hostility of some in this country to the automakers is astounding.”

    No its not. Thats what happens if people repeatedly feel cheated, gyped or ripped off after spending the money on their largest monetary purchase (after a house).

    Most people work hard for their money. The haughty F you attitude from detroit is now being paid back to them.

    Such truth.

    I posted this on another forum, responding to a (probably-fake) complaint on Toyota customer service, about my own personal dealings with various manufacturer customer services:

    Anyway, I’ll wait to hear of repeat abuse from Toyota customer support on a widespread, longterm basis from tons of sources before calling the corporation on it.

    In my personal experience, Honda seems to have the best customer support, bar-none. They offered to straight-up trade a 2006 CR-V for a 2007 because my stepmother had two problems with the ignition during the warranty period that their dealer wasn’t able to correct. They also replaced the a/c compressor on a family friend’s 1998 CR-V two years ago (the car had over 100,000 miles on it) for free – at a value of $2500 – to keep him as a repeat customer.

    My experience with Toyota’s CS people hasn’t been negative, but it hasn’t been overwhelmingly positive. They don’t seem to shirk responsibility for much, but don’t do much to play to the customer’s wishes.

    Mitsubishi has no customer support whatsoever. You have the warranty, and that’s it. They aren’t bad about it, but aren’t willing to help you out any, either. Nothing more than I would expect from a company in such financial trouble.

    GM, on the other hand, is straight-up militant. They lie about TSBs, and even recalls, that I know about through 3-minute internet searches. They lie about product alterations. They lie about warranty coverage. They try multiple times to charge credit cards for warranty work. They will not, under any circumstances, fix your car without you taking the fight directly to them – and often, even then, they still try to wriggle out of the bind they put themselves in. They are, by far, the worst company I’ve ever dealt with in the realm of customer service, and this for a four-time repeat Oldsmobile customer when the division was still operating (my mother). Ridiculous. Oh, and by the way, she didn’t exactly plunk down $18 grand for a base Alero. We’re talking a $39k loaded 2001 Aurora 4.0 that she bought new.

    Luxury car, near-luxury price, K-Mart-grade customer service.

  • avatar
    alpha94

    I thought the real problem is having to pay a union worker an almost 6 figure salary to drive a forklift or drop a windshield onto a mini-van.

  • avatar
    autoacct628

    The auto business is unique in several facets:
    1. the average customer makes a purchase 1 every 4 to 6 years. At best, every three years. Yet, the purchase transactions (and surveys) are the determiner of market trends for future transactions
    2. the customer typically uses the product every day for years, so the daily experience of the buyer after a transaction is made has a large contributory impact to subsequent purchases. Or so the OEM’s hope….
    3. Large sub-industries exist critically evaluating the quality of OEM’s products on a daily, weekly, monthly basis.
    4. decisions are made within the industry and government months before product hits the market which limit or define the product.

    This is apropos of nothing whatever, it just was thoughts that occurred to me about our how our industry differs from others.

  • avatar
    BEAT

    The speed of the boss is the speed of the team

  • avatar

    alpha94 “I thought the real problem is having to pay a union worker an almost 6 figure salary to drive a forklift or drop a windshield onto a mini-van.”

    Strange, the Toyota Corolla and Tacoma are made by UAW workers. So I don’t buy that argument. GM can and probably will outsource all work to Mexico and China and the problem remains bad management and more specifically bad upper level management which this article rightly points out.

  • avatar

    umterp85 “A government handout is a government handout—-I could care less if it happens at the local, state, or federal level.”

    Agreed but your complaint seems to be that Hyundai and BMW got subsidies from the state of Alabama and South Carolina while the domestics did not. GM and Ford could easily get the same deal just promise to build a 500 million dollar
    factory there and not Detroit, hire a thousand locals there at 20 dollars an hour and not Detroit and build the support network there and not Detroit.

    You don’t want to do that then you don’t get the goodies that the local government was willing to pay. It may or may not be a good thing (state subsidies), but don’t cry that the foreign carmakers get them while the domestics do not.

  • avatar
    geeber

    The domestics DO get subsidies…they just aren’t building new plants, so there is no reason for states to offer incentive packages in exchange for a new GM, Ford or Chrysler plant.

    When the domestics revamp or upgrade a plant, they receive tax breaks, incentives and infrastructure upgrades, courtesy of state and local governments, too.

    They have even played one state against another when announcing that X number of plants are on the chopping block, to see which state will come up with a better incentive package to save the plant within its borders.

    I’m against state and local governments offering corporations incentives to upgrade existing plants or build new ones, but let’s not kid ourselves into thinking that only the transplant manufacturers benefit from this practice.

  • avatar
    nonce

    Strange, the Toyota Corolla and Tacoma are made by UAW workers. So I don’t buy that argument.And Toyota’s contracts are vastly different than GM’s.

  • avatar
    rainking

    “And Toyota’s contracts are vastly different than GM’s.”
    Not anymore. They’re a LOT closer now

  • avatar

    I believe the post was that the problems were based on the high wages of the UAW, so tell me how do the Fremont California UAW workers wages differ from the Detroit UAW wages?

    I don’t see the wages paid to the grunt being the problem. Its the descisions made by upper level management.

  • avatar
    Dynamic88

    I live in MI and I no longer worry about there being a Detroit auto inudstry. Their failure is almost certain.

    They don’t get it, and they aren’t going to get it. In the end, the unions will be blamed, which is a shame, because most people won’t know how badly mismanaged the D3 are.

    But there will be a domestic auto industry. Honda, Toyota, BMW, Merc, Hyundai, Subaru …….. all are building in the US, and creating demand for the suppliers to fill. The profits, less taxes, R&D, reinvestment in technology, etc. will spent on the Ginza rather than in Grosse Pointe, but I can’t see that it makes a hell of a lot of difference.

  • avatar
    umterp85

    Sherman Lin + Geeber: I think you should really re-read my posts. Do you see anywhere where I condone government handouts for companies ? Ahhh didn’t think so…in fact I think I said the opposite and assumed you would get that I meant all government corporate giveaways

    To point out that the transplants receive massive subsidies at taxpayer expense to locate their plants is fact. I think most other posters do a pretty good job of pointing out the negative facts around domestic manufacturers so I didn’t feel the need to repeat.

    But I will if you want me to be even more explicit—–a GM handout from Michigan for the new Lambda Trio Lansing Plant is bad for the taxpayer—-just as much as the South Carolina government handout for BMW.

  • avatar
    geeber

    umterp85: My point is that it is not just the transplant manufacturers that have received these incentives and subsidies.

    The domestics are just as good at wringing them out of state and local governments.

    Since they aren’t building new plants, the domestic receive subsidies to revamp and upgrade old ones, often by threatening the close the plant if such subsidies aren’t forthcoming.

    Some posts implied that only the transplant operations have received these government handouts, and that is not accurate. I was responding to those posts.

  • avatar
    nonce

    While current wages are probably out-of-line, they’re not what’s really killing Detroit. It’s the inflexibility of the current workforce and commitments to prior workers.

    When you cannot lay people off without paying them 2 years’ salary or putting them in a “jobs bank” at 90% of salary, and keep on paying their health benefits in any case, you just leave them on and slowly bleed to death. You overproduce cars which cuts into resale value. And falling resale value cuts into sales, which means you have to overproduce even more cars.

    I guarantee you that it’s much easier for Toyota to change the size of its workforce than it is for GM.

  • avatar
    cjdumm

    Brock:

    You might not be a Simpsons fan, but there was an old episode where car mogul Danny DeVito let Homer design his brand’s latest model. Homer, of course, designed an unmarketable Batmobile- inspired behemoth, and DeVito’s company promptly went bankrupt.

    At least DeVito got something right: he came down from the silvered towers of the RenCen and at least TRIED to listen to a real (animated)-life consumer.

    What consumer has ever ASKED for a Cobalt? G5? Chevy Astro? Aveo? Metro? Cavalier? I could go on, but let me just say I’d rather drive the Homer Special; at least there’d be room for my mother-in-law.

  • avatar

    Very interesting editorial. And comments.

    I would note that Brock’s comment about Lincoln spending much time away from the White House–often with the troops, despite personal hardship to get there–is spot on. See Team of Rivals, by Doris Kearns Goodwin.

    But I think there are plenty of leaders who stay out of touch. My own Congressman, Edward Ma[la]rkey, came to a meeting with 10 local citizens with environmental concerns where he proceeded to spend the majority of the time telling stories about himself, rather than listening to our concerns.

  • avatar
    Lokki

    The first problem that GM has is pretty simple and pretty terrifying:

    Young people don’t want or trust their cars. Oh, they might pine for an old Camaro, but that’s no money in GM’s pocket now. My niece is about to buy her first new car – I tried to give her some advice, but she interrupted with “I know – no Detroit cars”. Her girl friends had been teaching, she said.

    The second problem is that the cars they are making aren’t satisfying their customers yet. One of the exec’s here bought a Solstice. After a year, he’s put 6K miles on it and hates it. He’s not a GM hater lured in by its pretty face; he’s been talking about buying an STS to replace it. Recently though, he’s suddenly thinking about going to look at a Lexus before he buys the STS. Bad for GM when their halo models are bad cars.

    Finally, even if the cars were perfect tomorrow (and they sure aren’t yet today), it’s going to take years and years to lure customers back. My 70 year old Mom got angry when I suggested a new Buick for her – she went and bought an Avalon by herself. All the Consumers Reports Articles in the world wouldn’t get the taste of her 80’s Chevy out of her mouth. She didn’t care what they say about Buick quality.

    So the question is still the same – how much more time does GM have to convince people they’ve changed? Chrysler ran out their clock. Ford is running down. GM has to face the Toyota and Nissan assault on trucks. They haven’t gotten it right yet, but they’re improving every year while GM trucks are staying the same

  • avatar
    umterp85

    Lokki: “GM has to face the Toyota and Nissan assault on trucks. They haven’t gotten it right yet, but they’re improving every year while GM trucks are staying the same”

    I find it very hard to disagree with most of your post—-that said the above snippet is kind of off base. First—Nissan isn’t even in the game. The Titan has been an abject failure form both a sales volume and quality standpoint. Second—while the Tundra is vastly improved vs. its prior iteration—there is no concensus that it is a better truck than the Silverado / Sierra. Third—GM trucks do not stay the same—the Silverado and Sierra are vastly improved vs. the prior model and meet / exceed the competition…at least until the new F150 and ram hit the market this summer

    Net—-crucifying GM for their cars is fair game….wading into truck territory holds much less credibility unless you are willing to wade into compact trucks.

  • avatar
    William C Montgomery

    During the Civil War, Abraham Lincoln spent more time away from the White House than in it.

    If I were married to an uggo nut-job like Mary Todd, I’d make myself scare, too. Then again, Lincoln was no Don Juan…

  • avatar
    Phil Ressler

    Even in a Silicon Valley start-up with open-plan offices and everyone from the CEO to the accounts receivable clerk resident in a cubicle, it’s difficult to ensure that senior managers and CEOs are not isolated from their customers. Everything Yates describes about the arrogant insulation and isolation of Detroit automotive executives is within degrees observable in large technology companies too. The old-school clubbiness of Detroit’s automotive ecosystem isn’t surprising in a cloistered city somewhat removed from the cosmopolitanizing influences of a mixed-economy city, particularly when one considers the compensation won by the few. But it is not the root of the problem.

    The essential problem is that our automobile companies are managed, not led. Managers count, calendar, constrain and devise accountability. Management is a left-brain function, analytically-driven, intellectually-derived, mechanically manipulative. Management sees the structure of a business and its players as machine-like, susceptible to “operations.” Management tries to argue its way to success.

    The management personality is absolutely necessary to build a scalable business. But managers truly succeed under the direction of leaders. Leaders focus on positive motivation, clear articulation of an identifiable destination or a “north star” of reference, and their engagement with employees, shareholders and markets is emotional. Leaders are quick. Managers are deliberate. Managers delay decisions, attempting to gain the fullest scope of information available. Leaders accept time is of the essence and accept the mandate to be “the Decider ;>)” on incomplete information. Leaders can explain their objectives and means of attaining them, to anyone. Today, the top spot in any of the D3 is not held by a leader. They’re managers all. Bob Lutz, for all the criticism he takes here, is a leader using power of personality to get a recalcitrant internal organization moving. John Kennedy and Ronald Reagan were leaders. Richard Nixon and Jimmy Carter were mere managers. Lyndon Johnson was a leader on civil rights and economic opportunity. But he was just a manager — as was Bob McNamara and later George Bush & Don Rumsfeld — in war, hence his polarization and truncated legacy.

    Look at Apple Corporation. Apple’s early CEOs were figureheads who put Steve Jobs and his leadership personality front and center. The company not only innovated but also won market influence well beyond it’s actual sales or financial performance. Jobs’ ouster from Apple — in part for being too much of a leader and not enough of a manager — was predictable when a leadership individual is made subordinate to a manager. Jobs’ exit seriously dampened Apple’s market performance while he ventured into Pixar and built his grand experiment, Next. Apple was mis-led by a trio of mere managers: John Scully, Michael Spindler and Gil Amelio. They were each initially respected by Wall Street and trusted for their alleged management acumen. All the while, Apple lost market share, value and influence under their direction.

    Then the company got its leader back. Jobs snookered Apple into buying Next and pretty soon, he was driving the bus. And pretty soon after that, Apple began turning up the wick. Jobs re-instituted design as a leading appeal to market, repackaging existing technology in friendlier, swoopier industrial design. He dispensed with tired notebook computers and freed the mobile computing team to lead rather than imitate. Software development became a strategic driver for market penetration again. And he spurred the company to combine extant technologies in a new way to deliver the high-capacity personal music player, using that as the leading edge of a broader assault on consumer electronics, music and general home entertainment. In fields he chose, Jobs put the Asian consumer electronics behemoths back on their heels.

    Management got alot of the grunt work done, but leadership is what pumped ambition and transformed it into a sequenced agenda for emotionally engaging the market with irresistible products that masked their flaws and made no apologies for them. Sealed power supplies and poor battery life? Hey! Stay focused on where I’m taking you! Lightning product obsolescence? It’s digital. Look how much better the new unit is! Everything from purpose, to product to promotion to service evidenced leadership over management. Not sure you want to bet your push for the Digital Life on Best Buy’s sales dorks and nickel-pinching executive managers? Let’s redefine retail for computing and open our own stores!

    The men running today’s D3 understand business through a spreadsheet. They negotiate the legal restrictions boxing them in. They can relate to an analyst and they can delegate operations. But watch Nardelli, Wagoner or Mullaly speak to a crowd and you can see, there is no leadership without communications. These are managers at least, grand administrators at best. They are delegating leadership to people beneath them. Wagoner has Lutz. Nardelli ostensibly has Tom Gale. Mullaly has…..Mark Fields??? Franklin Roosevelt knew communications are strategic to leadership, but this trio does not. Steve Jobs and — once upon a time — Lee Iaccoca knew how to make the bying public care. They knew how to drive a relationship with the mass market and not just transactions. Leaders would be selling the next three cars you buy while you’re pondering this one.

    Starbuck’s, McDonalds, Apple, Oracle, Microsoft, LG, Sony, Honda, Google, Murdoch Media, Virgin, Tata are all examples of fast rise-time major brands that were informed and infused by clear, strategic and often personal vision. Sometimes a company can hire that in, as BMW has multiple times while Jaguar has not. GM has had a taste of it with its series of leaders behind the Corvette program. GM, Ford and Chrysler do not have their emotional centers of gravity in top-line personnel that those companies have had.

    General Motors was vastly more successful when the only CEO who mattered to the market was the division GM. You were buying a Chevy or a Pontiac. While far from perfect, the great ones were emotional leaders able to move on conviction and finagle the bureaucracy around them, choosing when to use it, when to ignore it. John Delorean, Bunkie Knudsen, Ed Cole, later John Rock, others; and of course for design the great Bill Mitchell. Modern management has wrung those kinds of personalities out of the top ranks. Where’s John Colleti when Ford needs him? Oh, that’s right….they killed his beloved SVT and sidelined him. Meanwhile Ford is shoulder deep in managers who think giving a FWD car AWD and a funny chin makes it a luxury contender….

    In 1992, I was in a senior position of a large software company. I had many millions of dollars to spend on media for marketing and found myself invited to New York for morning coffee, lunch, cigars and cognac with Steve & Kip Forbes at Forbes Magazine in Manhattan. Needless to say it was an enjoyable day, devoid of small talk and instead filled with informed and substantial conversation. About an hour into it, Steve Forbes walked in with Red Poling, then Chairman & CEO of Ford Motor Company. I’m sure that outside of that context, Mr. Poling would have taken no notice of nor interest in me, but since I was in the august confines of the Forbes’ family offices with him, he was engaging and egalitarian, and we all presumed the others’ success. In that context, Poling was a delight.

    It happened that 1992 was one of the few years since 1983 that I drove an imported car. I was the youngest in the room so Poling wanted to know what I drove. He was unperturbed to learn I didn’t own a Ford or another American car. There was no curiosity about my market rejection of his company’s products, so I asked him what customers my age (then 38) who liked driving dynamic, responsive cars, could expect from Ford in the next few years. Poling couldn’t really answer that question. He replied in effect that he didn’t know what people wanted, but he did know how to get it to them at the right price with enough left over to suit Wall Street. Poling liked the business of building cars, but he didn’t have much confidence in grasping what made people *want* one over another.

    His Wikipedia profile includes this:

    “Poling graduated from Monmouth College in 1949. He earned his MBA at Indiana University and began his career in 1951 as a Cost Analyst in the company’s Steel Division. Poling made his swift climb through the company as a financial executive, serving as a manager, assistant controller, and controller of the transmission and chassis division during the 1960s, then as controller of the engine division, then controller of the car product development group. During this time he was responsible for codification of much of Ford’s “Finance Manual”, directing his subordinates in standardization of the company’s financial reporting and analysis practices.”

    Can we agree such a person is unlikely to have, nor lead, nor guide the synthesis of a strategy for winning market share through organic growth driven by must-have products? It’s not his fault. He was good at what he was good at. It’s the fault of the Board of Directors that picked him as chief.

    Several years later, Ford located its Premier Automotive Group HQ in Irvine, California. I was in a software start-up that was automating a series of variable cost solutions in large companies, including performance compensation and channel incentives. I wangled a meeting with some senior managers at Lincoln to learn the intricacies of channel incentive payments in the car business. Lincoln had just shown the Blackwood weeks earlier at the L.A. Auto Show. Long story short, I left that meeting informed about channel incentives but painfully aware that no one at Lincoln had any holistic notion of the brand’s emotion and what products would carry that emotion into the market.

    Insulation and isolation are part of the problem and are as politically damaging as GHW Bush marveling over a supermarket scanner in the 1992 election. There’s no excuse for senior management not engaging salespeople during a visit to dealerships. I’d love to see Rick Wagoner walk a customer through the process of buying a car and complete the transaction. Sure, Michigan is an inhibitor to competitive recruitment of top talent. But at the end of the day, managers might hide in their privileged cocoon; a leader wouldn’t consider it no matter where his office is. Leaders are compelled to engage, motivate and excite their markets, and marshall their employees and partners similarly. Leaders take their case to the people.

    Phil

  • avatar

    Phil why don’t you submit that as an editorial?

  • avatar
    Captain Tungsten

    The premise here is seriously flawed. All you have to do is take a look at the lists of senior executives GM and Ford have on their websites. Brock says “the men who run the city’s car companies are local men”. Well, first of all, they aren’t all men, you will find several women, and in responsible jobs, Group VPs of Manufacturing Engineering and Labor Relations. And plenty of Chief Engineers and Plant Managers as well. And they certainly aren’t all local, there are dozens of foriegn born and bred executives in the ranks here (yes, here, not running the foreign ops), and many more who are Americans, but did siginficant tours of duty all over the world. The GM or Ford senior executive that has worked an entire career in Michigan is a rare bird indeed.

    And even if you say that they flew in from all over the world but they are now cloistered safe and sound in Detroit, you are missing the fact that more and more of the work of these companies is being done outside Detroit. GM has engineering centers around the world, and cars that are on the market here now have had big parts of their design, product and manufacturing engineering, and parts sourcing done in Europe, Asia and South America. If you are huddled in Detroit, you are missing just about everything, and won’t be around long. For example the Saturn VUE on the market right now was designed in Europe, engineered in S. Korea, tooled up in North America and Brasil and is being built in Mexico. Not exactly “Made in Detroit”.

    I’m not exactly thrilled about all this, the good professional and technical jobs in the Big 2.8 are following the manufacturing jobs right out of the country. But claiming that the Detroit Three’s problems are caused by “Detroititis” demonstrates a lack of awareness of the current situation that, at least in my mind, destroys any credibility the article may have had. I’m a big Yates fan, check my bookshelf if you don’t believe me, but this one was a swing and a miss….

  • avatar

    Phil – As usual you have hit on a sound and succinct argument for the woes of American “management” – it is in fact far too skilled at avoiding risk (because that’s a manager’s job) while generally failing to solicit leadership’s important role in the process.

    I have worked in the big building business for nearly 40 years and have found that a high quality design arises only from a creative tension between a visionary designer aided by an informed and experienced technical staff. The design is then fully realized when a knowledgeable owner is assisted by a contractor who can clearly translate the technically proficient and visionary design into a completed structure that meets the economic and programmatic objectives of ownership.

    If any one of this group overpowers the other, insisting that he is the only true leader, the result is a muddle which may have the appearance of excellence, but is at its core mediocre.

    Sadly we have mostly ourselves to blame for the muddle which represents our automakers, airlines and even government. If the consumer goals are primarily price, or profit (depending upon whether one buys the product, or the stock), the result will be mediocre. If the metric is cost or profit alone, and not value, quality, reliability, the result is unfortunately quite predictable. But it is we the consumer who allow our choices to be made on a single criteria when there are far more issues at stake.

    So, as much fun as it is to grouse about executive compensation or lazy union workers, we really have ourselves to blame if we do not support innovative and high quality products produced by folks who are planning strategic value both for their customers and their companies.

    I fly frequently for my job and wonder how it is that my fellow passengers are willing to be uncomfortable for one to six hours or endure the ridiculous burden of “airport security” simply to get from one place to another. I’m also aware that it is not going to change unless the people get fed up and make their views known.

    The fact that quality, reliability and value are becoming matters of importance to a large part of the automobile consumer community does give me some hope… As much as any of us may hate to admit it, P.T. Barnum’s famous quote: “No one ever lost money underestimating the intelligence of the American public.” still rings quite true in most fields of endeavor.

  • avatar
    walt501

    This opening salvo from Mr. Yates shows that something else hasn’t changed in 40 years – auto journalist bias against Detroit auto manufacturers.

    Is there anywhere on this site that details its source of income? If you want to be believed Mr. Yates, I’ll need to see the money trail, both hard and soft dollars. Let’s take a look at your own eye glass prescription and see if it’s being filled by dollars from import manufacturers, or soft dollars in the form of long term test vehicles and trips to autos shows paid for by manufacturers. Do they have country clubs in Japan to sooth your nerves after putting in an appearance at the Tokyo auto show?

    Show us the money trail TTAC, then I might believe you actually write from conviction and not compensation.

  • avatar
    skor

    Let’s see, management totally detached from the company’s customer base, dealer network and factory workers? Sounds just like what happened to another great American manufacturer of wheeled transportation, the Schwinn Bicycle Company.

    The future of the American auto makers will be a repeat of Schwinn: Bankruptcy, plant and equipment sold for scrap, brand names purchased by corporate vultures that will slap them on products made in China(really cheap stuff) and Taiwan(not quite so cheap stuff)and then sold at Walmart.

  • avatar
    davekatz

    Absolutely no surprise here, is there, when every waking second an American is blasted with voices shrill, soft, bellowing and whispering how special each of us is, how deserving of that extra dollop of whipped cream made just for you, that empty beach, your own road, the 60th floor condo, the Gulfstream, the VIP lounge…. no need to go on, is there?
    All up and down the food chain in America is the desire to segregate–behind windshields, TVs, gated communities, at Ivy League colleges. We eat the world’s lunch, for crissake, and then tell ’em to effin’ like it or we’ll Abu Ghraib ’em–which is markedly more involved than the lofty AutoNabobs’ splendid dim isolation, but not any prettier, and more a matter of degree than of difference.

    It occurred to me reading a TTAC rant about Euromodels never sold here, that maybe the USA isn’t the premier market no mo’.We get the second-rate crap now, kids, cause we’ve proven that we really don’t have the critical analysis skills to actually grapple with the changing world, preferring, like our AutoNabob brethren, to hope that 1965 will somehow come back. Morning in America, anyone? Snake oil for you, sir?

    What a pitiful bunch of gullible ijits. Go, natural selection!

  • avatar
    Phil Ressler

    Phil why don’t you submit that as an editorial?

    1,739 words of off-the-cuff observation pared down to Robert’s draconian 800 word limit. Let’s see what I can do….

    Phil

  • avatar
    dkulmacz

    Mark Fields lives in Florida.

  • avatar
    Phil Ressler

    Mark Fields lives in Florida.

    Yeah. Not that living in Florida is adding any discernible value to Ford’s executive perspective or the execution Fields is responsible for driving.

    Phil

  • avatar
    CyberNick

    Thanks Phil! That was long but interesting to read. Good that there is no limit for comment length. ;)

    Edit: As an aside, I also think this article from Mr. Yates belongs under editorials section, not under reviews. I almost missed it!

  • avatar
    Rix

    The image of the big 3 is so bad in northern california that to drive a domestic car in my social circle is to be viewed as the victim of some misfortune- financial woes or perhaps brain damage. I’m not overstating it when I say not a single person I know in their 20’s or 30’s- and I know dozens-drives a domestic car, even the ones who make very little. Basically, in order to win back market share, or even maintain it, the Japanese, German and Korean automakers would have to seriously fumble. People generally don’t leave brands they are satisfied with and everyone seems to be reasonably satisfied with their imports.

  • avatar
    alanp

    Much of the problem was caused by the erroneous assumption that advertising could create demand for any damn product one wished to sell. And while advertising is good at creating demand, the lack of functional and fun vehicles from Detroit is why I left them after my Valiants and Darts, and have not really looked back. German and some Asian vehicles have responded to the needs of people – especially boomers – for practical cars that are good to drive and that stand up well to use. Much as I wish the American makes could match the imports, the fact is that the domestics just have problems that rarely seem to hit the foreign cars. In the last 10 years my wife and I have had German and Japanese cars and while there was a recall or so, basically we’ve never had a problem that left us immobile. Our neighbors with their GM cars have had transmission failures at 40K miles, and even on the 2007 Silverado at 2600 miles a failed powertrain computer that left the truck in limp mode. The other neighbor is on his second F-150 despite problems with the first one, and a V6 Mustang that had some bad oil leaks.

    Just anecdotal, but still…

  • avatar
    jurisb

    skor- unfortunately you are right, that`s what is already happening- US is selling scrap metal worth of 3 bn monthly to China, while importing 35bn monthly of the same scrap being stamped as cars, computers, you name it.

  • avatar

    A friend worked for GM, before leaving to work at a high level at a financial house.
    She got a new car every three months. She picked it up (washed) from a central depot. At the end of three months, she gave it back, and would be assigned another car. They varied between mid level cars and all sorts of trucks, even a Vette for one special occasion.

    She never: a) had a “stealership experience” or b) had to fight with a service manager or c) deal with her own products once the shiny wore off.

    This sums up why the Execs are clueless.

    PS- my friend left because she is not clueless, and thought her long term career would be better served OUT of the car industry.

  • avatar
    Thinx

    No disrespect to Mr. Yates, but why are his articles on the review page? They belong in the editorial section.

  • avatar
    BuckD

    Juris B I believe that it is rather a US inability to sustain high precision complex manufacturing due to lack of demanding customers within the continent and lack of engineering organization.

    You mean, like the high precision manufacturing of a jet airliner or fighter jets or helicopters or microchips? Yeah, we suck at that. And Boeing is eating Airbus’s lunch at the moment, largely because of their “double decker” farce, so I hardly think that’s a worthy example.

  • avatar
    BTEFan

    One more reason to be scared of middle aged men in power. Absolutely no clue about the real world and happy in thier own cigar club world.
    Mr Yates, your book ‘The Decline and Fall of The American Auto Industry’ was a real eye opener. As a GM fan and a long time cheerleader for the underdog, it made me quite sad to see that the ‘us versus them’ culture was so ingrained that there is no hope of shaking it up. There’s too much ‘old boys network’ to weed out.
    Other than bankruptcy to strip it down and start again, or a takeover by an outside industry, they are doomed to repeat their past failures.

    Great article and great comments folks.

    Can anyone email any of these to the ‘Powers That Be’ at the Big 2.854023894 so they can get a dose of the real world.

  • avatar
    AGR

    Brock,

    Are we so naive to believe that only the “Detroit Inner Circle” functions in that fashion?

    You forgot to mention the G5’s!

  • avatar
    rtz

    Just like when electronics started to be built exclusively in Japan in the 1960’s, the same could very well happen with cars. Build them anywhere but here(US). If you’ve ever tried to get a product built or produced in the USA, you know it just costs too much to be competitive.

    How much will the buyouts cost? How much would it cost to pack up the assembly line and put it on a train and ship it to Mexico like a circus coming to town?

    What if you lived on the Texas border, yet worked at the GM plant in Mexico? What if you had a house in the States(vacation home/permanent residence), and a work home in Mexico?

    But we can’t because we cost to much to employ. Automakers would love nothing more then to have a fully automated assembly line.

    They need to look back to when times were good. How did they do it and how were things different? What’s changed and what’s missing? Look back at the 1950’s and 1960’s. Something changed in the 1970’s and it’s been the same ever since.

    Wages, cost of materials, weren’t paying out massive retirement plans, lack of foreign competition. I still can’t believe Ford or GM can’t clone a Honda Civic. Examine the design and metallurgy. The fuel mileage and reliably can’t be impossible to duplicate.

    What’s wrong with Malibu and Impala? I hear those names and think of those cars in the 1980’s and 1990’s. Those aren’t new and fresh. No matter how they change up those cars, it won’t be and can’t be new and fresh. Few, few, vehicles can stay popular over time. Ford and GM full size pickups, Mustang and Corvette.

    Common cars are pretty soulless. Civic and Accord are mundane, but reliable. You can have one of those and “fit in”. Common cars for common people. Or average cars for average people. Generic and blend in. In style. Hip, cool, accepted, party line. You gotta have one of those to be in the “in crowd”.

    The only way Ford or GM could compete with those two models is with new models. The old models have stigma’s and memories attached to those troubled names. Focus had wheels that fell off. Everything else, people drove them for the first time when they rented a car at the airport. I’ve never been impressed with anything I rented at the airport.

    If Ford or GM wants to save their SUV market, they should offer them in full electric models. Sell them in various ranges per charge. 50 mile per change models, all the way up to 1,000 mile per charge models. Make the acceleration absolutely impressive. There’s nothing wrong with using an off the shelf industrial DC motor. They are proven and reliable. No need to reinvent the wheel designing a custom one off glamorous AC motor. A half a megawatt controller is already available. Good enough for now lithium batteries are available right now. So too is a battery management system for them. All the pieces are there. All it will take is a rebellious and desperate automaker to break away from the mold and build something that doesn’t require liquid petroleum to move. No need to design a one hundred percent new vehicle(Volt) just to showcase and introduce this form of vehicular propulsion. Any vehicle being made is a candidate for conversion. Take just one model(any model) and try it.

  • avatar
    tech98

    …inability to sustain high precision complex manufacturing due to lack of demanding customers within the continent and lack of engineering organization.

    There are plenty of demanding customers, especially in California, that’s why the Big 2.x are bleeding market share. They’ve skated for too long on the ‘My country’s cars, right or wrong’ mentality of some of the population.

    I think it has more to do with the practice of American management, its relentlessly stupid short-term focus and particularly the Detriot numbers-numbnut upper management dominated by financial organization-men. The ‘hit the quarterly numbers’ mentality is a horribly mismatched culture in which to manage the manufacturing of an expensive durable consumer good with product cycles and development lead times of 3-5 years. If you don’t actively promote a culture of long-term thinking and emphasis on engineering like Toyota and Honda, you end up with rampant corner-cutting and mediocre penny-pinched products.

    And Billy-Bob-wearing-a-Superman-cape bombastic sales pitches don’t work when you’ve burned bridges with an entire generation with decades of crap products. Detriot skated for several decades on its former reputation for decent vehicles until people caught on that they were building junk. Now it will take probably as long a period building reliable, quality vehicles before people will trust them again.

    Why can’t GM engineer and build a car as good as, if not better than, a Honda Civic? They have plenty of capable engineers. And GM has engineering facilities in South Korea and factories in Mexico, which could beat a Japanese-designed, Ohio-built Civic on raw labor costs per hour. Is crappy engineering that sells at a trickle at KMart prices to rental fleets really a superior financial proposition than building a world-beater that costs more to make but is actually good enough to be sold at a premium, profitable price point?

  • avatar
    wardenr

    Mr. Yates,

    Being an old “Gear Head” like yourself, this (also) MBA gives a standing ovation to the powerfully prescient words you penned over 40 years ago…in “The Grosse Pointe Myopians.” Wish I had your article framed and hanging on my wall! Even more, I wish said article, along with “The Decline and Fall of the American Automobile Industry” AND John DeLorean’s “On A Clear Day You Can See General Motors” were distributed to ALL 535 members of Congress…as they decide about the fate of Detroit…and the CRETINS who manage it!

    Keep giving them HELL, Brock. I LOVE IT…and DETROIT DESERVES IT!!!


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