By on October 19, 2006

center.jpgFor any journalist covering the American auto industry, The Big Two Point Five's insularity is a constant source of amazement. And so it has been, for well over six decades. Over the last forty years or so, the names have changed, but  the message hasn’t. The party line: “foreign” cars are a fad (especially the small ones), ours are as good as if not better than theirs, prosperity is only a couple of cars away and, oh yeah, it's all the union’s fault. One insider coined the perfect term for this combination of reckless denial and mindless optimism: “Grosse Pointe Myopia” (GPM).

Note the term’s geographic specificity; Grosse Pointe is the swanky suburb just outside of Detroit favored by highly-paid automobile executives. Every member of The Big Two Point Five– which includes no less than fourteen domestic sub-brands– are headquartered in and around Detroit. This concentration of industrial energy, all directed towards the creation of products within a single consumer category, is not the norm for manufacturers in most industries. Even within the car biz, America's insularity is without parallel.

Even in much smaller countries, there’s a greater physical separation between the main players in the automotive sector. In Japan, the Dai-san are separated by almost as much distance as they are in the US. While Honda, Nissan and Toyota all have offices in Tokyo, they also have “home turf” in very different parts of the country. Volkswagen, BMW and Mercedes all have their own lebensraum in a country roughly the size of Texas. Even SAAB and Volvo weren’t neighbors until they were bought. When it comes to cross-corporate cultural incest based on simple geography, Motown rules.

The biggest single problem with sharing your home base with your rivals: it stunts your perceptions. Every new development– whether it’s a design, technological advance, personnel policy or marketing technique– is analyzed in terms of what your not-so-friendly neighborhood competition is doing. The “what would BLANK do?” debate slows the adoption of new ideas, especially in manufacturing. It also retards the pace of innovation. After all, the “visible” competition is moving just as slowly as you are.

Equally important, Detroit and its environs are a terrible place from which to survey the domestic automotive scene. Even in the days when The Big Three ruled the American market, their distance from the left and right coasts made import-related trends seem much less important than they really were. Just about all the foreign competition made their first inroads on the coasts, away from Detroit (and nearer to where the economic heart was moving). Is it any surprise that The Big Two Point Five are most dominant in America’s economic backwaters, including their rustbelt fiefdoms?

Detroit is one of the few major metropolitan areas in the US where imported automobiles are still a relatively rare sight (and even this is changing). Like ancient potentates unaware of the barbarians at the gates, the current Kings of Detroit look out their windows and find false reassurance. Ford moved Mercury to California for this very reason. They scurried home soon thereafter; what the rest of Ford couldn’t see, didn’t exist.

Obviously, this plethora of monomaniacal, short-sighted executives wasn't trained from birth (though a large number of Detroit's movers and shakers are second and third generation automobile executives). Rather they’re plucked from a narrow range of design, engineering and B-schools. Those who fit the profile and succeed soon find themselves living in glass towers– literally– seeing the rest of the world through a strange prism of executive privilege. They know real customers don’t drive box fresh, hand-picked vehicles. They know they don’t fly first class or private jets. But the execs gratefully submit to the common, alternate reality, and, eventually, become oblivious to its distancing effect.

Of The Big Two Point Five, GM suffers the most from its GPM. Ford's recent decision to poach their new boss from Boeing reflects a historical willingness to hire executives from other auto companies and industries. A fair chunk of the Dai-san’s American management (especially Nissan’s) started with The Big Two Point Five. GM is different, a royalty unto itself, pure, unsullied, and inbred. The fact that their current CEO Rick Wagoner has never worked for a company other than GM tells you everything you need to know about The General’s terminal myopia.

Ford talks of Bold Moves. GM speaks of on-track turnarounds. Chrysler says wait and see. Meanwhile, Nissan’s moved to Tennessee. There is no question whatsoever that The Big Two Point Five should also up stakes and split town– for three different destinations. They can leave whatever technological and manufacturing operations remain in Michigan in Michigan, but their executives should abandon Detroit as soon as possible. It’s the best way for The Big Two Point Five to learn to see the world in sharp focus, as it really is. Only then can The Big Two Point Five start the process of psychological recovery that financial recovery demands. Otherwise, whether they like it or not, whether they know it or not, they're all going down together.   

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63 Comments on “Grosse Pointe Myopia...”


  • avatar
    Steinl

    The Big 2,5 are looking for the most stupid customers they can find.
    They should have been building better cars.

  • avatar
    Humourless

    From what I have read, Nissan’s move to Tennessee was not a very fruitful venture, given the number of people who didn’t want to make the leap to the new location.

    This argument might have made more sense pre-internet and pre-cable TV, but I don’t believe the insularity of location is as much a problem as the issue of groupthink.

  • avatar

    I don’t think you can call Nissan’s move a failure because X number of people didn’t go. The question is: is their corporate culture healthier for the move?

    By the same token, the internet can actually increase insularity, forcing execs to spend all their time dealing with each other, commmunicating within the belly of the beast.

  • avatar
    1984

    WTH are you talking about? GM Ford and Chrysler have engineering and design centers all around the country (including California) and around the world.

    Honda and Toyota do not even allow non-Japanese executives on the board or god forbid the CEO. Yeah, that sounds really diverse for a global company without the blinders on.

    I’m not sure if you have been paying attention for the last two decades but there is not much that is “swanky” about anything in Detroit. Walk across Woodward on the other side of GP and you will sh*t your pants all the way back to your suburbanite paradise. Detroit has it hard enough without you pissing on it thank-you-very-much.

  • avatar
    starlightmica

    Anybody else remember when Lincoln was moved out to California, to hang out with the rest of PAG? that didn’t last long, did it? Just another couple hundred nails in that coffin, I mean the 07 Navigator’s grille.

    Will Nissan be for the worse for the TN move? Autoextremist’s rumor that cast-offs from the Det 2.5 were setting up their own fiefdoms. I guess we’ll see.

  • avatar
    clearance42

    From Wikipedia:

    >>
    As of the census2 of 2000, there were 5,670 people, 2,388 households, and 1,559 families residing in the city. The population density was 2,046.0/km² (5,297.9/mi²). There were 2,504 housing units at an average density of 903.6/km² (2,339.7/mi²). The racial makeup of the city was 97.18% White, 0.79% African American, 0.07% Native American, 1.04% Asian, 0.02% Pacific Islander, 0.30% from other races, and 0.60% from two or more races. Hispanic or Latino of any race were 1.46% of the population.

    In the city the population was spread out with 25.4% under the age of 18, 4.3% from 18 to 24, 25.3% from 25 to 44, 29.3% from 45 to 64, and 15.7% who were 65 years of age or older. The median age was 42 years. For every 100 females there were 88.1 males. For every 100 females age 18 and over, there were 83.2 males.

    The median income for a household in the city was $81,111, and the median income for a family was $101,889. Males had a median income of $79,637 versus $44,167 for females. The per capita income for the city was $53,942. About 2.2% of families and 2.5% of the population were below the poverty line, including 1.3% of those under age 18 and 1.9% of those age 65 or over.
    >>

    To 1984: I’m not from the Detroit area, but all of those income numbers are well above national averages, and way above the MI average of $30,439. You’ll have to pardon my skepticism that Grosse Pointe is quite the dump you seem to be describing. And if it’s not, if it is a suburban wonderland filled with Detroit execs as Andrew describes, well then I agree with him that it can only aggravate the overwhelming insularity already established in the Big 2.5

  • avatar
    NeonCat93

    Don’t pull any punches, 1984. Tell us how you really feel.

    The 2.5 remind me of those movies from the 60s where the CIA and the FBI were fighting the enemy – which was each other.

    If Detroit is such a crappy place (and what footage I’ve seen suggests that it is) why hasn’t the management of at least one left for more salubrious environs?

    No matter what design and engineering offices there may be elsewhere, the decisions get made at the top. If that top is concerned with the in-town crowd, is as insular as it seems, then they are in a not dissimilar situation to the residents of Versailles in the 1780s. Let them eat cake, let them drive Malibus.

  • avatar
    1984

    The racial makeup of the city was 97.18% White, 0.79% African American

    The median income for a household in the city was $81,111

    Hahahahah! choke* caugh Hahahah ha mmhmm! excuse me.

    Wikipedia LOL!

    http://detroit.areaconnect.com/statistics.htm

  • avatar
    BostonTeaParty

    clearance 42 which city are you quoting on. Everyone knows grosse pointe aint no dump if you ever drove through it. Try driving along jefferson from downtown sometime and seeing the change, it quite literally is like entering another world when you pass one particular set of traffic lights. Also try adding a few zero’s onto the median wage for grosse point then you might get more of the picture.
    As for detroit it is a sh!t hole, start over again with it and give the people there a break they have enough to put up with.

  • avatar
    jaje

    Having a design or engineering center elsewhere may help (slightly) but who makes the call as to what is produced – it’s the Execs in Detroit. Where do you think the final decisions for the Ion came from, or the GM’s also-ran Minivans, or the Aztek, or the quality of the myriad of GM interiors? Who is making the idea to make Saturn into the car lot of rebadged Opels (what Saab was supposed to be)? Did you think Saab (who still has design elements in Europe) was clamoring for a rebadged Trailblazer (if they did that’s suicidal) – Saab asked to make an SUV but GM gave them the worst platform to make a “born from Jets SUV” – now Saab is basically damaged beyond repair as they get no new customers and their die hard loyalists are leaving in droves.

    If you look at a supposedly rebaged Lexus ES350 versus it’s Camry origins the level of refinement and luxury is a complete step up. Look at the Lincoln/Mercury rebadged Fusions (which is a rebadged Mazda6) and it’s a joke that they want $3-$5k more for the same exact car with the exact same engine. Drive a CR-V and a RDX (both brand new and built off the same platform) and the difference is substantial – note the different engines. Ford has that weak 3.0 v6 they slap in every car and shove into the Freesytle and 500 – engines in those big cars make it very slow and difficult to drive when you need to go forward.

    Even look at the H3 – under that big heavy Hummer body it’s a Colorado in facade with one of the worst truck engines made – the Inline 5 (the 4.3 ohv v6 was more than adequate in the S10 – they can also fit in a 5.3 v8 – why this pathetic engine?). Hell the Colorado is SLOW and the H3 at a premium price is pathetically SLOW. Yeah I drove one when I bought my Silverado and was laughing while flooring it – the salesman of course didn’t address the lack of power but kept on noting it could off road (exactlly what yuppies want to hear – give them that macho vision and drive something slower than a mid 80’s 4 cyl caravan for $30k+).

    Then there’s the R/T versions of the Caliber with the 2.4 liter Neon/tractor engine and a CVT Transmission that literally takes any torque out of that low revver and makes that car slower than all it’s competition. Dodge of course ill slap on a big ole turbo to make their weak engine faster in a year or two – but why not 5 spd manual in the R/T?

    Japan does not have blinders on b/c their management listens to their different divisions and design/engineering centers around the world. Note most of their executives are engineers and not bean counters or sleazy sales guys looking to make money not satiate the customer. If you’d rather buy a car made by management that will nickle dime you into a Pinto or sell you something no matter what it is then be that sheep for the culling – you are the exact type of customer they look for. Blame it on Japan, on the world.

    Detroit’s stupid decisions due to inbred management who don’t listen to their customers or to the market are getting what they long deserve.

  • avatar
    Ed S.

    Detroit is not the problem!

    I think the problem demonstrated throug a lack of external hiring. And this is indicative of a larger corporate culture that does not breed new ideas by severely punishing failures and artificially proping-up bad business men (read: nepotism). Detroit, the city, has NOTHING to do with it. Trust me when I say that executives that make $X00,000/year are going to live in a big house, in a nice community, and probably belong to a country club. This happens in NY City, LA, Miami, Indianapolis, and even Nashville, TN!

    The solution is not to move away from Detroit, rather to change the corporate culture. How? I don’t have that answer. But I figure a good way to start would be to reduce the layers of management to something that makes individuals more accountable for their actions and the overall company performance. How do you motivate such a change? The Board of Directors cans the CEO and brings in a change specialist, a la Ford, Delphi, Nissan…

  • avatar
    Jordan Tenenbaum

    1984, While Yuki Funo is still the CEO of Toyota, this past year they brought on the first American, Jim Press, as the President of the company.

  • avatar
    Kevin

    Couldn’t agree more. My dream is to see a new-new American car company, founded far away from Michigan. A real new company — not, uh, Saturn. Needless to say, non-union.

    I’m in Detroit for the week, renting a Chevy Malibu. Guess what, this nearly brand new car has a very ill-fitting hatch with mile wide gaps. I keep getting a chronic “Gate Ajar” warning. Why? And what the hell is a “Gate”?? Since when does anyone use that word? Why is that the warning message I get? My colleague and I actually had to waste time debating what a gate is in order to know what to pop open and reclose. Dear Detroit, this only strengthens my perceptions of you.

  • avatar
    guyincognito

    Detroit is not only the problem in terms of upper exec insularity, although I’m dubious of the idea that changing locations would change that, but it is a problem in terms of attracting a diverse pool of skilled employees. Don’t get me wrong, I wish the best for the city and it has its bright spots, but the safety issues that garner national attention and the general negative perception most people who have not visited harbor serve to repel prospective employees from outside the state.

  • avatar

    Sadly, the myopia isn’t limited to the Detroitians.

    People will ignore that brands like Mercury and Buick have consistently spent large amounts of time towards the top of JD Powers polls, and Cadillac and Lincoln also hover up there.

    While Lexus and Jag have been fighting over the top spot for years, these domestic brands keep bubbling up around-and sometimes above-Honda and Toyota.

    Rodney Dangerfield got more respect than the domestics have gotten from the press for some time now…and a couple brave scribes have actually admitted that very thing. I’ll be the first to say I’d love to see horrible fates befall Roger Smith and Jac Nasser (Trotman escaped the list by being dead already) for blowing many calls in the 90’s…but I’d love to see as many stories showing the progress since then as I saw gloom-and-doom articles.

    God forbid, y’know, fairness in the auto media.

  • avatar
    kaisen

    Why do the import-buyers keep judging apparent US Automaker’s quality by the RENTAL CARS they pick up at the Airport?

    Kevin, could it be that your Malibu was hit in the rear and quickly repaired as to keep it generating revenue?

  • avatar
    geeber

    Wasn’t the term “Grosse Pointe Myopia” originally coined by Brock Yates in a 1968 Car & Driver article that made many of these same points?

  • avatar
    mikey

    1984 and ED.s have said it all.I live in Canadas version of Detroit.only a lot smaller, Oshawa ont.we got it all crack adicts hookers crime the whole package.I think its true of any industrial city anywhere.
    We also got highly paid GM exutives that live in the best parts of town,but it is still Oshawa.
    The writer Andrew D. does make some good points.
    From my view at the bottom of the food chain at GM
    There is nothing more entertaining than a visit from one of the royality coming up from Detroit.
    A private jet lands at oshawa airport,a hand washed and vacumed herd of Denalis and yukons pick them ,and thier entorage up and whisk them by the urban decay of oshawa
    to the plant.
    They are walked through a pre selected guided tour by the gushing plant manager and his hand picked a– kissers
    Back in the 70s some of them would stop and talk to the guys on the floor you know,the bad old days 50%market share.Things are different now they don,t even aknowledge
    that we are alive.I guess they are proud of thier acomplishments 22% market share and all.
    And the end of the day[ 5hrs ] they are wined and dined and back to the Motor City,for cocktails at 5 o,clock.
    All this from a company thats bleeding red ink?

  • avatar
    Sid Vicious

    I am currently in S. Carolina on (Automotive) business. You wouldn’t believe the number of Michiganders down here looking for a house.

    The industry (as well as others) are sliding south. Detroit’s death will be complete soon.

    One day who ever is left will wake up and finally realize what an ugly strip mall hell they live in (ragardless of the suburb.) I have never been to a less appealing metro area in my life (meaning metro Detroit.) There is very little to recommend it. Problem is the people who grew up there think it’s the greatest place on the planet. Beauty is in the eye of the beholder. Still – this explains a lot of the inreeding and nepotism in the US industry.

    US auto execs still do really believe that everyone wants to buy their stuff. The reason (excuses) tossed out as to why they they don’t are: a biased media, biased quality studies, the price of gas, and on and on.

    Pathetic.

  • avatar

    Y’know what the weakest possible point is? Stating what someone else thinks, particularly people one has never met.

    Just sayin’.

  • avatar

    We’ve met these people, and they ain’t us.

  • avatar
    craigefa

    Sadly, this myopia is found all over Michigan. This past summer I returned my leased TrailBlazer to the mega dealership in Saginaw where I got it. The salesperson that was completing the paperwork for me asked if I had found another car. I said I had already made a deal on an Odyssey. She said, “Oh yeah, who makes that?” A couple of weeks later I counted 3 brand new Odysseys in one row of parking at the grocery store next to the dealership.

  • avatar
    1984

    Who is/are “us” Robert and what are “they”?

    The rich? Yeah, how is that different from anywhere else?

    Why do we need an article stating it’s us-against-them? The last time I checked California and Michigan are in the same country. Should we talk about the difference between Hollywood and East Hollywood? Is it all Hollywood’s fault for jamming American Idle in my face? They assume that drivel is what I want?! I need that like you need a Jeep Compass!

  • avatar
    Jordan Tenenbaum

    A new American car company… I like that. I doubt it will ever happen, just look at what happened to Tucker, or DeLorean.

  • avatar
    Joe Chiaramonte

    Mikey, you’ve said it all, appropriately from the inside:

    Back in the 70s some of them would stop and talk to the guys on the floor you know,the bad old days 50%market share.Things are different now they don,t even aknowledge that we are alive.

    They…simply…don’t…want…to hear it. These days, the insularity has gone beyond the blinders which allowed Japan and Europe to blindside them. They now cover their ears as well, so as not to hear the shouts from the salt mines.

    This is also why they only set up design centers and marketing centers in locations outside Detroit. God forbid the decision-makers actually had to watch the tuner cars rolling down Los Angeles boulevards or the Prii congesting diamond lanes. Maybe they’d grab a clue about emerging markets and consumer buying trends before they – once again – were forced to play catch-up.

  • avatar
    tms1999

    I agree with all the defenders of Detroit. The article is all wrong. There’s absolutely nothing wrong with the big3 cultures or their management.

    Case in point, the current apparent slow down of sales will be taken care of if you wait long enough for the next big thing it will sell like hot cakes.

    The imports are indeed a fad and it will extinct on its own. Suddenly everyone will realize that the 10 or so foreign (japanese, korean, usw) brands are just crap and they will come back in the bosom or american car manufacturers.

    And when I say everyone, I mean Californians especially. They are not that american in the first place.

    The perception problem is with the people, not with the manufacturers.

    Step 1: build more cars than will sell, sell cars at a loss with extra incentive and 0% apr.
    Step 2: …
    Step 3: profit

  • avatar

    1984: I was responding to Zanary's comment: Y’know what the weakest possible point is? Stating what someone else thinks, particularly people one has never met. My comment was an assertion that I've met enough top level Detroit execs, and been to your fair city enough times, to generalize about their world view. The "it ain't us" remark means that these execs' myopia sets them apart from the type of people who comment on this site (including yourself): open-minded, passionate pistonheads with a reasonably accurate picture of the multi-faceted ground level skirmishing that typifies today's domestic car market. In short, I wasn't setting-up a Detroit vs. California grudge match. That said, if most of America's automotive trends take root in California, as a carmaker, where do you think you should set-up base camp?  BTW: One of our posters has agreed to pen a pro-domestic editorial, saying how far Detroit-based automakers have com in their thinking.

  • avatar
    Jordan Tenenbaum

    tms1999:

    How long is this foreign car fad going to last? We’re getting close to what, 40 years? While you’re at it, what’s your definition of an American, and more specifically, how are Californians not as American as the rest of us?

    If you honestly believe anything you wrote, I think Ford is looking for a guy like you. Call them up.

  • avatar
    Slow_Joe_Crow

    The article is right, the Detroit automakers are blinded by the bubble they live in. The execs need to be out in the world where they can see the competition all over the streets.
    DCX should move its executives to Freightliner’s site in Portland, so they can look out the window and see the ships unloading Toyotas next door. For that matter, Ford and GM can build offices on Marine Drive, across the street from Honda and Hyundai’s docks.
    If they see the reality of Asian imports streaming into the country every day they may finally get a clue and build cars worth buying.

  • avatar
    tms1999

    I’m sorry Jordan, sometimes my natural sarcasm does not transpire well in my writing. And when I say sarcasm, I really mean cynicism.

    I do not believe anything that was written in that comment. I was reacting to the crowd vehemently defending the Detroit point of view.

    And I have nothing against Californians.

    Personnally, I feel sorry for the american car industry, because in the end we all lose. I sure wish they would be striving and sell good products and be profitable. Unfortunately, they are getting their butt kicked.

    The first step is actually to realize you have a problem. Then you can start correct. However, the current problems (and especially GM’s) is 20+ years in the making and it’s not clear that they realized they need to address it with other thing that “more of the same”.

    I wish my next car would be American, I don’t know if my current (american, GM actually) will last long enough to see a product I am confident to buy.

  • avatar
    Jordan Tenenbaum

    My apologies too, after I typed that I said to myself, “I bet he was just being über sarcastic.”

    I agree with you though. I want the domestic automakers to succeed; in fact, I think we all do, deep down. I think the automakers are finally coming to terms with the fact that they have a problem. Unfortunately with all the committees and bean counters, this realization took about 15 years to set in. So now it’s going to take another 10 before we really notice a change. We may even lose one along the way, which I hope doesnt happen.

  • avatar
    chaz_233

    Man o’ man. The Big 3 can’t do anything right. Even being headquarted in Detroit gets them critizism. This article is as myopic as what it is arguing against. The problem it claims to report is an American issue. You find that everywhere because American is such a darn big country. You think that living in LA or in NYC makes people less myopic? On the contrary. You won’t find people more parochial than Southern Californians. They are no more cosmopolitan than the folks from Michigan just because the majority of people there are from Mexico and Asia and refuse to buy American cars. Andy, you need to confront and resolve your ethnophobia and xenophilia.

  • avatar

    I think you’re missing Mr. Dederer’s point: there is too great concentration of auto execs in one place.

    If The Big Two Point Five all moved to LA, the same problem of insularity and myopia would simply be transplanted.

    As a journalist who worked in Manhattan, then moved to Atlanta, I can tell you from personal experience that geography influences culture that influences corporate culture.

    Would Starbucks be Starbucks if it wasn’t HQ’ed in Seattle? Would GM be a different company if it was on its own in, say, North Carolina?

    It’s worthy of serious consideration, ’cause you gotta admit: these companies have lost touch with many (if not most) American consumers. Not to mention reality.

  • avatar
    naif

    Excellent, Andrew.

  • avatar
    Joe Chiaramonte

    Another case in point I just remembered:

    In the late 1990’s I was invited to the grand opening of a Mercedes-Benz Technology Development Center they plunked right in Palo Alto, the heart of Silicon Valley. Its intent was to draw upon the newest emergent technology that was even remotely applicable to automobiles – to be there when the seed sprouted. MB sent young but experienced auto techs from Germany to staff it. It may still be active.

    The big 2.5 have some car dealerships in Silicon Valley (a few have recently closed). That’s about it.

  • avatar
    geeber

    I don’t doubt that location can influence corporate culture.

    But I wonder if the disconnect between the Big 2.5 and their customers has less to do with being based in Detroit than it does with a much wider – and more serious – problem that afflicts many large American corporations.

    Namely, top management has little or no knowledge – or respect – for the people actually making, selling and buying the product, because they never worked their way up through the ranks.

    Mikey hit upon this in one of his posts when he described the visits by top GM brass to one of the plants.

    Today very few top managers really started “in the trenches.” Most came out of college with an bachelor’s degree or MBA, and then were rotated through a series of white-collar management positions that gave them a flavor of corporate culture, but very little actual knowledge of the nuts-and-bolts of the product being sold.

    These managers were very good at implementing jazzy new marketing or product plans…and support for them tended to evaporate when they were promoted to their next position. Their successor had no interest in the success or failure of a plan that he or she really had no input in planning. Hence, constant change with little or no progress – and no real improvement in the final product. (Witness the constant product-planning turmoil at Ford over the past few years.)

    This isn’t limited to the American automobile industry. I witnessed the same phenomenon when I worked at a Fortune 500 telecommunications company that was NOT based in Detroit.

  • avatar

    The first time I visited Detroit (and it’s surrounding burbs) was two years ago. My immediate thought was “I understand now why American cars look and drive the way they do!”

  • avatar
    dolo54

    I’ve been to Detroit. Picture a city as bad as it gets. Then multiply times 10. That’s Detroit. And, although I did have a great time there, I wouldn’t recommend it to the faint of heart. That being said, I think these guys’ glass bubbles would follow them wherever they went.

  • avatar
    dolo54

    Detroit is the only place I’ve ever seen where a residential house had plate steel fences topped with razor wire. That’s right, plate steel.

  • avatar
    Joe Chiaramonte

    Wow – DCX still maintains the RTNA facility:

    http://www.daimlerchrysler.com/dccom/0-5-7182-1-558633-1-0-0-0-0-0-8668-0-0-0-0-0-0-0-0.html

    So, I guess there is at least a Chrysler presence there, by marriage.

  • avatar
    jmilanese

    Twenty some years ago I had a father-in-law who ran Chevy stores in Michigan and Indiana. In his view, foreign cars were cheap and unsafe. When I mentioned Mercedes, he actually said that, if you spent as much money maintaining a Vega as you did a Benz, it would hold up just as well. He didn’t get the quality thing. Of course he never drove anything but a demo with a few thousand miles on the clock and the roads in the flatlands of Indiana wouldn’t challenge the suspension of a milk truck. He really surprised me when we ran an errand in my Honda Accord. He closed the door and allowed as how the car was pretty well screwed together. Really.
    These Grosse Point myopics should read “Honda: An American Success Story” by Robert Shook. Then maybe they could figure out why a small manufacturer like Honda can turn out hit after hit in the most competetive segments of the market. Could it be that evryone that works at Honda must spend at least some time doing every job at Honda? Or that they focus on making the best product they can and not the cheapest to manufacture parts bin special?
    Once, on a business trip, I got talking in the hotel bar to a guy who worked for Cadillac. I asked him if he thought Cadillac would ever return to being a luxury brand. He was insulted. I suppose if he’d spent any time in Greenwich or New Canaan or Darien, not too different than Grosse Point, he’d notice that the garages were filled with Mercedes and BMW and Audi and Lexus.
    There’s an idea. Field trips to Marysville and Greenwich for the motown execs. Nah.

  • avatar
    keepaustinweird

    Every time a ship pulls into port loaded with foreign cars, the domestic auto industry should look at it as a failure. Failure to produce domestically what American auto buyers actually want to buy.

    The fact that we are capable in this country of producing the best the human imagination has to offer – but don’t – should be unnaceptable.

    And the sense I get is that the myopia includes some deluded sense of entitlement within the big 2.5 that we, as Americans, should be expected to buy American. That’s all well and good, but have enough respect for our sensibilities – and hard earned money – to innovate, build and present to us cars that we actually want to buy.

  • avatar
    kablamo

    tms1999… hahahahaha… you’ve got me rolling on the ground.

    Detroit execs really *are* like underwear gnomes!

    Step 1: Build cars
    Step 2: ????
    Step 3: Profit!

    I think the article is bang on: Silicon Valley geeks made the same mistake in 1999 – it’s well known group-think. The way I see it, Detroit still doesn’t make any products that really interest me (and, to be honest, even Toyota and Nissan make very few as well). Not even the C6 vette (give me for the same amount in used Porsche), not even the trunkless-overweight Solstice/Sky.

    What’s just been said of the auto biz can said of many industries too, but the urgency here is almost unparalleled.

  • avatar
    BTEFan

    This is a great discussion. And this has been Detroit’s achilles heal for ages. Brock Yates wrote a book called ‘The Decline of the American Auto Industry’ in 1982 and he discussed at great length the insulated world of the Detroit Exec. They were all middle aged white men who drove their Electras and New Yorkers and Continentals (of which they got a new one evry 3 months) from Bloomfield Hills to their executive offices where they figured out how to steal sales from one another. Every 6 months or so, someone would go out to California to see what was happening in Hippie-land. It was their one chance to wear golf shirts with their dresspants and loafers (how exciting is THAT).
    I liken Detroit to capitalism’s version of Pyongyang – they have no idea what its like in the real world – they only know their own propaganda.

  • avatar
    Dave M.

    I think it was DeLorenzo over at Autoextremist who related a story about an associate flying into Detroit from the west coast and asking why all the cars headlights were on. Only then did they realize the high density of GM products with their DRLs around, quite the polar opposite of his experience back on the west coast.

    Here in Houston, with the exception of work trucks and Tahoe/Suburbans/Expeditions, car-wise the 2.5 are hosed.

    Perhaps its cyclical. Perhaps just incompetence. Regardless, its very obviously the end of an era.

  • avatar
    tech98

    Wasn’t the term “Grosse Pointe Myopia” originally coined by Brock Yates in a 1968 Car & Driver article that made many of these same points?

    I first saw it in Yates’ book ‘The Decline and Fall of the American Auto Industry’ in 1983.
    If you read that, you’ll depressingly realize that Detroit has learned nothing in the last two decades.

  • avatar
    BeenThere

    This is a very accurate article, I have worked in the Detroit GM HQ building in middle management, although it was nice to get a new car every 3 months, Detroit GM management are unbelievably insulated and naive about how badly their company is doing, some of this is ignornance because they have not worked anywhere else, some of it is arrogance because they managed to pull out of a tailspin in the early 1990 s. The company (GM) and downtown core in Detroit is tanking, this is fact, you just need to walk around the HQ building and empty retail space inside and out to confirm this.

  • avatar
    pwr

    Yeah, I think you've been reading Yates too. This isn't exactly a new idea. The scary thing is, it's still relevant TWENTY-FIVE YEARS after Yates published _Decline and Fall of the American Automobile Industry_. Modern day Borgias; they forget nothing and learn nothing. Let me update you, though–most of the auto execs moved out of GP after the riots, during Coleman Young's 20 year long administration, to Birmingham and Bloomfield Hills. GP is like the Green Zone in Baghdad–you have to go through some scary stuff to get there, and once you're there you still don't feel really safe. Folks who posted above who can't believe this, just haven't been there. At least Bloomfield Hills has Birmingham, Royal Oak and Ferndale for a buffer. I've lived in a lot of places, southeastern Michigan most recently. It is truly insular. And by what you see on the roads here, you would think that the US industry is doing great. I pass a solid stream of new Fusions on the way to work. Went to St. Louis a few weeks ago–didn't see three Fusions the whole time I was out of MI.

  • avatar
    anahit

    For those feeling a need to defend Detroit, this isn’t really about Detroit.

    I read the piece as about insularity, complacency and lack of view. It doesn’t matter that it involved the city of Detroit. It could’ve been anywhere–the only difference would’ve been how exactly that area’s culture translated into insular non-competitiveness.

    While insularity can happen anywhere, Detroit certainly facilitates it. Executives from all industries live in certain areas. Whites and blacks live in certain areas. Detroit doesn’t draw talent on its own. Next to nobody says, “I really want to live in Detroit! I just need a job that takes me there.” Instead, jobs force people to move to Detroit.

    Detroit’s even geographically isolated. Folks traveling from state to state has no reason to drive through Detroit or any of Michigan. Detroit gets very few tourists outside those on layovers from Northwest Airlines. Heck, even the airport is long way from Detroit.

    A constricted world view can, and does, happen everywhere. Detroit just makes it easy.

  • avatar
    Steven T.

    This is a great discussion. I’m glad to see Yates get his due, because I recall him being kicked around the parking lot for such an honest critique of Detroit . . . and, not-so-coincidentally, losing much of his journalistic bite. (Back then there was no Internet to take refuge in.)

    I would argue that Detroit HAS learned a few new tricks in the last 20-25 years. Look, for example, at Ford, which today is much more international in many facets of its operations (e.g., most of its car platforms come from abroad, as do more than a few of its executives).

    The problem seems to be that Detroit hasn’t adapted quickly enough to the sea changes sweeping American society. Each of the 2.5 has somewhat different dynamics. GM’s insularity is very much anchored in its historic domination of the industry, whereas Ford’s tends to revolve more around the politics of being a family controlled company. In contrast, Chrysler’s insularity seems more rooted in an inferiority complex of being an often-sickly No. 3.

    It’s difficult to talk about this stuff without lapsing into unsatisfying generalities. But one thing I most liked about Yates’ critique was his description of the social conformity of Detroit’s executive class — these white guys (women and minorities need not apply) pretty much spent their entire existence hanging out with the same folks on and off the job.

    Someone needs to do an update of “The Decline and Fall.”

  • avatar
    Jonny Lieberman

    In a past life, I worked as a computer consultant in GM’s Legal Department.

    We were installing new docket management software. Part of our task was to reduce the insane number of weekly reports that the lawyers cranked out. The number was over 500. A week.

    We would go to a paralegal and say, “What is this report for?” She would say, “I don’t know. I have to print it out every week and get so and so to sign it.”

    Then we would approach the lawyer. “What is the purpose of this report?” He would say, “I don’t know. She just puts it on my desk every week and I sign it.”

    We eliminated over 300 weekly reports.

    I remember my project manager freaking out at lunch one day because the consulting firm (Deloitte & Touche I believe… maybe Aurthor Anderson) had figured out that there were a number of employees that had been working in the legal department for more than 30-years and who had no job whatsoever. They didn’t do anything. They showed up, hid in an office and collected a check.

    My project manager was a very good natured man and he was upset that he had (was being forced to) recommend so many layoffs.

    I happened to be there when the infamous $4.8 billion verdict was handed down against GM for defective gas tanks. Most of it was punative damages. They didn’t even react. The whole department immediately went into appeals mode. Total and complete business as usual.

    Worst of all, I was tasked with personally tutoring the chief attorney on the new software. He didn’t know how to use a computer. However, that was fairly typical of 60+ year old lawyers in the late 90s. I was used to that.

    However, this man was a walking god to them. I had five people “assist” me when I was instructing him. The only parallel I can think of is a friend of mine who while living in Japan decided to take a trip to North Korea. He explained how they had a single tour guide plus four agents who monitored the guide’s every word and gesture.

    It was insane.

    Luckily, the head counsel — who was a very nice and intelligent man — booted everyone from his office after an hour of me getting interupted and occasionally pulled outside and told not to say anything negative about the product.

    This was just one 500-person department. I can’t even imagine how the top brass operates.

    Myopic is putting it very kindly.

  • avatar
    ttilley

    anahit wrote, of Detroit:

    “Executives from all industries live in certain areas.”

    Is it still the case that Ford executives live in the Grosse
    Pointes and GM executives live in Birmingham and Bloomfield
    Hills? This is what I remember from the early 1980s and
    it seems beyond belief even now.

  • avatar
    BTEFan

    Does anyone remember what happened to Volkswagen when they moved their HQ from New Jersey to the Detroit area. I can’t remember where. I think the move coincided with ‘Chevrolet-ization’ of the Rabbit and Jetta and Dasher products. Softer suspension, tacky velour, wood and chrome. I wonder if the folks at Volks were ‘inspired’ or jealous of their fellow Detroit- suburban dwelling executives.
    It will be interesting to see how Nissan’s move from California to Tennessee will affect the corporate culture and the vehicles they produce. Will they turn into Saturns? Who knows?

  • avatar
    Ar-Pharazon

    While this is a good article and a good theory on paper, I’m just not sure that I really buy it . . . not to deny the problems, but rather to dispute your explanation of the cause.

    In my experience at Ford, a LOT of the high level execs either come from overseas or spend a significant amount of time there . . . for a long time the top of the house has had a significant British flair to it. It’s nearly impossible to get near the top without time at Mazda or in Europe or South America unless you’re a woman or a minority. Of course Alan Mulally is still out west (for now), and I *believe* that Mark Fields still commutes weekly from New York. It’s really a bit unfair to drag out the ‘old white males’ saw, as well . . . while the absolute top may fall in that category, please don’t neglect the others that don’t. The lately departed Anne Stevens, head of marketing and sales Cisco Codina, heck even Jaques Nassar hardly fit into your characterization. And there are plenty of others slightly lower on the food chain (lower level VPs and Directors) who are not generic white males.

    As I said, I’m not necessarily disputing the problems, but think you may be stretching to make a point wrt your causes. Frankly, it almost sounds like a case of ‘if only they lived in California’ more than anything . . .

  • avatar
    rox

    Mr. Dederer,

    Thank you for writing such a creative and informative article. You have certainly done well fostering a lively discussion; however, it makes me sad to see that many of my fellow TTAC members are missing the point of your editorial.

    I agree with most (but not all) of your observations and feel that your suggestion for the big 2.5 to move their HQ’s to three opposite locations is a sensible/creative one (although maybe not new – according to readers of Yates). However, it is in my opinion that such a move (at this time) could prove meaningless since much damage has been done (financially & spiritually). Not to mention it would be a logistics nightmare for each company to deal with.

    Do you think it would be more advantageous for them to “wait out the storm” before planning a move or would doing it now position them for a strong positive resurgence?

    If I were to pick where they should move, here would be my picks:

    GM’s Exec. & Admin. HQ => North Pole
    (since they think they’re on top of the world anyways)

    Ford’s Exec. & Admin. HQ => Detroit, MI
    (no reason to move a company with no vision, like a blind man… just walk him in a circle and tell him he’s somewhere new)

    Chrysler’s Exec. & Admin. HQ => Stuttgart, Baden-Württemberg (Deutschland)
    (to be with it’s fräulein)

    To my fellow TTAC peers… does anyone know if it would be more appropriate for me to laugh or cry if the position of CEO (from one of the big 2.5) was outsourced to say… India?

    -Go Minnesota Wild!

  • avatar
    chaz_233

    Ok, so if the Big 3 moved one to NY, the other to LA, the other to Miami or Seattle, then what? They would be more in touch with American consumers? Why? And meaning what? They would build the cars that “Americans” want? As if non-coastal regions are less American or didn’t know what kind of cars they want. Not to mention that the idea that Americans know exactly what they want and producers have to strive to discover that and make it negates the principles of innovation, where you produce something new, and the principles of marketing, according to which you can manipulate/influence anyone to buy anything.
    The media, including TTAC, is too self-absorbed, thinking that only the happenin’ places are the ones that count, where the sexy rich people live and where wealth is concentrated. The rest of unsexy America doesn’t count. Reminds me of atheistic communists (aka liberals) who can’t put their minds around the fact that red states exist.
    That the Big 3 are concentrated around Detroit isn’t all that weird either. How about Silicon Valley? Or the airline industry (RIP all non-Boeing) located on the west coast? Funny thing is that if they were to vacate Detroit, guess who would move in? Yup, even as a symbolic move Toyoduh would move a phantom headquarters there to claim ‘mission accomplished’.

  • avatar
    Jonny Lieberman

    Chaz_233,

    Aside from casting aspersions all over the joint, you are missing the point of the article.

    America is now 300,000,000 people strong.

    Having the seat of all Domestic Automotive production be centered fortress-style in one city has and is proving disterous.

    I think Ford should stay in Dearborn, but send Mercury to Chicago and Lincoln to New York. Or anywhere. GM is in an even better position. Old folks like Buicks — move to Palm Beach. “Red-staters” (whatever the hell that means) like pick up trucks — GMC to Dallas, post haste! LA is full of poseurs who only care about status and wealth — hello Cadillac!

    etc.

    Seperate them. Diversify. Do something!

  • avatar
    geeber

    tech98: I first saw it in Yates’ book ‘The Decline and Fall of the American Auto Industry’ in 1983.
    If you read that, you’ll depressingly realize that Detroit has learned nothing in the last two decades.

    I have that book…as I recall, Mr. Yates said that he originally coined the term in an article for Car & Driver.

    It’s an interesting read.

    Another interesting book is Make ‘Em Shout Hooray!” by the late Richard Stout, who worked at Packard and then Lincoln-Mercury in the 1950s. It’s a fascinating insider account of how the beancounter mindset – best symbolized by former Ford head Robert McNamara – gradually took over Ford, and then GM.

  • avatar
    tech98

    At the moment I’m reading On a Clear Day You Can See General Motors about DeLorean’s career at GM, which deals with much the same mindset — the parochial insularity of the culture, executives acting like spoilt third-world potentates demanding fawning entourages, promotions based on butt-kissing skills. You wonder how GM are still in business at all. A good read.

    LA is full of poseurs who only care about status and wealth — hello Cadillac!

    Very few Angelenos under the age of 70 would be seen in a Cadillac, except perhaps a pimped-out Escalade with spinners. Palm Springs or Phoenix is more their customer base.

  • avatar
    geeber

    tech98, I saw the DeLorean book for sale at a Carlisle show a year ago…I could kick myself for not buying it then!

  • avatar
    ZoomZoom

    Excellent article! I enjoyed reading the responses. I have family in the Detroit suburbs, one of whom works as a mid-level manager for some department for Ford or Ford Credit, or something.

    Talk about an insular environment! He’s convinced that the automotive press has it in for Detroit, yet he thinks that’s what everybody drives. Well yeah, just take a ride on Woodward or Hines Drive, and you’d think all of America is driving Ford and GM products.

    He never sees the competition at home, so he’s not convinced that there’s a problem. Hence, he won’t even discuss other cars. It’s almost to the point of being “stuck on stupid.”

    I’ve given up trying.

    tech98 wrote: “Very few Angelenos under the age of 70 would be seen in a Cadillac, except perhaps a pimped-out Escalade with spinners. Palm Springs or Phoenix is more their customer base. “

    Spinners. Ug! A couple years ago, I saw a TV commercial about “Class vs. No Class”. Spinners were in the “No Class” category, along with those 3-foot-tall deck spoilers on front-wheel-drive cars.

    I saw a car just recently where one of it’s spinners was malfunctioning. As the car moved, the spinner appeared to remain “stationary,” making the car look like a busted “Hot Wheels” car where one wheel axle is bent and no longer works. Sad, sad, sad. And oh-so-“No Class.”

  • avatar
    Ar-Pharazon

    Zoomzoom,

    Oddly enough, there is plenty of apparently biased reporting against the domestics in the Detroit press. I never quite understood it, but they seem to take great pride in printing every negative story they can, regardless of the underlying truth. Go figure.

    Regarding your ‘middle management’ family member. The guy sounds clueless. I wouldn’t blame that on an ‘insular environment’, unless he’s personally responsible for making his own environment insular. I can’t really speak for what goes on at the VP level, but down ‘in the trenches’, anybody I’ve met with a lick of sense knows exactly what the score is. Believe me, driving on Woodward or Hines Drive you’ll see plenty of non-domestic vehicles considering the fact that the domestics are all headquartered here. Not to wish him ill personally, but I really hope that he and anybody else like him will be the ones gone come February, because we need to cut the clueless out of the organization if we expect to survive and thrive.

  • avatar
    BTEFan

    I do think the domestic car magazines do have a bit of a bias against the domestic manufacturers. Its possible that they KNOW that the domestics CAN make better products, its just the bean counters say no. Remember the Olds Intrigue? They LOVED that car – of course, in classic GM fashion, they killed it when it got good.

    The domestics have an interesting relationship with the press and auto media. 5 years ago, I used to work at a Pontiac Buick Dealership in suburban Vancouver BC as a stock controller. Part of my duties included managing the GM of Canada Western Zone Media fleet, where I would handle the bookings of press vehicles with the different local media folks. It was a fun job – got to meet the press, do the walk around with them, get to personally drive them to make sure nothing was amiss etc. Anyways, some GM ‘process analysts’ came out to the Zone office and were reviewing the policies and processes of the press loaner program. It was interesting sitting in this meeting, with the folks from Oshawa (Canada’s Detroit), the local zone managers and my counterpart from another dealership that handled Chevrolet Oldsmobile. We got to sit in on a meeting where the GM folks discussed things like who fills the gas in the press car, why we charge them for washes when the cars are supposed to come back washed and vacuumed, how a GM person cannot borrow a GM car if he/she/it has a company car already etc etc. Aside from being a waste of time, it struck me at how ‘THEM vs US’ the management were with respect to the auto media. They were convinced they were out for ‘a free ride’ and that they were using GM for cars, and not writing glowing reports. I actually heard one of them say ‘ I would love to nail these media a$$holes with a few bills for a few car wash and gas bills’. It was unbelievable how they would be so petty on these little things. If they said ‘don’t worry about it’ and let it slide and were generous and showed a bit of customer service to the media folks, they might have got more positive reviews, and more sales.

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