Auto-psy

Lately, I've been listening a lot on my iPod to a number of pop songs from the late 1960's: "Wichita Lineman", "Love Is Blue", "Everybody's Talkin'", "To Sir With Love", "Classical Gas" and so on. These are some of the AM radio songs of my youth, sitting in the back seat of the car while watching the scenery go by.

My parents' cars were always big and always American -- Detroit steel. Although we did own a few Ford cars, my dad generally favored General Motors products: typically Chevy Impalas in my earliest memories, escalating to Cadillacs by the end of his too-short life.

In addition to the music from forty years ago, I remember most of those long-ago cars very well. For some reason, circa 1968, I vividly recall the first time I saw a seat belt, whose buckle was ornamented with the blue rectagonal GM logo, and its motto "Mark of Excellence".

At the time, partly because of my dad's loyalty to their cars (how could he be wrong?), I assumed that GM indeed did make superior automobiles. But as the 1960's gave way to the 1970's, as I grew from child to adolescence, it became clear to me that Detroit autos -- and GM cars in particular -- were generally of very poor quality and design.

During that lamentable decade (remember leisure suits, everyone?), between the cars my family owned and the cars we rented on trips, we experienced innumerable lemons during the 1970's. These cars sometimes didn't start, they would often sputter and stall, their bodies would rust through, trim pieces would be mismatched or fall off, and electronics wouldn't work. My brother's 1971 Chevy Vega was particularly laughable: it died an early death after but a couple of years and maybe 30,000 miles -- the cylinder head blowing up one morning when he tried to start the engine.

As a senior in high school in 1979, my parents gifted me with a rust-colored 1975 Toyota Corolla with 75,000 miles on it (a lot of miles for a car in those days). It was butt ugly, and had no carpeting. It couldn't outrun a tortoise off the line, nor outcorner a garbage truck. It was by no means a chick-magnet (or perhaps that was my problem?).

But, that car didn't pretend to be anything it wasn't. It had no stupid gimmicks or features. It got pretty good gas mileage (~25 mpg), was cheap to keep running, and it was damned reliable -- as hard as I tried to make it unreliable, with misguided attempts to do my own maintenance (why did I even think about rebuilding the carburetor?)

As utterly unexciting as even that old beater Toyota Corolla was, I much preferred driving it to my parents' 1979 Cadillac Sedan DeVille, which had the most god-awful bordello velour bench seats and a hideous vinyl roof that started peeling off within months. That awful land yacht clinched it: I had come to intensely dislike GM products, and vowed never to own one. And, I never have, and probably never will. I even avoid renting cars from Avis and National, because their fleets are heavily populated by GM vehicles.

I speak of my personal experience, but I think it is the experience of a significant segment of my generation: we walked away -- no, ran away -- from Detroit, by our choice. And even though American cars have improved dramatically, imported cars seized the opportunity of the 1970's and have consistently stolen market share for decades. The brands were broken; Detroit couldn't win us back.

A radical rethink is happening now across the U.S. auto industry, pushed in large part by the Obama Administration's policy proposals, but it seems to be all too late for GM. The day of reckoning is now at hand.

The talk today is of the imminent bankruptcy of GM, with outpourings of grief throughout the Midwest, as if the company were dying just now. But, in my view, the company became terminal long ago, when a whole chunk of the U.S. population turned away from American to imported cars. And, the autopsy offers interesting lessons for the future industrial economy of the U.S.

Management was at fault, for designing and offering lousy products in which style trumped substance, and for dragging their feet on advancements in safety and efficiency. Labor was at fault too, for setting unreasonable wage rates, benefits packages and work rules, and for being so inattentive to the quality of the product coming off the line.

It's impossible to date exactly when both management and labor started traveling down the slippery slopes, and when the decline became irreversible. However, something tells me that the late 1960's represents something of a turning point -- when U.S. industrial hegemony was seemingly permanent, and big American beasts powered by thirsty V-8's roamed the newly-opened highways across our seemingly endless landscapes.

And while it's embarrassing to reflect on the outright arrogance of thinking and feeling as if we ruled the world, it's nevertheless still seductive to remember those sepia-toned days. Today's economic difficulties, and the possible death (and certain major restructuring) of GM, intensify the bittersweetness of those 1960's tunes, as we look backward in the rearview mirror to naively happier -- though patently unsustainable -- days.

In life, I have learned to find more satisfaction when looking through the windshield, to the future. In moving forward -- rebuilding the U.S. auto industry, and growing the clean-tech and green energy industry at large -- we need to bear in mind the sobering lessons of the demise of GM, so as not to plant the seeds of future collapse.

Management teams cannot consistently insult the intelligence of their customers by offering crappy products with poor value. Labor must also keep the customer in mind, by not demanding unreasonable agreements that inflate prices or by producing inferior products. Management and labor must work together in much better harmony -- and the unifying theme must be technological leadership to produce customer satisfaction.

If we want to build a sustainable economy, it means we need both economic and environmental sustainability. We need sustainable businesses, producing environmentally sustainable products with an economically sustainable business model -- and economic sustainability only comes when management and labor work together to serve the customer well by superior product innovation.

Interestingly, many of today's behemoth energy corporations -- electric utilities and oil companies -- are in a situation similar to GM's 40 years ago. With little competition from alternative supply sources, token efforts to portray their meager technological diversification as leadership, and sometimes haughty disdain for their customers, their brands are weak: customers can't wait to leave once a compelling option is presented to them.

When that day comes, many of today's gargantuan energy companies may follow the same fate as we're seeing now with GM.

Will the U.S. public care then? Will Houston follow Detroit? Will today's kids be yearning for the songs of "American Idol"?

Comments

[illusionpainter]

I am so sick and tired of everyone bashing the UAW. First of all, go back and do some research about the health care benefits. The UAW DO NOT want the company to carry their health care. They wanted to find a different way to do it. THE COMPANY INSISTED!!!!! So, that disputes that point you made. Second, whatever came down the line WA NOT the UAW members fault. If engineering made a faulty design the line workers had NO PART IN THAT!!!!! It was not their fault if the vehicle rusted. They DID NOT design the paint or coating that went on the steel, same with the muffles. If a part was fault that WAS NOT the UAW workers fault. They played no roll in designing that part. etc...etc.­....etc...­.. Third, the UAW's wages are less than what Toyota worker make here; Toyota workers make $30 ph and a UAW members top pay after 25+ yrs. seniority is $28 ph. The UAW contracted with GM in 2007 that new workers only make $14 ph.

[illusionpainter]

Their health care benefits were cut in half. Their retirement was cut. They only get from about $800 to $1500 a month and they paid for part of that out of their own wages!!!!! The UAW cost to a car is less than 10% of the vehicle. The foreign auto makers costs are less because they only produce 17% of their vehicles here and GM produces 78% of their vehicles here. Most of the workers in foreign countries make under $5 ph or their country has nationalized health care. These are all FACTS you can research.....

[mcsurge]

Good post except for blaming the unions. Blaming the unions is like blaming the shoe clerk for bad management. There is only one reason they failed: laziness, incompetence and greed. Rick Wagoner gave himself a 40% raise in 2007 when GM was losing billions. That says it all. It was all about management making more than their buddies down the street and the hell with your company or country.

[Photofarm]

I'll disagree slightly with your story, and some of the reasons for it. Two things happened in the early 1970's that had a huge effect on the automobile industry. 1.) The EPA put emission regulations on cars, which I think started in 1972 or 1973. 2) Massive commodity inflation starting with the Russian grain robbery, which increased oil prices dramatically. This led to people wanting higher mpg cars, when car companies were struggling to get emissions down. The first emission controls lowered fuel economy of cars. We used to buy all GM cars and pickups. Dad bought a 1977 Impala, which was a pretty good car, but the 1980's brought diesel engines in cars. The big problem was the diesel engine was quick remake of a gas engine, and the crankshaft's were too weak for the higher compression ratios of diesel engines. The 1980's were the worst for GM, but by 1990 the cars came back a lot better. In fact, I think today's Chevy's are as good or better than Toyota or Honda cars.

[sino53]

The issue wasn't just the mileage, it was the quality.

When consumers started demanding smaller cars, Detroit responded with cars like the Vega and the Chevette and the Pinto, which just weren't good cars. They rusted out, fell apart, or had serious drivability problems.

I bought a 1995 Honda Civic. It's now nearly 14 years old, and it still runs like a charm. And it even looks like a car that's much younger, even though it's been parked in the street all that time.

Detroit simply can't build cars like that.
And that's why I buy Honda and Toyota only.

[Photofarm]

I just got rid of a 1992 Ford Explorer last summer with 200,000 miles on it, and the person that bought it put another 50,000 on it.

While the quality issue may have been true in the 1970's and 1980's, it wasn't true in the 1990's, or current models.

[KillTheMessenger]

Let's face it... GM has never figured out how to make money with quality and customer loyalty. Not back then, not now.

Now, problems like you describe with your Impala are not engineering problems. They are management problems of the sort that can be summed up in this four line sketch:

"Engineer: But, Sir, this won't even work on paper. It will break after two years.
Manager: Do it anyway! We have to get this thing out!
(Three years later...)
Customer: Da...! Fool me once, shame on you. Fool me twice..."

:-)

[KillTheMessenger]

Very good article. Thank you.