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!!!

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?

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.

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

You forgot to mention the G5’s!

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.

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.

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.

Just anecdotal, but still…

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

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

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

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!

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.

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.

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.

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….

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

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…

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.

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