One Aspect of General Motors Corporation History

General Motors Building, New York City

The "finance men" at General Motors have often been blamed as the reasons why the firm has fallen on hard times during the past 40 years. What happened to the "car guys" and engineers at GM? Arthur Jones sent me sometime back what he considered as the best article ever published in the Automotive History Review -- William P. MacKinnon's "Developing General Motors Chairmen: The Extraordinary Role of GM's New York Treasurer's Office Since World War I," AHR, 32( Spring 1998), 9-18. Jones may be right about this article, as I found it incredibly informative, written by someone who was for a time but who also is a published historian with a sense of context. It is a good thing that I started to review my file folders this summer!

MacKinnon begins by citing a number of units within major organization that have had a powerful impact on future leadership -- the Skunk Works at Lockheed, the Jesuits within the Catholic Church, the Europeans operations group at Ford Motor Company, the the Green Berets at the U.S. Army Special Forces. At GM since WWI it was for a time Kettering's Dayton Engineering Laboratories Company and Harley Earl's Art & Colour Section, and then to the recent past the small New York Treasurer's Office. The number of leaders coming out of that office at GM, other firms, and government is astonishing, and you can scan the list by reading the article. AT GM it included Jones M. Roche; Richard C. Gerstenberg; Thomas A Murphy; Roger Smith; Robert Stempel; John F. Smith; and Rick Waggoner.

While this article is a celebration of that story of leadership, it does not explore the failings of these men in terms of sustaining the momentum that had its origins with Pierre DuPont and Alfred P. Sloan.  Is it fair to say that these executives were not car people, and thus did not really understand the technology, the cars, and intangible consumer and social behavior? Did they have weaknesses of communication and human relations that blinded them in ways different than what engineers may have possessed?  Should GM have recruited liberal arts majors instead for their top positions?

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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Zion Lutheran Church Car Show, July 7, 2019 -- Two Interesting VW Beetles

I had a nice time at the show today -- and I won one of the drawing prizes as a bonus! Attached are photos of two interesting old VW Beetles. the vast majority of cars were Detroit Iron, but these two were different.
Thanks to the congregation for putting on a spectacular lunch and organizing a smoothly run show.

An ingenious carburetor setup. This owner can really improvise!

Two Kinds of Moms: Subaru Moms and Range Rover Moms

From Ed!

Study: Ann Arbor Has Most Subarus with Hillary Bumper Stickers Attached.

ANN ARBOR — With the 2016 presidential election nearing its third anniversary, a recent study from the University of Michigan has revealed that Ann Arbor is home to America’s highest concentration of Subarus featuring bumper stickers supporting Hillary Clinton, the losing candidate of the 2016 presidential race.

In a press conference, researchers expressed little surprise at the results after having lived in Ann Arbor for at least a few years. 

“This wasn’t a shock whatsoever,” said University of Michigan professor of anthropology, Dr. Taylor Sikura. “Ann Arbor has that perfect blend of liberal ideology and wealth, creating a sort of lukewarm support of socialist policies that wouldn’t genuinely disrupt an upper-middle-class lifestyle. So, you get a lot of people feeling guilty enough to vote Democrat, but not guilty enough to vote Bernie Sanders and actually have their wealth redistributed. And Subarus are just good in the weather up here, I guess.”

Ann Arbor voted overwhelmingly for Clinton over rival candidate President Donald Trump, and has a historical reputation for liberalism. And Midwest weather is indeed challenging, with Washtenaw County receiving on average of 57 inches of snowfall a year. But not all residents are convinced Dr. Sikura is correct in her analysis.

According to local Ann Arbor middle school student Robin Norell, the Clinton-Subaru phenomenon is socially motivated.

“There’s two kinds of moms: Subaru moms and Range Rover moms,” said Norell, referencing the two car brands popular in Ann Arbor. “My mom has a Range Rover, and like, she wears Lululemon shirts and drinks smoothies with her friends and stuff. But Carson’s mom has a Subaru and only eats organic stuff from the farmers market and wears flowy pants.

“They both like Hillary Clinton, only my mom’s friends don’t have the sticker on their car either, so she says it would look weird, and Carson says his mom really wants everyone to know their family didn’t vote for Trump.”

Whatever the reason, Ann Arbor residents seem proud of their ongoing reputation for progressive politics and winter survival skills.

“I don’t really care what people think about me, as long as they know I’m a Hillary woman,” said local resident Jamie Bondra. “That’s why I got the Subaru. It’s not that nice to look at, but it’s low maintenance and gets the job done.”

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Cars & Coffee, Austin Landing, Dayton, July 6, 2019

I had good fortune to park in the shade this morning, and minimize the effects of a very hot morning with a strong sun. Cars and Coffee brings out plenty of  recently minted cars, and a number of cars that really should be parked at the very periphery (like the Prius that was parked next to my 1971 Porsche 911!).

An unabashed celebration of materialism, Cars & Coffee does bring out the younger set, which is good for the car hobby, but doesn't pique my contrarian attitude that places a high value on the historically technological sublime. Below are three cars that I found of interest: 240 Z  Datsun a 1951 MG TD, a Mercedes Benz 300 CE Cabriolet.

The Dynamic Nature of the Import Automobile Market in the U.S., 1963-74

1963 Toyota Crown

1969 Toyota Corona

1974 Toyota Corolla

The American Automobile Industry experienced several historic inflection points between the middle of the 1960s and the end of the 1970s. One happened in the mid-1960s when government took on the role of regulator, both in terms of emissions and and safety. Another took place at the end of the 1960s when consumers decidedly began to prefer foreign cars, a shift anticipated between 1958 and 1960 but then evaporated to a degree after the Detroit import fighters entered the marketplace (Corvair, Falcon, Valiant). Foreign cars were attractive because they were different; often innovative with front drive and rear engine configurations; and finally they were not often subject to planned obsolescence.   A third inflection point and certainly a most significant one took place beginning in October, 1973, with Oil Shock I. And then the second Oil Shock in 1979-80 catalyzed a new order in the global  automotive business.

Note the table below, and the impact that Oil Shock I had on the import market. Everyone lost, but some were far bigger losers than others.  VW sales had flattened before late 1973, the consequence of too much air cooled Beetle and not enough new product lines. Opel, Volvo, British Leyland,  and Mercedes-Benz also experienced little growth at the end of the era, but M-B would emerge with a true niche luxury brand, as exemplified by the 450 SL that was so popular in California. And Japan, despite a modest 1974 decline, was rising fast on the scene (except note the conspicuous absence of Honda).

Import U.S. Sales by years, 1962-1972 (includes cars, tourist deliveries, trucks)

Mfr.	1974	1973	1972	1968	1963
VW	336,257	480,602	491,742	427,694	278,549
Toyota	269,376	326,844	311,770	130,044	1,096
Datsun	245,273	319,007	268,666	---	---
Capri	75,260	113,069	91,995	---	---
Opel	59,279	68,400	69,407	84,680	176
British Leyland	54,870	65,948	68,641	58,616	55,776
Mazda	75,709	119,004	62,818	----	---
Fiat	72,129	58,447	58,375	30,521	---
Volvo	53,043	60,761	57,772	38,826	14,188
M-B	38,826	42,405	41,998	24,553	11,204

1963 VW Beetle

1974 Beetle -- the elegant simplicity is lost, as mandated bumpers, emissions and safety add-ons  weigh this car down

1963 Opel Kadett

1973 Opel Manta

1973 Opel GT

1965 Fiat 500 F