“The first real casualty of the current recession may well be the middle-priced automobile. For years it not only provided transportation for the middle class but was a firm steppingstone on the stratified pyramid of personal material progress.” That’s from Time magazine, 1958. A different recession, in a different era. But there can be value in gazing back. That’s how we’re supposed to learn, right? To keep from doing the same stupid things over and over? Or maybe you’re more in the Conway Twitty camp. His message from the same year: It’s Only Make Believe.
Reading some of the coverage of the recession 50 years ago is eerie. You’ve got to keep checking the date of the article to make sure you didn’t accidentally pick up (or click on) something from last Tuesday. Car sales fell 31 percent, unemployment in Detroit hit 20 percent. Lots of people said “worst since the Great Depression.” As with our current recession, prices didn’t fall across the board. Wholesale prices actually rose 1.6 percent. The Democrats made huge gains in Washington.
The differences surface as you drill down. No housing bubble; this one started as commodity prices dropped off. Hedge funds didn’t tumble like Sputniks. Credit did not get tighter than Annette Funicello’s sweaters. When it comes to the automotive industry, the story’s as fresh as ever. The Time article continues:
“[Sales of mid-range cars] are down 51% from the same period last year, far more than other sections of the industry. Production of Oldsmobile has dropped 44%; Buick, which was once in third place, 40%; De Soto 77%; Mercury 64%; Pontiac 31%; Dodge 70%. Ford’s middle-priced Edsel, brought onto the market last year, is a flop.”
The names have changed, but not to protect the innocent. In the first recession following the post WWII boom, half of America’s middle class ducked a new car purchases. De Soto took it hard. Dodge wouldn’t have made it through if hadn’t been part of Chrysler. The axe hung over Olds for another 40 years.
Economics isn’t the whole story.
In 1958, Detroit suffered a design gap. Tastes switched quickly. Suddenly, Motown wasn’t making what the bulk of American’s wanted. (Sound familiar?) As the economy grew from 1945 to 1955, American cars grew as well. Your basic Chevy lengthened by two feet in ten years. Ford grew four feet.
In terms of scale, amenities and prices, entry-level cars moved up, in many cases surpassing what would once have been considered the near luxury or luxury class. The process left nothing beneath. In 1958’s recession, the choice wasn’t between a small Plymouth or Chevrolet. It was between holding on to your current car or taking the bus. This pattern repeats itself for the next 50 years, tracing every boom/bust cycle until it seems inevitable.
As inevitable as the invasion of foreign cars. While nascent after the War, overseas marques were steadily attracting fans. The foreign car market-– British and German, mostly– rose 110 percent, as the market for Detroit iron fell. The European brands were smaller, more fuel-efficient and, people were learning, still fun to drive. The massive increase percentage-wise meant fewer than a quarter-million cars, but another part of the pattern formed. People sampled Volkswagens and MGs and didn’t go back to Impalas and Imperials.
Albert E. Birt, president of Manhattan’s Hambro Automotive Corp., sold 24k British cars in the US in 1957. In 1958, Birt said “The imported-car market might increase to 300,000, but I can’t believe it will go beyond that.” Detroit believed imports carried the threat of hula hoops.
Nor did Motown believe in America’s sustained desire for small, economical cars. The late 50s were a blip. In terms of labor, design, marketing and advertising, small cars were not going be all that much cheaper than full size cars. So why bother?
In the end, American automakers were half right. The pendulum swung in the early 60s. For another decade it was all about size and power. Funny thing about pendulums, though. They keep swinging. GM, Ford and Chrysler weren’t ready for the tune to change in 1972. They weren’t ready for it now. In every downturn, imports make gains. And hold them.
The 1958 recession ended quickly. The lesson– to hedge, to put your eggs in like three or four baskets– was never learned.
“Since its beginning,” Time reported in ‘58, “the U.S. auto industry has narrowed from more than 2,000 different automobiles to 17 makes turned out by five major companies that produce 96% of all cars sold in the U.S. In the future, many of the overlapping models produced by the big five may also disappear.”
Remember the big five? Yeah, next time around no one will remember the big three either. Or, as Connie Francis put it, Who’s Sorry Now?
Plus ca change, plus ca la meme chose.
Time to bring in the “new” entry level car and make the current compacts the mid range car.
The period after 1958 is when they introduced the Falcon, Chevy II, Rambler American, Valiant, and Corvair.
In a way small car fads are a “blip”, they’re just a pretty consistent blip, happening every 8-10 years or so and lasting 1-3 years.
The very small cars probably don’t sell in large enough numbers to help any but I’m crossing my fingers that they stay on the market for a while.
(Ford Fiesta, Chevy Beat)
That’s a beautiful Impala.
Just like 1958, assuming the socialists in Washington stay out of the way, people will go back to buying what they want soon enough – remember the early 60’s and the “409”? . That is one difference 50 years later – we are a socialist country with the government controlling nearly every aspect of business today.
Small cars aren’t a blip. They are a direct result of high gas prices. Who wants to drive a little car when they can afford a big car? You will not catch a European politician moving around in a small car. Just for the peasants.
Good article. One minor issue: “the axe (didn’t) hang over Olds for another 40 years”. The Olds Cutlass was the number one selling car for a number of years in the mid-late seventies, pushing Olds into the #3 spot, past Pontiac. The Cutlass was a major driver of GM’s big profits during this period.
I’m not sure of the attraction of big cars. Obviously, people feel it, but aside from attitudes cultivated from the AMC Gremlin, Ford Festiva penalty box era, I don’t see why people would necessarily be against them merely on the basis of size.
The Fit is light on its feet, comfortable for anyone not in the NBA, and has enough space for most uses that don’t involve family road trips.
It’s fun to take turns at speed in the Fit that would threaten a roll over in an Escalade.
Michael Martineck: In every downturn, imports make gains. And hold them.
Very good article, but this is not necessarily true.
Imported car sales rose dramatically from 1955 to 1959. They promptly collapsed in 1960, after the debut of the Corvair, Falcon and Valiant. They didn’t start rising again until 1964.
Also note that one of the big successes of 1958 was the first four-passenger Thunderbird, which was hardly cheap or economical. In one year it nearly doubled the sales of the two-passenger model, and by 1960 was selling over 90,000 units. (The two-seat Thunderbird had peaked at around 21,000 units in 1957, its final year.)
It was smaller than the typical luxury car. Meanwhile, Ford’s all-new, dramatically larger standard Lincoln landed with a thud for 1958. But the car it was meant to take on – the Cadillac -was one of the cars to suffer the least in sales that year.
The market was giving off very conflicting signals in 1958.
@geeber: I believe Ford’s first 4-door Thunderbird arrived in 1967.
Verbal,
You are correct that the 1967 model was the first Thunderbird with four doors.
The 1958 model was the first one with a back seat. The 1955-57 models did not have a back seat. They were considered two-seaters (although one could sit in the center, as those first Thunderbirds did not have bucket seats, so in a pinch, they could seat three people).
We need more of these posts, with the Time/Business Week, etc. articles from 1980, 1984, 1993, 2000 that claim how GM now ‘gets it’ and proves that and will blow the world away because now GM has its swagger back.
Some examples…
“Detroit’s Uphill battle” (1980)
“What Went Wrong? Everything at Once” (1992)
“Back on the Fast Track” (1993)
You can have that recession in any color you want, as long as it is black. or red.
I suspect that the supply of good used cars is much higher vs. demand in 2009 it was in 1958. Not much need to buy a new car with record number of cars produced in recent times. In 1958 at least the shutdown of the auto industry for WWII would limit the number of older used cars. In 2009 I plan to buy a good used luxury car for the price of low-end new car.
George B:
I think there was a pretty good supply of used cars in 1958. Car sales boomed after the war, reaching a then-record 7 million units in 1955, when almost everyone had all-new designs. Some of these were great cars, like the tri-five Chevys. I can remember those days, and a lot of late 40s cars were still on the road.
Ooooh, and can I have that Impala? I once had a 1/25 scale model of one, in the same color.
And I agree about Olds — the best days were yet to come, as was also true for Pontiac. DeSoto never recovered though, and I never realized Dodge was down so much in ’58.
@mikey610,
Thanks for remembering. This is one of the major points of frustration for many who really want DET to succeed, or at least, survive.
Since the publication of On A Clear Day You Can See General Motors the story is always the same.
Time to bring in the “new” entry level car and make the current compacts the mid range car
Davey: The new entry level car of today is already here. It’s the new car of 2 years ago.
The huge supply of decent, low mileage used cars on the market (by modern standards anything under 50k can be considered “low mileage”) is one reason it’s so hard for anyone to break into the entry-level car market.
What would you rather have, a 2009 Aveo or a 2006 Accord? Both can probably be found for near the same price. I’d take the Accord in a heartbeat and not look back.
@mikey610 und porschespeed-exactly.
One of the things that the “domestic true believers” never seem to get is that those of us that are skeptical don’t (by and large) want the Debt 3 to fail, we are simply unconvinced that they can.
It’s sad, but some of these guys need to remember that prophets of doom are saying what they want to see, just what the do see.
Cheerio,
Bunter
Great article. About the mid price sales drop, note that Desoto and Dodge were the worst by far. There was another factor here – the 57 Chrysler products were fabulous designs, with Chrysler brands grabbing share from everyone else like crazy. However, these designs came out on a too-short development cycle (2 yrs for cars with new transmissions, suspensions, bodies, frames and engines) and suffered from horrible quality problems. By 1958 word had caught up with the cars and sales went into a ditch, although the worst problems had been solved. By 59, they were really pretty decent cars.
The Edsel/Mercury thing is also an interesting story. Ford tried to move Mercury up-market and put Edsel between Ford and Mercury. Edsel had 4 models, the bottom two (Ranger and Pacer) shared the Ford body and the top two (Corsair and Citation) were on the Mercury body. I have read that Edsel also suffered from some pretty bad quality in 1958. And there was that grille. Actually, from any angle except the front, the 58 Edsel may have been one of the best looking non-mopars of 1958. But that grille was just awful.
It is true that small cars were popular in 1958. My parents had both a Karmann Ghia and an english Ford Anglia. And Rambler became the number 3 selling brand in the US behind Chevy and Ford. But other than VW, none of the foreign cars had much impact. Either they were impractical sports cars (MG, Triupmh, Austin-Healy) or were just no good. The Renault Dauphine, Simca, Ford Anglia – they were just not very good. Though my parents loved the Ghia, I never heard a kind word about the Anglia, which was gone by 1961. (Replaced by a 61 Olds F-85 wagon with the aluminum V8). And, with the 1959 Studebaker Lark and the 1960 Falcon, Valiant and Corvair, only the best (VW) maintained any semblance of popularity.
Finally, the recession was not all that short-lived. The economy did not really start to pick up until 1963 or 64. Even in the 1961-62 period, we saw cars like Chrysler Newport, Mercury Montery and Pontiac Catalina that pitched themselves as just a few bucks more than the low-priced 3 of Ford Chevy & Plymouth. Once things really hit their stride by 1965, sport and luxury were back in style and new car sales hit a new record. Even American Motors started to stray from its economy car roots and developed the Javelin and the Ambassador.
I love these historical articles. Keep em coming.
“Look, honey, there’s a giant Impala leaping over the car!”
“AAAAAARRRRGGGHHHH!”
“GM, Ford and Chrysler weren’t ready for the tune to change in 1972.”
But…but… Plymouth was able to get the Cricket over here in a hurry.
Pip pip cheerio and all that ye blokes.
Although this may not be the forum for this, we are reminiscing…I have, from the Time Archives, an article from June 24, 1974, that warns of impending doom that will arise from the bizarre and unpredictable weather occurring in different parts of the world. The worlds top scientists were certain, after studying the situation that we were all about to be plunged into another “ice age.”
taxman100 wrote:
That is one difference 50 years later – we are a socialist country with the government controlling nearly every aspect of business today.
No, in many ways we were a much more ‘socialist’ country in 1958:
—The top marginal income tax rate was 91%
—The labor force was heavily unionized
—Labor supply was kept low (which pushes up wages) by legal/social sanctions against women and ethnic minorities in the workforce.
—Most people were covered by not-for-profit healthcare plans.
—The minimum wage was significantly higher (in constant dollar terms) than almost any time after 1970.
—There was no such thing as “outsourcing”.
—There was almost no cheap foreign labor exploitation free trade.
Gee, when people have good paying jobs they expect to be able to make payments on a new car. What a concept!
oldguy wrote:
I have, from the Time Archives, an article from June 24, 1974, that warns of impending doom that will arise from the bizarre and unpredictable weather occurring in different parts of the world. The worlds top scientists were certain, after studying the situation that we were all about to be plunged into another “ice age.”
Which only goes to show that Time magazine did a p*ss-poor job of reporting, because there was no such scientific consensus.
http://www.realclimate.org/index.php/archives/2005/01/the-global-cooling-myth/
@mikey610: wow, the 1982 Time article has this quote that doesn’t need much updating:
Looking at a worst of all possible worlds, which would be the result if recent trends continue, Chrysler Chairman Lee A. Iacocca says: “If you take that scenario, by next April we’re bankrupt. By October, Ford is bankrupt. By the following October, GM is bankrupt.”
Sadly, there are many more choice quotes.
“Who wants to drive a little car when they can afford a big car?”
Me. I want a car that is reasonably sized for me. I drive a 2002 Accord. It is quite big enough, and I really do not want any thing bigger. I don’t like driving oversized overweight vehicles. I prefer small and nimble.
Detroit in the 50s, and again in the late 60s, just could not make anything other than barges. They were not fun to drive and I did not like them.
Great article, thanks Mike Martineck. Entire thread was a fun read. Great memory tweeks.
All I can add is, back in the early 60s when I was dating the “first” love of my life, we double dated alot with a couple and the guy had a ’58 Impala Coupe, Black with a Red gut. That was one sweet car. Had a great back seat.
“Who wants to drive a little car when they can afford a big car?” As long as the driver’s seat is comfortable I would want a smaller car with good fuel economy. Driving in big cities narrow streets and dealing with a parking garage is a pain with big car. Also I can count the number of times there were more than two people in my car on my hand within the last six months.
@ mikey610
Thanks for sharing. Those articles are truly amazing.
Who wants to drive a little car when they can afford a big car?
I keep hearing this time and time again, but the thing is, it is simply not true. I don’t want a big, bloated, sluggish car. Big slow cars are for old people. I want a fun car to drive. The youth of today don’t like big old cars like gramps drives, they want small, fast ones. This is the market that will be buying cars for another 40,50,60 years instead of the next 10 or 20.
I like big cars, REALLY big cars, and I’m only 33….but I’m an anomaly. In 1996 I convinced my parents to buy a Roadmaster because “this is your last chance to buy a real car”.
mtypex :
January 9th, 2009 at 3:27 pm
You can have that recession in any color you want, as long as it is black. or red.
Or Green it seems