“In the end, it was all about the car—designing, engineering, assembling, and selling a product that consumers wanted to own and drive.” So observes Bill Vlasic near the end of Once Upon a Car, his 379-page account of the recent “fall and resurrection” of the Detroit car manufacturers. Vlasic’s book is quite late to the party, following other journalistic accounts by Alex Taylor III and Paul Ingrassia and insider accounts by Steve Rattner and Bob Lutz. Can it possibly offer anything new? Is it worth reading? Yes, and yes. Yet Vlasic’s book also shares a fundamental weakness with the others, one all the more damning because of the above observation.

POV

Taylor’s account is unique in that it explicitly includes the author’s personal experiences, personal relationships, and personal emotions. We learn what it was like to be a leading journalist covering the industry. Vlasic’s, like Ingrassia’s, does none of this. Instead, Vlasic artfully employs quotes gained through over 100 interviews (on top of those he conducted earlier as a reporter for the Detroit News, BusinessWeek, and the New York Times) to make readers feel like they’re the ones in the room, listening in. This is the book’s greatest strength. Despite not covering the decades before 2005, it’s 100 pages longer than Ingrassia, 140 pages longer than Taylor, yet reads more quickly and easily. Vlasic knows how to tell an engaging story.

But can an author completely divorce himself from his account? Vlasic avoids sharply criticizing any executives, and very often portrays them in a flattering light. The more positive portrayals also tend to be the most detailed, suggesting that Vlasic had the most access to their subjects. Of course, people expecting a positive portrayal are more likely to grant extended interviews, so this correlation is perhaps unavoidable. Ford executives Bill Ford, Alan Mulally, Mark Fields, and Jim Farley are especially well-covered. Rick Wagoner and Bob Lutz? They receive less attention than outsider-insiders Steve Girsky and Jerry York (the latter appears to have been an especially helpful informant). We hear that Chrysler’s cars required many improvements, but somehow the postively-portrayed Dieter Zetsche escapes any blame for this.

What Car Executives Really Care About

The UAW and its members are clearly focused on their paychecks. But not senior executives. Vlasic devotes many pages to Ford’s recruitment of Alan Mulally and Jim Farley. In both cases the pitch was highly emotional, ultimately winning over the executives by appealing to their patriotic desire to save an American icon, the Ford Motor Company. Cerberus head Stephen Feinberg was similarly motivated in his purchase of Chrysler. As was Ed Whitacre when fervently recruited by auto industry task force head Steven Rattner to serve as chairman of GM’s board.

The exception: when Cerberus paid “top dollar” to poach Jim Press from Toyota to serve (with no apparent impact, as Nardelli had no use for him) as co-President of Chrysler. Later Press begged to keep his job, not because he cared about the company or because of what he could do for it, but in order to avoid personal bankruptcy. FIAT CEO Sergio Marchionne, who had taken control of Chrysler, fired him anyway. A good morality play: those with non-monetary motivations triumph while the servants of mammon are shown the door.

Once at Ford, Alan Mulally emotionally connected with people, remarking that “I have never seen the depth of feeling for a company as these people have for Ford.” In return, Ford lifers, notoriously hard on outsiders, warmed to him, confided in him, and worked hard for him. At a big dealer meeting, Mulally “made” a group of Ford executives say “We love you” to the audience. This convinced Farley to join Ford, which he saw as like Toyota but “with a visceral, emotional component.” Once there, Farley worked to meet with as many dealers as possible and to forge personal connections with them.

Was it really so simple? Mulally supposedly wasn’t in it for the money, but you’d never know this from the massive size of his paycheck. Apparently non-financial motivations and large financial rewards are far from incompatible.
Beyond executives primary motivations, throughout the book we learn more about what executives were feeling than what they were thinking. Anger, humiliation, worry, enthusiasm, crying, pride, and despair appear frequently. Clearly these executives are very emotional creatures—you’ll find more cerebral beings on a daytime soap. The notable exception: Rick Wagoner, who “never seemed to grasp the raw, emotional element of effective leadership. How could the vast number of people at GM believe in him if he never really acted like he cared about them?” This emphasis on emotions should help the book connect with a broader readership, much of which couldn’t care less about the details of running a car company.

What Car Executives Think of One Another

One of my largest problems with Bob Lutz’s Car Guys vs. Bean Counters is that he hardly touches on his personal relationships within GM, and how they helped or hindered him. Vlasic to the rescue. We learn (a little) about tensions between Lutz and Cowager, who together failed to effectively manage GM’s North American Operations, and then a (quiet?) conflict between Lutz and Wagoner. Lutz disagreed with Wagoner’s heavy reliance on rebates to move the metal, preferring to improve the cars and let the rest take care of itself. From Wagoner’s perspective, Lutz didn’t recognize GM’s unavoidable need for short-term solutions and couldn’t be trusted with responsibility for the bottom line. Lutz hated charts, plans, and meetings. Wagoner thrived on them. Forced to toe the line, Lutz sarcastically referred to Wagoner as “our commander in chief,” someone he obeyed only because of their relative positions in the almighty hierarchy. Over at Ford, executives like Thursfield and Leclair tussled with everyone until they were pushed out. At Chrysler, Press was marginalized by Nardelli then fired by Marchionne.

Trust and Chemistry

Vlasic repeatedly touches upon one topic close to my own heart, as it consumed a decade of my life: the importance of trust and chemistry within organizations. With it, executives get a lot done. Without it, they don’t. We hear a lot about how Bill Ford and Jim Farley bonded over a shared love for the Mustang, and a bit about how Bill Ford and Barrack Obama bonded over a shared interest in green technology. Who knew cliches could be so effective? Upon meeting Bill Ford, Alan Mulally concluded, “I knew I could work with this guy.” Over at Chrysler, upon hearing that Cerberus had hired an outsider to take his place as head of the company, Tom Lasorda stated: “If I like Nardelli, I’ll stay. If I don’t, I’ll walk.” They clicked immediately. In contrast, we hear next to nothing about any clicking inside GM.

Ultimately, everyone was clicking with everyone else at the top of Ford. How did this come about? We learn a little about the steps Mulally took to reduce the initially high level of distrust within Ford. He emotionally connected with many people while actively suppressing infighting and quietly encouraging those who couldn’t adapt to a less political environment to leave the organization. Unfortunately, as much as Vlasic seems to get you into the room he never gets you into a room where people are actually performing real work. We hear about Mulully’s meetings with his senior executive team, at first weekly, later daily, but almost nothing about what went on inside these meetings, just that they had an “electric atmosphere” (those emotions again). Mulally built on effective team. But how? York notes that Mulally “forced” Ford’s executives to act as a team, but how did he manage to do this? Usually teamwork cannot be forced, but must be cultivated with a healthy helping of finesse.

Meetings: Good or Bad?

At GM, Lutz hates meetings and processes. At Ford, Mulally loves meetings and processes, and uses them to save the company. Granted, the gentlemanly meetings at GM were dull, guarded, and overly scripted (thanks to rounds of “pre-meetings”) while those at Ford were open and electrified by a sense of urgency. So it would seem that meetings and processes aren’t the problem, only dull or ineffective ones.

A Fundamental Weakness

While it’s clearly important to create great cars, there’s virtually nothing in the book about what was done to create the new cars upon which the current, still tentative resurrection rests. We hear that the new Ford Focus is great—because Ford product development chief Derrick Kuzak says so—but the story of how this greatness was achieved remains untold. Kuzak receives far less attention than Mulally, Fields, and Farley.

Ditto the Volt, the subject of the quote with which I began this review. After reading all of the recent auto industry books, including Lutz’s own, I still have very little idea of what “Maximum Bob” actually did at GM to improve its products. What were any of these executives like to work for? Like Taylor, Ingrassia, and so on Vlasic interviewed few if any people below the senior executive level, and if he asked any underlings what these senior executives really did and what they were really like to work for he divulges very little of it.

We read about this or that executive’s enthusiasm for “the product.” Giving these executives the benefit of the doubt, and assuming that this stated enthusiasm was more than a mantra, it might be essential but it’s far from sufficient. There have been plenty of car enthusiasts involved in the creation of every failed automobile. What has varied is how well these enthusiasts have been able to get done what they felt should have been done. One enabler that is implied within the book: senior executives who support these enthusiasts and prioritize their goals over others within the organization. But this is just scratching the surface.

The Unexpected Exception

We do hear how some specific product improvements came to be, but it’s an exception that very much proves the rule. Chrysler redesigned or heavily revised the interiors of nearly every one of its products for the 2011 model year—an impressive feat. FIAT will get credit for many of these. But Vlasic recounts how Bob Nardelli, CEO of the company under Cerberus, went through the cars and personally ordered 200 changes. The oddity: Nardelli was an outsider with no experience within the industry. He’s far from a car guy. He was the guy at the very top. Yet he’s the one who made these changes happen. One way to get them done, to be sure, but far from the way it should be done—where were the designers?—and a sign that the organization and process were badly broken. (We also hear a bit about Bob Lutz conducting similar reviews at GM, but entirely without specifics.)

Conclusion

Vlasic’s book is enjoyable to read, as he captures the personalities and the drama that transpired among them. We do often seem to be in the room. But look beyond what is in the book to ponder what isn’t, and you’ll realize that Vlasic rarely puts the reader in the right room. He repeatedly emphasizes that “it’s all about the car,” but as with many of the executives portrayed this is just lip service. If Vlasic walked the talk, we’d be reading about what was done to make better cars, and how well these attempts played out. Instead we read far more about executive suite politics, the recruitment of this or that star player, attempted end runs by outside investors, labor negotiations, and, of course, the government bailout. The book mirrors executives’ failure to focus on the cars even as it criticizes them for this failure. Despite all of the books about the auto industry’s recent brush with bankruptcy, the stories that really matter remain untold.

Never assume that press accounts of what’s going on inside the auto companies resembles what’s actually going on. For my Ph.D. thesis, I inhabited General Motors’s product development organization much like an anthropologist might inhabit a Third World village. What I observed during my year-and-a-half on the inside bore virtually no resemblance to what I read in the automotive press. Journalists aren’t inside the companies, have contact with select high-level insiders, and tend to print the PR-approved accounts these insiders provide. These accounts reflect how senior executives want outsiders to think the organization operates and performs much more than how it actually does. To the extent journalists know the reality—and few do any digging—they rarely print it. So I’ve refrained from even guessing at what’s been going on inside GM. Instead, I’ve been hoping that some insider would write an insightful account of the eventful past 10 to 15 years. None have, until ex-vice chairman Bob Lutz’s new book, Car Guys vs. Bean Counters: the Battle for the Soul of American Business. Lutz has a reputation for speaking his mind and straight shooting. What does his book tell us about what really went on inside GM?

Not much. Lutz’s lips might be moving, but he ain’t talking.

Unlike former “car czar” Steven Rattner’s recent tell-all or the “Corvette book” that enraged GM design executives back in the mid-90s, Lutz avoids naming names. Former CEO Rick Wagoner is rarely mentioned, as if Lutz had little direct interaction with him, and always in respectful terms: “Rick was a kind, intelligent CEO of spectacular human qualities.” Consequently, the adversaries in Lutz’s battle against the “bean counters” are faceless and his accounts of what happened are few and lack illuminating detail. We’re treated to a few brief examples of pre-Lutz products that sold poorly, but no detailed accounts of how better new cars were developed under his watch. Clearly corporate norms of what’s permissible to divulge to outsiders had a much higher priority than providing readers with insight into what really went on. As Edward Niedermeyer noted in his review, Lutz ultimately blames outsiders for GM’s fall, and lets his fellow executives off the hook. His book could have been incredible. Instead, for this review I’ve had to work with scraps.

Dealing with “them”

Ron Zarrella, head of GM North America back in the late 1990s, once remarked that he couldn’t do what he knew needed to be done to improve the company and its products because “they” wouldn’t let him. The response of the person in the room who relayed this to me: “I thought you was ‘they.’” The lesson: even those at the top felt powerless to change things because of some faceless “they,” so what hope could those lower down have?
Lutz takes some cheap shots at Zarrella, who as someone long-departed apparently isn’t protected by the executive code, but acknowledges a key failing shared by many intelligent people inside GM: Zarrella gave up. Lutz vaguely describes his own power as limited, but he didn’t give up. Relying on persuasion more than the direct exercise of power and aided by Wagoner’s unflagging support, he was able to make a few significant changes to GM’s way of doing things.

Too many brains, too little focus on what really matters

Lutz repeatedly argues that GM had over-intellectualized and over-complicated the task of developing a new car. The design process began in a room full of disturbingly casual, hirsute, beanbag-ensconced designers charged with envisioning “big ideas” (they failed to come up with anything useful). Marketing and the ad agencies it employed contributed boards that vividly and distinctively characterized the brands and their intended customers (they failed, too). A product planning group full of big brains applied complex analyses to vast amounts of data to deduce segment-busting new products like the Envoy XUV (which then failed to sell). Engineers required that every car meet a vast number of criteria that had accumulated over the decades. In one especially pernicious instance of the “tyranny of process over results,” the Vehicle Line Executives (VLEs) in charge of programs were awarded bonuses based on how well they achieved a large number of subgoals such as piece cost, build combinations, and time-to-market. Lutz recounts how one (unnamed) VLE demanded a bonus because his “scorecard” was all “green,” even though the product had received bad reviews and didn’t sell well. Struck speechless at the time, Lutz observes that “the obstacle has been, as always, pursuing a subgoal that was easy to game instead of putting the real objective above all.”

Design uber alles!

The real objective? Creating cars that sell. For Lutz, there is a simple way to achieve this overarching goal: make the cars look beautiful and expensive. Everything else is secondary, at best.

At the simplest, most superficial level, Lutz repeatedly had to direct designers to add more chrome trim. (Imagine: a world where GM had to be pushed to add more chrome by an exec brought in from outside.) But, as GM learned way back in 1958, chrome can’t fix everything. Even an executive with the so-rare-it’s-practically-raw good taste of Bob Lutz can’t draw a beautiful car on his own. You must free the designers to do what they do best.

To free the designers Lutz:

–eliminated the beanbag room

–eliminated the brand character nonsense

–greatly reduced the role of product planning (a hotbed of over-intellectualization whose focus on numbers squeezed out spontaneous creativity)

–pushed engineers to re-examine each criterion, and consequently discard many that were outmoded or that, due to an overly narrow focus, hurt more than they helped

–handed product responsibility to the VLE, usually short on good taste, and (un)focused on too many other things, only after the design was done

Eliminate handoffs.

Lutz added a handoff to the VLE after the design was complete. But within design he did the opposite, simplifying the design process by eliminating hand-offs from the advanced studios to the brand character studios to the production studios. The often disastrous consequences of these hand-offs in terms of both time-to-market and the appearance of the car came up often in my own research. Eliminating them should have been a no-brainer (and was among my recommendations), but GM was generally oblivious to how people work (or fail to work) together. In this case, and likely others, Lutz brought some much-needed common sense to GM’s top leadership.

We don’t need no education

Note the double negative. Wide, imprecise gaps between body panels endangered Lutz’s drive to make GM’s cars look more attractive and expensive. But this design problem couldn’t be fixed within his design bailiwick. Instead, the gaps were the result of “a generalized tolerance of sloppy [product] execution.” Lacking sufficient power to dictate a fix, Lutz kept bringing the issue up until the annoyed head of the metal fabrication group finally offered, “show me a car that has the fits you like, and we’ll do the same with ours.” Lutz showed this exec a 2002 Hyundai Sonata. The skilled engineers in metal fab then achieved the requested tight, precise gaps with shockingly little effort and expense. Apparently they’d never realized this was desired. Once educated by Lutz, they did much better. Enlightened and encouraged by this victory without losers, Lutz took his show on the road, educating the scattered tribes on how to recognize sloppiness and the need to eliminate it.

Working within the system

Lutz taught me about the danger of a cheap-looking interior. Indirectly, and through a negative example. Among his cars at Chrysler: the original Neon. I advised my sister to check it out. She summarily rejected the car because to her it looked so cheap inside. By the time he returned to GM, Lutz had also learned this lesson. Here as well he couldn’t dictate a fix. But he recognized (as did many of the people I spoke with for my thesis) that cheap interiors often happened because the interior is the last part of a car to get locked in. (There’s less lead time on interior components than on the body and the mechanical bits.) Consequently, any cost overruns over the course of the program had to be counteracted by downgrading the interior. Lutz couldn’t simply eliminate the bean counters’ cost controls. Instead, he intelligently worked within the system by removing interiors from the VLEs’ responsibilities and giving them a separate budget. This way cost overruns in the body, powertrain, or chassis couldn’t result in cheap interiors.

Half-truths without consequences

Lutz notes, without going into any specifics, that the VLEs and product planners didn’t like having their responsibilities reduced. But otherwise he ascribes no negative consequences to his empowerment of design and his war against “the tyranny of process.”

I observed the ridiculed processes inside GM, and can confirm they weren’t working. GM’s executives and managers devoted far too much time and effort to tactics and minutiae and far too little to strategy and the car as a whole. But the things the processes were supposed to do did need doing, and cannot be effectively done entirely by Lutz’s favored creative types. In his earlier book, Guts, Lutz writes eloquently of the need to combine “left-brained” and “right-brained” approaches. The new book does state that, under Lutz’s leadership, the “planning people” and the “idea people” developed mutual respect, where each recognized the value of the other’s work (while still not liking it). But, with no description of how these two groups actually worked together to create better cars, this comes across as the typical PR-approved “one big functional family” effluent. How well are the two approaches actually being combined?

For the beginnings of an answer we must look beyond the book’s unrevealing pages to the products Lutz oversaw. Many of the engineering criteria were unnecessary. But what about engineers’ legitimate priorities? Making the cars more comfortable, functional, or enjoyable to drive doesn’t really come up in the book. In fact, the opposite is the case: Lutz asserts that if a car looks good, buyers (essentially all of them, he’s anti-segmentation) will willingly sacrifice functionality. Creative, cross-functional, both-brained solutions that might make cars both look better and more functional? They don’t seem to have been explored. More broadly, it’s not clear that design and engineering work much better together now than they did earlier. Lutz might have simply shifted the shoe to the other foot. In his approach, there are a small number of top priorities (usually styling) and other things (like curb weight) are allowed to slide. This might explain why GM’s latest cars are hard to see out of, suffer from poor ergonomics, and hug the road with a few hundred extra pounds. While some buyers are won over by the cars’ styling, others are turned off by these shortcomings.

Lutz ad infinitum, by design

So, as vice-chairman in charge of new product development Lutz was able to get some desirable things done. The cars are more attractive inside and out, and drive more smoothly and quietly. But did he fix the core problem? Are GM’s many intelligent, talented people now more able to get done what they think needs to be done to create a better car? (Meaning without working laboriously up the hierarchy to somehow enlist the involvement of a sufficiently powerful senior executive.) Or, do the great majority of designers, engineers, and marketers remain nearly as frustrated now as they were pre-Lutz?
Unfortunately, on this question the book is silent. The role of personal judgment is clear. Design is important, and good design can only be recognized by someone with good judgment, not some left-brained type following a process. More broadly, judgment must fill in the void left by the eliminated processes. People must rely on their judgment, their “gut,” to make many different decisions with an eye to the superficially simple goal of selling more cars.

How many people possess the necessary judgment? Apparently not the VLEs who desperately need it. And if Lutz felt the need to constrain this high-ranking, carefully selected, thoroughly trained bunch within a new set of rules, then what hope is there for people lower in the organization? Though he spent much of his time educating the judgment of the multitudes, Lutz ultimately recognizes only one sufficiently gifted person—Lutz. How, then, can GM survive without him? Though he’s pushing eighty, apparently it can’t. Lutz retired—not for the first time—on May 1, 2010. But, as of last month, he’s back. Again. Still.

Has it really been a year since the United States tore itself apart in a frenzy over the possibility that Toyota’s might suddenly accelerate out of control? So intense was the furor over Toyota’s alleged misdeeds, that it seems like the whole scandal occurred only yesterday, yet the brevity of the crisis already gives it the distance of ancient history. Now, just a year after the height of the hysteria, the first major book on the subject has arrived, casting a clear light on the events of the recall. Serving as a history of the scandal, a case study in Toyota’s responses to it, and a cutting critique of the media’s coverage of the recall, Toyota Under Fire is a powerful reminder of the many lessons that emerged from one of the most intense and unexpected automotive industry events in recent years.

One of the inevitable challenges facing anyone writing about the Toyota Recall Scandal is placing a starting point on the narrative. Some have suggested that long-term erosions of quality control led, inexorably, over the years to the cries. Others claim that Toyota’s rapid expansion in the late 1990s and early 2000′s sowed the seeds of its embarrassment. Though elements of these theories seem to have played some role in the events of the recall, the authors of Toyota Under Fire, Jeffery K. Liker, an engineering professor at the University of Michigan, and Timothy Ogden of Sona Partners, begin by charting Toyota’s rise and then launch their narrative in earnest at the outset of the oil crisis and recession of 2008. By combining the recession (which led to the bankruptcy-bailouts of two of Toyota’s key US-based competitors) and the recall scandal, Liker and Ogden are able to paint a compelling portrait of a firm facing two very different problems.

This approach works perfectly for Toyota Under Fire, as Liker and Ogden are students of Toyota’s corporate culture and philosophy, and are able to show how Toyota applied its values to solving two very different problems. In fact, though Toyota Under Fire is the best history of the recall scandal written to date, Liker insists in his preface that

There is a great deal of detail from our investigations and interviews that doesn’t appear in this book, because this book is not intended to be a defense of Toyota or investigative journalism. Instead we’ve tried to provide the materials that are relevant to understanding the crisis and what others can learn from it. The hard times Toyota was living through allowed us to see Toyota in a different context than ever before.

This new context is the crux of the book, and Liker’s background as a decades-long student of Toyota’s corporate philosophy and previous authorship of The Toyota Way, which explores this topic, is germane. As Liker says, he is not an investigative journalist bound to the ideal of pure objectivity, but a long-term student and (admitted) admirer of Toyota’s ideas and practices. This familiarity with, and respect for, Toyota’s values meant that, when the crisis hit,

the press reports were painting a picture of a company that looked nothing like the one I know.

And though he admits that “my first instinct was to write a storm of letters to the editor and opinion columns defending Toyota,” he reveals that a friend and fellow Toyota Way acolyte reminded him that such a defense would not be in accordance with genchi gunbutsu (go and see), a key Toyota value. Instead, he and Ogden applied Toyota values like genchi gunbutsu to a thorough investigation of the recall, a process that produced Toyota Under Fire. And the key finding of their research is that, faced by both a “carpocalyptic” recession and a major recall scandal, Toyota did precisely the same thing, turning to the corporate values that launched it to the pinnacle of industrial achievement, and rigorously applying them to a variety of challenges. Both Toyota’s emergence from the twin crises and the high-quality research and analysis of Toyota Under Fire stand in tribute to these values.

Corporate mission statements may not be the reason most of us read about cars, but any student of the industry (and business leaders in any industry) will find much to learn from Toyota Under Fire’s culture-centric analysis of Toyota’s actions since 2008. For example, Toyota’s decision not to involuntarily separate its US manufacturing staff even when the recession caused massive overcapacity could be read as misguided altruism or a neo-”Jobs Bank” aimed simply at keeping workers happy, but as the authors point out, the issue is actually that Toyota sees employees as investments which become more valuable as they learn and apply Toyota’s values. This might sound like so much feel-good propaganda, but Liker and Ogden bring a wealth of evidence connecting Toyota’s values and practices with the exercises, trainings, “quality circles” and waste-eliminating efforts, and connecting these to tangible results in Toyota’s US plants. Though a large cash pile helped, Liker and Ogden point out again and again that Toyota’s profound commitment to the practical application of values like “embrace challenge,” kaizen (continuous improvement), and “customer first” allows it to emerge from challenge after challenge, stronger than before.

Having endured the recession with relatively minor losses, Toyota was poised to resume its ruthless domination of the auto industry (particularly in the US market), when the recall scandal struck in earnest in the fall of 2009, with the infamous crash of an off-duty police officer near San Diego. Here Liker and Ogden switch to a more investigative mode, focusing on the facts of each incident and recall, as well as the media’s coverage and the government’s response. TTAC readers will be familiar with the extent to which hysteria around sudden acceleration in Toyotas was fueled by ignorance, media hype and government posturing, but readers who did not seek out solid reporting on the subject or who still do not understand the issues will have their eyes opened [see also TTAC's retrospective on the recall]. Without belaboring the point, Liker and Ogden’s thorough survey of the recall’s timeline is critical of NHTSA, but damning of the news media and the trial lawyers who so masterfully manipulated it. And more than merely debunking the witch-hunt hype, Toyota Under Fire goes a step further, exploring some of the intriguing characteristics that make electronics systems and sudden unintended acceleration so vulnerable to such hysteria.

But perhaps the most fascinating chapter in Toyota Under Fire deals with Toyota’s response to the crisis, in which Liker and Ogden’s familiarity with the Toyota culture, not to mention their deep access to company figures and facilities, once again serves them well. In light of the dispassionate dissection of the media-fueled recall scandal, which serves well to put the accusations against Toyota into some much-needed context, it’s not surprising that the chapter opens with a chronological description of Toyota’s responses to the different stages of the scandal, starting with Toyota’s efforts to react to, and contain the situation. Though Toyota’s efforts to mobilize dealers and customer service call centers to deal with the problem, as well as its (somewhat belated) efforts to address widespread misperceptions are good illustrations of the company’s strategy, it isn’t until phase three “turning the crisis into an opportunity” that you really understand the point that Toyota Under Fire is trying to make.

In this section the authors begin drilling down into the root causes for the recall scandal, not simply because it’s the appropriate point in the book’s structure, but because it was at this point that Toyota’s value system forced the firm to do so itself. The authors note

Improvement kaizen and turning the crisis into an opportunity for the company to improve are dependent on correctly identifying the real problems, not just the problems presumed by outside observers. Only then can the underlying root causes of those problems be diagnosed, a necessary step before generating solutions.

The problem as identified by outsiders was, in the words of Ray LaHood, that Toyota had become “safety deaf.” Liker and Ogden explore that possibility, but argue that neither Toyota’s culture and operations nor a survey of defect and recall data show evidence of that popularly-held perception. Rather, Toyota’s internal investigations and ongoing kaizen processes pointed to a number of factors which allowed the scandal to play out. Toyota’s organizational structure, with sales split from manufacturing and overseas operations split from corporate headquarters was identified as an underlying weakness, hurting Toyota’s ability to communicate with government regulators (for example, after-sales engineering was based in Japan, unable to communicate with local regulators). Toyota’s methodical pace was acknowledged as a problem, as it fed media speculation. Another problem, possibly one of the most serious, was Toyota’s weakness in listening to customers. Shinichi Sasaki, Executive VP for global quality explains:

As you know, Toyota has made a lot of efforts to achieve the classical definition of quality control… things like the dependability and durability of the vehicles. But, if there’s a lesson from the recent recalls, it’s that things we engineers do not think are serious could sometimes create a lot of concerns on the part of the customers… We should not just be talking to the customers from a purely engineering viewpoint, but we have to care more about the customer’s feelings.

This, in a nutshell, seems to be the major area where Toyota contributed to its misfortune in the recall crisis. Not only does SUA bend the traditional “defect” paradigm, but in my opinion Toyota’s core value of not blaming customers may have denied it an important tool in explaining the distinction between a true “defect” and an opportunity to misuse or become frightened by an automobile (like installing the wrong mats, or misunderstanding the function of a “smart” cruise control system). From a pure PR perspective, one could argue that Toyota allowed its reputation to be turned on its head (at least temporarily) in order to avoid the perception that it was blaming anyone other than itself, an approach that actually fueled suspicion of it.

But, as Toyota Under Fire proves, culture is the lifeblood of Toyota, and blaming customers would have gone against a number of the firm’s cultural values, including “customer first” and “ownership and responsibility.” Though adhering to that culture put Toyota at a tactical disadvantage once in the midst of the scandal, the fact that Toyota refused to abandon its principles in a moment of desperation will ultimately maintain the firm’s strategic advantage. Had Toyota truly become “safety deaf” or actually allowed dangerous defects to be sold, it might have had some cause to rethink the culture that has launched it to the top of the auto industry. Because the recall scandal was actually caused by a number of subtle, even mundane challenges that arose from Toyota’s development, the Toyota Way (which is, at its base, a system of identifying and eliminating problems) was the perfect foundation on which to once again rebuild the company.

Toyota Under Fire ends with a number of lessons, aimed largely at leaders of organizations wishing to learn from Toyota’s experience. The authors offer lessons about cross-cultural communication, the media, confronting weaknesses, taking responsibility and more, but perhaps the most important lesson is the simplest one: commitment to a healthy culture will always trump radical change once a crisis arrives. In an industry dominated by products, personality, style and cyclical changes, it’s easy to forget that one of Toyota’s greatest contributions to modern industry is in its corporate culture.

In fact, since Toyota’s struggles last year, several industry commentators have goner as far as to wonder how Toyota ever became as dominant as it did, given that its brand and products don’t have any “special appeal” in terms of power, styling or image. What Toyota Under Fire explains so wonderfully is just how deeply engrained Toyota’s culture is in everything it does, how that culture discretely goes about the business of constant improvement, and how it delivers meaningful results even when facing huge challenges. And as Toyota has proved by becoming one of the world’s dominant automakers and then surviving two huge challenges in its largest market, the cultural “intangibles” can be the difference between success and failure.

Toyota Under Fire is available from Amazon and other fine book retailers. Contact the authors, access their research materials and order the book directly at www.toyotaunderfire.com

The Truth About Cars, Edward Niedermeyer and Bertel Schmitt are all cited as sources in this book.

Sports Car Racing In Camera, 1950-59 by Paul Parker

John McElroy recently quit the Automotive Press Association because they invited Steven Rattner, former head of the government’s auto industry task force, to speak. He warned, “If you want to read [his] book, DON’T BUY IT. Get it from your local library, because Steven Rattner is a rat who doesn’t deserve a dime of anyone’s money.” What he didn’t say: don’t read the book. And with good reason: it’s well-written, insightful, and definitely worth reading.

McElroy has repeatedly attacked Rattner’s character, even ripping on his last name, Fast Times at Ridgemont High style. He notes that Rattner was an investor in Cerberus before serving on the task force, likely used his influence to keep the media from covering his wife’s DUI, and was involved in a kickback scheme with the New York pension fund. I don’t doubt that this is all true, but still see insufficient grounds for such a vehement reaction.

Rattner’s book clearly involved a lot of hard work. He did not simply write up his own recollections. Instead, he claims to have interviewed many of the people involved, and impressive levels of detail and accuracy confirm this. The average book by a seasoned automotive journalist is shoddy in comparison.

If anyone should see a thoroughly researched book as work that deserves to be compensated, it is a journalist. Essentially, McElroy is arguing that anyone accused of a crime (Rattner hasn’t actually been convicted of a crime, though he has now paid very large settlements) does not deserve to be compensated for any of their work, even hard work unrelated to the crime. (A book based on the kickback scheme would be a different matter.)

This isn’t a tenable position. Something else is going on. McElroy provides some hints, labeling the book a “kiss and tell.” He’d clearly prefer that Rattner had, like most insiders, kept his mouth shut. The problem isn’t the accuracy of what Rattner wrote. This isn’t questioned. The problem is that Rattner divulges the contents of private meetings and private discussions. These meetings and discussions were conducted in the public interest, and involved tens of billions of public dollars, but apparently the public has no right to know what went on in them. McElroy interviews people for a living, and touts his show as “uncensored.” He must want at least some people to talk. Why not Rattner?

Rattner’s character isn’t a sufficient reason. Everyone in the auto industry isn’t squeaky clean, but dirty laundry tends to be ignored. Rattner is a special case.

What makes Rattner special? I don’t know, but can hypothesize.

Rattner was and remains an outsider who by his own admission knew nothing about the auto industry. The latter proves a non-issue. I’m generally skeptical of the entire concept of “quick studies,” but Rattner almost makes me a believer. The book includes accurate insights about how GM and Chrysler operate that have seemingly eluded the bulk of the auto industry press for decades. For example, “nothing happens at GM without PowerPoint,” labor was being treated as a fixed cost with absurd consequences, and the “grin fucking” “culture of mediocrity” couldn’t handle open conflicts, preferring to let things drag out forever behind the scenes. In comparison, the UAW’s leadership seemed knowledgeable and realistic once out of view of the membership. They had a better grasp of GM’s situation than GM’s leaders did, and behind the scenes were interested in working out a viable solution.

Unlike a journalist who must maintain access to sources, Rattner clearly felt free to communicate what he and other insiders observed. Such as the Treasury Secretary Paulson’s initial reaction to GM’s initial request for help: “This is complete bullshit!” And Rahm Emanuel’s reaction to the supposed need to save union jobs: “Fuck the UAW.” (Was the latter said and then written for the sake of appearances? Perhaps.) In true “kiss and tell” fashion, names are named, and Rattner colorfully expresses his personal opinions of various players. A violation of insider etiquette? No doubt. But we learn much more as a result.

Perhaps the largest revelation: GM possessed a very weak grasp of its finances and cash position, and was repeatedly unable to answer basic financial questions. GM’s leaders “seemed to be living in a fantasy world” and refused to consider bankruptcy, even though a bankruptcy seemed virtually certain to the task force. (The goal of the task force nearly from the start was not to avoid bankruptcy, but to avoid an uncontrolled bankruptcy.) For these reasons, Rattner repeatedly characterizes GM’s top executives, and especially CFO Ray Young “whose lack of common sense seemed limitless,” as incompetent. And yet he also gives GM’s leaders credit where it is due, noting that GM’s manufacturing operations were much more efficient than the task force initially assumed, and that there was thus no fundamental reason it couldn’t compete.

Worse than being an ignorant outsider, Rattner was from Wall Street, the worst sort of outsider. His New York personality tends to rub Midwesterners the wrong way. They—and I do mean they, McElroy is far from alone in his opinion—don’t like him.

Adding insult to injury, this unlikable outsider decided he could overhaul the auto industry without relying heavily on insiders. Rattner acknowledges that the team received “much unsolicited advice,” but found many of the suggestions “impractical.” In general insiders were seen as too wedded to how things had been done and so incapable of envisioning much less producing the necessary changes. Some insiders with advice (or more) to offer might have felt slighted.

Some have argued that Rattner’s book is overly self-serving. They must have read a different book than I did—if they read it at all. Rattner rarely takes personal credit for the accomplishments of the task force, instead ascribing nearly all of them to other members, especially labor expert Ron Bloom, corporate restructuring expert (and Republican) Harry Wilson, and bankruptcy expert Matt Feldman. Bloom took the lead on Chrysler, while Wilson did the same with GM.

Rattner describes some conflicts within the task force. Some members, most prominently Wilson, wanted to kill Chrysler, partly because the case for saving it was weak, partly to give GM a better shot at success. The decision to instead save Chrysler was ultimately made by Obama, and by the slimmest of margins. Rattner doesn’t conceal his distaste for Sergio Marchionne, who apparently tried to use the unbeatable hand the government dealt him to bully the other parties into submission. After Chrysler was taken care of, Bloom tried to assume an equally prominent role in the GM overhaul, which brought him into conflict with Wilson.

We’ve heard a lot about how badly bondholders were treated, but Rattner convincingly argues that they’ve actually received more than they should have. If the companies had liquidated, debt holders would have received very little, perhaps even nothing in the case of GM’s bondholders. Only the government’s desire to save the companies from liquidation gave them any reason to expect more. They knew that every day the situation remained unresolved would cost the government tens of millions of dollars. So by threatening to delay a resolution they hoped to force the government to pay them off. The task force called their bluff and managed a quick resolution through the bankruptcy courts, where the judges prioritized keeping the companies alive. As part of the process the debt holders ended up receiving considerably more than Rattner strongly felt they deserved. They received their payoff, just not as large a payoff as they dreamed of receiving.

Rattner does take personal credit (blame?) for one thing he felt needed to be change, but that insiders were not going to change. New investors in troubled companies often replace the top executives, and the government was serving as GM’s investor of last resort. So, acting much like a private equity investor, Rattner personally fired GM CEO Rick Wagoner, and stepped up to take the resulting flack. Many prominent members of the automotive press liked Wagoner. And, even if they hadn’t, they don’t like the idea of outsiders firing insiders. Prominent members of the press likely think of themselves as insiders, and closely identify with the executives they cover. Powerful outsiders like Rattner are the common enemy.

Rattner doesn’t pretend that the outcome was perfect. Though Obama is generally portrayed in a good light, the president is criticized for one thing: refusing to jointly work with the Bush administration on the crisis. In Rattner’s view, the “one president at a time” mantra cost taxpayers billions by delaying the bankruptcies. Another indication that the book is not political, Rattner praises Republican senator Corker for attempting to use the crisis to force needed changes, and credits him for laying down guidelines that shaped the outcome.

Rattner also wishes more could have been done to wring concessions from the UAW, especially with regard to the pension plan, and to change the culture at GM. He criticizes the UAW for selling out new hires in order to protect the wages of existing workers. And, at the end of the book, the question of who can and should lead GM remains undecided, with Henderson and Whitacre (the latter the task force’s last chance to effect meaningful cultural change within GM) both out after short terms.

But, by his own admission, Rattner’s a pragmatist. He realizes that the outcome is never going to be perfect, and that insisting on a perfect outcome likely would have resulted in a much worse outcome for all involved. The major achievement of the task force was forcing everyone to accept a less than ideal outcome from their own perspective, to share the pain—which had not been done with the financial industry bail out. Given huge problems decades in the making and just a few months to solve them, the task force achieved much more than anyone could have expected it to without the benefit of hindsight. It’s easy to forget how impossible a GM bankruptcy seemed to most people, especially those leading GM but also much of the auto industry media, before the fact.

Rattner doesn’t pretend that politics were not a factor. Some actions are described as politically-motivated, most notably the government’s insistence that GM’s headquarters remain in downtown Detroit and GM’s early repayment of some of the money—by using some of the money. Senator Barney Frank got GM to delay the closing of a small parts depot in his state. Some proposed actions fail what Rattner labels “the Washingon Post test:” how would they appear on the front page of the paper? But these were exceptions, not the rule. Rattner did what he could to minimize the role of politics, and largely succeeded.

Are there things Rattner is not telling us? No doubt. For example, it’s possible that Obama was more involved in some of the task force’s more controversial actions, such as the firing of Wagoner, and that Rattner is continuing his role of shielding the president from criticism. In general Rattner says little about what might have been his primary function, buffering the rest of the team from politicians and other parties interested in influencing the outcome so members could do their jobs. But overall I find Rattner’s book as complete and lacking in extraneous bias as an insider account could possibly be. For once we’re not entirely stuck on the outside, wondering, “What were they thinking?” It no doubt helped that Rattner’s position was temporary, and that he does not have to continue to work with the people portrayed in the book.

No one likes being told what to do by an outsider, even (especially?) when they know the outsider is right. Rattner’s book now serves as a well-researched and well-written permanent record of this outside intervention, and how well it worked. Since the book itself is unassailable, Rattner’s character becomes the target. I, for one, generally dislike character-based attacks, and would like to see such an informative insider account properly rewarded.

If you feel the same, buy the book.

Michael Karesh owns and operates TrueDelta, an online source of automotive pricing and reliability data

Motorbooks

First things first: having stuck my neck out a quite a bit with a piece I wrote last year The Truth About Why Chrysler Destroyed The Turbine Car, I approached this book with a mixture of eagerness and trepidation to find out if my own theory held any water. It does (whew!). This well researched book by Steve Lehto confirms it: the myth that Chrysler had the bronze beauties scrapped because of import duties that needed to be paid is utter junk and a baseless urban myth. It even confirms my speculation that the Ghia bodies cost about $20k each, and therefore any import duties would have been insignificant:

“The reality was the import duties at that point would have been peanuts. They didn’t want the cars hanging around, getting into people’s hands and messing up the image of the program, people getting them and putting V-8s into them, that was the real reason” (Chrysler’s) Bill Carry explained.

It also confirms that only six museums responded with Chrysler’s offer to donate them (without cost) for display. So feeling vindicated on those accounts, how does the book stack up otherwise? Like the turbine program itself, it never really got me fully spooled up.

OK, that might be my problem, having long ago decided that the whole Chrysler Turbine program was more about the promotional value and the zeitgeist of the jet age than the likelihood that the automobile turbine engine was ever going to be mass produced. And this book reinforced that more than ever, even if that wasn’t the intent. Even the subtitle “The Rise and Fall of Detroit’s Coolest Creation” unwittingly (presumably) reinforces my jaded perspective: jets were cool in the fifties and early sixties, and Chrysler wanted in on the coolness, regardless of the obvious obstacles to mass production.

If that’s a little harsh, I admit that some genuine progress came out of the program, but it wasn’t so much at Chrysler itself. Although George Huebner Jr. was the public face of the program, and milked it for all the personal and corporate glory and publicity possible, it was Sam Williams, a quiet scientist that really made the Chrysler turbine workable in its first few incarnations. But he left early on, and founded Williams International, which has found considerable success, especially with its micro-jet engines for small jets. His ability to see the inherent problems in adapting the turbine to automobiles and instead focus on replacing the piston engine in small airplanes perfectly underscores the whole turbine issue: it was always way too expensive to put in production, period. Airplanes? that’s a different story.

Chrysler really never faced that reality properly during the Turbine Car’s heyday for a good reason: the huge amount of publicity it generated nationwide for several years was grossly in excess of what it was spending, so who cared whether it was financially viable or not. Detroit, like most businesses, lives on the short term buzz, and the Turbine Car was giving it plenty of that. The book even speculates that Chrysler’s dramatic resurgence during the years of the Turbine Car program may be attributed to it, to one degree or another. Quite plausible.

A substantial part of its pages are spent documenting the experiences of the ordinary folks who got to “own” a Turbine for a few months. It was a hugely popular program, and those that had one never forgot it. The reason is simple: they became instant celebrities in their towns and cities, the forerunners of today’s reality show stars. The shortcomings of the cars themselves were mostly lost in the haze of excitement; no wonder so many wanted to buy them. When Chrysler asked them if they would hypothetically pay $20 k for one ($140k adjusted), they all blanched. That was more than most of their houses cost back then. And Chrysler was only feeling them out; even they didn’t know if they could actually build them for that amount even on a large scale.

The book also details those shortcomings, and they were very substantial. Fuel consumption in city driving was abysmal. The cars had to be fed diesel or kerosene; ironically, the leaded gasoline then would have damaged them. Yet the multi-fuel abilities of the turbine is extolled too often here; one too many references to them being able to run on perfume or tequila. How cool is that?

There’s lots of detail about what an effort behind the scenes it took to keep the Turbines running, and avoiding public scrutiny of that aspect.

A minor gripe with the book: calling them “jet cars”. A jet engine is one that specifically uses its thrust to propel a vehicle or plane. A gas turbine is related, but not the same. Call me a grouch, but…

The book may indulge in the”cool factor and it’s obvious from reading the publicity reviews on the back cover, that it will feed many folks’ notions that the turbine car program was madly cool and the innocent victim of changing government standards or other externalities. Shades of GM’s EV-1 program and “Who Killed The Electric Car?” Did they read a different version? What I kept getting out of it was the the program’s overwhelming limitations that assured its inevitable death. I guess this book is able to be interpreted in multiple ways. Or maybe they didn’t really read it.

But the conclusion is presented starkly here, even if one chooses to ignore it: Chrysler finally admitted what it knew all along: the key parts of the turbine were way to expensive to build cost-effectively.

And since then, the internal combustion engine has solved all the problems that bedeviled it back the. Today’s engines are quiet, smooth,  economical, multi-fuel capable, long-lived, reliable, clean and very cheap to build. The turbine’s appeal as a replacement, regardless of building cost, evaporated with modern electronic controls and new technologies.

That’s not to count out the turbine in the future; but if it does become a viable option, presumably it won’t be because of its “coolness”. Note that I said “presumably”. Hydrogen fuel calls were mighty cool just a few years ago. And we’re about to embark on a very large scale public (and publicly-subsidized) test of EVs. The turbine will undoubtedly not be Detroit’s last “cool” creation.

So the book successfully reinforced my own skepticism about the Turbine program, although that was probably not the author’s intent. It’s a common problem: are we looking for facts or coolness? The facts are here, but getting them to support the cool factor not so much so.

Published by Chicago Review Press; who supplied the book.

]]> http://www.thetruthaboutcars.com/2010/10/book-review-chryslers-turbine-car-the-rise-and-fall-of-detroits-coolest-creation/feed/ 42 http://www.thetruthaboutcars.com/2010/10/book-review-where-the-suckers-moon/ http://www.thetruthaboutcars.com/2010/10/book-review-where-the-suckers-moon/#comments Thu, 14 Oct 2010 21:56:07 +0000 Jack Baruth http://www.thetruthaboutcars.com/?p=368721

Book Reviewed: Where the Suckers Moon: An Advertising Story, by Randall Rothenberg, New York: Alfred A. Knopf, 1994, 477 pages.

I don’t know what you get out of the current Subaru Legacy ad campaign, but what I get out of it is: “The Subaru Legacy is so banal, and sucks so unrepentantly hard, that we had to put extra crap on an old Kia Optima to create an alternative you wouldn’t automatically prefer.” This is not the first time Subaru has pointed a shotgun at its own feet, nor is it likely to be the last.

Where The Suckers Moon is, primarily, a story about advertising, but along the way we get a true sense of Subaru itself: a company stumbling from failure to failure, forever being rescued by market conditions, outrageously misinformed buyer perception, and completely random factors. It’s simply a company that is too lucky to fail, no matter how hard it tries.

Although it was originally just another one of the infamous Malcolm Bricklin’s get-poor-quick schemes, Subaru of America found itself an unwitting beneficiary of circumstances beyond its control. An early adoption of part-time 4WD, done at the suggestion of the Japanese Post Office, made the little “DL” and “GL” the darlings of the Northeastern ski set and those who wished to emulate them. Later on, the Voluntary Restraint Agreement meant that every Japanese car that could find its way onto a boat would eventually be sold at a healthy profit somewhere.

Subaru’s almost unbelievably bad advertising tagline, “Inexpensive, and built to stay that way”, wasn’t a bad way to sell extremely cheap cars as sixteenth-birthday gifts to bi-curious Vermont coeds, but as the rising yen pushed prices through the roof, Subaru decided to reinvent itself as a “desire” brand. Their subsequent choice of “Just Do It” creators Wieden+Kennedy, and the “What To Drive” campaign that follows, provides the meat of Randall Rothenberg’s delightful liitle book.

Time and again, Subaru reveals itself to be the most hilariously incompetent of Japanese automakers. In one vignette, Rothenberg describes how a Japanese designer proudly shows a visiting Subaru of America delegation the interior of the new XT, noting that he put in checkerboard seat fabric “for the American dude.” Another chapter details how Wieden+Kennedy’s “visionary” television director refuses to actually put any shots of the Subaru Legacy in his commercial, focusing instead on homoerotic shots of sweaty, muscular line workers.

Caught between the bumbling Japanese and the insane “creatives” are the Subaru dealers, most of them hucksters and confidence men who couldn’t get a Toyota dealership in the Seventies. Their simplest desires are repeatedly frustrated. They want more no-equipment sedans; Subaru gives them the SVX. They want regional advertising to move cars before summer sets in; Subaru spends the money on a magazine ad campaign for which they are later forced to apologize to everybody from MADD to the NHTSA.

At one point in the book, the author cannot restrain himself any longer and states a simple fact: Subarus are primarily sold to people who cannot afford (or, in the VRA era, cannot get) a Honda or Toyota. While that was entirely true in the early Nineties, we are now familiar with Subaru as the people who bring you the WRX, STi, and Legacy GT, to say nothing of the Outback and Forester which actually keep the lights burning at the stars-and-swoosh dealerships.

Still, as we take a look at the way in which Subaru continually manages to snatch defeat from the jaws of victory (look at the STi and current Outback for some great examples) it’s worth noting that reality as described in Where The Suckers Moon hasn’t completely disappeared. It’s worth a read for any number of reasons. And for those of you pointing to Subaru’s current sales success as a refutation of everything I’ve said above… well, perhaps you’re right, but I’d recommend checking Rothenberg’s work out anyway. TTAC readers have recommended it no less than four times in the comments section. Consider this a fifth thumbs-up.

Available on Amazon.

Predicted by site founder Robert Farago when few people thought it could actually happen, GM’s bankruptcy is now history. So, time for the histories.

Paul Ingrassia certainly seems qualified to provide one. The Wall Street Journal’s man in Detroit for years, he won a Pulitzer (with Joseph White) for his coverage of the auto industry’s early 1990’s brush with disaster and subsequent recovery. That coverage provided the basis for 1994’s Comeback: the Fall and Rise of the American Automobile Industry, a definitive account of that period.

Does Crash Course: the American Automobile Industry’s Road from Glory to Disaster similarly deserve a place on your bookshelf?

Well, it depends. Did you know:

• most Japanese cars circa 1970 were front-wheel-drive

• the Japanese invested in direct fuel injection in the 1980s

• Iacocca started the SUV boom with Jeep, and gave them the 4.0 engine

• the Saturn SL2 was larger than the SL1

• the Toyota Prius runs entirely on electric power below 30 mph

Of course you didn’t. When discussing cars, Ingrassia gets such facts wrong as often as he gets them right. So, should we wonder what else isn’t correct? Or should we grant that someone can know the car industry inside and out, without knowing cars?

The first 160 of the book’s 280 pages review the industry’s history from its roots through 2005, with an emphasis on labor relations. There’s nothing particularly insightful in them, and certainly nothing new.

The key point: the UAW, shaped through confrontation, and with a monopoly on the supply of labor, kept demanding more and more, and industry executives, lacking courage and in denial, accepted and appeased them. For example, GM executives might have been able to bankrupt the union in 1998, but ultimately “lost their nerve” because “the UAW was the devil GM knew.”

In 2005 the UAW successfully fought an attempt to ban smoking on the assembly lines. Ingrassia’s take: “the union often stood for the right to be irresponsible, and the company accepted the ridiculous.” The most damaging concessions: retirement after 30 years on the line and a “Jobs Bank” where displaced workers continued to receive nearly full pay. When a threat to the existing ways of doing things emerged in the form of Saturn, both management and labor successfully worked to kill it. Secondary points: industry executives were out of touch with the market, and product development funds were spread too thinly due to an excessive number of brands.

The book starts earning its purchase price once it reaches 2005. Though still not insightful, but it is at least mildly interesting. Rick Wagoner is criticized for making major blunders (the FIAT debacle, the failure to sell Saab and Hummer, GMAC home mortgages, huge financial and market share losses), yet refusing to make big changes, and continuing to believe that gradualism would work. Jerry York gets props for trying (without success) to make GM accept reality and take necessary steps to avoid bankruptcy. Cerberus and the executives it hired vastly underestimated the difficulty of fixing Chrysler, and were in way over their heads. Alan Mulally faced reality and did what needed to be done before it was too late.

The last two chapters are easily the best in the book. Heavily based on confidential interviews with the people involved, they start with the first Congressional hearings in late 2008 and end with the bankruptcies. We get positive portraits of the principal Presidential Task Force members, whose lack of industry experience, as with Mulally, proved to be an advantage. Lacking this experience, “they would ignore all Detroit’s conventional wisdom about what couldn’t be done and take their guidance from common sense instead of car sense.” They did know mismanagement when they saw it. The more Wagoner touted the Volt as the solution to the company’s immediate crisis, “the more Rattner and Bloom became convinced he was removed from reality.”

We get a somewhat detailed account of how the task force, with common sense and the courage to force major changes, squeezed all of the parties hard. It forced both management and labor to take steps that should have been taken years earlier. It forced debt holders to take major haircuts, because keeping the companies operating was the top priority. The “ridiculous” Jobs Bank? Finally gone. Non-essential brands? Gone. Mountains of debt? Gone. Wagoner? Gone. In short, “the task force had brought more common sense to GM than the company had seen in decades.” Government intervention was necessary because the UAW, company executives, and debt holders would never have worked out a solution on their own, even though (in the case of the first two) their livelihoods were at stake.

Crisis was always necessary to get the UAW and executives to make any changes at all, and even with a life-threatening crisis they weren’t willing or able to make sufficient changes on their own. So what, now, that the companies have been saved? In an afterward, Ingrassia doubts that the cultures of the UAW or the “lifer” executives who remained in control had undergone the needed revolutions.

The account throughout is very much that of a professional journalist. Unlike with Alex Taylor’s Sixty to Zero (reviewed here), the personality and opinions of the author are well hidden. There’s minimal wondering what might have happened, for better or worse, if various people had acted differently. The exceptions: GM could have avoided bankruptcy if it had followed Ford’s lead, and Chrysler was nearly permitted to go under. But, once the decision was made to save both companies, what might have been done differently? What opportunities for change were missed? These questions aren’t asked, much less answered. The focus is on what did happen, on the (hopefully correct) facts.

The largest failing of Crash Course: it doesn’t dig much beneath the surface. Ingrassia’s new, shorter book (280 vs. 474 pages) is in general considerably less interesting and insightful than Comeback, which continues to be a joy to read. One likely factor: while the old book thoroughly delved into the biographies, work, and personalities of many mid-level managers, the new book focuses more tightly on harder-to-access people at the very top of the companies. (Two exceptions: a guy on the line and a car dealer.) Despite numerous interviews—they were “confidential,” and so are not listed—the major players remain caricatures. “Complacency, arrogance, and hubris,” “isolation,” a lack of “common sense,” and “lack of courage,” though certainly present, are the same, overly simple characterizations Detroit’s critics have been making since  Brock Yates penned “Grosse Pointe Myopians” back in 1968. And probably before that.

These characterizations don’t go far enough. These people aren’t stupid; smart people somehow kept doing stupid things. Replace these smart people with other smart people, and more often than not the new people will do the same stupid things. Why does experience apparently suppress common sense? What were the UAW and corporate leaders actually thinking as events progressed? Why did they feel they had no choice but to act the way they did? Why are the “cultural revolutions” Ingrassia calls for still not happening?

The best answers Ingrassia offers: “courage” and the “common sense” of an outsider’s perspective. Both Mulally and the task force came from outside the industry, and so neither accepted that the way things had always been done was the way they had to be done. Beyond this, they had the courage to make big changes, and to face down those who opposed these changes—though both also appeased the union, if to a lesser extent.

Was “courage” truly the key difference between Wagoner and Mulally? And the courage to admit failure and step side the key difference between Wagoner and Bill Ford? Briefly mentioned: the Ford family and the priority it placed on retaining control through its stock ownership. Left implicit: while GM’s executives claimed until the last minute that bankruptcy was not an option, in Ford’s case bankruptcy was truly not an option. Perhaps this and not the courage of this or that individual explains why only Ford did whatever was necessary to avoid bankruptcy? Even though they held large amounts of stock and options themselves, perhaps GM’s executives did not feel the same amount of pressure to safeguard GM’s stockholders?

With his experience and contacts, Ingrassia should have been able to offer deeper, more thorough explanations for why the various players did what they did. Did he not try, or even in retirement does he remain bound by the culture of the mainstream auto media, and so unwilling to dig too deeply or say too much? Ingrassia criticizes the local Detroit media for “helping to create the very insularity that had made Detroit executives and UAW officials oblivious to the sentiment elsewhere in America.” The cultures of the UAW and executive suites are not the only ones still in need of revolution.

To say that the auto industry has had a rough several years would be an understatement of epic proportions. The bailouts of GM and Chrysler dragged many of the industry’s challenges into the open, and the dramatic rescue effort brought an unprecedented level of public awareness of long-festering problems with Detroit’s business model. Here at TTAC, these troubles have provided much grist for our discussions, which tend to focus on the product, business and customer care factors. But behind the decades of Detroit’s weak products and poor business practices, lies a political-economic narrative that tends to be left out of the discussion. In End of a Dream or The Great Auto Crash: An Inside Story, economist William Vukson fits the great sweep of macroeconomic policy since Richard Nixon into a slim volume, and explains Detroit’s dramatic collapse in terms of trade and fiscal policy rather than, say, Detroit’s “Deadly Sins”.

Needless to say, this is something of a departure from standard TTAC analysis, which tends towards product-driven explanations for Detroit’s collapse. The temptation to see GM and Chrysler as the anti-Horatio Alger stories of our times, in which good companies make bad and fall from riches to rags as a pure function of the free market, is undeniable. And if The Great Auto Crash has a shortcoming, it’s that it largely ignores Detroit’s relationship with the consumer in favor of Detroit’s equally dysfunctional relationship with Washington DC and the globalizing economy. But Vukson isn’t an industry specialist (his previous work includes consulting on the Euro launch, and books on currency, and macroeconomics), and his tale of currencies, politics and international relations no more completely explains  the auto crash than a purely consumer-driven explanation. As a backdrop to Detroit’s failure in the marketplace, however, The Great Auto Crash is indispensable.

It is not for nothing though, that economics is widely referred to as “the dismal science.” After a promising preface, Vukson dives into a defense of the Federal Reserve policies of recently disgraced former chairman Alan Greenspan. Without the benefit of Vukson’s economic narrative, this seems like a something of a non-sequitor, as it touches only briefly on auto industry-specific details. Keep reading though, and Vukson’s narrative unfolds in an epic sweep, starting with the Cold War policies of Richard Nixon, all the way through the Bush-Obama industry bailout.

After detailing the challenges faced by auto industry analysts attempting to read a US car market that has collapsed from nearly 17m units of annual sales to about 10.5m units, Vukson sets the way-back machine to the early 1970s, when the US auto industry’s dominance was first challenged by foreign competitors and pressure from rising inflation, OPEC and safety advocates like Ralph Nader.  Nixon, argues Vukson, inherited an auto industry that faced little external pressure, and was focused largely on balancing economic gains between the union and OEM pricing power. But the first cracks were already beginning to show. The US market, long closed to competition, was opened to key cold war allies like Japan and Germany. Vukson holds that this decision, though motivated by geopolitical rather than economic concerns, would have one of the more lasting impacts on the US industry.

These foreign competitors were not expected to ever replace the Detroit firms, but were rather seen as curiosities that would soon go the way of French and Italian brands, as well as the many British sportscar makers of the post-war import boom. And though he acknowledges that Detroit’s quality was in a sorry state by the mid-1970s, he avoids drawing the conclusion that superior quality alone accounts for the rise to prominence of German and Japanese automakers.

The Ford administration’s resolution of the first OPEC energy crisis, argues Vukson, allowed Detroit to continue a “business as usual” approach that ignored the potential for a second energy crisis. When the second energy crisis hit, Detroit was left vulnerable by its own complacency, which was enabled by the “false hope” of the Ford administration. When energy prices doubled between 1978 and 1980, the imports which were only allowed market access for geopolitical reasons, suddenly found themselves holding the ball with an open path to the end zone.

Much of Auto Crash is devoted to changes that came about in the Reagan administration, particularly the inflation-busting experiments of Fed Chairman Paul Volcker. With the auto industry already struggling under pressure from OPEC and safety advocates, Volcker’s decision to halt runaway inflation with tight monetary policies sent interest rates soaring above 18 percent, and made the dollar appreciate considerably against the Japanese Yen. Vukson writes:

It was not necessarily a fact that the Japanese made more fuel efficient cars, hence the American consumer was focused on hedging the increasingly erratic prices at the pumps; but it was more a testament to the undervaluation of the Japanese imports which was made possible by tight Fed money policies to the point where these vehicles were just too good to pass up or, at least experiment with.

Vukson does acknowledge, however, that Detroit’s complacent response to the first energy crisis resulted in crude, uninspiring products that were rushed to market when the second energy crisis hit. Was this complacency the original sin? Would the Japanese automakers have made the gains in this period that they did had the Dollar-Yen relationship not spun out of balance? Vukson’s implied answer to both of these is no. In any case, he argues that the more crucial decision in the Reagan era was not Volcker’s inflation-busting per se, but the government’s response to growing pressure from Japanese automakers.

Though Reagan helped break OPEC’s power and check inflation, the final leg of his economic policy would prove to be the most disastrous yet for the Detroit firms. In the effort to secure currency concessions from Japan, the Reagan administration demanded import restrictions, and more fatally, demanded that Japanese firms produce more of their vehicles in the United States. Given the industry’s relatively rapid transition from serving a protected market dominated to the Detroit 3 to a far more globalized, competitive environment, this would prove to be the final nail in the protectionist paradigm.

With consumers already tempted by more-efficient, higher-quality Japanese cars, the rise of transplant manufacturing broke Detroit’s long-unanimous support in congress. The transplants’ decision to build plants in non-union Southern states not only helped maintain their cost-competitiveness, it divided the American body politic to the point where protectionist policies of the past had no chance of being exhumed, and enabled the loud opposition to the Bush-Obama industry bailout. The NAFTA free-trade deals of the Bush I and Clinton administrations further complicated the political perspective on Detroit, especially when Detroit became a major beneficiary of cheap Mexican labor. Low oil costs were the major government priority in terms of Detroit-friendly policies, and once again it allowed complacency that led to the short-term SUV boom.

With quality improving thanks to intense transplant competition, yet another problem was building for Detroit by the time Bill Clinton took office. Cars were lasting longer and car ownership was outstripping the population, leading to concerns about the sustainability of the industry. With Alan Greenspan in charge at the fed, financial deregulation became the industry’s great hope for a sustainable future. Taking advantage of Greenspan’s low Fed rates to offer cheap loans and cheaper leases, the industry was able to revert to a more fashion-oriented business model than the pragmatic, fear-driven approach of the 1970s. This drove huge profits in fashionable segments like SUVs and luxury cars, as the industry convinced more and more consumers to trade in their vehicles after two to four years, despite the fact that they would now last longer than ever.

But the low rates that enabled this consumer debt binge was also combining with the rise of global free trade to hollow out the American manufacturing sector while hiding its effects in subsequent technology and real-estate bubbles. This, argues Vukson, is ultimately why GM and Chrysler collapsed just a few years ago. With collapse of the credit markets, the cheap loans and leases that kept the US market “sustainable” above 15m units were no longer available, causing the entire industry to collapse to its current level. Already staggering under legacy costs, and having never fully recovered from the OPEC/currency imbalance/transplant body slams, GM and Chrysler’s immune systems were unable to survive the correction that occurred in 2008 and 2009.

Of course, Detroit had no shortage of opportunities to turn itself around, most recently with the huge profits of the SUV era. Vukson tends to trace Detroit’s inability to capitalize on the good times in preparation for the bad to government policies like Alan Greenspan’s low interest rates, which he says caused Detroit to become complacent. And if you subscribe to a more free-market philosophy, it’s tempting to dismiss this analysis as apologia. This response, however, would be missing Vukson’s main point.

Though it’s interesting to dissect the decline of Detroit, and though focusing strictly on that single phenomenon requires more than just macroeconomic analysis, there’s a larger issue at play here. The final bankruptcy and bailout of GM and Chrysler were but symptoms of a larger issue, and one that has not been resolved by the bailout: drastically reduced demand for automobiles in the US. The bailouts and reorganizations at GM and Chrysler have helped these two firms adapt to a dramatically smaller market for new cars, but it will only have been worth it if future growth is still possible. Because of inertia in consumer perceptions (not to mention anger at the bailout), GM and Chrysler’s future depends more on a pick-up in the overall market than on major gains in market share (which never happen without a fight). But, says Vukson, financial “magic” was the key to the market’s “sustainability,” and now it’s gone with no obvious replacement waiting in the wings.

Will the market return to 15m or more units any time soon? It’s hard to say that Vukson is optimistic on this point. The only real options he leaves on the table are resisting calls for financial regulation and allowing the financial “magic” to continue, or “aggressive spending” to counter the industry’s decline, specifically in the area of green technology and improved production models. Neither of these options are particularly attractive, especially for free-market-oriented thinkers, but the alternative could be an industry stuck battling for a market that refuses to grow organically. From this perspective, perhaps a more fitting title for the book would be The Great Auto Correction. In any case, Vukson’s ability to condense decades of economic and political policies into a slim, easily-understood volume is of far more value than attempts to politicize his findings. As always, the truth is a complex thing, and The Great Auto Crash adds another valuable level of analysis for more product-oriented industry-watchers.

Matthew Crawford is a practicing motorcycle mechanic out of Richmond,Virginia. He’s also an excellent writer who holds a philosophy degree from the prestigious University of Chicago. This unusual trifecta informs “Shop Class as Soulcraft: an Inquiry Into the Value of Work.” Anyone who’s changed their oil or timed a distributor (remember them?) will appreciate the result.

Disregard the slightly woo-woo title. This is no Zen and the Art of the Motorcycle, which was a prissy piece of pretentious, barely readable hokum. [One reviewer damned my book The Gold-Plated Porsche with faint praise by asserting that it was better than Zen and the Art . . ."] Crawford’s book is a querulous examination of how and why we’ve given up our appreciation for the skills of the craftsperson—-or even the simple integrity of the committed do-it-yourselfer. In the process, we’ve become a culture of “change ‘er out, not worth troubleshootin’ it” techs.

Crawford traces the shift to our collective belief in the mantra “Time Is Money.” As a consequence, some of our ’57 Chevys and ’71 240Zs are worth more than a used F430—if you multiply hours times the going hourly day-job rate of some of the enthusiasts who lovingly restore and maintain them. There are other ramifications . . .

My daughter recently became a San Francisco homeowner. She asked me if she should buy an extended warranty on her new washer and dryer. After explaining the transaction’s super-scam aspect, I told her that the appliances are in fact incredibly simple machines. They can be stripped naked by the removal of a few sheetmetal screws, exposing a motor, belt and drum (or a motor, pump and hoses). She could rectify most problem using internet how-to sites plus the substantial toolkit I had assembled for her Manhattan-apartment days.

Crawford would approve. More to the point, he’d agree that the mini-education thus attained would stand my daughter in good stead. Both practically and philosophically.

Crawford charts the changes that I’ve seen first hand. Back in the 1950s, a mechanical education was a standard part of the average high school curriculum. As a child of the FDR era, I “took shop.” To this day, I remember the specific differences between crosscut and rip saws (Lesson One, I believe).

Sometime around 1990, American educators decided we’d moved beyond such skills, into the Information Age. High schools across the land dumped their industrial-quality lathes, drill presses, bandsaws and welding rigs onto the used market. (You can still find them on eBay.) And if a student were “retarded” enough to need shop class, he could always go to the local BOCES and become a butt-crack plumber.

The sea change created a vast sea of cubicle Dilberts—people doing things they neither care about nor understand. They follow simple patterns to accomplish their jobs. Crawford points out that the transition started long before shop class went the way of the hula hoop.

According to popular mythology, Henry Ford paid his workers twice as much as they’d otherwise have earned to make them affluent enough to buy Model Ts. In fact, when Ford developed the assembly line—each worker turning one bolt or fastening one bracket all day long—his former bicycle and carriage craftsmen quit in droves. Overpaying them was the only way Ford could secure enough workers willing to withstand the endless, mindless, repetitive, monotony. The creation of the middle class, and their accession to Model T ownership, was an unintended consequence.

Fast forward to 1969. If you’d taken your Porsche to the dealer with an infuriating cold-start problem, a mechanic who’d made a camshaft from a steel billet with a hand file to satisfy his apprenticeship would have quickly sorted it out. And now? Your Porsche is serviced by a “technician” who relies on the computerized OBD fault code that he (or she) finds on a list.

As Crawford correctly points out, the Porsche “specialist” is reasonably effective, but he lacks a deep understanding of the machine under his care. He’s like the Information Age student who has learned how to find a square root on their calculator—but doesn’t know what a square root signifies. A single botched keystroke can turn the root of 36 into 18 rather than six, and they won’t have the knowledge or experience to say, “No, that can’t be right.” In the same way, the Porsche tech may not tumble to the fact that if the sparkplugs are carbon black, maybe the engine is running rich—-even though the fault code “insists” on lean.

If you skip some of Crawford’s heady philosophy, “Shop Class as Soulcraft” reassures mechanically adept readers that working on your car imports treasure beyond measure. Still, as the old Zen says, the map is not territory.

P. J. O’Rourke takes the decline of the American car personally. And not just because his family has sold Buicks for three generations. In his latest book Driving Like Crazy, O’Rourke sees the very story of our nation written in the crazy, chrome-clad arc of American automobilia. From “the sheer genius that transformed the 1908 Model T into the 1965 Shelby Cobra GT500 in a single human lifetime of speeding tickets” to the industry’s decades-long “sayonara,” O’Rourke reflects on where we’ve been and what we drove to get there. But he also knows that cars are about more important things than mere cultural and political commentary. They’re about fun. Fast fun. Busting axles in Baja fun. Pointing a big, noisy car at the horizon and burying the gas pedal fun. And what’s more American than that?

Driving Like Crazy compiles O’Rourke’s automotive writings, spanning a career well spent at publications like Car and Driver, Automobile, National Lampoon and Rolling Stone, among others. It is only appropriate then, that Like Crazy bounces and jolts across topics like a Jeep on an old logging road. From a National Lampoon treatise on “How To Drive Fast On Drugs While Getting Your Wing-Wang Squeezed And Not Spill Your Drink” to a gonzo Baja road test with the cream of American automotive journalism, from NASCAR to the “Geezer Grand Prix” (California Mille), O’Rourke takes on all things automotive with his trademark razor-sharp wit.

But Driving Like Crazy is not simply a collection of automotive O’Rourkisms past. The author revisits each of his pieces with the benefit of a lifetime of living the American romance with cars. The result is a timely mix of nostalgia and topicality; the excesses of youth tempered with reflections on a life that has witnessed the glorious past and ignominious present of the American automobile.

Indeed, the lamentable state of American enthusiasm for automobiles seems to be the driving force behind this anthology. A nefarious group that O’Rourke identifies as “The Fun Suckers” have latched onto the automobile, turning it into “a public enemy, an outlaw they could persecute without compunction.” From pollution controls to safety features, from speed limits to DUI hysteria, this “Fun Sux Klan” has deprived generations of the essential freedom, fear and fun that O’Rourke most highly prizes in his automotive interactions.

And it’s no wonder O’Rourke takes fun so seriously. His life has been chock-full of the stuff. Before even hitting his stride with boozy explorations of NASCAR, Baja, and, er, Illinois, he was exhorting the readers of National Lampoon to “get drunk and drive like a fool.” Now, twice as old as when he wrote “How To Drive Fast On Drugs,” he follows up on his own advice. A younger PJ suggested that with enough courage and strength of character, a drug-addled, girl-crazed young man could die in a fiery wreck, thus saving him from balding, Country Squire-owning decline. An older O’Rourke questioned his younger self’s ability to acquire the necessary drugs, girls and fast cars to even make a go of it. Plus, “to be young is to be driving in the figure-eight races and demo derbies of life. There’s better fun to be had as you head toward the finish line at Monte Carlo,” he advises.

If you agree with this sentiment, you’ll appreciate the progression of O’Rourke’s work. From youthful incitement to early death through several decidedly gonzo interludes, Driving Like Crazy eventually finds its author discovering more prosaic inspiration. Buying a family car. Defending SUVs from the British. Family road trips in a Ford Flex. Younger readers may see the bleak visions of slow death by Country Squire coming true. Certainly, “the finish line at Monte Carlo” is less glamorous, less obviously fun than you might expect.

But don’t cry for P. J. The old bastard has had his fun. In fact, as Driving Like Crazy progresses, the gonzo levels drop off and are replaced with ever more frequent complaints about fun suckers. But having just read pedal-to-the-metal accounts of booze-soaked junkets, destroyed press cars and general misbehavior (on a healthy expense account), one can’t help but wonder if O’Rourke’s fast living, fast driving ethos hasn’t inspired the very fun suckers he despises.

Though O’Rourke rages against the dying of the light (and now knows which poet he’s referencing), he’s had a front row seat for one of the most epic sunsets in American history. Good thing, then, that he’s such a talented writer. His diatribes may do nothing to bring back the days of rumbling V8s, perpetual drunkenness and small-town girls begging to be whisked away by men on motorcycles, but his vivid recollections bring them to life in the reader’s imagination.

As the age of the American car slips into memory, writers like O’Rourke remind those of us who missed it that the future need not be ever more quiet, safe and appliance-like. At the very least, his writings provide a poignant counterpoint to the neutered, socialized culture and industry currently surrounding cars in America. The presence of which proves that there really are worse things than going out early “in a blaze of flaming aluminum alloys formulated specially for the Porsche factory race effort.”

Now, if you don’t mind, I’ll be out burning the last of the hydrocarbons as an offering to the few remaining gods of fun. That way, if I don’t die young, some whippersnapper of the future can accuse me of ruining the fun for his and all coming generations. Which, if I’ve learned anything from P. J. O’Rourke, is the only way to know you’ve actually had any.