The Truth About Cars » Sixty To Zero The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Mon, 14 Jul 2014 16:00:14 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Sixty To Zero Book Review: Sixty To Zero [Part II] Thu, 19 Aug 2010 18:06:54 +0000

Editor’s Note: Part One of Michael Karesh’s review of Sixty To Zero can be found here.

Journalists write stories. A coherent story is a partial truth at best. If it’s portrayed as the whole story, it’s a lie.

In Sixty to Zero, veteran auto industry journalist Alex Taylor III provides an unusual level of insight into the relationships between top auto industry journalists and the executives they cover. He acknowledges getting too close to these executives more than once, and blames this for several embarrassingly off-base articles. But even in his most self-reflective moments, Taylor fails to recognize an even larger source of distortion.

Taylor’s explanation for the collapse of GM is simple: the company’s senior executives were removed from reality, wedded to the past, and unwilling to act quickly and decisively to fix their firms’ mounting problems. Ford’s Mulally, according to Taylor, indicates the path Wagoner should have taken at GM. Though true to a point, this explanation doesn’t nearly go far enough. It’s not only simple, it’s too simple.

In Taylor’s view, “the history of nearly every auto company revolves around the CEO.” He has sought and received far less contact with people lower in the auto company organizations—even Bob Lutz, since he was merely a vice chairman, is a “lesser executive” who normally would not have received frequent press attention.

Why such a strong focus on the CEO? For starters, Taylor is clearly moved by status and prestige, the qualities embodied by the CEO position. Taylor’s approach to journalism is also strongly influenced by the desire to tell a good story and sell magazines. Individuals are easier to understand and more enjoyable to write and read about than teams or organizations. Just as Taylor was most interested in talking to CEOs, readers tend to be most interested in reading about CEOs.

Taylor does note in passing that the role of the CEO has been exaggerated: “When a company is performing well, there is an understandable impulse to attribute the success to the CEO and to examine his actions in light of that.” He also notes that “projecting the capabilities of the CEO onto an entire management is especially problematic for a company as large and complex as GM.” Despite these realizations, however, Taylor continued to do both.

Most of all, Taylor never seems to fully grasp that CEOs—even the good ones—have a severely limited and distorted view of what goes on inside their companies. The ideal access he describes, to shadow the CEO as he goes about his daily work, is a step in the right direction. With such access, he might see what a CEO actually says and does, and not have to rely on what the CEO claims, in interviews, to be saying and doing. But even if the CEO does and says what he would normally do and say while being shadowed, this assumes that all of the important activities inside these companies involve the CEO, or at least occur with the CEO in the room.

I must admit to an unfair advantage. Back in the late 1990s I spent 18 months practically living inside various parts of General Motors while conducting field research for my Ph.D. thesis. I attended over 400 working-level meetings within program management, design, marketing, and engineering, and spent entire days as a fly on the wall inside the Design Center. I rarely saw a senior executive. I never saw the CEO.

In one instance, Taylor shadowed Wagoner during a meeting with design executives. But did the real design work happen with Wagoner in the room? Should it have? During the days I spent inside GM, real work only happened when executives were not in the room. When the executives arrived, the real work stopped and the “dog and pony show” began. Beyond this, it quickly became apparent that within GM, and I later learned within just about any organization of any size, scant information makes it up even two levels, much less all the way from the product development teams to the CEO. Whatever information does make it has been heavily massaged. By continuously relying on CEOs as his predominant source of information, Taylor has been fated to keep repeating the same mistakes.

Compounding the problem, Taylor and his colleagues influence the industry that they cover. Executives want to have positive articles written about them, and so further exaggerate how much they can personally know and do. No one gets positive press by acknowledging their limits. After one debacle, GM’s Jack Smith continued to assert that he was well-informed about what was going throughout the organization, as if this were really possible, and tht he was not “out of the loop.” Wagoner convinced Taylor that “he was no forty-thousand-foot manager; he was intimately involved in key areas of the business” and comfortably interacting with everyone from engineers to dealers. Taylor never appears to have tested such claims by actually talking with people lower in the organization.

This exaggeration of the CEO’s role and the CEO’s abilities has been repeatedly validated by the resulting magazine articles. Cults of the CEO have been born and sustained. Encouraged by the press, auto companies concentrate decision-making (or a lack thereof) at the top of the organization even more than they might otherwise.

What both the journalists and most CEOs miss: the best senior executives develop teams of experts much lower in the organization, enable these teams to do their jobs well, then let them do their jobs. Mulally has made some tough decisions at Ford, but he has also focused on eliminating infighting and building teamwork within the organization. Mulally isn’t a car guy, and he knows he’s not a car guy. If he’s as smart as he’s reputed to be, he lets the car guys lower in the organization do their jobs without even pretending to be intimately involved in what they do.

Unfortunately, this isn’t the story one is likely to hear while interviewing a senior executive. Even if the executive does talk about “the organization,” such an account cannot compete with the portrayal of an individual executive for color and doesn’t make for a dramatic article the way killing a brand, publicly taking on the UAW, or a “ritual firing” does. Taylor repeatedly wishes for more “ritual firings”—his term, not mine.

The unrecognized problem with ritual firings: at best they assume that the individual fired was responsible for the mistake, and that other individuals would not have made the same mistake. At worst, they realize this, but don’t care. It’s just fun to watch heads roll. Taylor notes that executive firings were historically much more common at Ford, and that Mulally’s suppression of political infighting improved the company’s performance. Strangely, Taylor does not seem to learn from this that ritual firings don’t improve company performance.

Taylor also calls for auto company CEOs to take more risks, but this seems more than a little cliché. What sort of risks would he have them take? Jack Smith and Rick Wagoner get little credit for GM’s big bet on China. Don Peterson gets labeled an odd “iconoclast” for taking Ford in unusual directions. Roger Smith took many risks while CEO of GM, and gets severely criticized for each of them. Lutz receives mild praise for having some minor successes while avoiding disasters. Taylor wants risks without failures. But the real possibility of failure is what makes a risk a risk.

Taylor’s suggestions that executives should both take more risks and fire more people for mistakes comprise a recipe for firing lots of people. The “ritual firings” he wishes for would discourage the risk-taking he also wishes for. These are contradictory recommendations.

In reality, while there are some bad executives, all too often there are good executives placed within social systems that make it virtually impossible to make good decisions. Unless senior executives fix the underlying problem, which is the organization, not the individuals within it, they’ll just keep firing executive after executive.

Auto industry journalists like Taylor, by celebrating CEOs and largely ignoring the rest of the large organizations they lead, and by repeatedly focusing on the symptoms rather than the underlying problem, have themselves been part of the problem.

By focusing so intently on CEOs, and relying on interviews with them as his primary sources of information, Taylor has, without ever realizing it, spent decades building overly close relationships with the wrong people. Assuming, of course, that the goal was to accurately report what was going on inside these companies, and not making friends with important people in the process of selling more magazines.

I’d like to learn what’s really going on inside these companies, and how and how well they’re actually operating. Such a story makes it into the automotive press perhaps once every five to ten years. We have had insiders share bits of their knowledge, insights, and perspective here at TTAC from time to time. But true investigative journalism, where a writer builds relationships with people throughout these large organizations, and is able to report what’s really going on as a result? There are a number of reasons this still hasn’t happened—among them the very real possibility of “witch hunts” like the one Taylor describes—but I’m still hoping.

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Book Review: Sixty To Zero Tue, 17 Aug 2010 17:45:16 +0000

With Sixty to Zero, leading auto industry journalist Alex Taylor III claims to provide “an inside look at the collapse of General Motors – and the Detroit auto industry.” The book is well worth reading, but not because it actually provides this inside look. Instead, this book, atypically as much personal memoir as history, lets us peer inside the life and mind of a top auto journalist. A close read suggests why such journalists provide little insight into what really goes on inside the auto companies.

Taylor’s coverage of the auto industry for the past three decades (like much of business journalism) has been based heavily on interviews with senior executives, and especially with CEOs. In his book, he describes how journalists seek to build close relationships with executives, and avoid jeopardizing these relationships. Admiring articles written to build relationships with executives even have an insider label: “beat sweeteners.” Smart executives work this desire to build relationships to their advantage. As Taylor notes, “There’s nothing like a little personal attention from a top executive to win over a journalist.”

These relationships between journalists and executives come across as intensely personal. In describing each executive, Taylor focuses on their mannerisms, how they dressed, and whether he personally liked them. Roger Smith had a “high, squeaky voice and jittery mannerisms.” Lee Iacocca: “an insecure man who wore his neuroses on his sleeve.” Bob Stempel: “a big, beefy man [who] would become visibly angry, his face turning red, when he became irked” and “the classroom grind who gets ahead not by virtue of his smarts or quick wit but because he works harder than everyone else.” Lloyd Reuss: “dressed like a riverboat gambler…but underneath he was another GM suit who always saw good times just around the corner.” Bob Eaton: “a peculiar personality that put some people off…his usual expression was of vague stomach upset.” Jürgen Schrempp: “Iacocca’s ego and ambition and none of his insecurity…an imposing man with enormous energy and an irresistible personality.” Dieter Zetsche: “an intense intelligence with an instinctive flair for personal relations…[I] never failed to be charmed by his candor, wit, and the literal twinkle in his eye…he said all the right things.” Rick Wagoner: “smart, personable, and thoughtful.” Mulally: “the personality of an Eagle Scout who had memorized How to Win Friends and Influence People and dressed like a scoutmaster.”

Bob Lutz is a special case. The lusty personal description, too lengthy to reproduce here, includes “the body of a gymnast,” “übermale,” and Savile Row suits “to show off his physique.” Summing up: “Favored with exceptional physical equipment and a psyche that allowed him to give it full expression, Lutz became the center of attention wherever he went in automotive circles. It was a role that he enjoyed and played to the hilt.”

With Iacocca and Lutz in particular these relationships formed “a special club in which [the executive] controlled the membership.” Taylor further describes the relationship between the press and Lutz as “a longtime romance that Lutz cleverly exploited…he pretended we were equal partners in his five-star world of fast cars and international travel.” Taylor guarded a special relationship with Iacocca but ultimately opted not to join “the Lutz club.” As he candidly explains, “I was intimidated by his überness,” “I found his need for attention to be exhausting,” and “hordes of other writers were enamored of Lutz; I didn’t want to get in line.”

These relationships were not always smooth ones. Those times when Taylor did write a critical article he often received a vigorous response from the covered executive. In the most colorful example, Taylor described how Stempel “once forced me to sit and listen while he read one of my articles aloud, correcting me on every point he disputed.” He then notes that this performance in conjunction with Stempel’s physical size and CEO position “created the unmistakable impression that he was bullying me.” Later on, GM’s status as a major advertiser led the magazine to arrange a “sit-down” among Taylor, two other editors, and six of the auto makers’ top executives. In another case, Ford CEO Trotman first tried to use personal connections to kill a story, and when this failed began a “great witch hunt” in search of the leak. Taylor does not acknowledge any way in which these responses shaped his writing, but could they have had no effect?

Most unusually, Taylor acknowledges how often he has been wrong. With both Jack Smith and Rick Wagoner he was acutely embarrassed by incorrectly reporting that GM had turned a corner; another Fortune contributor had to write that the company might go bankrupt. He was sold on Zetsche’s plans for Chrysler. Though he was usually unduly optimistic, this wasn’t always the case. Taylor thought Mulally would fail at Ford because he was an outsider who didn’t dress or talk the way a CEO ought to (in Taylor’s personal view).

Taylor attempts to explain these errors. Blame generally goes to personal attachment to the CEO in question—getting too close—and a desire to write a positive story. He acknowledges “gulping” the “GM Kool-Aid” and allowing his personal feelings for a CEO to influence his opinions about the company. With hindsight he realizes that “executives almost always look relaxed and confident; that’s part of their job,” and so he should not have read much into GM’s CEO appearing relaxed and confident. He recognizes that executives like Lutz are acting out roles—but still seems to have accepted much of what they said at face value.

In the end, we are left wondering how much of the mainstream media’s coverage has been distorted by personal relationships and personal feelings. It seems to be a very small, tight club, where people cannot help but become friends with many of the executives they are reporting on. Does anyone who gets close enough to gather inside information necessarily end up too close? Can people write appropriately critical stories about their friends? To his credit, Taylor seems quite aware how these factors have affected his coverage, and assigns them much of the blame for his missteps.

But this isn’t the whole story. The second part of this review explores other, perhaps more serious limitations inherent in Taylor’s methods—which he doesn’t seem to recognize.

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