Detroit Death Watch – The Prequel (Part 3)
The Big Three entered the 1980’s in typical Three Stooges fashion. GM (Moe) knocked the other two automakers’ heads together, and then gloated over the market share he’d stolen– oblivious to the imports stealing it right back from under his nose. Mild-mannered Larry (Ford) scratched his professorial pate, and cooked up a brilliant scheme to avoid getting hit in the coming (import) brawl. And buffoon Curley (Chrysler) lay on the floor, doing his dry-swimming antics in a desperate attempt to draw attention to his only product: K cars.
GM’s ability to outspend Ford and Chrysler in the first round of seventies-era downsizing paid off, Big Style. In 1978, GM enjoyed a 48% share of the domestic market. During the eighties, Uber-Moe Roger Smith (of Roger and Me fame) staged one of the greatest tragi-comedy acts in industrial history. By 1989, GM’s market share fell to 35%.
GM’s efforts to re-invent their compact cars crashed. Literally. The company claimed their 1980 front wheel-drive X-Bodies (Citation, Phoenix, Omega and Skylark) offered “BMW-like performance and handling.” Note the omission of “braking.” Bereft of a $14 weight-sensing proportioning valve on the rear brakes, X-Bodies were known for their tell-tale kamikaze rear-tire screech– and the subsequent crunch as they found their next victim. Smart buyers/drivers gave them a wide berth.
Two years later, GM introduced their J-car sub-compacts (Cavalier and clones). Chevrolet General Manager Robert Lund announced their arrival with characteristic pugnacity. “We’re tired of hearing how the domestic auto industry let the Japanese take the subcompact business away from us. The whole Chevrolet organization is spoiling for a fight.”
Yes, well, the Cavalier’s design wasn’t particularly hot or competitive; pitting it against the increasingly sophisticated imports was like bringing a rubber band to a knife fight. Keeping it essentially unchanged for 23 years was like watching that same fight on an endless loop.
Mid-decade, GM embarked on an unprecedented act of auto self-mutilation. In the first bloody stroke, the Cadillac DeVille, Buick Electra and Oldsmobile 98– The General’s grandest luxury sedans– were reduced to Camry size, and fitted with front wheel-drive, 125 hp, 14” tires and tinny fake-wire hubcaps.
The Seville, Eldorado, Toronado and Riviera were next. GM reduced them to puny “eunuch-mobiles” (Oxenado?). The $27k Eldorado was now virtually undistinguishable from a $9k Buick Somerset compact, in both styling and size. Build and interior quality were equally miserable. The Cavalier-based Cimarron, Skyhawk and Firenza destroyed any remaining premium value of the once proud Cadillac, Buick and Oldsmobile divisions. Enter Lexus, BMW, Mercedes and Infiniti.
During the eighties, Ford was Camelot. CEO Donald E. Peterson was a smart, modest and plainspoken “car guy”. He motivated the Ford troops like no one since, instructing his minions to focus their efforts on higher quality, smaller, more efficient cars.
Peterson gambled the precariously-weak Ford farm on the pioneering aero-look ’83 T-Bird and ’86 Taurus. The T-Bird soared again and the Taurus went to the top of the charts– to become the bulls-eye for the Japanese darts Camry and Accord.
Ford also introduced a dumbed down version of their first “global-car” (the diminutive Escort) and the Tempo. While both models were forgettable, they sold well enough.
When Peterson left Ford in 1990, Ford’s Big Boss expressed grave concerns about the future of the U.S. auto industry. A reporter wrote “The word survival came up a lot [in our discussion]. It’s no joke to ask how much of our home-grown auto industry will exist in a generation from now.”
Peterson’s successors dropped the ball. By 1992, Ford’s lackluster line-up led the company into a $7.39b loss and a potential Chapter 11.
The 1979 government bail-out left Chrysler a shell of its former self. Development budgets evaporated. The K-car, Omni-Horizon, and the ancient hold-over RWD Diplomat (nee Volare) were the only toys in Lee Iacocca’s box. The seemingly endless stream of photo-chopped variants gave testimony to his fertile but tasteless imagination.
Fortunately for Chrysler, its “K-car in a box” (a.k.a. the Caravan/Voyager mini-vans) were an instant hit. In 1987, Iacocca went two-for-two, spending a measly $1.1b to buy AMC/Jeep.
And yet, by the end of the decade, the import brands were devouring The Big Three’s passenger-car lunch. The Three Stooges didn’t really care. By that time, the domestic market had become SUV and truck mad; the profits were phenomenal.
Once again, Detroit thought themselves triumphant. They failed to realize that they’d been lucky; cheap gas and the marketplace had evolved in their favor, rather than the other way around. When safety, rising gas prices and environmentalism eventually convinced American buyers to abandon the SUV genre for smaller, more efficient alternatives, Detroit suddenly found itself at an evolutionary dead end.
GM, Ford and DaimlerChrysler are now looking abroad, trying to marshal their global resources to develop passenger car salvation to their union-influenced domestic woes. Live or die, the past has finally caught up with Detroit.
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- Theflyersfan Nope. Has nothing to do with Gladiator sales falling off of a cliff and having 5-figure discounts. Or...YTD 2023 compared to last year:Compass +7%Wrangler -14%Gladiator -31%Cherokee -25%Grand Cherokee +6%Renegade -35%Wagoneer -31%Grand Wagoneer: -14%End of 3Q 2023: 490,106 Jeeps soldEnd of 3Q 2022: 541,297 Jeeps sold490K is still a decent number of expensive SUVs sold, especially Grand Cherokees, but it's still a decline. And people want the 4xe models, so that could reverse the trend if they crank more of them out. But let's blame the government for everything. It'll lead a news cycle on any red hat network.
- VoGhost California is the reason Dodge and Chrysler were starved of new models for the past decade. OK...
- Random1 I don't know what the "right" price for transit/tolls/driving should be. I'm currently a commuter from Westchester, and it is cheaper for me to commute by car on days my wife is working (she's part-time so 2x/week, I'm 5x/week). Those costs, if you care, are $18/park and a somewhat optional $6.94 toll (pay or spend about 10min to take a free bridge) vs 23.50 round-trip each on Metro-North. That's absurd, either a)transit is too expensive(and we don't need to add subway/bus like many do) or b)driving/parking is too cheap, or c) bothFWIW, the congestion charge means I'll more or less never drive in again, so I guess it'll work?
- SCE to AUX I'm not understanding the linkage between the old State v Federal domain debate, and layoffs at Stellantis.Stellantis has serious portfolio issues, so I'm inclined to blame layoffs on them.