allen5h: That plan only works if a)you sell the cars “as is where is”, without any representation that they will be covered by warranty, and b)no chance that the POS reputation such vehicles will earn, before this hypothetical PMD dies, will in any way transfer to your other divisions… else it is a totally self-defeating strategy.

busbodger: another thing that would have killed Corvair besides emissions would have been compliance with upcoming FMVSS regs.

And finally, could it be, that the market just didn’t fractionate as much as GM hoped it did, or would, and that they mistakenly believed that they could keep their representative market share by building more and more nameplates within such an evolving market? Did they focus more on this, and less on producing just 1 or 2 great cars per segment, rather than however many they ultimately did??

Nick, I have known the Corvair guys for several years now and they have explained to me that the Corvair was seriously dinged by GMs cost cutting on several details like the leaf spring they finally added after 5 years (1964 model) to cure the rear suspension droop which qould cause a rollover under the right circumstances. Then there was the 20 psi front tires with nearly 30 psi required in the rear tires which were often all filled to 30 psi by ignorant owners or gas station jockeys leading to wandering steering or poor front tire traction. That might have been the result of design cost cutting but I’m not sure. My VWs (also rear engined) had the same pressures all around I think.

Then there were the muscle cars. The Corvair wasn’t going to be in the same class as the biggest and baddest of the V-8s but I don’t know if that would have killed the Corvair.

The early seventies would have likely raised the fortunes of the Corvair when the Arab oil embargo started but it was gone after 1969.

GM might have had to update the engine to catalytic converters and fuel injection to maintain compliance with the air pollution regs of the 1970s. At least that is what VW and Porsche had to do to their aircooled engines. VW gave up on the air cooled engines in 1983 with the last of the aircooled Vanagons. The Beetle “died” in the USA in 1979 I think – the last versions were Super Beetle convertibles only.

I frankly don’t think that GM would have done what was necessary to keep the Corvair up to date through the 1970s despite the fun handling, sporty performance, and generally good looks of the Corvair.

I often wonder if the American consumers just generally come in two breeds like sexual preferences. There are those who generally want a domestic and there are those that generally want what an import has to offer and then there is that much smaller group that go either way… I leave it to you guys and gals to figure who is who.

In this sense Pontiac dealers are not in the car business; they are in the real estate business. They are hanging on until some bigger fool comes along and offers them a profit on their real estate foot print.

I know of a local Pontiac dealership where there is a revolving door of personnel. Nobody wants to be a service writer / adviser, nobody wants to sell these cars, nobody wants to service these cars, nobody wants to be an administrative assistant, nobody wants to work there plain and simple.

Good bye and good riddance.

- C-level executives who made decisions to look good over the SHORT term…whether they were schooled as an engineer or an accountant…
- Middle management and the engineers that designed and launched faulty product with planned obsolescence…
- Unions that fought for it ALL….high wages AND job security AND the best health care AND the fat pensions…and rendered their manufacturers less able to respond to changes in the marketplace…
- Franchisees who were more interested in making a quick buck today by screwing a customer than in retaining that customer for the long term…

“A people who values its privileges above its priorities soon loses both.” Well said, Mr. Eisenhower. A bit ironic that he said that at his inaugural address in January 1953.

I can’t agree. Until the Hawley-Smoot tariff of 1930 decimated U.S. new vehicle exports, American cars were sold throughout the world, and very much desired. Many European companies copied the American marques.

Beginning in the mid-1920s, and throughout the pre-World War II era, Cadillac – along with Packard – was the best car in the world, having displaced Rolls-Royce. Mercedes had more advanced engineering features, but it wasn’t as durable and was not as easy to drive.

Cadillac was widely admired for its comfort, styling, engineering and durability. (Again, so was Packard, Cadillac’s chief competitor in those years.)

After World War II Cadillac was still among the top marques in the world…if it was no longer definitely the “best” by the early 1960s, it still ranked among the best.

There are two aspects of Sloan’s model – his management principles and the stairstep divisional structure. (”A car for every purse and purpose.”)

Both worked beautifully for a time.

The first problem was that, as Mr. Niedermeyer noted in his article, successive leaders did not adhere to his management principles. It is not his fault that the leaders who followed him did not follow the path that he had blazed for them. Many of his management principles are still valid today.

The second problem was that the fracturing of the American market that began with the success of the 1958 Ford Thunderbird and 1958 American Motors Rambler spelled the death knell for his divisional structure.

Now back to GM, in effect it is a “death” because GM, as we know it, is dying. How it’ll be “reborn” is another story and possibly another series entitled “GM birth watch”?

But in my humble opinion, GM’s death started pretty much at its inception. It’s amazing how GM (and Ford and Chrysler) flourished when there was no REAL competition. Then Toyota, Honda and Hyundai (as we know them now) came and their market share gradually got eroded. Alfred P Sloan’s model never worked to start with……

Peter DeLorenzo has called GM “the canary in our coal mine” for good reason. It isn’t just GM executives who have continually made decisions based upon expedience and maximizing short term gains, but a system in which the primary strategy is to look good over the short term. Union leaders, stockholders, and even we the public are guilty of this, and it may be endangering our way of life. Tax law is written to encourage short term investment. Investment funds show off their ability to manipulate money over the short term. And we are willing to consume ever poorer quality products in the name of “saving money”.

He appointment is when the beancounters took over and killed Detroit’s passion for cars. McNamara was a numbers guy. He ran Ford by numbers. He ran the DoD and Vietnam war by numbers. Cars were just widgets. Dead GI’s and dead Vietcong were also just widgets.

GM followed Ford’s lead and learned how to allow the beancounters to run things. It was his stewardship of Ford and the examples they set that kept true talent from rising into the top echelons of the big 2.8. They firmly established Detroit’s “That’s Good Enough For You” way of doing business.

There is a place for McNamara and his likes in corporate America. They are needed. But CEO was not it.

To Dynamic88, yes caring is what’s really needed, but no amount of caring on the part of the engineers and designers will overcome a board of bystanders without any vision or concern for the future. The problem with the bean counters is they care about the money not the product. Demming showed them how to improve their production/quality not what they should sell. That job fell to the people who had a feel for the business and what customers wanted.

Fascinating. I had never heard of the Cadet before. I always pegged the start of GM’s decline as the Corvair (GMs ill-advised penny pinching combined with Ralph Nader’s book). Small, lightweight, aluminum engine, turbocharging…it had it all. When it died, so died GM’s hopes of leading the pack.

The part of this story that concerns GM is that GM management in the late 50’s ignored this opportunity to remove this cost from themselves and place it on the government. GM management was arrogant at the time and thought that they could easily handle and control medical costs.

After 50 more years we now know we can not trust doctors, lawyers, MBAs, HMOs, and insurance companies around money.

Great Death Watch seeing the truth behind whats been drowning Detriot for decades is really interesting. It relates to so many other things, I would love to see the rest of Mr. Niedermeyer’s Death watch diary. Someone seriously needs to write an in depth book about this, maybe an unofficial before and then one after the vaults have been opened.

Someone wrote about Pontiac being dead and eventually killed and under the current management I wholey agree, but as a brand under new leadership with real vision, maybe purchased by an independent I think it could be a thriving American brand. Great history, some decent platforms to work with even though the final execution sucked, and a presence in the marketplace even if its not that great right now(Hyundai’s sucked also). I was going to write an arm chair CEO editorial for Robert about what I would do if I bought Pontiac(like billions of dollars would ever drop from the sky into my yard) but I’m thinking someone so removed from the auto industry shouldn’t be writing that. I think most of GM’s brands have a life left in them, just not under the current management and over blated brand stucture. Too much competing with eachother with the same products and lack of resources.

The desire to do a “good job” is what results in the Ford Five Hundred/Taurus, which is certainly a decent, competitive product.

It is not, however, exactly flying off the dealer lots, and even Ford has basically admitted its failure by rushing a redesigned version into production within the next two years.

Dynamic88: Demming was interested in these things, and that’s what he taught the Japanese. But I’m not aware that Demming was any sort of car buff.

Which is why a smart executive team will let Deming lead quality initiatives and oversee the consumer feedback process, but not let him run the whole show.

Just as a smart executive team will allow accountants to work with engineers and designers to keep costs in check, but not allow them the final say on product plans, or styling and engineering decisions.

Dynamic 88: Anyway the D3 have not always been led by accountants, and they’ve been “dying” for several decades. Blaming the accountants is just too easy and pat an answer. I don’t buy it.

It’s not just accountants…it’s the accounting mentality, which is symbolized by the rejection of the Cadet in 1947 because it wouldn’t generate sufficient profits.

A more comprehensive shift occurred in the late 1950s (the process was gradual), when Robert McNamara and Ed Lundy solidified their power within Ford, and the GM Board promoted Fred Donner, an accountant, to the position of chairman and CEO. It was Fred Donner who remarked that GM had to be worried about the stock price, which was an alarm bell for car enthusiast Bunkie Knudsen, who believed that if the corporation built great cars, the stock price would take care of itself.

There remained sparks of inspiration within Detroit – Lee Iacocca at Ford, Ed Cole, John DeLorean, John Beltz and Pete Estes at GM – but the bottom line is that the corporations became less willing to try new ideas or incorporate new technology into their vehicles. They became followers instead of leaders.

They were lucky in that, during most of the 1960s, the foreign competition wasn’t yet ready for prime time in the U.S. Which is why you didn’t see major declines in their profits, despite stagnant engineering.

But when the Oil Embargo hit in the 1970s, and the imports were there with more efficient, quality products on the high end (the Germans and Swedes) and the low end (the Japanese), the decline became obvious.

Increasingly shoddy quality in the early 1970s certainly didn’t help Detroit.

Dynamic88: The engineers I know (except one) work for the D3 and none of them is much interested in cars, at least not judging from their personal life.

Well, if the engineers don’t even care, then that further explains why we have a GM Deathwatch series…

Dynamic88: But my point is, no one involved with designing, building, and marketing the Vespa was passionate about scooters. Not one of them was a “scooter guy”. They were passionate about survival, and making something people needed and would buy.

That works when there isn’t much competition. I wonder how Vespa is faring TODAY, and how much government aid or protection it has received.

Detroit got by in the 1960s because there really weren’t any decent alternatives available in the heart of the market. Toyota, Mercedes, VW, Datsun, Austin and Renault were not making vehicles that could really serve as a subsitute for the American family sedan, or even “sporty” cars (i.e., Mustang, Javelin, Camaro, etc.).

Note, however, that when Detroit went head-to-head with the imports on THEIR turf (say, subcompacts), Detroit’s products were absymal compared to the competition. And we all know the history of the American auto industry once the foreign team began invading segments dominated by Detroit…

In the late ’40s when Piaggio came out with the Vespa, it wasn’t because the company was passionate about scooters. Piaggio had been making aircraft during the war. The allies destroyed the factory.

But the son of the founder saw a need for low cost transport. The engineer tasked with designing the Vespa hated motorcycles. Using aircraft design concepts, aircraft wheels, stub axles inspired by airplane landing struts, and the small motor which started up the large aircraft engine, Piaggio was able to cobble together a motor scooter.

It was a good product for the time, and remains a pretty good product now – though I think if I wanted a scooter I’d prefer a Honda, Yamaha, or perhaps Kymco.

But my point is, no one involved with designing, building, and marketing the Vespa was passionate about scooters. Not one of them was a “scooter guy”. They were passionate about survival, and making something people needed and would buy.

Sorry, I’m reopening the case. I reject this idea that “passion” is needed. At least passion about cars. What’s needed is both the desire and the knowledge to do a good job. Caring about quality. Caring about ergonomics. Caring about durability. Caring about continually improving the product. Caring about the process. I see no evidence that the average engineer cares about these things. (At least I certainly don’t see evidence in Detroit). But caring isn’t enough. There has to be knowledge about how to do it.

Demming was interested in these things, and that’s what he taught the Japanese. But I’m not aware that Demming was any sort of car buff. The Demming methods can be employed building cars, or sewing machines. (Does one have to be passionate about making one’s own clothes to make good sewing machines?)

Anyway the D3 have not always been led by accountants, and they’ve been “dying” for several decades. Blaming the accountants is just too easy and pat an answer. I don’t buy it.

The engineers I know (except one) work for the D3 and none of them is much interested in cars, at least not judging from their personal life.

But engineers know HOW to make a good car, accountants give me less confidense in this area.

Frankly, the accountants at the Debt3 don’t inspire much confidense in the fiscal area either.

Kix-Thanks, your reply on euthanizing “Auntie” hit the right spot. Heck, why would we want to bump of Auntie GeM? She has more debt than cash, even a bad nephew can see he won’t get any inheritance.

As for crazy uncle Bob…I sometimes think Rick keeps him around to keep the heat off his back.

Bunter

And he has taken the Big Three approach to cost-cutting, with the expected results on reliability. Note that Nissans regularly score lower than Hondas and Toyotas on reliability surveys.

Dynamic88: Why the assumption that an accountant can’t be interested in cars ?

Sure, accountants can be interested in cars. The problem is that the accounting mentality has ruled the roost at the Big Three for decades…compare the cars they produced from about, say, 1975, to those from firms that are run by more engineering-oriented management.

For that matter, compare most GM cars (except for the Corvette) to most Hondas.

After closely examining and then driving their respective products, one can be forgiven for assuming that accountants aren’t too terribly interested in cars.

Accountants have their place. But if they get too powerful, they can end up ruining the product.

Anyone can cut costs. Anyone can take content out of the product. It takes passion and commitment to design cost-effective, excellent products that excite buyers, and judging by long-term sales trends, the more accounting-oriented management of the Big Three is failing in this area.

Dynamic88: (In addition to the assumption that being passionate about cars is necessary for success).

At the Big Three, for years, having a passion, or even a real interest in cars, was often enough to keep someone out of the uppermost echelons of management. If there is no passion about the product, you get dull products that cut as many corners as possible, but are “cost competitive.”

Which sounds pretty much like the lineup of GM right now, with few exceptions.

Dynamic88: I know several engineers (who work for the D3) and I know some accountants (who do not work in the auto industry) and the accountants are much more interesting well-rounded people, and they have passions (hockey and music).

The question is whether they know cars and understand car buyers, and how this impacts the final product, not whether they appreciate a night at the opera. The accountant’s question – “What will it cost?” – must be balanced against the enthusiast’s question – “Will it make the final product better?”.

For too long, the Big Three have been out of balance, regardless of how well-rounded the individual members of their management teams have been in other areas.

The Big Three have been dominated by the “accountant” mentality for decades. Look at the products those companies have produced since then. Case closed….

Also note that it was the accounting mentality that led GM to reject the original Cadet. The car wouldn’t generate enough return on investment, so it was smothered in its crib…too bad GM hadn’t tried to open up a new market in the late 1940s.

That was an entirely correct decision from the accounting standpoint. Which is why accountants need to be balanced by leaders with passion for the product, not to mention inspiration and vision.

One wonders how the history of the American auto industry would have played out if GM had produced the Cadet (and Ford had built the postwar small car that Edsel Ford I and Bob Gregorie had developed and styled).

I know several engineers (who work for the D3) and I know some accountants (who do not work in the auto industry) and the accountants are much more interesting well-rounded people, and they have passions (hockey and music).