Crash Course

by Paul Ingrassia

  Thanks to Reuther, some skilled-trade workers began earning enough to join the country clubs where their managers were members, but that rarely, if ever, happened. Detroit’s line of social demarcation was class as well as cash. Managers and executives (except for the few who favored the old-money enclave of Grosse Pointe, on the east side) lived west of Interstate 75, territory that included the northwest suburbs of Birmingham and Bloomfield Hills. Their kids often attended Detroit Country Day School or the Roeper School. Their social courts were elite country clubs such as Orchard Lake and the Bloomfield Hills Country Club, the latter being such a GM bastion that even a Ford was considered a foreign car.

  Hourly workers, though, lived east of I-75 in Macomb County, where their powerboats, sitting on trailers, often were longer than the homes alongside them. They hung out at union halls and American Legion posts. This social-geographical dividing line continued all the way up the state to the playground communities at the top of Michigan’s Lower Peninsula.

  West of I-75 lay the white-collar resort towns of Petoskey and Harbor Springs on the Lake Michigan shore, and upscale inland lakes such as Torch, Walloon, and Charlevoix. The seasonal residents attended summer “up north” parties, where the women wore silk and the men wore seersucker. East of I-75 the Lake Huron shore was lined with blue-collar bungalows and blue-jean bars, where even saying seersucker would get you a punch in the jaw.

  The 1970s would be the UAW’s high-water mark; the 1970 strike was a singular victory for Leonard Woodcock, Reuther’s successor. Woodcock was cut from the same ideological cloth as Reuther, but lacked his predecessor’s considerable charisma. After Reuther’s death the union’s executive board had elected him president by a meager 13–12 margin. Thus Woodcock had to prove his mettle to his membership by winning contracts richer than Reuther’s.

  He would succeed, but in the process the UAW started killing the geese that had laid the golden eggs at the feet of its members. It made gains in wages and benefits, but it also single-mindedly emphasized protecting the rights of workers, often without expecting workers to fulfill their responsibilities. Rights were trumping responsibilities everywhere else in America during the 1970s, but the UAW’s power in the nation’s car factories had special consequences.

  Many factories had to close for the first days of deer-hunting season, for example; so many workers took unexcused absences—with little fear of penalty—that it was impossible to stay open. Along with piston rings, some auto plants had gambling rings. The union’s cohort of committeemen and their appointees in each factory had to be matched by a costly company counterpart to deal with the union people—which had less to do with making cars than with keeping a tenuous peace on the factory floor.

  When a machine broke down and stopped the assembly line, workers would take an unscheduled break and wait for an electrician or machinist instead of rushing to fix it themselves. Only skilled tradesmen were allowed to repair machinery, even if ordinary workers were capable of doing it—rules enforced not only by the national contract but also by the separate local contracts at each factory. The electricians or machinists often took their time getting to where they were needed, so that the plant would have to go into overtime to make up for lost production, and everybody would get more money.

  The culpability for accepting all this lay squarely with managers, who understood the problem but deemed giving in to the union to be the path of least resistance—especially because consumers had to pay up regardless. And when one company caved in to avoid or to settle a strike, the other two had little choice but to go along. Workers at Ford and Chrysler, for example, weren’t about to settle for less than what GM workers were getting. That’s what pattern bargaining, and the UAW’s monopoly on automotive labor, was all about.

  Labor was just one challenge that Detroit faced as the 1970s began. Ralph Nader’s consumer movement and America’s growing environmental consciousness were spawning new federal regulatory requirements for cars. Shoulder-harness safety belts, in addition to lap belts, became required. In the wake of the first Earth Day, on April 22, 1970, Congress passed the Clean Air Act, which phased out the use of lead as a gasoline additive—to the dismay of virtually every executive in Detroit except Ed Cole. Automotive engineers hadn’t yet learned how to make high-horsepower engines run without the performance-enhancing (albeit polluting) properties of lead. So one result was that in 1976 the Chevy Corvette had to sputter along on just 165 horsepower, less than half what the car had in the late 1960s.

  Detroit’s engineers were already overwhelmed in trying to keep up with clean air and safety regulations, but there were more challenges to come. Because of the regulatory piling-on, in addition to the alienated workers and inept managers, Detroit’s quality nosedived just as import sales were growing. In 1960 imports had accounted for less than 5 percent of U.S. car sales, but by 1971 they accounted for about 15 percent, or 1.5 million cars out of the total 10 million sold. Most imports were from Germany, but Japanese Toyotas and Datsuns were gaining ground on the West Coast and eyeing expansion into the American heartland. Imports gained further from the trend toward small cars as rising inflation squeezed Americans’ incomes and as baby boomers bought cheap wheels to take to college.

  The management teams that faced these challenges were becoming increasingly inbred and sycophantic. In a telling incident in the mid-1970s, some junior GM executives had a meeting with chairman Thomas A. (for Aquinas) Murphy that happened to fall on Ash Wednesday. Murphy, a devout Catholic who attended Mass most mornings, was wearing the ritual ashes on his forehead. One of the young men dipped his finger into a nearby ashtray, dabbed a smudge on his own forehead, and—yes—walked in to meet the boss. Years later he would become an executive vice president of the company.

  The new generation of “subcompact” cars that were launched in 1970 to combat the imports made Detroit’s dysfunction apparent. First out of the box was AMC, which launched its new Gremlin model (appropriately) on April Fool’s Day. It featured a long snout and a chopped-off back end that led, inevitably, to the joke: “What happened to the rest of your car?”

  Five months later, on September 10, GM introduced the Vega, and the very next day Ford followed with the Pinto. Both were more conventionally styled than the Gremlin, and both—like the Gremlin—were conventionally engineered. That is, they were little versions of Detroit’s big cars, with a heavy driveshaft to connect the front engine to the rear-drive wheels. The driveshaft created a big hump along the length of the car’s floor, making a small car feel cramped and adding extra weight, thus sacrificing fuel economy.

  The fledgling crop of Japanese imports weren’t stylish, but they had the sort of engineering innovation that Detroit had come to neglect. Most had front-mounted engines and front-wheel drive, eliminating the need for a driveshaft and making the cars roomier and more fuel efficient. The weight of the engine directly over the drive wheels also increased traction in rain and snow.

  In the spring of 1971 Ford chairman Henry Ford II saw enough troubles looming on the horizon to speak in an unusually blunt tone. On May 13, after the company’s annual shareholders’ meeting, he held an impromptu press conference and delivered a downbeat assessment of Detroit’s future. “I frankly don’t see how we’re going to meet the foreign competition,” he told reporters. “We’ve only seen the beginning. Wait till those Japanese”—instead of confining their sales mostly to the West Coast—“get a hold of the central part of the United States.”

  As for Washington, “holding the industry’s feet to the flame might be a satisfying and politically useful kind of exercise for some people,” Henry II declared, “but it’s not a justifiable practice.” Concerning the trend to small cars, Ford was direct. “Mini cars,” he said, lead to “mini profits.” It’s hard to fault the man for lack of foresight.

  The 1970s were the decade that undid Detroit. During the 1980s and 1990s, the Big Three would mount periodic, and sometimes spectacular, comebacks and undergo equally drama
tic crises. But never again would Detroit rule the automobile industry unchallenged and unbowed. All that Henry Ford II had cited—foreign competition, government regulation, and the trend to smaller and less-profitable cars—would combine to produce the proverbial perfect storm, and the inbred industry was ill equipped to react to it.

  The 1970s had been foreshadowed for General Motors on October 3, 1968, when the company opened the GM Building—a white fifty-story skyscraper—at 59th Street and Fifth Avenue in Manhattan. Chairman James M. Roche (the same man who had apologized to Ralph Nader three years earlier) chose the occasion to announce that in two years, GM would introduce an innovative small car. It would weigh less than two thousand pounds, be priced the same as the Volks wagen Beetle, and be built with the latest American manufacturing technology. Roche was throwing down the gauntlet to the nettle-some imports.

  To build anticipation, in May 1970 GM started running teaser ads, saying “You’ll see” but neither showing the car nor disclosing its name. That same month, by unhappy coincidence, Ohio National Guardsmen shot and killed four students during an antiwar protest at Kent State University. Kent State was located about an hour from the massive Chevrolet assembly plant in Lordstown, Ohio, where the mysterious unnamed car would be built. The Lordstown plant, which had opened in 1966, had one of the youngest workforces in the auto industry; many workers were roughly the same age—and of the same disaffected mind-set—as the kids over at Kent State. That demographic would loom large in the years to come.

  The new car, christened the Vega, was launched in September 1970, with advertising that proclaimed, “Chevy’s new little car is open for business.” But shortly thereafter the UAW’s sixty-seven-day strike against GM began. Production of the Vega, the most serious “import fighter” in GM’s history, was suspended in the midst of its launch. The high stakes maximized the UAW’s leverage against the company, just as the union’s leaders had intended. It was brilliant timing—unless the union was concerned about the long-term threat posed by Americans defecting to Japanese cars, which it wasn’t. The result: Chevy dealers, geared up to sell the Vega, wouldn’t get many of them for months.

  Meanwhile the Vega failed to meet Roche’s weight and price targets. Four hundred pounds overweight, it was priced at $300 more than the Beetle. To be sure, the Vega had its strengths. Its sleek, distinctive styling and innovative features won it Motor Trend magazine’s coveted Car of the Year award in 1971—even though the Pinto outsold the Vega that year, 317,000 cars to 245,000.

  But that same year GM took the Lordstown plant away from Chevrolet and folded it into the new General Motors Assembly Division (with the unfortunate acronym of GMAD), which henceforth would run all GM assembly plants. The corporate restructuring move—one of many that GM would try in the decades to come—was aimed at streamlining operations, eliminating duplication, and boosting efficiency.

  Though little noticed at the time, the creation of GMAD would prove a turning point. It complicated the company’s quest to produce high-quality cars just when quality was becoming critical, because it constituted a new organizational layer between Chevrolet and its customers. So if Chevy’s general manager wasn’t satisfied with the quality of the cars coming out of Lordstown, he couldn’t just crack down on the plant’s management himself. He’d have to take the problem to the top man at GMAD, a move that often spawned bureaucratic infighting, with the Chevy people blaming GMAD’s manufacturing methods and the GMAD guys blaming Chevy’s engineering. Alas, both sides often were right. In such finger-pointing contests, finding solutions became nearly impossible.

  Not long after GMAD took over Lordstown, it increased the speed of the assembly lines to make up for production lost during the strike. But instead of going from 60 cars an hour to 65 or perhaps 70, GMAD boosted the line speed at times to an incredible 100 cars an hour. GMAD also reduced the number of quality inspectors. It deemed these moves to be reasonable because the Lordstown lines had been designed to build up to 140 cars an hour. The GMAD managers also figured, incorrectly, that Lordstown’s highly automated assembly process would ensure high quality without much traditional quality inspection. They didn’t count on the reaction of the workers, who thought the moves were a heavy-handed speed-up that forced them to bust their butts for the bosses.

  Before long the sort of angry rebellion that had blown the lid off Kent State found its way to the factory floor, as some workers resorted to sabotage. “Autos regularly roll off the line with slit upholstery, scratched paint, dented bodies, bent gearshift levers, cut ignition wires, and loose or missing bolts,” reported Time. “In some cars, the trunk key is broken off right in the lock, thereby jamming it.” Drugs and alcohol became rampant at Lordstown, and more than a few workers carried guns or knives, either for self-defense or otherwise.

  In early 1972, just fifteen months after the sixty-seven-day national strike of 1970 had ended, the Lordstown workers staged their own local strike that yet again interrupted shipments of Vegas to dealers. The repeated strife grabbed the attention of the national news media, which couldn’t resist the story of oppressed young workers bucking the corporate establishment, and they dubbed Lordstown the home of the “blue-collar blues.”

  If Lordstown’s manufacturing was a mess, the Vega’s engineering was also suspect. Some of the features that had won it Car of the Year honors began to backfire. The Vega’s engine had a weight-saving aluminum block and cast-iron head, but the two metals react to heat stress (which is inevitable in all engines) in different ways. In addition, the engine’s “sleeveless” piston cylinders lacked the solid seals of conventional “sleeved” cylinders. These features had been intended to save weight and boost gas mileage, but they unfortunately made Vega engines prone to leak oil in copious amounts. Engineering innovation took another hit, in Detroit’s eyes.

  Little wonder that “the Vega seems to be recall prone,” as Consumer Reports magazine deadpanned in September 1972. Chevy dealers replaced so many Vega engines that they joked that the engines were “disposable.” As the Vega’s reputation suffered, so did Vega sales. After all, Americans who wanted small cars had more and more alternatives, beyond just the Beetle.

  Japanese car companies had been selling cars in the United States since the late 1950s, though they didn’t sell many at first—and for good reason. They were tiny, tinny, and underpowered, qualities exemplified by the Toyota Toyopet, an awful little sedan introduced to America in 1958. The number of Japanese cars sold in the United States that year totaled all of 1,604—barely enough to fill a big-city parking deck. The Toyopet was a misfit in so many ways, beginning with its name, that Toyota soon pulled it off the American market and went back to the drawing board. But that move was a tactical retreat, not a permanent withdrawal.

  In 1965 the company started shipping its compact Corona, which offered more room and more horsepower than the Toyopet, along with American-oriented options such as air-conditioning and an automatic transmission. The company sold 6,400 cars in America that year, a number that soared to 71,000 in 1968 and to 300,000 in 1971. By then Toyota’s U.S.-model lineup had expanded to include the Corona Mark II, the Carina, the Corolla, and the Celica. It was a confusing plethora of soundalike names, but that didn’t seem to matter.

  Similar sales gains were being posted by Japan’s second-largest car company, Nissan. Like Toyota, Nissan had sold its first car in the United States in 1958, but it dithered for a decade before launching its first car specifically designed for the American market—the Datsun 510. Other Japanese automakers started exporting to the United States: Subaru, Mazda, and in late 1972 Japan’s newest and smallest car company, Honda. The Honda Civic subcompact, which had debuted in Japan earlier that year, was surprisingly roomy inside, was fun to drive, and got more than thirty miles per gallon, compared to the Vega’s twenty-five. What’s more, thanks to pure dumb luck, Honda’s timing couldn’t have been better.

  In October 1973 the State of Israel vanquished six neighboring Arab countries in
the latest Mideast war. Instead of just licking their wounds, the Arab nations slapped an embargo on oil shipments to Israel’s foremost ally, the United States. Gasoline prices, which had remained remarkably stable for nearly fifteen years, surged nearly 60 percent within months. Even worse, shortages broke out. Some Americans had to line up at gas stations for hours to fill their cars. To reduce the length of the lines, some states and cities started odd-even fill-up days, limiting cars with license plates ending in an odd number, for example, to buying gas on Mondays, Wednesdays, and Fridays, and reserving Tuesdays, Thursdays, and Saturdays for cars with even-numbered plates. In 1974 Congress passed a new national speed limit, fifty-five miles an hour, to conserve fuel. In the rush to do something, to do anything, small cars became hot items. The emotional qualms that many Americans still harbored about buying Japanese cars gave way to practical considerations.

  The experience of a young woman who graduated from a small midwestern college in 1975 was typical. While she was growing up, she had watched her grandfather religiously buy a new Chrysler every two years. But Chrysler didn’t have much to offer someone on a tight budget except the Dodge Colt, which actually was made for Chrysler in Japan by Mitsubishi Motors. So she reluctantly bought a Honda Civic and adorned it with a hand-lettered bumper sticker that said: “I Would Have Rather Bought American.”

  The first half of the 1970s were difficult years for America. The country was reeling from defeat in Vietnam, the Watergate scandal, and “stagflation,” the unholy combination of inflation and economic stagnation. Detroit’s Big Three, meanwhile, were beset by an aggressively determined union, bitter strikes, unprecedented new regulations, and a fresh wave of foreign competition. All this occurred in just five years. But only in the second half of the decade did the real troubles begin at General Motors, Ford, and Chrysler.