When The Detroit Automotive Four were at their Zenith -- 1965

The story of the American automobile industry of the 1970s is one of few successes and many failures, and of a general decline that has continued to well into the 21^stcentury.  But it was only a few years before 1970 that the industry – and indeed the American nation – was at its zenith. The four dominant automotive firms in the 1960s – General Motors, Ford, Chrysler, and American Motors, were the first, third, fifth and one-hundred and thirteen largest businesses in the U.S., employing most of the 770,780 employees enumerated in the “Motor Vehicles and Parts” industry (SIC 3717) in 1965. One firm in six in the U.S. could be listed as automotive dependent, either making, distributing, servicing or using motor vehicles The Detroit Four were highly integrated, particularly General Motors and Ford, as engines, transmissions, castings and stampings, valves, gears, clutches, wheels, brakes, steering plastics, glass and steel were frequently made in-house.  Suppliers accounted for between forty and fifty percent of the costs of making cars given the highly integrated nature of the business.

That is not to say that even industry-leader General Motors had vulnerabilities even before the Federal Government began challenging the autonomy of the industry, first with the 1965 Motor Vehicle Pollution Act and 1966 National Traffic and Motor Vehicle Safety Act.  John Z. DeLorean recounted how Alfred P. Sloan’s fine-tuned organizational balance between centralized control and decentralized operations had gradually unraveled at the edges:

As I progressed in the corporation, I watched GM’s operations slowly become centralized. The divisions gradually were stripped of their decision-making power. Operating divisions were more and more being made on the Fourteenth Floor. This is because men rose in power who did not seem to have the capabilities or broad business outlook necessary to manage the business. They had gotten into power because they were part of a management system which for the most part put personal loyalties from one executive to another, and protection of the system above management skills; and put the use of corporate politics in the place of sound business leadership. …
They also lost sight of the corporate objective of keeping policymaking and control separate from the day-to-day operations of the business….

And the committees and subcommittees which were methodically set up during the 20s and 30s and 40s to plan and guide General Motors growth were not doing that. They spent little time looking at the big picture, instead occupying themselves with miniscule matters of the operation which should have been considered and disposed in the divisions or much further down the management line.[1]

At the divisional level, DeLorean recognized that in the 1960s Chevrolet was plagued with too many models, options, and engine, transmission, and axle combinations, hence resulting in huge manufacturing inefficiencies. Chevy was losing its market leadership to Ford between 1962 and 1968. These weaknesses were acerbated in 1970 in the midst of a costly UAW strike that shook the firm.   

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