Crash Course

by Paul Ingrassia

  None of them were on hand, though, in March 1948, when Henry II met with British army officials in Germany. The British occupation zone contained a partially destroyed factory that turned out small numbers of an odd-looking beetle-shaped car that the British thought had commercial potential. They offered to give Volkswagen to Ford Motor, free of charge. Henry II turned to one of his vice presidents, Ernest Breech, who said, “Mr. Ford, I don’t think what we are being offered here is worth a damn.”

  Sixty years later Volkswagen would be worth more than General Motors, Ford, and Chrysler combined. Ford’s historic missed opportunity wasn’t evident then, however, and in any case it didn’t seem to matter. The shape of the American auto industry had been determined by forty-five years of inventing, maneuvering, building, fighting, and growing.

  The eighty-eight American car companies that existed in 1921 would shrink to just five by 1958—American Motors and Studebaker in addition to the Big Three. Of the five, GM, Ford, and Chrysler accounted for 90 percent of sales. Power in the auto industry had been concentrated, as if by natural selection and survival of the fittest, in the hands of three companies and one union. The model of corporate oligopoly and union monopoly seemed poised to stay in place forever. Meanwhile America was enjoying an historic postwar economic boom, with Detroit leading the way.

  THREE

  GLORY DAYS OF PONIES AND GOATS

  It was remarkable that a straitlaced, stiff-collared guy like Alfred P. Sloan, Jr., would conceive of cars as personal me-mobiles—rolling advertisements, as it were, for the sensibilities and aspirations of their owners, however ostentatious or frivolous. But Sloan probably never figured that his insight would evolve into cars with designs, styling cues, and names inspired by women’s breasts, men’s genitals, Flash Gordon spaceships, and wild animals. That’s exactly what was happening to automobiles by the 1950s, when Sloan was ending his career with acclaim as the greatest manager of the twentieth century.

  Whatever Detroit built, America bought, partly because it didn’t have much choice. But during these years General Motors, Ford, and Chrysler really did seem to know exactly what people wanted. And what Americans wanted was often pretty outlandish. Tail fins that pointed to the sky. Sporty cars that exuded the exuberance of the country’s youth culture. Muscle cars with 350-horsepower engines driven by testosterone-fueled boy racers whose driver’s licenses were barely two weeks old.

  Cars were celebrated in song: “Fun, Fun, Fun,” “Little Deuce Coupe,” and “409” by the Beach Boys, “GTO” by Ronny and the Daytonas, “Dead Man’s Curve” by Jan and Dean, and more. The 1960 hit television series Route 66 starred two hot young actors, Martin Milner and George Maharis, and one very hot car—the Chevrolet Corvette. In 1968 Steve McQueen, as detective Frank Bullitt, drove his Ford Mustang fastback through the streets of San Francisco, pursuing the bad guys driving a Dodge Charger. It was Hollywood’s first iconic car chase, and such chases would be a staple of action movies happily ever after.

  Throughout the 1950s and 1960s, America’s love affair with the automobile deepened and intensified. In the late 1950s Gene Benner (unaware, of course, that half a century later he would be a car dealer scrambling to cope with Detroit’s greatest crisis) played car-watching games with his twin brother, Tom. They would sit on the front steps of their home in Auburn, Maine, and call out the make and model years of the different cars that passed by. In those days each model had its own distinct style, which wouldn’t always be the case later.

  Boys across America played similar games and dreamed of buying their first car. Benner’s came in 1967, when he was a college sophomore: he bought a well-used, seven-year-old Ford for $500. But his joy was deflated not long afterward when a windstorm blew a huge branch off a tree and onto his car’s roof, wrecking it entirely. With cars, Benner learned, things could go from good to bad in a hurry.

  In the 1950s and 1960s, television brought cars and all they represented—freedom, status, style, and sex—into millions of American living rooms nightly. Cars were the perfect appliances for a society that was physically and upwardly mobile. And new institutions were being built around the automobile by people who didn’t even work for the car companies.

  One was Abraham Levitt, who built tract housing in Long Island in the late 1940s and early 1950s, creating Levittown, suburban sprawl, and the attendant daily commute to work by car. Another was Kemmons Wilson, who opened his first Holiday Inn on the road between Memphis and Nashville in 1952, launching a national motel chain that made car travel more reliably comfortable than the no-name dives then dotting the highways.

  Then there was Ray Kroc, who bought a little drive-in hamburger stand in San Bernardino and built it into a nationwide chain called McDonald’s, turning cars into portable dining rooms. Knitting all these things together was the new interstate highway system, which President Dwight Eisenhower developed to move troops quickly from one place to another as part of America’s national defense during the Cold War. Thus it might be said, with some poetic license, that Detroit boomed in the 1950s and 1960s because of the “4-H Club”: hamburgers, highways, houses, and hotels.

  Who knew then that Detroit’s sky’s-the-limit success was fostering the insularity and arrogance that would bring the American auto industry to its knees half a century later? America was preoccupied with its remarkable postwar economic prosperity, underpinned by Detroit. In January 1953, during his confirmation hearings as Eisenhower’s secretary of defense, GM president “Engine Charlie” Wilson responded to a question by declaring, “I thought that what was good for our country was good for General Motors, and vice versa.”

  Wilson’s remark would be famously quoted—and far more often misquoted—over the years, but it contained a great deal of truth. In the early 1950s two-car families and even women drivers were rarities in the United States. By 1970 they had become the norm. The 1950s also saw the development of automotive creature comforts—notably air-conditioning and electrically powered windows—that would become increasingly common.

  In the early 1950s, new leaders burst onto the scene in Detroit. In 1955 Edward N. Cole, Chevrolet’s hard-charging chief engineer, had developed a hot new engine that put some zip into everyday driving and put zest into Chevy’s sales. Cole’s landmark “small-block” 265-cubic-inch V8 was only as powerful as some four-cylinder engines forty years on, but it was a marvel in its day. What’s more, the ‘55 Chevy could be purchased with coral and charcoal paint, two-tone coloring that gave the car a memorable art deco look.

  Cole was also a key figure behind the Chevrolet Corvette, a two-seat sports car destined for a place in boyhood fantasies. It was launched in late 1953, a seminal year that brought the end of the Korean War, the debut of Playboy magazine (with more boyhood fantasies), and the beginning of Elvis Presley’s career. The two-seat sports car looked great but had a weak six-cylinder engine, a mushy suspension, and an ill-fitting convertible top.

  Those flaws made the Corvette’s early sales so disappointing that GM was ready to drop the car. But a mid-level Chevy engineer named Zora Arkus-Duntov argued that killing the Corvette was precisely the wrong move, because Ford was preparing a sporty two-seater of its own, the Thunderbird. “If Ford makes success where we failed, it may hurt,” wrote Duntov, a Russian refugee, in a 1954 memo that was awkwardly worded but clear. “In the bare-fisted fight we are in now, I would hit at any opening I could find, and the situation where Ford enters and where Chevrolet retreats, it is not an opening, it is a hole!”

  The prospect of humiliation at the hands of Ford persuaded Cole to let Duntov reengineer the Corvette with a V8 engine, a better transmission, and other upgrades. The Corvette-versus-Thunderbird battle seemed destined to run for decades, but in 1958 the ‘Bird took a radical detour. Ford’s Robert McNamara decided the Thunderbird would appeal to a broader market if a backseat was added.

  Thus the Thunderbird became a four-passenger boulevard cruiser designed more for show than for go, surging ahead of the
Corvette in sales. In 1964 (the year that U.S. car sales passed 8 million vehicles for the first time) the Thunderbird was immortalized in the Beach Boys lyric song “Fun, Fun, Fun,” about a teenage girl’s adventures and misadventures while cruising in her car. GM, however, heeded its heart instead of its head, keeping the Corvette a true sports car with a smaller sales volume but an intensely devoted following.

  The Thunderbird was a rare commercial victory for Ford over GM, which U.S. antitrust authorities warned “to settle for no more than 50% of the market and keep out of trouble.” But Sloan, still GM’s chairman (though not CEO) at eighty, would have none of that. “If you stand still,” he said, “you go behind.” GM’s market share climbed past 50 percent in the early 1960s, though the company would escape antitrust action. Four decades later GM’s market share would plunge below 25 percent, as competitors did to the company what the trust busters didn’t.

  If the Corvette and the Thunderbird embodied exuberance in Detroit’s postwar automobiles, the Cadillacs of the 1950s exuded garish-ness that made them icons. The credit, such as it was, went to GM’s Harley Earl, who believed that cars should provide “visual entertainment.”

  During World War II Earl noticed the stabilizer fins that shot upward from the twin tails of the Lockheed P-38 fighter and decided to deploy smaller versions of them on cars. The result was small but distinct “finlets” that sprouted on the tails of the 1948 Cadillacs. Their popularity prompted Earl to turn his attention to the front of the car. Like the fins, the chrome protrusions he added to the front bumpers of Cadillacs started out small. But in 1953 they gained a prominent conical shape that was supposed to resemble artillery shells and thus project a sense of power. They also resembled female breasts, invoking a different sort of power. The chrome protrusions were quickly nicknamed “dagmars,” after a generously endowed starlet in a television variety show. To accentuate the obvious, in 1957 the chrome dagmars got black rubber tips that added an unmistakable nipplesque accent. Meanwhile, as the dagmars entered, well, full bloom, the great Tail Fin War of the late 1950s was getting under way.

  The war started not with Cadillac but with Chrysler, whose reputation for engineering excellence was often undermined by its dull designs. To change that, the company put exceptionally tall fins on the tails of its 1955 cars and labeled the new styling “The Forward Look.”

  Chrysler’s rocketlike fins proved an instant hit in a country that was becoming enamored of the space age. In the first five months of 1955 the company’s market share jumped to more than 18 percent, up from just 13 percent the prior year. Much of the increase came at the expense of General Motors.

  Chrysler put even bigger fins on its 1956 and 1957 cars, causing GM executives even more worry about the unlikely success of their smaller competitor. Cadillac designers rushed back to their drawing boards, and in the fall of 1958 GM unveiled the most outlandish cars the world has ever seen.

  The 1959 Cadillacs had tail fins that reached almost as high as the car’s roof. The fins were so big that Cadillac’s Series 75 model was three feet longer than GM’s massive Hummer H2 would be fifty years later. Astride each fin sat two prominent red taillights, placed side by side, resembling a particular part of the male anatomy. Nicknamed “gonads,” they briefly supplanted hub caps as the theft item of choice for greasy-haired juvenile delinquents. Cadillac reasserted its supremacy, and each different GM marque got its own distinctively shaped fins, including angled “delta wing” fins for Buick and horizontal “bat-wing” fins for Chevrolet.

  The booming crop of variously shaped fins would be little more than an amusing historical curiosity, except for one thing. It showed that the Big Three had taken to competing on styling instead of on technology or engineering. The obsession with styling eventually would catch up with Detroit when foreign car companies took a different tack. But in the 1950s Americans seemed enamored of styling, the more outlandish the better. The exception that would prove the rule was taking shape—literally—at Ford.

  In January 1956 big events were under way at Ford. It became the last of the Big Three to go public, though the Fords retained control with supervoting shares that only family members could own. At the same time plans were unfolding for a new premium brand.

  The Edsel brand was introduced on September 4, 1957, with four models. Instead of tall tail fins, their distinctive styling cue was an enormous, oval-shaped front grille. Before long it was being compared to a horse collar, a toilet seat, and, inevitably, a vagina.

  The grille was just one of the Edsel’s problems. Besides being aesthetically ridiculous, the car was technically pedestrian, and its quality—especially the jerky suspension system—was suspect. In the first year, Ford sold only 200,000 Edsels, less than one-third the number planned. In November 1959, after two years of futility and nearly $400 million in losses, Ford killed the Edsel before further losses could kill Ford.

  Five years into the tail fin craze, it was becoming clear that not everyone was buying Detroit’s definition of the American dream. The dissenters ranged from counterculture bohemians to college professors and students to sober-minded people who valued practicality over style. Some of them were turning to the little car made by the German company that Ford had brushed off a decade earlier.

  The Volkswagen Beetle was developed in the early 1930s by Ferdinand Porsche, a talented but stubborn engineer who had worn out his welcome at established car companies such as Mercedes-Benz. The car got its first name—Kraft durch Freude—from another guy who eventually wore out his welcome everywhere, Adolf Hitler. He wanted a people’s car for Germans, as the Model T had been for Americans. Kraft durch Freude, which means Strength Through Joy, was the name of the Nazi labor movement.

  The car was saved from that name by the outbreak of World War II, when the factory at Wolfsburg in north-central Germany switched from making the car to producing military vehicles. After the war the British occupied Wolfsburg and hired a former executive from Opel, GM’s German subsidiary, to run the partially bombed factory. Heinz Nordhoff didn’t really want the job, but in the wreckage of postwar Germany he was desperate.

  Nordhoff, like the British, saw possibilities for the car, which had a quirky design. Besides its buglike shape, it had an air-cooled engine mounted in the rear, quite the opposite of the front-mounted, water-cooled engines on virtually every other car in the world. But the result was terrific traction in rain and snow, because the engine’s weight sat squarely over the rear-drive wheels.

  To boost production, however, Nordhoff had to get modern machine tools, and the best place to buy them was the United States. For that he needed dollars, and that basic need—more than any grand strategy—prompted him to start shipping Beetles to America. The first year’s export, in 1949, totaled two cars. In 1952, the number topped 1,000, beginning nearly two decades of rapid growth.

  Early buyers included returning GIs who had seen, and often driven, the cars in Europe and liked them. At first the cars had just 25 horsepower, not much more than Henry Ford’s Model T. And they were strictly no-frills, lacking even a gas gauge until 1962. But no-frills meant low price: $1,548 in 1958 compared to more than $2,400 for a Ford Fairlane. That year Volkswagen sold more than 100,000 cars in the United States for the first time, including 25,000 Microbuses, a Beetle derivative that had been developed after the war. By 1959 Volks wagen’s success was prompting Detroit to enter the market for small cars. As a result, VW reluctantly started advertising.

  The Volkswagen ads, created by an upstart agency named Doyle, Dane and Bernbach, were as quirky as the cars. One of the first, in late 1959, showed a Beetle sitting in front of a prosperous suburban house and a headline that asked: “What year car do the Jones drive?” Readers couldn’t tell, of course, because the Beetle looked the same year after year. The ad took direct aim at annual styling changes, which lay at the very heart of Detroit’s business model.

  Another ad, which touted the Beetle’s thirty-two miles to the gallon and ease of parking,
carried a simple, two-word headline: “Think small.” Volkswagen’s unlikely success with its quirky car was beginning to prove that Detroit really wasn’t impregnable. It was also spurring Detroit to mount a counterattack.

  The first wave came from tiny American Motors Corporation, which along with Studebaker formed the “Little Two” that existed in the shadow of Detroit’s Big Three. AMC chief George Romney figured that at least some people wanted practical, sensible cars with an American flavor. The recession of 1958 proved him right. That year, to the surprise of the Big Three, AMC’s compact Rambler became the auto industry’s third-largest nameplate—behind Chevrolet and Ford, of course, but ahead of such stalwarts as Pontiac and Plymouth. Romney’s success grabbed the attention of General Motors, Ford, and Chrysler, who decided to strike back with compact cars of their own.

  Two years later they did.

  On October 3, 1959, just as the new 1960-model cars were appearing in showrooms, The Saturday Evening Post carried a lengthy article headlined: “The Big Three Join the Revolution.” It described the new compact cars being launched that year by the Big Three: the Ford Falcon, the Plymouth Valiant, and the Chevrolet Corvair. “This small-car move may be a giant industrial blunder,” the Post wrote. “Or it may be the smartest thing Detroit has done in decades.” The article added that the new compacts “will be a pleasant surprise in all ways but one—price.” At close to $2,000, the Falcon, Valiant, and Corvair were hundreds of dollars cheaper than Detroit’s full-size cars, but still $300 to $400 above the Beetle. It was a hefty difference at the time.

  The most daring and innovative of the new compacts, hands down, was the Corvair. It was the brainchild of Ed Cole, who in 1956 had been promoted from chief engineer to general manager of Chevrolet.