How the ‘Big Three’ lost their way

The great American humorist Will Rogers began his stage act by cracking open a daily newspaper and commenting on our human follies, especially the political ones. He said, “It’s not so hard to be a humorist when you have the whole government working for you.”

Leaving politics aside for the moment, I’m here to tackle a subject equally close to my heart, the automobile business in its decline, and my own hard knock experiences from inside Detroit during the 20th century, when things started to fall apart.

Another apt quote from Will Rogers applies, in my mind, to the former Big Three: “Everybody’s ignorant. Only on different subjects.”

Let’s begin with the postwar year of 1947. Building on his success of running a gas station since 1934, my dad decided to become a new car dealer. I was a teenager and overly enamored of the flashy new models that were beginning to arrive at our local dealerships.

Gone were the prewar clamshell fenders above each wheel; in were the slab-sided, sleek Ford, Mercury and Lincoln from Ford. General Motors’ lineup was even more stylish, with Buick’s portholes and exquisite chrome grille declaring that wartime dullness was a thing of the past.

GM had a size and a price for every class of buyer: Chevrolet for dependable transport. Pontiac with similar “Body by Fisher,” but chromed to a fair-thee-well for the up-and-comer. Oldsmobile was a Buick clone, yet flashier. Its Rocket V8 set young hearts aflutter as it burnished Olds’ reputation as GM’s technology leader. And Cadillac, well, what can you say about Cadillac that wasn’t said first by its advertising copywriters: “The Standard of the World.”

Last but not least in the “Big Three” was Chrysler. It had a softer-edged Plymouth lineup to compete with Chevy and Ford. Dodge cars offered a slight upgrade in trim from Plymouth, but in nearly identical body styles, a la Chevy and Pontiac. Dodge trucks were unsophisticated workhorses with a military resume. A leap upwards from Dodge took buyers to DeSoto, which shared bodies and engines with Chrysler but with slightly lower price and prestige. In those more humble days a successful doctor or business owner could luxuriate in his Buick or DeSoto, avoiding the neo-wealth boast of a new Cadillac or Chrysler.

Yes, the Big Three had a car for every pocketbook. Or, as one of my top salesmen used to confidently say regarding certain slow-selling models, “there’s a rear-end for every seat.” If his theory lived in dealerships of the day it was likely born then nurtured in Detroit.

Complacency breeds contempt for the customer and hubris for the world. It permeated Detroit and especially the bigwigs of GM, Ford and Chrysler. The we-know-best answer came down quick and hard when dealers would ask Chrysler, for example, “why don’t we build more compact station wagons?” Dodge 1980s Aries K-Car wagons accounted for a solid 40 percent of sales in New England. The model was dropped soon afterward. Subaru, another compact station wagon, is now New England’s volume sales leader in its class.

Getting back to the sales heyday of the 1940s and ’50s, there was enough business overall to support a number of independent makers: Studebaker, Nash, Hudson, Packard, Willys-Jeep and Kaiser-Fraser come to mind. Pent-up demand from the war years could only last so long, and by the time that I left the Air Force in 1955 the mergers had begun. Nash and Hudson became American Motors, which enjoyed great success under the leadership of George Romney, who parlayed business success into the governorship of Michigan and a run for the presidency. All the other independents, except Jeep, fell by the wayside as sales dwindled due to competition and the cost of developing new models. Automobiles are a volume business, and when volume drops by 40 to 50 percent as it has in the past year, even well-managed companies like Honda and Toyota lose money.

Romney had an argument and a concept that American cars as built by the Big Three were too big, absorbed too many of the world’s resources, and could only be described as “gas-guzzling dinosaurs.” An American Motors Rambler compact car delivered up to 30 miles per gallon, had room for six in its sedans; its Cross Country station wagons with built-in roof racks anticipated the green movement and minivans decades before their arrival.

In the 1960s Romney even initiated a modest incentive program to reward dealers for junking old, out-of-date, gas-guzzling trade-ins. This idea has just been adopted in Europe, and there’s a bill in Congress to soon give thousands of dollars in tax breaks to buyers who upgrade to the American-built electric and hybrid cars of tomorrow.

American Motors/Jeep merged with French automaker Renault in the early ’80s, which didn’t work out as hoped. Renault left the U.S. market when it sold AMC/Jeep to Chrysler in 1987. Germany’s Daimler-Benz spent $28 billion to acquire a profitable Chrysler in 1998, only to sell it back to Cerberus Capital, for peanuts, in 2007. Let’s hope that this week’s Fiat and Chrysler merger ends a whole lot happier.

That our world is changing is beyond dispute. The “Big Three” of my youth contributed greatly to the growth of the American middle class. Their sudden collapse in the deep recession of 2008 came as a shock to me and to many. The average driver must be equally mystified at the recent news stories detailing a huge industry’s crash and burn. We want to look away, but cannot. President Obama has committed his administration to rescuing the American auto business from itself by insisting on new management and a quick downsizing of GM, Chrysler and their dealer networks to reflect market realities. To paraphrase Will Rogers: “Obama never met a headache he didn’t face head on.”

My sympathies lie with thousands of independent franchised dealers who, like my late dad, his sons and his grandchildren, invested their lives, fortunes and reputations to serve an industry that let them and our nation down. Thousands of hometowns are losing locally owned dealerships, vendors and suppliers along with thousands of good jobs and the positive economic impact inherent in small businesses from coast to coast.

All thanks to a once great automobile industry that lost its way, and like many of us drivers, refused to seek or respond to new directions.

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