The American auto industry’s self-destruction


    During the 1968 presidential campaign, Democratic nominee Hubert
    Humphrey walked the long assembly line at Ford’s sprawling River Rouge
    plant trailed by Michigan dignitaries, Ford officials and the traveling
    press. It was a surreal scene out of “Modern Times,” a cacophony of
    noise and motion in what was still considered one of the wonders of the
    mechanized world.

    As the then-vice president of the United
    States passed each station on the long journey down Henry Ford’s
    legacy, workers turned from their assignments momentarily to greet him
    before rushing to catch up with the developing creations as they moved
    along to ultimate completion.

    Viewing the scene as it moved
    along, Newsweek’s John Lindsay, one of the most erudite and savvy
    political writers of his day, put it all in practical perspective: “I
    would hate to be one of the poor guys (not his real word) who buys one
    of those cars.”

    As wise as he was, even Lindsay probably didn’t
    realize that he had touched on a problem that would play a significant
    role in the decline of the American car. In those days, Detroit was
    selling everything it made. But years later, as poor quality for
    ever-higher prices began to erode the dominance of U.S. car builders, a
    major contributing factor was worker absenteeism and lack of management
    control, bolts that didn’t get tightened properly or parts that were
    left out and a dozen other oversights because someone didn’t show up.

    The warning that one should never buy a Detroit car made on Friday or
    Monday was a devastating indictment and, before long, it was applied to
    the rest of the week. Japanese cars, made by robots and dedicated
    non-union workers, were considered far more reliable. By the time the
    American companies had taken frantic measures to solve the problem and
    at least semi-repair the image, the foreign manufacturers had
    established a presence in the U.S. market that has grown steadily. The
    damage had been done.

    In the wake of announcements by Ford and
    General Motors that they are drastically retrenching their operations
    in almost desperate efforts to save their companies, I couldn’t help
    thinking about that day at River Rouge and Lindsay’s prophetic words.
    It would be silly oversimplification to attribute the loss of market
    share to this one problem. Bad management decisions; excessive demands
    from the United Auto Workers for steadily increasing wages and fringes;
    worker retirement packages approved to keep labor peace and a
    remarkable misjudgment on product selection all have contributed to the
    decline. Putting too much emphasis on sports utility vehicles at the
    expense of new development, including hybrids, has hurt.

    This is
    not an anti-union diatribe. But no one yet has figured out how the
    union employer with the burden of past management decisions and
    inflated wages and fringes through multiyear contracts can compete with
    those making the same product without the same encumbrances. The
    demands of $30 an hour plus fringes are debilitating enough, but when
    added to the horrendous burden of pensions and medical benefits for
    retirees, the result is disastrous. While leaving the sophisticated
    theories to the economists, it still is possible for the layman to
    predict with some assurance that unless Ford and GM can win concessions
    from their workers, their decline will continue.

    Life without
    these great companies and their contribution to the technological
    leadership of the nation would be difficult to imagine for those of us
    who learned to drive on the Model A. Although it is true that because
    of expansion by the foreign makers in this country, the total number of
    those employed in the auto industry remains constant despite the
    downsizing of the American companies, it isn’t quite the same. Some of
    that money certainly remains here but a whole lot of it goes across the
    water. When World War II arrived, the huge industrial capacity of
    Detroit helped save the world. Who will pick up that slack in another
    crisis?

    There is some irony here. In the late ’40s and early
    ’50s when the Toyotas and Nissans had little or no distribution system
    in this country, American car dealers convinced their manufacturers to
    permit them to sell these brands along side their own, giving these
    competitors an unparalleled opportunity at little expense. Very shortly
    they were flooding the U.S. market while at the same time restraining
    the sale of American cars in Japan.

    When it is all said and done, it would be unthinkable not to have a Ford in the nation’s future.

    (Dan K. Thomasson is former editor of the Scripps Howard News Service.)