The End of Detroit (38 page)

Within days of joining the company, Bonini was on a plane for Japan, where he finally visited Toyota’s factories not as an outsider looking for tips on how to improve Chrysler’s operations, but as a Toyota employee. After his 15-year career in manufacturing, the trip was a seminal experience. “The difference is that Toyota has been at this for such a long time. The skill level is so high, they are able to practice it at a higher level of detail and precision,” Bonini said. Returning home, one of his first tasks was to participate in a continuous-improvement session on the assembly line in Toyota’s West Virginia engine plant. There, managers and workers had studied the employees’ wrist motions as they put engine parts together and had measured their movements down to a fluctuation of 10 centimeters. Bonini had taken part in plenty of such
kaizen
exercises, but “not to that level of improvement,” he said, his voice showing that he was impressed.

In their own way, American consumers can sense that difference, too. They are not buying imports reluctantly, or for a single reason such as fuel economy, as they might have done 20 years ago. That was a reason Detroit could understand and make allowances for. But two decades or more after the energy crises that caused Americans to sample Japanese cars, they now are willingly and enthusiastically buying import cars and trucks, because the vehicles meet their needs and satisfy their expectations. The fundamental damage to Detroit has already been done.

To be sure, the end of Detroit’s influence on the American automobile industry is a tremendous loss for Detroit. A quick drive around Detroit and its suburbs gives a sense of just how important the auto industry is to the region. In every corner of Wayne, Oakland and Macomb Counties are office parks and low-rise buildings that are home to suppliers, engineering firms, advertising companies and public relations agencies who owe their existence in some way to GM, Ford or Chrysler. Every time a budget is cut, every time a new car project is canceled, each time incentives have to be raised in order to move metal from dealers’ lots, thousands of people feel the pain.

But there is a victory in all of this for American consumers. The imports’ success is being enjoyed by the people who have bought Hondas and Toyotas, Hyundais and BMWs, and who love their vehicles. Yes, the demise of Detroit is a tragedy for Michigan and other states that depend on the Big Three companies. But investments by foreign companies are a boon to Alabama, Tennessee, Kentucky, Texas, California and other areas. As for the argument that the profits earned by foreign companies go back to their home countries, consider this: In the 1990s, as it shut two dozen plants in the United States and eliminated 75,000 jobs, GM invested more than $1 billion in new plants all around the world. During the same period, Toyota invested more than $1 billion to expand its Georgetown, Kentucky, plant, build a truck plant in Princeton, Indiana, and start up an engine plant outside Charlestown, West Virginia, creating more than 20,000 jobs. Which decision was better for the U.S. economy? Which did more to raise the standard of living for people in the United States? By any measure, most people would say the money was better spent here. In June 2003,
Detroit News
columnist Daniel Howes argued that because of its growing market clout, Toyota had a responsibility to fund the charities, schools and cultural institutions in the Detroit area in the way that Big Three auto companies had done for years. If it was to be considered the industry’s leading company, Howes said, Toyota had to assume a leadership role in Detroit, the epicenter of the American automobile universe.

That misses the point. Toyota has no such responsibility to Detroit, nor do any of the other foreign manufacturers. Their responsibility lies wherever their customers live, their dealers sell cars and their workers manufacture vehicles. The American automobile industry no longer rests in one place; its influence is being felt all across the United States. And what’s more, import companies’ popularity has resulted in a much better American automobile industry. It may no longer be in Detroit’s sole control, but that is what happens in a country like the United States, where consumers are free to buy whatever they like. And they have those choices because of the efforts of countless Americans who have played a role in creating vehicles to suit American buyers’ tastes.

No one has enjoyed his role more than Robert McCurry, the Toyota executive, now retired, who set the company on its expansion path during the 1980s and 1990s. “Once I was there for about a year and got to know the people in Japan, I knew it was a great company. I knew they were going to be very successful. I was happy to be a part of that,” he said. Having worked in Detroit, he found that Toyota’s “system, their honesty and doing what you wanted done, was phenomenal. I knew they could accomplish what they wanted to accomplish. They’re loyal to quality, both at Toyota and at Lexus. They’ve accomplished that reputation, and that’s why they continue to grow, grow and grow.” Detroit, he said simply, “lost that.”

If the Detroit companies are to win back customers, they can’t simply flood the market with new vehicles and hope that will somehow generate more sales. Nor can they simply dump cars onto rental car lots, because the rental companies are only a last resort. Detroit’s survival cannot be based on leveraging history and making promises about a grander “next year” that somehow never comes to pass. To get it right, GM, Ford and Chrysler have to do what their foreign counterparts do: They must make every vehicle they develop uniquely special and targeted precisely at the consumers who will own it. They must make a concerted effort every time out. Every pickup, every car model, every minivan has to be the best of its kind ever built, and every generation after that must be the same. Detroit companies have to put in the kind of effort that Honda did with the Odyssey minivan; take the risk that Nissan is taking with the Titan pickup; stretch the imagination as Toyota has with its Camry and all its derivatives.

There can be no more compromises, no excuses about the need to save money, no halfhearted moves with a vow that “this will hold the place until next time.” Customers have moved far, far beyond that. And they know the difference as soon as they get behind the wheel. They don’t have to make choices based on patriotism or guilt. There is no need to make allowances or wait around until Detroit is ready with its entries. Customers can walk into any import showroom and drive home in whatever they desire, confident that they’ve chosen wisely and, just as important, as excited about their new car or truck, minivan, SUV or crossover as their parents and grandparents once were about cars from Detroit. Unlike past generations, Americans now stand an excellent chance that however long they choose to keep their vehicles, they will be rewarded with reliability. Whether the company that makes their vehicle is based in Japan, Germany or Korea, American consumers know they can find something that fully meets their needs. And that knowledge has ultimately spelled the end of Detroit.

NOTES

THIS BOOK IS BASED
primarily on hundreds of hours of original research, along with my reporting on the automobile industry for the
New York Times
from the years 2000 to 2003. In most cases, direct quotes are drawn from the interviews that I conducted in the United States, Canada, Europe and Japan. I visited manufacturing plants in Alabama, Indiana, Kentucky, Michigan, Mississippi, Ohio and Ontario, as well as a number of factories in Japan. Almost all of these interview subjects agreed to speak on the record, but there were some people who felt more comfortable being interviewed without attribution. The articles and books mentioned below supplemented my reporting in specific chapters, and my thanks go to the journalists who shared their work with me.

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

I
N 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 Miller. 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.