The End of Detroit
Page 33
CHAPTER TWO: A FALLEN COMRADE
Brown, Peter, “Incentive Wars: GM 1, Rest of Industry, 0,” Automotive News, January 20, 2003
DiPietro, John, A Ford Taurus/Mercury Sable History, Edmunds.com, December 2, 2001
DiPietro, John, A Honda Accord History, Edmunds.com, December 6, 2001
DiPietro, John, A Toyota Camry History, Edmunds.com, December 12, 2001
“Ford Executive Pays Rare Tribute to Toyota Camry,” Reuters News Service, February 12, 2003
McNamara, Mary, “The Great SUV Divide,” Los Angeles Times, January 29, 2003
Naughton, Keith, “The Fast and Luxurious,” Newsweek, January 12, 2003
Stiffer, Harry, “Dr. Range Cuts, Industry May Bleed,” Automotive News, January 20, 2003
Walton, Mary. Car. New York: W.W. Norton & Co., 1997
CHAPTER THREE: TWO PATHS TO THE SAME CONCLUSION
Meredith, Robyn, “The ‘Ooof’ Company,” Forbes magazine, April 14, 2003
CHAPTER FOUR: JOURNEY FROM THE INSIDE OUT
Shirouzu, Norihiko, “Honda’s Ambitions Pressure Detroit,” Wall Street Journal, July 10, 2002
CHAPTER FIVE: HOT DOGS, APPLE PIE AND CAMRY
Gwynne, Sam, “New Kid on the Dock,” Time magazine, September 17, 1990
Taylor, Alex III, “America’s Sweetheart,” Fortune magazine, November 26, 2001
Taylor, Alex III, “Competition: Here Come Japan’s New Luxury Cars,” Fortune magazine, August 14, 1989
CHAPTER SIX: THE CHALLENGER
Magee, David. Turnaround. New York: HarperBusiness, 2003
CHAPTER SEVEN: NIBBLING FROM
THE BOTTOM AND THE TOP
Hakim, Danny, “BMW Design Chief Sees Art on Wheels; Some Just See Ugly,” New York Times, November 29, 2002
Andrews, Edmund L., “A Loyal Survivor Rises at BMW,” New York Times, January 6, 2002
CHAPTER EIGHT: DETROIT SOUTH
“Alabama Criticized Over Benz Deal,” Associated Press, December 29, 1993
Corbett, Brian, Alisa Priddle, and Drew Winter, “Southern Hospitality,” Ward’s Auto World, August 1, 2002
Lyne, Jack, “Hyundai’s $1B Plant Alabama Bound,” Site Selection Online, April 2, 2001
“The 1980s Have Not Been Kind to America’s Auto Workers,” Time International, August 7, 1989
“Nissan Workers in Tennessee Reject UAW,” Reuters News Service, October 3, 2001
“UAW to Try Organizing at Honda,” Associated Press, October 4, 2001
CHAPTER NINE: THE END OF DETROIT
Detroit Free Press, various stories about Ford Motor Company, October 31, 2001
Detroit News, various stories about Ford Motor Company, October 31, 2001
Garfield, Bob, “GM Ad Demonstrates Marketing Ineptitude,” Advertising Age, June 2, 2003
Hakim, Danny, “In Their Hummers, Right Beside Uncle Sam,” New York Times, April 5, 2003
Hakim, Danny, “A Family’s 100-Year Car Trip,” New York Times, June 15, 2003
The History of Saturn, Saturncarsatlanta.com, January 19, 2003
Mackintosh, James and Jeremy Grant, “Ford Approaches 100 With Optimism,” The Financial Times, June 12, 2003
Welch, David and Gerry Khermouch, “Can GM Save an Icon?” Business Week, April 8, 2002
White, Joseph B. and Norihiko Shirouzu, “Backfire,” Wall Street Journal, October 31, 2001
CHAPTER TEN: WHAT DO CUSTOMERS REALLY WANT?
Hakim, Danny, “Hybrid Autos Quick to Pass Curiosity Stage,” New York Times, January 27, 2003
Rechtin, Mark, “Altered State,” Automotive News, February 24, 2003
EPILOGUE: THE WORLD IN 2010
“The Stars of Asia—Managers,” Business Week, July 2, 2001
“Toyota’s ‘Prince’ Prepares for His Reign,” Associated Press, November 12, 2000
SELECTED BIBLIOGRAPHY
Ghosn, Carlos. Renaissance. Tokyo, Japan: Diamond Co., 2001.
Honda Motor Co. A Dynamic Past, An Exciting Future. Tokyo, Japan: Toppan Printing Co., 1999.
Ingrassia, Paul, and Joseph B. White. Comeback. New York: Simon & Schuster, 1995.
Magee, David. Turnaround. New York: HarperBusiness, 2003.
Maynard, Micheline. Collision Course. New York: Birch Lane Press, 1995.
Maynard, Micheline. The Global Manufacturing Vanguard. New York: John Wiley & Sons.
Togo, Yukiyasu, and William Wartman. Against All Odds. New York: St. Martin’s Press, 1993.
Toyota Motor Corp. Toyota: A History of the First 50 Years. Toyota City, Japan: Dai Nippon Printing Co., 1988.
Walton, Mary. Car. New York: W.W. Norton & Co., 1997.
ACKNOWLEDGMENTS
IN ALMOST EVERY CORNER of this country, and around the world, people are fascinated with and affected by automobiles and the companies that make them. It is an industry that touches us all in one way or another, from manufacturing and marketing to labor relations, politics and finance, not to mention those heart-stopping vehicles that stir flights of fancy in any language. It has a rich history, a complicated present and a future marked with myriad questions. In short, one can spend years studying it and writing about it, as I have, and still only begin to understand all that goes into it.
I was drawn to write this book by my own experience as a car owner. Except for the Dodge Dart that I drove in college, whose peppy but erratic slant-six engine died with 177,000 miles on it, I have always owned imports. My first new car was a Toyota Tercel, bought in 1982 for $5,200. My current car is a Lexus RX 300, which I leased after running out of patience with a Volkswagen New Beetle whose gorgeous Vapor Blue paint and zippy ride masked substandard quality that tried my patience. Moreover, my own family is a microcosm of what has happened to Detroit. My brother was actually the first member of our family to buy an import, a yellow Toyota Corolla on which I practiced driving a stick shift. My mother was a loyal Oldsmobile buyer for nearly 30 years, but she has become a Lexus owner, too. My friends own everything from Hondas to Volkswagens to BMWs. I didn’t have to look far to test my theory that a growing number of consumers have turned to imports. The reality is right there in my address book.
Writing this book was a joy that was made possible by the cooperation and support of many people. I am grateful to my agent, Russell Galen, at Scovil Chichak Galen, for suggestions that helped me frame my book proposal in precisely the right way. My editor at Random House, Roger Scholl, was wonderful to work with, and my assistant, Lisa Robinson, was diligent and creative. I especially want to thank Andrew Sacks for shooting my book jacket photo.
I am indebted to my editors at the New York Times, particularly Glenn Kramon, Jim Schachter and Jim Cobb, for their insight and encouragement. Special thanks go to Detroit bureau chief Danny Hakim, for his humor and camaraderie, and to Howard French, Jim Brooke and Ken Belson in the Times’s Tokyo bureau, who made me feel so welcome during my stay there.
My 2002 media fellowship from the Japan Society of New York allowed me the once-in-a-lifetime opportunity to spend three months crisscrossing Japan, visiting factories and car companies. My thanks to William Clark, Jr., John Wheeler, Ruri Kawashima and Brian Byun. I also would like to thank the staff at the International House of Japan for their kindness, along with Kazuko Koizumi-Legendre at the Foreign Press Center for her wonderful assistance in arranging translators and interviews.
I appreciate the cooperation shown me by the car companies that were generous with their time and resources. At Toyota, I wish to thank James R. Olson, who opened doors and supported this project from our first conversation about it at the New York Auto Show in 2001. Daniel Sieger was tireless in arranging my interviews in the United States and abroad, and Jennifer Chung was of tremendous help in California. In Japan, I am grateful to Hisayo Ogawa for her professionalism and friendship, and I also wish to thank Tetsuo Kitagawa. At Honda, Jeffrey Smith was another early supporter who was invaluable in helping me understand the Honda Way. My thanks also go to Yuzuru Matsuno and Edward M
iller. In Japan, I was greatly assisted by Masa Nagai and particularly Tatsuya Iida, who patiently answered my endless questions about Japanese language and culture.
Thanks also go to Gina Pasco, Fred Standish and Galen Medlin at Nissan. At Hyundai, I would like to thank Chris Hosford and Steve Morgan, and Martha McKinley at BMW was extraordinarily helpful. Among the Detroit companies, I appreciate the help of Steve Harris, Tony Cervone and Tom Kowaleski at GM, as well as Ken Levy and David Barnas at Chrysler. In Alabama, my appreciation goes to Linda Paulmeno Sewell at Mercedes-Benz, Steve Sewell and Barbara Thomas, Mayor Lew Watson of Lincoln, and particularly Theodore Von Cannon, for being such a gracious host during my visit to Birmingham.
This project would not have been possible without the many experts on the auto industry who know it as well as anyone inside. I would like to thank for their gracious expertise Jeremy Anwyl, Karl Brauer and Jeannine Fallon at Edmunds.com; James Womack at the Lean Enterprise Institute; Joseph Phillippi at Auto Trends Consulting; Peter DeLorenzo at Autoextremist.com; Greg Kagay of Auto Market Scope; Steve Girsky at Morgan Stanley; John Casesa at Merrill Lynch; Chris Cedergren and Wes Brown at Nextrend; Ron Pinelli at Autodata; Art Spinella at CNW Marketing Research; Scott Sprinzen at Standard & Poor’s; and George Petersen at AutoPacific.
At the University of Michigan Business School, thanks go to Professor David Lewis, who knows more about automotive history than anyone on earth; to my department head, Cindy Schipani; and to Paula Caproni for being my patient academic mentor. My students, many of whom work for the auto companies, have given me a terrific inside view of the challenges they face in their daily lives. I have learned as much from them as I hope they’ve learned in my classroom.
My friends around the world provided invaluable encouragement and feedback. Thanks to Judith Burns, Keith Naughton, Warren Soiffer and Fara Warner. I also would like to thank my family: my mother, Bernice G. Maynard; my godmother, Maxine Clapper; my brother, Frank Maynard; my sister-in-law, Lisa Barry Maynard; and my nephews, Benjamin Maynard and Parker Maynard, who now have a book from Auntie Micki all their own.
In closing, I want to pay tribute to Chris Parks, my bureau chief at United Press International in Lansing, Michigan, who set me on the path to becoming a business journalist. Thank you for everything, Sluggo.
INDEX
*The following items may be used as a guide to search for information in this eBook.
Akai, Hisayoshi
Alabama: Birmingham; culture; Detroit South; economic impact of foreign carmakers; employee training; Honda plant, Lincoln; Hyundai plant, Montgomery; Mercedes factory, Vance; as right-to-work state; Talladega County Industry Training Center; Toyota engine plant, Huntsville. See also Bronner, David
Alden, Jim
Allen, Diane
Alliance of Automobile Manufacturers
Amemiya, Koichi
Anwyl, Jeremy
Arroba, Giovanny
Art Center School of Design, CA
Aston Martin
Audi
Autodata
Autoextremist.com
Auto Market Scope
AutoPacificGroup
Backlund, Nicholas
Baker, Charlie
Bangle, Chris
Benner, Tim
Berkman, Erik
Bernhard, Wolfgang
Bernstein, Sam
BMW; aviation and; brand image; Canadian Magna Steyr and; CEO (see Panke, Helmut); design and designer Bangle; Dixi; financial crisis, 1950s; global sales; Greer, SC, plant; history of company; iDrive; independence; Isetta; Japanese competition; lineup expansion; luxury market; market approach; Mini Cooper; Montvale, NJ, headquarters; motorcycles; 1-series; operating margin; priority of vehicle; profit margins; Quandt family and; Rover and; sales growth and expansion plans; 7-series; 6-series; SUV development and sales; tax on gas guzzlers and; 3-series; 328 roadster; U.S. sales; X3; X5; Z-3; Z-4 roadster
Bonini, Jamie
Borst, George
Boyer, David
Brauer, Karl
Broberg, Alisha
Bronner, David
Bush, George W.
Caldwell, Phillip
Camp, Billy Joe
Car (Walton)
Carberry, Charles
Cedergren, Christopher
Chaison, Gary
Chen, Ye
China
Cho, Fujio
Chrysler (DaimlerChrysler); American Motors acquisition; Auburn Hills, MI, Technology Center; bankruptcy threat and bailout; CEO (see Zetsche, Dieter); China market; Chrysler Crossfire; Chrysler LH sedans; Chrysler LX and concept cars; Chrysler nameplate, plans for; Chrysler Operation System; Chrysler Pacifica; Chrysler Town & Country; crossover cars; Daimler takeover; design and designer Trevor Creed; Dodge brand; Dodge concept cars; Dodge Grand Caravan; Dodge Ram; Dodge Tomahawk; Dodge Viper; Jeep brand; Jeep concept cars; Jeep Grand Cherokee; hybrids and; Hyundai and; K-car; legacy of substandard quality; management; market share; Mercedes and; minivans; Mitsubishi and; Nissan comparison; Nissan takeover try; platform sharing; Plymouth dumped; Plymouth Prowler; Plymouth Voyager; profits and losses; PT Cruiser; rear-wheel drive; rebates and incentives; rescue plan; sibling companies; strategy to improve brands, change image; SUVs; UAW contracts and; Windsor, Ontario, factory
Chung Ju-Yung
Clements, Denny
CNW Marketing Research
Collins, Jack
Colliver, Dick
Connelly, Jed
Consumer Reports
Convis, Gary
Cowger, Gary
Creed, Trevor
Cuneo, Dennis
Customers; brand expectations or disappointments; Civic owners; Chrysler disappointing; “conquests”; Consumer Reports and; cost of vehicles and; Detroit, lack of trust; education and Internet; fuel economy and imports; Honda’s respect for; hybrids and; Hyundai buyer; imports react to; Japanese carmakers and; Lexus treatment of; minivan demand; patriotism and; positive response to new Detroit products; quality demand; switch to imports; Toyota Camry owners; Toyota TPS system and; “tuning”; women; word of mouth; youth appeal (Gen Y)
Daewoo
Da Prile, Mike
David, Larry and Laurie
DeLorenzo, Peter
Delphi Corp.
Deming, W. Edwards
Detroit, “Big Three” carmakers: anger as motivation; arrogance; Auto Show, 2003; battle against imports; celebrity CEOs; communication closed; “conquests”; cost of vehicles; dealers; deals versus product development; development of new vehicles; Dream Cruise; economic impact on region; educated consumers and; emphasis on size, scale; employee pension funds and health care costs (legacy costs); employees, number of; engineers, role of; environmental regulations and; executives as finance men; factories outside U.S.; factory capacity utilization rates; factory renovation; failure of Ford Taurus; “good enough” mentality; Honda and Toyota ignored; hybrids, resistance to; infrastructure; joint ventures with imports (see also specific companies); loss of market to imports; luxury vehicle market, loss of (see also Toyota, Lexus); market share; market trends; mid-sized sedans, loss to Toyota (see also Toyota, Camry); minivan market, share; mistakes with customers; nameplates and market shifts; new business ventures by; outsourcing by; past market dominance; philosophy of emotionally motivated buyer; pickup trucks; plant shut-downs; politics and labor; poor quality and loss of consumer trust; positive consumer response to new products; power of; profit margin; profits, 1998; “push system”; rebates and sales incentives; remedy suggested; rental car fleets; resale value; Rouge complex and; sales incentives; scenarios for future; small-car market loss; suit against Japanese “dumping”; SUVs and (see also specific companies); “tear down”; UAW contracts and; See also Chrysler (DaimlerChrysler); Ford; GM
Drymon, Frida
Durant, William Crapo
Eaton, Robert “Bob”
Eberhardt, Joe
Edmunds.com
Elliott, Tom
EPA,
Fuel Economy standards; gas guzzler tax
Ephlin, Donald
Ernst, Chuck
Evans, Lisa
Fiat; Agnelli family and; GM stake in
Firestone, Harvey
Firestone Tire Co.
Folsom, Jim
Ford, Anne
Ford, Edsel
Ford, Henry
Ford, Henry, II
Ford, William Clay, Jr.
Ford, William Clay, Sr.
Ford Motor Company; acquisitions; “aero look”; annual losses, 2001–2002; benchmarking; Bronco; Bronco II; cars sold per day; cash balance; centennial; CEO (see Ford, William Clay, Jr.); China market; Contour; corporate culture; corporate headquarters, Dearborn, MI; employee pension and health care costs (legacy costs); Escape; Excursion; Expedition; Explorer; factory closings, job cuts, elimination of models; Falcon; Firestone and; Focus; Ford family and; foreign investments and sales; Framingham, MA; Freestar minivan; Freestyle crossover; F-series; Futura; goal to be big and grow; GT; hybrids; import brands; international operations; Lincoln; Lincoln Continental; Lincoln Navigator; Louisville, KY, truck plant; management; market share; Mazda joint venture; Mercury Mountaineer; Mercury Sable (see Taurus below); minivans; mistakes; Mustang; Nasser at; Nissan joint venture; pickups; Premier Automotive Group; profits and losses; quality, loss of; rebates and sales incentives; rental car market; revitalization campaign; Rouge, MI, complex; SUVs; Taurus; Thunderbird; Toyota and; Twin Cities, MI, plant; UAW contracts and; Volvo acquisition; Wixom, MI, plant
Foreign-based car companies: acceptance by consumer; advantages over Detroit; American market; American sales; “conquests”; consumer tastes and; core strength; crossover vehicles; dealers; Detroit Auto Show, 2003; Detroit opposition undercut; economic impact on U.S. (see also Alabama); European luxury cars; focus on vehicle, not company; fuel economy advantage; gasoline-electric vehicles; impact of global economy; legislation that curbed Ford and GM in Japan; luxury car market; management style; market share and sales; market trends; mid-sized sedan market; minivan market and; “money in the trunk”; nonunion labor; pickups, entry into market; political and popular support for; profit margins; quality stressed; resale value; selling to one customer at a time; small-car market; SUVs, light trucks; U.S. environmental regulations and; U. S. factories and employees; vehicles produced in U.S. per year; willingness to change; zaibatsu and keiretsu. See also specific car companies; specific states