|I do not see that at all, Ed. I went back, captured the illo, cropped the words and blew them up. It is pretty close to correct, for humor. |
There are many structural causes to the problems of the Big Three. For one thing, this is the broad history of automotive. Here in Ypsilanti, we have a Hudson Museum. Read about the Hudson. Later, Hudson merged with Nash to form American Motors. It is hard to find a nameplate today -- Dodge, Chrysler, Lincoln, Mercury, Cadillac, Chevrolet -- that did not begin as an independent company that failed, or was bought out, or merged. Where is the Dusenberg? "It's a doozie!" was part of our vernacular because of this outstanding car, now lost to history. Marxists make much of that, not without cause, but, of course, without full understanding.
In The Economy of Cities, Jane Jacobs contrasted Birmingham with Manchester. Friedrich Engels as a "Manchester man" a class of capitalist. Manchester was the textile capital of the world... for one generation... Meanwhile Birmingham thrived because of its broad basis of hetergenous enterprises. Detroit was like Manchester, a single industry town. That, too, is a lesson.
Three or four (maybe now five or six) generations of business managers ran those companies. The entrepreneurs were mostly gone by 1940. Ford was the last of the greats. DeLorean tried it in the 1970s and you see where that led. Managers made General Motors and the others, but managers do not take risks. Employee stock option plans (ESOPs) were supposed to invest the workers in the well-being of the corporation, but one of the consequences was to make the top managers responsive to the whims of Wall Street. Their personal wealth was tied to the performance of the stock, not the performance of the company. In my responses here about The Great Depression, I cited the fact that Henry Ford was personally willing to stand alone because his stock was not traded on the NYSE. He did not care about Black Thursday and Black Tuesday. So, you can blame the tax-funded governmentalist business management schools that churned out mediocre office bosses because there is no way to mass produce entrepreneurs. (Or if there is, well, it's an interesting question for another place and time.)
As for the risk-taking, where would have been the risk in a small independent division, or several of them, creating different kinds of cars, totally redesigned from concept to production in small batches to see what works, what sells, and why? Again, that kind of thinking was not rewarded -- or even expected.
Moreover, cars that fall apart before three years went out 25 years ago, when the Japanese came in. Union workers were busting up Japanese cars for TV cameras, but the American industry changed to meet the challenge. Yet, if cars last five or ten years, how many will you need? And when? This was all very predictable to anyone who cared to study it.
Myself, I drive a 1990 Toyota Camry with 323,000 miles on it.
In August of 1902, two men came to see Leland about a company they were trying to liquidate. It had been organized three years previously and was named the Detroit Automobile Company. It had only produced a few cars but the company failed in 1900. It was revived and reorganized a year later with the chief mechanic now in charge. He renamed it after himself. It was called the Henry Ford Company but Ford left after 3 months when the company was failing again. The investors claimed that Ford only wanted to build race cars but Ford said the company was in too much of a hurry to make a profit and had no long term plans. The investors, now trying to just get out, asked Leland to appraise their automobile plant and equipment for sale. Leland agreed and went to look the factory over. This gave him a tremendous idea. He went and got his new engine and took it for his meeting. When he later met with the investors, he told them “I believe you are making a great mistake in going out of business. The automobile has a great future. I have brought you a motor which we worked out at L and F [Leland and Faulconer]. It has three times the power of the Olds motor. Its parts are interchangeable, and I can make these motors for you at less cost than the others for the Olds works and it is not temperamental” (which was a problem back then). Impressed by the man before them, they voted to continue the business and gave him the leading role in the company which now needed a new name. The investors hoped that their new company would be the first successful automobile company in Detroit so what more appropriate title than the one the great French adventurer had first brought to that very spot some two hundred years before? It was dubbed the Cadillac and shortly afterward, the Cadillac family crest was adopted (the design was prepared using the celebrated many-quartered shield surmounted by a seven-piked coronet and garlanded with a laurel wreath) and registered as a trademark.