Grosse Pointe Myopia
For 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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