Wednesday, May 13, 2009

The Road to Ruin

What is good for the country is good for General Motors, and
what's good for General Motors is good for the country." --- GM president
Charles Wilson in 1952.

That low rumbling sound you hear is Charlie Wilson spinning in
his grave. Fifty seven years after he uttered that famous line, he
wouldn't recognize the old place.

Oldsmobile and Pontiac have joined the Nash and Studebaker on the
slag heap of automotive history. Plants have been closed,
subsidiaries jettisoned, the workforce slashed. The stock, long a
mainstay of the family retirement portfolio, is flirting with a buck
a share. There is talk the company could leave Detroit.

What's good for General Motors these days is bankruptcy. What's
good for the country is to keep the company propped up long enough for it
to reemerge from its financial woes as a completely different entity.

Of course, General Motors is not alone. Chrysler is already in
bankruptcy. Ford is banking on electric vehicles to stave off an
economic nosedive. However, as Henry Ford once said, "You can't
build up a reputation on what you are going to do."

There are a lot of reasons bandied about for the decline of the Big
Three automakers. Poor management often marked by arrogance (see
Wilson's quote above), management/union relationships that make the
Israelis and Palestinians look like John Lennon and Yoko Ono. Failure
to recognize that the Japanese had a better idea. And products that
set new standards for lousy quality and bad design.

It is that last category that concerns us today. As we bid goodby
to the American auto industry as we know it (does anyone really think
Fiat will make a better Chrysler?), it's time to take a nostalgic
look back at the cars that helped sink Detroit.

The Corvair. What can you say about a car that gave us Ralph
Nader? To refresh your memory, this sexy, rear-engined beauty produced by Chevy
was a radical departure from the iron being produced in 1960. But it had a
couple of flaws: it tended to careen out of control on its own, its
single-piece steering column could impale the driver in a front collision and it
leaked oil like the Exxon Valdez. All of which made Nader a media star with
his book, "Unsafe at Any Speed." Alas, the Corvair is gone but Nader is
still with us.

The Edsel: Ford's folly was not so much a bad car as a bad idea.
Prededed by years of hype (There was even an "Edsel Show" on CBS
starring Bing Crosby, Frank Sinatra, Rosemary Clooney and Louis Armstrong),
the car turned out to be nothing more than a bulbous Mercury with a stupid
grill. Even after 50 years, its name is still a joke punchline ("It looked
like an Olds sucking a lemon") and synonymous with failure.

The Vega. Chevy's attempt to take on compacts and subcompacts
like the VW Beetle, the Vega was initially popular when it was introduced in
1971. It was even Motor Trend's car of the year. Little did the public know
that the first time General Motors tested this car on the track, its front end
reportedly broke off from the rest of the vehicle. Buyers soon
learned that the body was prone to rust and the aluminum block engines could
overheat and burst into flame. Quality was nonexistent due to labor difficulties
at the Lordstown, Ohio, manufacturing plant. The recalls began to multiply
but customers didn't and it was off the market by 1977.

Dodge Aspen/Plymouth Volare. Rushed into production in 1976 as
Chrysler teetered on the brink of bankruptcy, the cars had a few problems.
"The engines would stall when you stepped on the gas. The brakes would
fail. The hoods would fly open. Customers complained, and more than three and a
half million cars were brought back to the dealers for free repairs--free
to the customer, that is. Chrysler had to foot the bill. But then even cars
that were mechanically sound started rusting." That assessment is from
none other than Lee Iacocca, Chrysler's main man at the time who coined the
phrase, "If you can find a better car, buy it."

Cadillac Cimarron. GM in its infinite wisdom decided to take a
world famous brand reknown for prestige and luxury and offer it up as a
humble, poorly performing compact. According to one source, the Cimarron,
introduced in 1981, was initially advertised as "Cimarron, by Cadillac" and
sales personnel were instructed by GM to not refer to the car as a Cadillac
and to inform customers that it was technically, not a Cadillac. It was, in
fact, a four-cylinder Chevy Cavilier priced twice as much as its sibling.
According to Car and Driver, current Cadillac product director John Howell has
a picture of the Cimarron on his wall captioned, "Lest we forget."

And last but not least, the Pinto. The Pinto, like the Vega, was an attempt to compete
with imported compacts and subcompacts. But the Pinto surpassed all others
when it came to failing both engineering and ethical standards.

It seems that the car's design allowed its fuel tank to be easily damaged in the event
of a rear-end collision which sometimes resulted in deadly fires and
explosions. This, and the fact that the doors could potentially jam during an
accident due to poor reinforcing made the car a potential deathtrap. When Ford
became aware of the flaw, it decided it was cheaper to pay off lawsuits than
to redesign the car. When all was revealed in a Mother Jones magazine
article, lawsuits, criminal (murder) charges and an expensive recall of all
defective Pintos followed. Although Ford was subsequently acquitted of all
charges, it paid several millions of dollars in damages and earned the reputation
for being the manufacturer of "the barbecue that seats four."

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