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American Pie: The Slow Death Of Detroit

John Merchant says the American auto industry seems to be bankrupt of ideas and unwilling to seek inovation from outside. Today cars made in Detroit hold barely half of the US market.

For more of John's perceptive columns about life in the United States please click on American Pie in the menu on this page.

When first I arrived in the USA in November 1973, the country was in the midst of a fuel crisis that most people have either forgotten or never knew about. Lines at the gas pumps extended for miles, lights in the stores were dimmed, and there were frequent power “brown-outs.” It subsequently emerged that the crisis was largely contrived by the OPEC nations cutting back on production, and initiating a series of oil price increases in retaliation for Western support of Israel in the 1973 Arab/Israeli war.

The situation was exacerbated by the US refiners who held back on supplies in order to jack up prices. The OPEC members ultimately failed to maintain unanimity, and the refiners were brought to book by the US Government, restoring both supply levels and prices by early 1974. Phony or not, the crisis spawned renewed resolves to make the US less dependent on oil – a by now familiar response.

Government departments were created, research funding flowed freely, and some old legends were dusted off. One such legend was that there existed devices and designs that had potential to improve the efficiency of the internal combustion engine by unprecedented amounts, thereby reducing fuel consumption. The legend also claimed that the inventors had either been bought off or otherwise silenced by the auto industry and the oil refiners.

I had personal knowledge of one such design, a forerunner of fuel injection that died on the vine, not because of suppression, but simply due to the return of plentiful fuel supplies, so I am inclined to believe that, technically speaking, internal combustion engines could be made to be more efficient. The real obstacle here lies with the entrenchment of the US auto industry.

For me, this first came to light in the late 60’s. As part of government policies to reduce the US’ dependency on oil, edicts had been issued to the Detroit car makers to reduce the weight and size of cars. Naively, I thought this would inspire a rush to hire designers from Europe, especially people like Issigonis, who had done such an outstanding job with the British Mini. But it was not to be.

Some, so called, “sub-compact cars” were developed by Ford and American Motors, but they were not really “small cars.” The Ford “Pinto,” as an example, was just slightly smaller than its huge forebears. It was designed by the same engineers who had designed the “clunkers” of before, and incorporated many of the same concepts and components. The result was one of the worst cars Ford ever put out. Americans were of the mind that small cars were no good anyway, and the “Pinto” provided all the proof they needed.

I had experienced some of Detroit’s intransigence before I left England, but once I began to do business here I felt the full impact of their collective arrogance, and the power of the “not invented here” syndrome. The general attitude of the middle and upper level managers I met was that foreign cars would never be significantly accepted in America. They claimed to have a loyal customer and dealer base that would ensure Detroit’s future. But little by little, the Germans, Japanese and Koreans began to undermine that false sense of security.

It wasn’t that American cars were so inferior, despite their clunkiness and their reputation for being “rust buckets.” In fact some of the foreign cars were as bad or worse. The British Jaguar and MG, the Japanese Subaru, the Volkswagens and even the BMW’s of the time were unreliable and poorly supported in the USA. The big difference was that the Japanese and Germans continued to innovate and improve their offerings and support, while Detroit rested on its laurels.

Sadly, the American auto industry still doesn’t get it. Their willingness to respond to market needs has improved, as has the quality of their product, but introspection is their worst enemy. It would seem that they are bankrupt of ideas and are unwilling to seek innovation from outside. Meanwhile, many of the Japanese cars are being at least partially designed in California, by young engineers and stylists who probably would be happy to work for Chrysler, GM or Ford.

Today, Detroit holds barely half of the US market. Sales of General Motors, Ford and Daimler-Chrysler recently declined even further, while Toyota’s US sales increased by almost 8 percent. Honda and Korea’s Hyundai achieved record sales here in March 2007. Marketing experts in the Industry say that Detroit’s problem right now is that “they have run out of options for what to do with incentives.”

Well how about ignoring what has emerged as a mythical, loyal market base, and starting to design cars that the majority of people want and need. And if I can be allowed an extremely sacrilegious suggestion, maybe even copying some of the successful designs of their competitors. Now that would be a real incentive to buy.

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