Is this real American, Big 3 leadership?
Is the Big 3 really any better than Big oil?
We build what Americans want. That’s the mantra US automakers tout regarding their over-dependence upon gas-guzzling pickup trucks time and time again. So, what about the other 50 percent of America? LOL! We really are a divided country, but in so many convoluted ways.
Anyway, I’ve been thinking a lot about the Big 3 recently, especially since coming across a JD Power study regarding the importance of perception and how it affects US auto consumers — we’re pretty manipulable, even to our disadvantage. Then came the Super Bowl commercials, particularly Clint Eastwood’s Chrysler commercial and also GM’s Chevy Silverado apocalypse commercial.
All of it has me wondering, when it comes to being pro-American, are the Big 3 really any better than Big oil?
I found myself wondering that again after reading Pols miss Chrysler ad’s true message, an opinion column in the Detroit News. Was the bailout good for America? Even that’s almost a silly question, if we’re being honest, but even that question misses the real point of the Chrysler ad, and that is, what have we learned? And is all this political spin regarding the bailout good for America? Are we really moving forward or will we repeat our mistakes?
The whole bailout is really pretty funny stuff. For instance, it was President George Bush — a Republican – that initiated the whole auto bailout by pumping enough money into the Big 3 to give the Obama administration time to deal with this crisis — a classy move in my opinion and a necessary one. Likewise, I bet Republicans are more pro-Big 3 vehicle buying than are Democrats. Ohhhh, the irony.
From there; however, things get overly political and even more nonsensical.
For instance, Obama probably would have had no chance to save the Big 3 if not for Bush’s actions. So Obama has to give huge props to Bush, or he’s being disingenuous. The Big 3 would have been out of money and 17 billion in bills due without Bush’s actions. Bankruptcy court would have been the only option, and it would have happened before Obama took office. Similarly, despite UAW rhetoric, Republicans like Mitt Romney weren’t trying to destroy the US auto industry and Detroit, but they were trying to minimize the power of the UAW — even destroy it. But as, Danial Howes in his Detroit News piece points out, significant blame for the Big 3’s downfall falls in the UAW’s lap, yet I’ve heard little talk from the UAW ever accepting any responsibility.
Likewise, Obama, didn’t blame the UAW much either. He can’t. It’s a key political base, and that’s more important than the truth as well. Thus, he focused on corporate greed and gave bondholders, for instance, the short end of the stick while protecting the UAW as much as possible — a move that car czar Steve Rattner has admitted was a a bit of mistake in hindsight. Nevertheless, to be certain, the corporate side of GM, the Wall Street side of the General, did deserve great blame, more blame than did the UAW.
But in great crimes, key accomplices are often equally culpable.
Inevitably, the reconstruction of the US auto industry was going to hurt no matter the approach — either Obama’s approach or a Romney-ian approach — and many people did get hurt, and the fall out still hasn’t been fully felt and tens of billions of dollars have been lost forever.
But that is no longer the point. Have we learned anything? That’s what Howes suggests was Clint’s — Chrysler’s – real point. More important, can WE come together?
Obviously, our politicians cannot. What about the auto industry?
Recent analysis by a number of economists, for instance, has found that the real estate bubble and all its fraudulent and greedy derivatives were not enough to account for the financial meltdown. High energy prices, it is becoming more and more accepted, were also an important contributor.
That brings up GM’s Chevy Silverado apocalypse ad, a commercial Ford found so offensive they sent a cease and desist letter to GM before the commercial was aired, claiming that GM’s commercial was void of truth in advertising. Essentially, Ford claimed they could use the same Polk data as GM and also claim that the F-Series is the longest lasting pickup truck.
Yet, we all know this isn’t about truth in advertising, it is about profits. Ford understands this game. It’s about perception, and like a good politician, Ford should have hit back with its own smear campaign — at least that was the old Detroit way of doing things, but should it be today? At the end of the day pickup trucks are the bread and butter of the US auto industry.
Unfortunately, pickup trucks certainly couldn’t save the US auto industry as gas prices started skyrocketing before the US recession. While consumers were lining up, paying premiums for hybrid cars at Toyota dealerships, consumers avoided Big 3 dealerships like the plague, and the Big 3 bled money hand over foot, dropping billions by the month — even though internal studies by at least one Detroit automaker had forecast the possibility of such a gas spike, but the beancounters decided it wasn’t worth preparing for — the government would never let the industry collapse anyway. How could they?
And they were right.
So, how did the Big 3 get in this spot in the first place? By building what Americans wanted? Or by building what drove the most short term profit because that was the only chance to keep their bloated, short term thinking and fuel inefficient approach to the future afloat? I mean instead of having an adaptable UAW workforce, the industry instead offered job’s banks. Instead of helping the guy out in the next production line backed up by demand, the guy or gal in the line with less work, took a nap, watched TV, or maybe went out to the parking lot to smoke a joint.
What kind of competitive business could ever imagine a scenario where a job’s bank would be the key to profitable success? Only one with the old UAW as a key partner. Is the new UAW better? I hope so.
Likewise, instead of embracing innovation, corporate boards embraced the status quo as long is provided the most short term profit. Short term greed is rarely the key to long term success.
But back to oil companies versus the Big 3
The other day I read a report about the unintended consequences of the last rise in fuel economy requirements — the 90’s SUV craze. Interestingly, states like California, for instance, tried to stop the SUV craze dead in its tracks early on, but the auto industry was able to wage a successful PR campaign built around the American ideals of freedom of choice, and safety.
SUV safety? In the 90’s?
If you were going to die in an accident in the 90’s, it was probably going to be in a rolled over SUV, yet the Big 3 inundated the market with ads about safety and freedom, while paying off the families of rollover death after rollover death in exchange for non-public, closed settlements. The perception of safety, not the reality, was all that mattered because it was extremely profitable.
Of course, it also drove US foreign oil dependence higher and made the Big 3 ever more dependent upon the light duty truck segment.
Even in the 90’s, after the Big 3 were given billions to develop technologies like hybrid cars, leading to NiMH patent rights, the Big 3 gave up the projects as soon as the money was gone, selling NiMH rights, for instance, to an oil company. What a great taxpayer expenditure.
But could you blame the Big 3? Why worry about hybrid cars when gas-guzzling SUVs were selling so great? Besides, the Big 3 were selling what Americans wanted, and if Americans weren’t concerned about US energy security, why should the most important industry in America try to be a noble corporate steward? Their only responsibility is to shareholders, not America. And the UAW went right along because the couches in the job’s banks were quite comfortable.
Today, many Americans hate on Big oil, except for the importance the industry has had on their pension funds and 401k’s of course. Or the way industry has helped keep gasoline prices low compared to the rest of the industrialized world for decades. For that we just bury our heads in the sand and blissfully plead ignorance.
But why are we so eager to embrace the Big 3? To overlook its greed-driven, monumental failures?
Sure the Big 3 create jobs, so too does Big oil — as well as a massive amount of wealth that is pumped into the US economy. However, the hypocrisy of building ‘American-made’ vehicles that are dependent upon foreign oil is a little too greasy for me to stomach, especially when some transplants offer domestic production at even greater levels than some of the Big 3. But they aren’t UAW run.
I know. Who cares? it’s all about who builds the longest lasting 16 mpg pickup truck. Didn’t you watch the Super Bowl, duh!?! Because take away those foreign oil guzzling, middle east war provoking gas guzzlers and it doesn’t matter whether a Republican or Democrat is President. The Big 3 are dead. Immediately. And the US economy crushed.
So, what have learned since the bailout? Have we really changed?
Can we — all of us — come together in a way where we don’t just share our responsibility in this mess we’ve all helped create, regardless of the political, self-serving and profitable spin? Can we work together for a better future that focuses less on blame and more on solutions? Because the blame part is the easy part, and it’s the part politicians are most adept at using, because like automakers, politicians know it isn’t reality that matters, just perception.
More important, can automakers, such as Chrysler, be better leaders, better corporate stewards? Because, really, Americans don’t owe the Big 3 anything. Rather it’s the Big 3 and the UAW that owe America. For once, for instance, it would be nice if Ford and GM didn’t worry so much about gas-guzzler domination, but rather how they can lead America to energy independence and economic security. It’s time for the Big 3 to stop blaming consumers, to stop blaming politicians — even though they all deserve blame — and to start taking real American leadership.
For example, what’s the Big 3’s plan for US energy independence? What’s their blueprint for a more secure and economically strong America? Because if their future is still just a future based solely on profits, particularly profits driven by foreign-oil dependent gas guzzlers, and being too big to fail, then the Big 3 are no better than the oil companies America loves to hate.
You’ve successfully talked the talked Chrysler, now show me something. Or Ford. Or GM. You owe us. You owe America.
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