Life of Automobile, The

by Parissien, Steven

  Michael Edwardes had begun BL’s brand devaluation in 1981, ruining the venerable Triumph marque, formerly associated with inexpensive but stylish sports cars and fast executive saloons, by rebadging the Honda Ballade, a four-door version of the bestselling Civic, as the Triumph Acclaim. This uninspiring model sold fairly well in the three brief years it was on the market; but no one was deceived by its name, and the car was soon popularly nicknamed the ‘Ronda’. In 1984 Musgrove launched the 200 series – which, once again, was merely a re-skinned version of Honda’s Ballade, with a few more British parts. But this time Honda struck a tough deal. In 1981 Edwardes had insisted that no Ballade should be available in Britain during the Acclaim years; now Musgrove cheerfully gave way, severely handicapping the new 200 both at home and abroad by allowing a Japanese equivalent to be made at Honda’s new British plant at Swindon. After 1986 Day continued the Honda alliance, replacing the SD1 with the Honda-derived Rover 800 and launching a Honda-based 400 series. He also reprieved the ageing Mini, which Musgrove had marked out for euthanasia in 1988. But neither Edwardes, Musgrove nor Day ever gave much thought to updating the Mini in the manner of Ford’s Fiesta or VW’s Golf.

  As the 1980s wore on, British car manufacturing became an increasingly pallid and pathetic reflection of German and Japanese successes. Day’s new model numbering system – from 200 to 400 and 800 – was a feebly disguised attempt to trump BMW’s numerical nomenclature, a strategy that was as obvious as it was laughable. The 400, though made at Longbridge, was basically a Honda Concerto, while the Cowley-made 800 was little more than a repackaged Honda Legend. At least the petrol versions of the 400 used a British engine (although Rover imported their diesel powertrains from Peugeot). But the range’s flagship, the Honda-powered Rover 800, fared particularly poorly. Ambitiously marketed in the US as the Sterling, serious quality and reliability problems, publicly highlighted by J. D. Power’s highly regarded customer surveys, soon made the 800/Sterling an American laughing stock – just at a time when its Japanese-made sister, the Acura Legend, was beginning to sell rather well. In 1992 the 800 was superficially Roverized by being provided with a Rover grille. But worldwide sales continued to be disappointing; even in its best year, 1987, only 54,000 cars were sold, and by 1998 a mere 6,500 were being made. The following year the 800 was axed to make way for what turned out to be Rover’s last hurrah, the aspiring, handsome, yet ill-fated Rover 75. Meanwhile, the old MG badge was trundled out to give the faster Rondas a spuriously sporty image, a fabrication that fooled no one either at home or abroad.

  Despite Day’s brave assurances of future success, Margaret Thatcher’s Conservative administration preferred to wash its hands of the whole business. When the government began negotiations to sell Rover to General Motors, Day countered with an eccentric proposal to sell the group to aircraft manufacturer British Aerospace (BAe). Day’s patriotic concept won the approbation of MPs, although many within BL and the motor industry were baffled, and Rover was duly delivered to BAe in 1988. But the industry experts had been right to be mystified. BAe had little idea of how to run a car maker, and had only been tempted by the government’s offer to write off Rover’s debts of £1 billion and provide BAe with £800 million in new investment and £500 million in tax credits. BAe’s single achievement was to add yet another Ronda, the Accord-clone 600, to the Anglo-Japanese Rover line-up. When it realized it had no further ideas, BAe sold the ailing car maker for £800 million in 1994, thus realizing a tidy profit. To everyone’s astonishment, the unlucky buyer was BMW.

  Not all British car makers found themselves in a downward spiral during the 1980s. By the end of the decade, Jaguar had emerged from its malaise and had recovered some of the jaunty confidence of the Lyons years. The much-vaunted replacement for the Jaguar XJ6, code-named (with typical Jaguar irrationality) the XJ40, had been in development throughout the 1970s, but nothing had appeared by the time Jaguar was spun off from the rest of BL as an autonomous division in 1980. Jaguar’s new boss, John Egan, believed in testing cars thoroughly before launch, as the Germans and Japanese had always done. Accordingly, the XJ40 became the most tested car Jaguar had ever produced, completing 1.24 million miles in Arizona’s summer heat, 1.1 million miles in Canada’s arctic winter, and 1.8 million miles in Australia’s unforgiving outback. When the car was finally released in October 1986, however, it did not look enormously different from the Series III XJ6 it was supposed to be replacing. Its front end was squared off and provided with rectangular headlamps, features that made it resemble a 1970s Ford. And shortly after the XJ40’s launch, it found itself eclipsed by the appearance of BMW’s revamped 7 Series. Jaguar would need something far more appealing and novel to take on BMW and Mercedes, and win.

  While Egan was reigniting a sense of corporate enthusiasm at newly privatized Jaguar, across the city of Coventry Rootes’ new French owners were losing heart. In 1986 Peugeot replaced the old Simca/Chrysler/Talbot Horizon with the Peugeot 309. The French had originally intended to anglicize the model by selling it as the Talbot Arizona in Britain, but now they simply could not be bothered. Instead, they ended the pretence that Ryton’s cars were as English as roast beef, badging all their UK-built models as Peugeots, and simultaneously sold their Whitley design centre to Jaguar.1 The only Talbot-badged product to survive the cull was the Talbot Express van, which lasted until 1992. Many now questioned how long Peugeot would commit to car production in Britain.

  While British Leyland and Peugeot-Talbot agonized over their lacklustre product range, Ford’s Fiesta wrestled with Peugeot’s French-made 205 for domination of the European supermini market. Further up the Ford range, in 1982 Ford took the decision to abandon the name and replace the legendary if unspectacular Cortina, along with Germany’s evergreen Taunus, with something completely different, the all-European Sierra. The company’s new family car originated as the pet project of Ford of Europe’s Bob Lutz. Alongside fabled figures such as Iacocca and DeLorean, Lutz was one of the glamorous, colourful, tough guys who burst into the higher ranks of the auto industry at the end of the 1970s. The Swiss-born Lutz was an imposing, charismatic figure who had served as a Marine fighter pilot in the US. He cultivated an oldfashioned macho image, flying his own private jet fighters and collecting sports cars, and derided contemporary ecological concerns, such as global warming, which he famously labelled ‘a total crock of shit’. Yet in 1982 Lutz stumbled, showing that even mighty Ford could still sometimes get it wrong. The Sierra’s aerodynamic, ‘jelly-mould’ external styling was devised by Ford’s German stylist, Uwe Bahnsen (the author of the Capris and Taunuses of the 1970s), and the design department’s rising French star, Patrick le Quément, to provide a dramatic contrast with the familiar contours of generations of Cortinas and Taunuses. But instead of winning new customers for Ford, the highly controversial styling proved a major stumbling block for potential buyers. Moreover, the Sierra’s cheap interior plastics looked outdated and tacky, the car’s oldfashioned rear-wheel drive seemed to be a backward step, and the model’s hatchback format implied that the boot would be too small for family or executive use. More seriously, the car’s erratic behaviour in crosswinds prompted Dagenham and Köln to add rear spoilers to keep it straight and stable. Ford belatedly attempted to make amends for the lack of a boot by issuing a traditional saloon version, the Sierra Sapphire, in 1987, but by then the damage had been done. Although Sierra sales had become quite respectable by the end of the 1980s, in 1993 the model was quietly dropped to make way for Ford’s much-vaunted ‘world car’, the Mondeo, whose all-round qualities (and capacious boot) helped Ford of Europe to recapture the fleet sales it had lost with the Sierra.

  Ford’s rivals were quick to scent that the American giant had tripped. The big corporate fleet orders of the 1980s went not to the Sierra but to more orthodox rivals, notably GM’s conservatively styled and well-packaged second-generation Vauxhall Cavalier/Opel Ascona/Opel Vectra, which was one of Europe’s bestselling models throughout the decade. Uwe Ba
hnsen’s reputation never recovered. Having adapted the Sierra format for the upmarket Ford Scorpio, which aimed to challenge the mid-range BMWs and Mercedes but which failed to make any impact in the executive market,1 Bahnsen left Ford for academia in 1986. Le Quément was luckier. Leaving Ford for Volkswagen in 1985, two years later he joined Renault as vice president in charge of corporate design – on the understanding that he would answer only to the firm’s chairman, that he would sit on the main board, that all Renault’s external design consultants would be dismissed, and that his design team would be doubled to more than 350 people. The Renault board agreed, and strapped themselves in for a rollercoaster twenty-two years with le Quément, during which he gave the firm some audacious and successful new models, such as the anthropomorphic Twingo, the Espace II, the Mégane II, the Scénic ‘compact MPV’ and the idiosyncratic Kangoo ‘leisure activity vehicle’, and some courageous failures, such as the angular Vel Satis executive car and the Matra-made Avantime crossover.

  Thanks to le Quément’s boldness, Renault entered the twenty-first century with a reputation for cutting-edge design and technological advance, and – along with Volkswagen, BMW, Mercedes, Fiat, Toyota, Nissan and Honda – as one of the world’s premier auto manufacturers. The fact that Renault and its European and Japanese rivals were able to expand their global sales, however, was due not just to the excellence of their products but also to the failures of America’s Big Three. During the 1980s General Motors fell from its lofty position as the manufacturer of almost half of America’s cars to a dismal 35 per cent domestic market share. In 1979 Chrysler boss Lee Iacocca had acknowledged that ‘imports and GM cracked 70 per cent of the [US] market’; by 1990 GM had not only lost this pre-eminence but was dangerously deep in debt. And as GM faltered, the gates opened for the rest of the world.

  In 1980 General Motors had seemed by far the healthiest of the Big Three. In that year Ford reported a $1.5 billion loss, while Chrysler, which had recently been bailed out by the federal government, declared an annual loss of $1.7 billion. GM, though, announced only a very modest annual deficit, of $762 million, and continued to pay quarterly dividends to its shareholders. Moreover, in 1981 GM’s new chairman appeared to have found the right solution: rather than demand government subsidies, as Chrysler had done, or insist that Washington limit imports of Japanese cars, as Iacocca was doing, GM’s boss announced: ‘The answer is to become competitive.’ Over the next nine years, however, GM did exactly the opposite, squandering its impressive heritage through a series of elementary errors.

  The erosion of GM’s position in the 1980s can in part be attributed to a single individual. The new chairman, Roger Bonham Smith, was the definitive insider. He had begun his career at GM in 1949 as an accounting clerk, having graduated from the University of Michigan as a business major. Twenty-one years later he found himself GM’s company treasurer, and the following year became a vice president. In 1974 he was promoted still further, to become executive vice president in charge of finance, government relations and public relations. Seven years later this former accountant was elevated to the head of the company.

  A man whose character the Detroit News later described as ‘brilliance unimpeded by humanity’, and whom CNBC voted ‘one of the worst CEOs of all time’, Roger Smith was a short, pink, bespectacled figure, with few social graces (‘He long ago lost “please” and “thank you” from his active vocabulary,’ commented one GM vice president), a very short fuse (he often stormed out of meetings, and was notoriously unaware of others’ sensibilities) and, famously, no sense of humour. Smith was also uneasy in social situations, rarely making eye contact with others when he spoke, and was an appalling public speaker, reading in a monotone from his script in a high, squeaky voice. He scolded his senior executives like children, and issued a stream of diktats from his office without consulting anyone. By the end of his tenure he had destroyed morale at GM (‘No one believes he gives a damn about anyone but himself and his bonus buddies,’ noted one Flint foreman) and brought the once-proud giant to its knees through a series of abysmal business decisions. Yet in the early 1980s he was hailed as a ‘visionary’ and ‘the innovator of the age’. Smith, the motoring press suggested in 1981, was just the man to take on, and beat, the Japanese and Germans.

  Smith’s first big mistake came in 1984, when he destroyed Sloan’s painstakingly assembled divisional ladder in one fell swoop. All GM’s divisions, including Fisher bodies (which ceased to exist as a separate entity), were combined into two huge combines: Chevrolet-Pontiac-Canada (CPC)1 and Buick-Oldsmobile-Cadillac (BOC). The result was chaos. Nothing new was launched or developed for almost two years, while workers’ divisional loyalties disappeared at a stroke. Smith’s seemingly random binary split also made no sense when applied to the various GM plants; thus CPC ended up building Cadillacs while BOC found itself making Pontiacs. New layers of management were added just at the time when GM’s rivals were streamlining, and existing staff were duplicated (CPC alone added eight thousand new staff). Crucially, the new GM10 range of midsize cars was seriously delayed; approved by Smith in 1981, GM10’s first tangible results – the new Pontiac Grand Prix, Buick Regal and Oldsmobile Cutlass Supreme – were not available until 1988. By 1989, the year before the last of the GM10s was launched, General Motors was losing $2,000 on every one of these cars. When asked by Fortune magazine why the project had been such a catastrophe, Smith replied: ‘I don’t know.’ (‘It’s a mysterious thing,’ he later added inarticulately. ‘I’ve said I’ll take my share of the blame on all those things.’) One of the first decisions taken after Smith’s departure was to undo his corporate structure and group all of the car brands into one single division.

  Roger Smith’s method of dealing with the increasing threat of Japanese imports was similarly planned – and similarly flawed. Ignoring, once more, GM’s proud and valuable brand heritage, to say nothing of the allegiance of both consumers and dealers, he established wholly separate, stand-alone ventures outside GM’s existing brand structure. Turning his back on GM’s own historic marques, he made common cause with the Japanese manufacturers he had so recently and bitterly denounced, thereby providing GM’s rivals with the ideal Trojan horse with which to penetrate the American market.

  In 1984 GM and Toyota launched New United Motors Manufacturing Inc. (NUMMI) at an old plant at Fremont, California, which had actually been closed by GM two year earlier. Fremont had been a notoriously badly run factory, with appallingly high rates of absenteeism, stoppages, drunkenness, assembly-line sabotage, and even fist fights. It was the Wild West of American automobile production. (‘When GM locked the plant,’ said one reporter, ‘the greatest surprise was that they bothered to save the keys.’) Now NUMMI proposed to make Chevrolet Novas and Toyota Corollas at Fremont with many of the same workers – but with a largely Japanese management. The result was predictably embarrassing for America’s floundering car makers: NUMMI’s Japanese or Japanese-trained management was soon able to produce 25 per cent more cars per hour than its GM parent, using one third of the floor space and with minimal absenteeism and shop-floor disruption. Boundaries between workers and management were dismantled; there were no executive washrooms or cafeterias, and not even any assigned parking spaces. Revealingly, too, NUMMI’s cars had far fewer defects than their American rivals.1

  Smith’s ostensible reason for creating NUMMI was to enable him to export Japanese management to other GM plants. Yet the lessons of Fremont were never applied elsewhere; instead, Smith launched a brand-new subsidiary in Toyota’s image. Saturn Corporation was a £5 billion autonomous concern which, Smith declared, would be ‘a different kind of car company’, one that completely distanced itself from GM and which overtly aped the Japanese. Even its sinuously enigmatic logo looked Asian rather than American. But the Saturn initiative, too, was delayed by Smith’s complex restructuring plans; first devised in 1982, the new company was not launched until 1985, and the first Saturn car (driven off the assembly line by Smit
h himself) did not appear until July 1990 – just in time for the recession. Saturn had little to do with the rest of GM: its Spring Hill, Tennessee, plant was entirely new; its models were distinct from those of its GM cousins and incorporated no existing GM parts; and there was even a separate Saturn dealer network. Yet Smith had not thought the idea through properly. While the faux-Japanese Saturns, when they finally appeared, were initially popular (largely because they were cheap), they were never quite good enough to compete head-on with Japanese cars, many of which were by now being made in American plants. At the same time, Saturn sales tended to cannibalize GM’s existing market share; over 40 per cent of Saturn buyers already owned a GM car. When these factors were added to the recession of the early 1990s, it is not surprising that Saturn never reached its optimistic sales targets. Meanwhile, the rest of GM was seething with jealousy at the £5 billion that Smith used to launch Saturn – money that they believed, rightly, should have been invested in existing brands and plants. After Smith’s departure, Saturn was run down as an expensive irrelevance. In 1994 Saturn was merged into the rest of GM’s operations; the last Saturn cars were made in 2009; and the Saturn Corporation itself was finally dissolved on 31 October 2010.