I’ve been doing a lot of catch up reading of auto industry classics I should have read ages ago. I finished David Halberstam’s “The Reckoning” a couple of days ago. It’s a superb in-depth look at the key forces that were reshaping the car industry in the post-war era, focusing on Nissan and Ford. Lots of insight into the culture of Ford, and a better appreciation of Lee Iacocca, including his positive qualities.
Now I’m reading Maryann Keller’s “Rude Awakening” about the travails of GM during the Roger Smith era in the ’80s. I will share more tidbits later, but I just hit a quote by Lee Iacocca about Smith’s plans for Saturn that I had to share right now, as it’s such a gem.
“By 1985, the Saturn project had become a giant media event, propelled by a steady stream of tantalizing announcements from Roger Smith’s office. Even Lee Iaccoca, a master at creating the big media splash, expressed grudging admiration and admitted “I was envious. Not because I thought the car was great, but because as a huckster I hadn’t thought of the PR scam first.“
Wow. There is so much in that short quote that could be unpacked. Not only does it perfectly sum up what Saturn really was (as well as Iacocca’s insatiable ego) but it gives so much insight into the mentality of Detroit’s CEOs. It was always about them, the press, their egos, their bonuses, the sloganeering and the endless empty promises.
This is so utterly blatantly in contrast to the Japanese way, which emphasizes genuine teamwork and a 100% commitment from the CEO to the line worker to share in the process of designing, engineering and building quality cars as the solution to a lasting success that would then be shared by all: the workers as well as society at large.
Ironically, Smith initiated the NUMMI joint venture with Toyota precisely because he wanted to find out what the Japanese secret sauce was. He thought it had to be some new technology. Not at all. Their plant equipment was largely actually rather old-fashioned. It was just an utter commitment to create a teamwork approach and inculcate trust and risk-taking across the board. Not surprisingly, Smith (and most of the rest of the GM execs) didn’t get it, and instead went on a high-tech binge to try to out do Toyota with robots and Saturn. We all know how that turned out.
I recall from one of those books that one of Roger Smith’s big visions for GM was the ‘lights out’ factory, i.e., completely automated. He came to this conclusion after visiting a Toyota plant and seeing how effective the automation was.
Unfortunately for Smith, what he didn’t understand was that Toyota (and others) didn’t automate overnight. It was a careful evolution that occurred over time. They’d implement one, small part of the automation and wait, giving it plenty of time to work out the bugs. When they were satisfied it was working, they’d move onto the next assembly phase.
Smith, OTOH, thought every facet of assembly could be switched to automation instantly. As one might imagine, the results were disastrous with automatic windshield installers routinely breaking the glass and spray paint booths where the automatic sprayers would paint each other.
Without the hucksters the Japanese companies wouldn’t have had styling to emulate, preestablished categories to cater their models towards, and engineering/technology to discern from and improve upon for their own in their formative years. As the saying goes, the pioneers take the arrows, the settlers take the land.
In their formative years, the Big Three weren’t nearly as much run by hucksters as they were later. That’s the big change that happened. The American car companies used to mostly be run by genuine car guys. Then it was finance, business and marketing guys. Big difference.
It wasn’t until the late 60s or early 70s that the Japanese realized this, and just how deep the shortcomings of the Big Three were. And that’s when they stopped emulating them. And started feeling sorry for them, to the point of sharing their “secret sauce” with NUMMI and other joint projects.
Although they continued to be very worried that the Americans would learn quickly, and get their shit together. It took them a long time to realize that was never likely to fully happen. The Japanese were still genuinely worried about the Neon. That was probably the last time they did, once they realized what a tinny piece of junk it was.
Which begs the question:
When ARE we gonna get our shit together?
We have our shit together. Have you heard of Tesla? The other domestics are lost causes. Let’s see if Ford can turn it around with Mach E and Bronco.
Tesla – that would be the company that would fold practically overnight if it were deprived of revenue from the carbon credit scam? (If someone gave me a Tesla I’d give it back.)
@ Just a car guy: since you live under a rock you might want to come out once in awhile and get updated, like the fact that all of the tax credits that Tesla’s buyers used to get expired last year. Zip. nada. No more. yet they haven’t folded overnight; in fact their stock is at record highs.
And if someone gives you a Tesla, I’ll take it off your hands.
Which raises the question of when are people going to understand what begging the question really means?
I think the Japanese learned more from their 60’s motorcycle successes, esp. Honda, without having to look too closely at the american or european auto industries. There is lots to unpack there.
Car companies run by car guys and engineers: that seemed to work well.
Car companies run by MBAs: er…not as well.
Car companies run by techbros babbling about disruption: I don’t think we’re getting warmer.
One more cigar and one more libation at lunch and I’m sure that Iacocca would have thought of that.
Didn’t Iacocca copy that scam?
I mean “cab forward design”, Dodge Neon and all…
He’s referring to the “PR scam”, not the actual car.
Saturn was an endless PR build up, for years. GM was going to re-invent the car company. It was going to leap-frog the Japanese. But instead of GM re-inventing itself, it was going to be a separate unit. Which of course made no sense.
reprise
they should have called it the VegaII, because it was what GM did first w/ the Vega in @1970
– they sold the Vega sight unseen it for months and months as the game changer – the little car that would do everything well, w/ new engine tech and new assembly it would show the world that Americans could build the best and turn back the foreign invaders
and it was a giant flop – strike induced crap assembly and engine tech that wasn’t tested and failed
it was Saturn before Saturn – but worse
It wasn’t a flop until people discovered how bad it really was. Rinse and repeat with Citation. Rinse and repeat with Fiero.
Somewhere along the way I learned to separate the product from the maker of it.
I can enjoy Michael Jackson’s music.
I can enjoy Louis CK’s comedy.
I can enjoy a Roman Polanski film.
I can enjoy (some of) Iacocca’s products.
If we try to remove all the character-flawed people’s products from our entertainment and life we would all just be listening to Tibetan monks, walking everywhere and eating mud.
FWIW, “The Reckoning” gave me much more appreciation of Iaccoca. His ego was always there, but he kept it somewhat in check at Ford. And he was obviously successful at Ford, although he had a bad habit of hogging the credit for many of those successes. But after HFII fired him, he changed dramatically, as all those around him attested to. It became an epic battle to make Ford look bad and himself ever greater.
I give him credit for what he did at Chrysler, but his ego really went overboard, especially when his book sold so well. He came every close to running for president. Ford had warned him that if he ran for public office, he was going to spill some ugly secrets about him.
That book was terrific, and really expanded my understanding of how Ford was run in the post-war era up to its writing in 1986.
Thanks, I’m going to have to check that out.
I had a Pontiac TransSport until a couple years ago. It was a very modern ahead of its time Eurostyle design with a stamped steel space frame including a substantial roll bar and an entirely plastic exterior. In other words, a Saturn, except actual Saturns were not innovative in style or design. Three GM divisions sold those vans, BUT NOT SATURN.
It’s always about management.
Saturns should have been innovative beyond plastic panels (which cost more and made for unfashionable panel gaps). Instead, mini Oldsmobiles with the worst ride and handling in the business. Not even a hatchback.
A writer back then wrote that never has a car company gotten so far with a flower (on the front seat of your new one) and a smile.
Later Saturn scrambled with adding various Saturn badged Opels, without even the plastic panels they originally touted. Like when Studebaker was going down consumers could smell the desperation and lack of investment.
The Aura was too little too late. A second generation Malibu with a nicer style, kind of a lower budget Audi. Maybe it should have been the Buick Regal already.
It’s always about management.
Thanks for this Paul. The Reckoning has been on my Amazon wish list for some time and I kind of forget about. This seals the deal though, I will be buying it. It is only available in Kindle edition new so I guess I am going to have to buy it used.
I will also add Rude Awakening to my list too.
It’s available new at other web sites and used at several including Ebay. I bought a copy today.
Nothing will change until the US industry system changes to one where instead of instances like the Boeing CEO getting canned and earlier today reportedly still collecting a literal fortune ($62 million I believe I read earlier) for his abject failure rather than either going to prison or at the very least showing genuine remorse which isn’t too much to ask but not going to happen since he’s scared of someone going after his failure fortune if he looks even remotely contrite. Likely he’s completely relieved that he won’t be asked to step aboard a 737MAX…
Yes, a little off-topic but it’s all about ego and money; society, fellow man, and especially the paying customer be damned, there’ll always be more.
The Boeing employee emails that came out today are rather interesting.
But these paragons of capitalism are “job creators” and should be deified, given substantial tax breaks and not be burdened with pesky regulations. If their lucky the businesses they run into the ground will be deemed “too big to fail” and will benefit from taxpayer bailouts. Never accept responsibility when something goes wrong. Just unfortunate accidents when ill designed planes fall from the sky or gas tanks explode. And in the rare case when public outcry jeopardizes profits?Just take your golden parachute and move on.
Jim, maybe I’m way off but I read all your COALs with great interest and appreciation, so whenever I stumble on your name (I don’t always read the comments), I make it a priority to read what’s on your mind.
It seems to me you have slowed the car buying frequency significantly and here you are, a (until recently) Porsche driving real estate agent(?) talking about how greed is ruining corporate America – you may have always felt like this but you haven’t always made sure to write about it. And it doesn’t fit the mold.
So what I’m getting at here is that it seems to me – as someone who doesn’t know you – that you have gone through some interesting personal development, and I would love to read a more dedicated post on where you’re at. You have gone from primarily writing about frequent purchases of new premium cars to recaps of junkyard trips – I love both but there seems to be a shift in focus, and that’s always interesting to me.
(I figured as you started talking about Boeing, I’d help out by derailing the conments further :))
“I was envious. Not because I thought the car was great, but because as a huckster I hadn’t thought of the PR scam first.“
I wonder if Lee was intuitively blinded to the potential PR scam because the pain of Edsel at his alma mater was still fresh?
He hadn’t thought of the idea of creating a whole new car company that was going to revolutionize the industry. That was the PR scam. GM was going to leapfrog the Japanese.
Good thing he didn’t, since it ended up costing GM some $12 billion in losses.
Giving credit where it’s due, even if he missed the big one, Lee sure had a knack for making a decent enough silk purse from a sow’s ear.
I am thinking that Eagle was Lido’s “Saturn” done on a shoestring budget. If that comparison is appropriate, then in hindsight, Lido’s Eagle Talon is arguably the most iconic car that was born out of either brand. Lido beats GM Again: with much less investment.
I recommend Iacocca’s and Walter Chrysler’s biographies next. Read both recently. Totally different personalities and approaches, but both equally fascinating.
A friend bought a brand new Saturn in 1995 after selling me his old ’82 Toyota. We ended up getting rid of both these cars at about the same time a couple of years later. The Saturn because he hated it, the Toyota only because my mom wrecked it.
Since this comment references WP Chrysler, it wouldn’t be out of line for me to note a related CC Effect: today I saw a WP Chrysler Signature edition minivan. Factory or dealer trim package? And why not an Iacocca signature edition?
They tried that, but Iacocca kept insisting that his signature be so BIG as to encompass the entire van, windows and all, plus it had to pull a trailer to fit the last few letters. Also, it had to be written in velvet and chrome Sharpie.
“Besides, I have moved beyond names.” He is quoted as saying. “From now on I shall be referred to as 💰💵💵💵🎩.” He then returned to diving into his giant room of gold coins like Scrooge McDuck. Except with more hookers.
After further negotiations, Chrysler and Lee settled on the name “K-lassy”, but by then the world had moved on.
The WP Chrysler was factory.
Yeah, well, don’t look now, but at CES this past week Chrysler were showing a concept car called…
…the Airflow.
Settle for the next best thing, import a Cadillac BLS. It is rumored that BLS stood for Bob Lutz Special. It was also argued that it stood for Built Like Saab. My interpretation, using my official Cadillac decoder ring was B-Segment Luxury Sedan but of course the others are much more charming.
I recently read Iacocca’s bio, only 35 years after it was published. It was a fascinating book, quite self – serving (what bio isn’t?) but an interesting insight into the auto industry. His experiences at Ford were far more interesting than Chrysler.
Boy did he hate HFII. I had no idea how much HF ruled the roost at Ford, holding sway on decisions at all levels of the firm. I’ve always wondered why Fords of the ’70’s had a certain look, irrational styling cues that were emphasized on the larger models. Reading between the lines from Iacocca’s book it was because HFII wanted them to look that way, their styling was ultimately his personal expression, stamped into every vehicle the firm made, for a period of time.
Iacocca seemed envious and resentful of HFII, his name and his inheritance of his position at Ford. I had the impression his work at Chrysler was an emulation of HF… to rule the firm as a personal fiefdom and as a vehicle (no pun intended) of self – expression.
He came to realize he was always just going to be HFII’s hired hand, and no more. And when he was fired, that really brought that home. Iaccoca desperately needed his own kingdom in which to be king. At Chrysler he found that, until they had to drag him out at the end.
And once he went to Chrysler, his sole and burning motivation was to show HFII up.
A few things I recall from Iacocca’s book: HFII once introduced him at a dinner as “my little Italian friend”. Then there was Iacocca claiming that if he’d have known things were so bad at Chrysler after he got there, he’d have never taken the job. Of course, a statement like that makes him look all the more like a business genius.
It’s worth noting that Ford did okay after Iacocca left, so, despite what he might have thought, they got along just fine without him, although that might have been due more to Roger Smith’s inept bungling over at GM than anything else.
Finally, there was that last chapter where Iacocca did a hard sell on wanting readers to donate towards refurbishing the Statue of Liberty. He completely lost me with that little bit of huckstering.
Another good read about the auto industry is “Riding the Roller Coaster” by Charles K Hyde. It chronicles the persistent ups and downs of Chrysler. Each time, Chrysler pulls a rabbit out of its hat to survive. The book covers from when Walter steps into the picture thru the Daimler purchase. Looks like a sequel would be appropriate considering the Daimler fiasco, bankruptcy, FIAT acquisition, and PSA merger.
Ego, hubris, and arrogance appear to be the major weaknesses of the US auto industry.
It’s not just the auto industry, but corporate management in general that does these kinds of things. In the USA, we have a major retail chain…not one that is in dire financial straits, but which is hugely profitable…that got its new CEO indirectly from a major competitor, which he departed because he didn’t get the promotion he wanted and thought he deserved. Now he is taking his new company down in imitation of his old company, whose JD Power consumer service rating is far below average, while that of the company he is trying to remake is above average. But all that anybody cares about is whether on the way downhill, the stock price goes up for a while…long enough for the hedge funds to cash in and then dump the stock.
If you’ve read all the other books, or even if you haven’t, I recommend Albert Lee’s “Call Me Roger: The Story of How Roger Smith, Chairman of General Motors, Transformed the Industry Leader Into a Fallen Giant”.
I worked at a fortune 500 company for a while about 25 years ago, and the stuff the management did constantly amazed me. Trips on the company plane for golf, and then back again before sundown. Trips to Pebble Beach for execs that cost an amazing amount of money. Exec’s wive’s and husbands hired as “consultants”, it went on and on. One big shot’s wife was hired to “color coordinate” her husband’s office for about $10K! The plane, fuel costs and pilot salary were somehow kept for a long time after they filed for reorganization, but eventually, the execs had to suffer by going on commercial flights. Always first class, of course.
Oh, they had filed bankruptcy before any of the above had happened. One year, they hired a new guy who was a known “headchopper”, and right before Thanksgiving, the heads started rolling. It was about then that the Pebble Beach golf outing costs were printed out and spread all over the building. I’m the only one who knew who did it. No, it wasn’t me, I just happened to see him taping copies of the bills all over the building.
Needless to say, those copies pasted everywhere caused a huge shitstorm, and the head of security was totally frustrated because he couldn’t figure out who did it. I hated that guy, and watching him stew made it a nice holiday season for me.
Different area of the planet but the first big PR car I recall was the endlessly promoted via print magazine Leyland P76 it was going to revolutionise the way we drove they promised the world but unveiled an ugly piece of crap that fell apart when you drove it, if it had been half as good as promised it would have been wonderfull.
Americans embraced Iacocca and Smith. Japan embraced Deming. That’s really the crux of it.
There’s a certain chutzpah in acknowledging shamelessly that you’re a huckster.
I always remember in the Reckoning the Ford exec. who asked for $500k to redecorate his office. HFII wrote back “make do with $250”. No wonder…
An excellent book – I bought the hard copy when it first came out in 1989 when I was 23 and still have it. Great comparisons of GM versus Japanese manufacturing philosophies and strategies. She covers the Ross Perot stock buyout pretty well, also.
I’d also recommend Ford: The Men and the Machine by Robert Lacey, if you come across it.
Lee had to keep his ego at check at Ford–his boss also had a big ego, and his boss’ name was on the building.
I recall reading Alfred Sloan’s book (My Years at General Motors?) a long time ago. Looking today at Sloan’s progression of car buying- start with Chevrolet, and work your way up to Cadillac- it seems that that was not really how the car buying public works. In the ‘Eighties, all the GM cars were basically the same. I read that it only cost GM $600 more to make a Caddy over a Chevy. And where is that progression now? Where are Olds and Pontiac? And, I understand, if it were not for China, Buick would have been done away with also. (for the other companies: DeSoto, Dodge, Imperial, Mercury,)