Before Chrysler and GM filed for bankruptcies in 2009, their end has been predicted seven years earlier by author Micheline Maynard. Her thesis states that the failure of the Detroit automakers did not come quickly or unexpectedly. The demise started at least three decades before.
The car manufacturing industry is more than just an economic segment of the American society. The car is part of America's culture. For example, my husband could enumerate the cars he had owned since he was 16, including the car model, the year, the engine under the hood, the merits, and the shortcomings. There is no shortage of car movies, such as Will Ferrell's Talladega Nights: The Ballad of Ricky Bobby and Walt Disney's animation Cars. Thus, the bankruptcies of Chrysler and GM, two of America's three domestic automakers, is more than just an economic concern. It will have cultural consequences that might become obvious only after several decades have passed.
The first question that came to my mind is this: was it possible to prevent the bankruptcies of these automakers? There are many divergent views offered by economists, politicians, and even pundits. Michelin Maynard, however, offered a customer's perspective. With exclusive interviews and intensive research into the histories and backgrounds of carmakers, Maynard presented the reasons why the fall of two of Detroit's Big Three started at least three decades ago. The disquieting part about it all is that Maynard predicted these bankruptcies seven years ago, in her book The End of Detroit: How the Big Three Lost Their Grip on the American Car Market.
In her own words, "by the end of this decade, at least one of Detroit's Big Three will not continue in the same form as it is in now" (page 10). Thus, instead of reading the analysis of those who write about GM and Chrysler after they filed for Chapter 11, I find it more enlightening to read the one written by someone who have enough insight to see the automakers' current state of affairs while everyone else is in the state of denial.
There are many factors that contributed to the fall of GM and Chrysler, such as the economic recession, the mismanagement of the companies, and the unsustainable position with which the UAW has pushed the automakers with their labor contracts. From the perspective of the customers, Michelin Maynard offered two more important reasons, the quality of the products and the increasing globalization of the car market. For those who are inclined to believe that customers who buy cars from Japanese-based transplants are not patriotic, Maynard explains that the loss of loyalty was first launched by the Detroit Three. These automakers offered their customers a series of low-quality, unreliable cars, misled by an arrogant belief that Americans would simply tolerate keys that don't fit, tires that blow, and engines that break down in the middle of winter just because the cars were made by GM or Chrysler or Ford. The American consumers, as Maynard describes, is similar to a betrayed lover who became wiser. "Consumers may sigh nostalgically over the cars their parents drove, and they still crowd curiously over the vehicles that Detroit puts on display at auto shows and in shopping malls. But when it comes to spending their hard-earned dollars, their decisions tell a much different story."
The foreign-based transplants did not enter the American market with high-quality cars. In fact, the first cars that Honda offered were chided for the small size. So why did the Big Three never kept their lead over other automakers? The foreign-based transplants poured their resources on engineering and research in a continuous quest to make better cars and cars that the American consumers would enjoy owning. If the Big Three did the same, they would still be leaders in the American market. But they were more focused on increasing profits, offering huge discounts instead of increasing the quality of their vehicles. For example, according to Maynard, the development of the Taurus, Ford's best selling car, was abandoned because the company focused on producing gas guzzling trucks. Instead of improving the Taurus, Ford simply offered deals for rental companies, making the once-craved-for car a familiar figure in rental lots.
At the same time, the foreign automakers, like Toyota and Volkswagen, built factories in the US and created jobs for Americans. The concept of the "American Car" changed slowly but inevitably. What is, after all, an American car? Is it based on the name? Or is it based on the parts from which it is made and the workers who made it?