I could write a book about Detroit’s decline. It’s a complex story of greed, arrogance, intransigence, incompetence, ignorance and more greed. Hopefully, a book reviewer wouldn’t boil it down to “Detroit built gas guzzlers when everyone wanted alternative energy cars.” That’s a misleading simplification that takes us to the wrong morality play: Motown as mustache twirling planet killer faces well-deserved comeuppance at the hands of kindler, gentler foreign car companies. In fact, Detroit built plenty of higher mileage vehicles (just not many good ones) and spent billions (many of them yours) exploring alt-power vehicles. Their product lineup conformed to all US fuel economy legislation (unlike several fine-paying foreign manufacturers). In terms of self-destruction: production efficiency, labor relations, reliability and branding are far more significant. But the big, stupid, insensitive greedy planet-killer meme is more politically effective. Just ask the president’s chief of staff Rahm Emanuel . . .
White House Chief of Staff, Rahm Emanuel, said the plight of General Motors Corp. is “a wakeup call to America” that signals the need to increase energy independence and overhaul the nation’s health care system.
Emanuel, a former Democratic congressman, said GM pursued a strategy over the past 20 to 30 years that left the biggest U.S. automaker in a “very unfortunate position.” The company relied on sales of “gas guzzlers,” never invested in alternative energy cars and instituted an outdated health care program that hurt the company’s business and employees, he said.
Hang on. Does “outdated” simply mean plunderable? The Detroit News reports that Big Ron II thinks Detroit’s suffering makes a wider point: we’re going to bury you with taxes. [paraphrasing both Khrushchev and Obama]
“It’s an example, in my view, of what the president’s saying for this country, we have a day of reckoning,” Emanuel said on CBS’ Face the Nation. “That is the challenge we face as a country.”
Ironically, conservative talk show host Sean Hannity has been using the exact same rhetoric, from Martina McBride’s Independence Day, for years. Chorus:
Let Freedom ring
Let the white dove sing
Let the whole world know that today
Is a Day of reckoning
Let the weak be strong
Let the right be wrong
Roll the stone away
Let the guilty pay
It’s Independence Day
Uh-oh.
I agree with you Mr Farago (don’t be shocked, it does sometimes happen!).
There’s quite a few misconceptions about the failure of GM and Chrysler and I could never quite work out how people could be this ignorant until I remembered a very salient fact:
I’m a petrolhead, not an average consumer.
Here’s an example, which will hopefully illustrate my point:
When GM went to the government, cap in hand, many people I work with, were shocked, then felt relaxed about it. I asked why they felt like this. The general consensus was this:
“Well, I didn’t realise that GM was in trouble! This is very sudden! But it doesn’t matter, as it’s an american company and won’t affect us.”
I had to point out the flaws in their logic.
“Well, you all drive SAABs, Vaxuhalls and Chevrolets. Who do you think makes them? And if the Vauxhall plant in Cheshire and the Luton plant closes, it’ll affect us strongly! (My old job was as an automotive supplier) Secondly, this isn’t sudden! It wasn’t the recession which caused this! GM have been on a downward spiral for ages! I’m talking years.”
This all came as a shock to them (particularly, since quite a few of them had ordered brand new Vauxhalls!). I felt angry at their ignorance, but then I remembered that they weren’t to know. They’re not petrolheads.
Now, the biggest myth I hear is “The recession is bad, even GM is hurting.”.
It’s not the recession which is killing GM…..
GM was mismanaged long before this economic meltdown. And the governments have regulated their every move both inside the plants and the final product. But this sudden decline is caused by the economic meltdown, which is going to worsen.
And Europe is in much worse shape economically than the US with England being one of the more troubled countries.
This is the man that wants to (and likely will) control the next Census, which has always been under the control of the Commerce Dept. Maybe they will find extra Democrat voters sitting in cars like they found extra Democrat votes in Minnesota.
@windwords: Maybe. Probably just add some dead people to the total, as that’s a tried-and-true method for Chicago politicians.
@RF: Are you seriously going to write a book? I hope you get started soon so you can publish ahead of everyone else once the old GM and Chrysler are gone.
GM before bubble-pop was like an Boeing 747 with engines out, a semi-controlled glide to a non-runway landing.
This descent certainly was interrupted by the bubble pop, which is like fire in the main cabin AND wings falling off. Now they are dropping vertically and breaking up in air.
GM wants you to know that the previous emergency crash landing procedure was business as usual, as they threw everything out the window except executive pay in their slo-mo death spiral. They call this “repositioning” or whatever.
What are they supposed to say? “We all yearn for the good old days when our business was merely dying a slow horrible death of our own devising.”
Or “no fair, the US government refuses to really tax petroleum products, so Americans wanted huge badly built expensive barely roadworthy SUVs which needlessly guzzle gas, then we fooled the gum chewing public on “huge and primitive is safer” so its not our fault we don’t make a decent, attractive transport solution like our competitors do”
He’s not happy because the unwashed masses do not do what their overlords in Washington (we do have a new Messiah, you know) wish them to do.
Now they will compel the masses to get with the program, since they are clearly smarter than anyone who has worked in the U.S. auto industry the last 50 years.
When is the next election, so we can end this train wreck?
Gas guzzlers carried Detroit. What killed it is a lack of sound vehicle portfolio management.
Actually, Emanuel is partly correct. GM, Ford and Chrysler had all hitched their profit wagons to light trucks and SUV’s, so once the sales on these (not particularly fuel efficient) vehicles began to slow, their profit stream was hugely impacted. A reasonably far-sighted Mr. Mulally saw the writing on the wall (as did many others in and out of the industry) and put Ford in a position where they could regain profitability while producing fewer trucks and SUV’s.
This is not a recent phenomenon, however, as virtually all of Detroit’s attempts at fuel efficient cars were loss leaders meant to sell larger vehicles on which they could make a profit.
Mulally’s entrance on the scene however, is proof positive that emperors at Chrysler and GM were running around naked. Ford was in at least equivalent condition when Mulally stepped in, yet they are the one squirrel left who saved a few nuts for the winter. It seems that they may be killed if GM and Chrysler do C11, because of the secondary effect on suppliers, but this really is beyond Mulally’s control. I doubt even he thought his cross-town competitors could fail so quickly.
FWIW It was Khrushchev not Stalin. Getting fat and lazy on SUV profits while ignoring cars and the small car market didn’t help. Small car owners usually move on to bigger and more profitable categories.
Decades of inept management, rapacious unions, horrible products, and immoral business practices killed the Detroit-3.
Sherman Lin:
I knew that. Text amended.
If you’ve ever seen the Independence Day video and listened to the whole song, it’s about a wife in an abusive situation and the day of reckoning is murder/suicide (she offs the husband then burns the house down with them inside leaving their daughter behind).
I’ve always felt that Hannity took it out of context by just grabbing the chorus.
Such comments from Rhambo help no one.
Once again an Obama administration key member is using the bully pulpit of the office to speak in a derogatory manner about a key element of the U.S. economy. This behavior is reprehensible and unacceptable and is doing nothing to help the already ailing economy. I wonder just when the Obama administration plans to stop talking down the economy? Any day now folks…any day.
For a member of the White House staff to talk down to and chastise a large segment of the U.S. economy on a nationally televised program is insipid and clearly lacking in tact. The Big 3 are not on your vaunted ‘enemies list’ Rhambo…or are they?
Edgett – well said.
Mr. Emanuel can go on all of the talk shows he wants and talk tough. The truth of the matter is that he and his party are trapped. They will have to give Generous Mother all of the money she needs. They have garnered union votes for decades and they can hardly stand by and let the UAW implode. Not while they have pushed a trillion dollar recovery package and continue to throw hundreds of billions down the AIG/Citi/BAC/Name your financial institution of choice rat hole.
RF: I could write a book about Detroit’s decline. It’s a complex story of greed, arrogance, intransigence, incompetence, ignorance, and more greed.
…and the impossible task it is to change the mindset of these vipers or drive them from power.
An incredibly succinct description of the situation.
“it’s about a wife in an abusive situation and the day of reckoning is murder/suicide (she offs the husband then burns the house down with them inside leaving their daughter behind).”
But, she does vote for Obama and drive a Volt and live happily ever after?
Strippo :
March 2nd, 2009 at 9:04 am
Gas guzzlers carried Detroit. What killed it is a lack of sound vehicle portfolio management.
I would have to add in the UAW and the overall lower build quality compared to Toyota and Honda, among others.
I would have to add in the UAW and the overall lower build quality compared to Toyota and Honda, among others.
I’m no UAW apologist, but the workers have to dance with what the designers, engineers and bean counters brung. I have a hunch (and it’s just a hunch) that Toyonda designs a more easily buildable product with better engineered components than those products that UAW folks have historically slapped together.
The “gas guzzlers killed Detroit” meme is used by those who don’t know much about the auto industry. The causes of this meltdown are complicated, and took hold decades ago.
dejalma beat me to the point that Hannity uses only a portion of the lyrics.
But as in the song’s story line, trouble has been brewing for a long time. Geeber’s right. And now Detroit is being consumed in a an [economic] conflagration. A bunch of metaphors for the D3 might be pulled from this part of the song [my phrasing]:
Well she lit up the sky that fourth of july
by the time the firemen come
they Just put out the flames and took down some names
and send me to the county home
Now I ain’t sayin’ it’s right or it’s wrong
but maybe it’s the only way
talk About your revolution
it’s independence day
taxman100 :
He’s not happy because the unwashed masses do not do what their overlords in Washington (we do have a new Messiah, you know) wish them to do.
Now they will compel the masses to get with the program, since they are clearly smarter than anyone who has worked in the U.S. auto industry the last 50 years.
When is the next election, so we can end this train wreck?
Funny, I thought the last eight years were a train wreck. It’s amazing how defensive people are about their money.
Strippo covers it.
Springsteen’s Independence Day seems much more applicable:
Well Papa go to bed now it’s getting late
Nothing we can say can change anything now
Because there’s just different people coming down here now
and they see things in different ways
And soon everything we’ve known will just be swept away
Rahm Emanuel is the same guy who is quoted as saying, “That is the facts.”
Funny how we’re getting lectured on automotive propulsion technology by a guy who can’t get basic grammar correct.
http://news.yahoo.com/s/ap/20090302/ap_on_go_pr_wh/obama_spending
Justin
I thought the last eight years were a train wreck. It’s amazing how defensive people are about their money.
All new trains, all new wrecks
What, pray tell, does “Meme” mean.
Why don’t you use words that everyone can understand without having to go to the trouble of asking?
It’s the Democrats turn to grab us by the short and curlies and drag us through town. Since they ‘owe’ the UAWA and other unions, that is who they will protect. Who cares if it’s the middle class that’s getting shallacked? After all, we’re ‘just paying our fair share’, right?
If they gave the 1.5 trillion to those who pay taxes, the economy would have likely turned around. That money in the hands of the roughly 200mm who pay taxes amounts to $7500 per person.
I could write a book about Detroit’s decline.
Hmm, you’ve got a ready audience, a visible vehicle for marketing it, and it’s a topic in the headlines every day. Why the heck haven’t you already? I’ll buy one of the first used copies that shows up from an Amazon reseller. I promise.
I agree that GM and Chrysler have made many bad decisions, and people who blame the gas guzzlers on their downfall just don’t understand the whole situation, but has the quality, as many people cite, really been the downfall of the Big 3? I know many friends, myself included, that drive cars from GM, Chrysler, and Ford with 100,000+ miles on them and never have a problem. I myself own a malaise era camaro, a mid 90’s park avenue and regal, and my grandfather buys a new Impala every year, and I find the quality of all these vehicles to be at par or even better in respect to Toyota and Honda vehicles from the same time, save for the last gen. Honda accord, and I’ve been in and driven plenty of Toyota’s and Honda’s. I just don’t buy into the quality issue, never have, never will because MY EXPERIENCES have held true that the Big Three do, and have been making a higher or equal quality vehicle.
I myself own a malaise era camaro, a mid 90’s park avenue and regal, and my grandfather buys a new Impala every year, and I find the quality of all these vehicles to be at par or even better in respect to Toyota and Honda vehicles from the same time.
I’m afraid your grandfather’s buying habits detract from your point just a smidge.
The commentary from all sides on this issue is full of crap. If we all stuck to what is rather I obvious and left out the pet peeves, we could all see the truth. For the most part it is to blamed on everything except healthcare and mileage. The healthcare cost difference is small between any producer. Mileage is like blaming pneumonia for killing a patient who had eight other terminal illnesses and had been in a hospital bed for a year.
Guillaume9 :
What, pray tell, does “Meme” mean.
Why don’t you use words that everyone can understand without having to go to the trouble of asking?
It’s kinda like a “viral thought”. It’s a idea that’s easy to communicate, and psychologically comfortable. People accept it and pass it along without really thinking about it.
A non-car example would be “The Church Lady” from SNL. You can walk up to almost anyone and say, “Well isn’t that special?”, and they’ll get the reference, even if they never watch SNL.
Quite curious to my mind that here and other website’s commentaries, people who shall I politely assume disagree with the current president, refer to him as the messiah. It seems Mr Bush 43 was in fact, their messiah.
Anybody using name calling, rather than reasoned constructs of ideas and concepts, no matter their political persuasion, invalidates their arguments. Name calling proves nothing, except to reveal the disrespectful mentality of the name caller.
Anyone care to comment or question this following admittedly simplistic scenario I have formulated over the years? Detroit basically would not compete in the automotive sector of the market against the world class offerings of the “import” competition. They retreated to the fuel hungry light truck market where profits per unit were huge, and since no other significant vehicle market could support such vehicles, there was no competition. Detriot was safe, fat and happy. I do remember in recent years the 2.6 alway complained, and applied their influence on government to avoid making their vehicles more fuel efficient. As I recall they used the talking point that it would cost jobs. This fuel hungry vehicle strategy, I’ll speculate here, actually cost far more jobs.
ttacgreg,
Your scenario is indeed simplistic. Have you ever thought to question the assumption that CAFE is fair or works?
These companies met safety regs. If the government wants to reduce fuel use, that’s between them and the cosumers is it not?
Also, they did not retreat, they put their efforts towarda their strengths. They were right to fight CAFE. It’s slanted against the kinds of fleets they are best at producing and which the market wanted.
Had they not wasted billions trying to meet CAFE they might not be in their present mess.
Guillaume9 : What, pray tell, does “Meme” mean.
Why don’t you use words that everyone can understand without having to go to the trouble of asking?
Why don’t you use a dictionary instead of asking?
You apparently have a computer and Internet access. Go to: http://www.thefreedictionary.com/ and bookmark the page. Then type in the word, “meme”.
Then feel free to go back to the online dictionary and look up other words you don’t know the meaning of.
Re: Emanuel’s comments yesterday, he’s got no resume in the car business, and, can’t be taken seriously on the matter of what needed to fix the US car business.
Simply put, Emanuel “can’t reach the pedals.”
While I have no doubt you could write a wonderful book of the downfall of the Big 2.8, several other authors already did a good job – and quite a while ago. De Lorean’s ‘On a clear day you can see General Motors’ from 1979 (written in 1973) or Brock Yates’s ‘ The decline and fall of the US automobile industry’ from 1983 have pretty much all the writing on the wall in them already – and it is exactly the factors mentioned in the article, rather than a specific vehicle / class of vehicles, which is to blame.
On another note, in a recent article here, on the cultural deficiencies at GM Elmer Johnson’s memo titled ‘Strenghtening GM’s organisational capability’ was quoted. Makes for some very interesting reading – for instance one of the problems he describes is that 80% of the development budget at that point of time was invested in cars, which contributed to around 50% of the sales – he then called for an increase in the development budget for trucks. It’s not developing or profiting from SUVs that was ever the problem – it was not having built in the flexibility of adapting to makret conditions and realities, not having an appropriate structure in place, etc. that were to blame. Just like they suffer now from putting too many of their eggs into the SUV basket, so they were harmed by putting too few of them into the same basket 25 years ago.