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Let me add that it took more than Iaccoca's personal talent and mere marketing presence (and a strong motivation to rub HFII's nose in it) to bring Chrysler back from the brink. At first, I simply thought that he stole as much good automotive talent as he could from Ford to come up with some badly needed new product and then sign up as many new dealers as he could to help full up the assembly lines with orders. In retrospect, however, I can see now that he also assembled a team of people with the right connections not only within the industry, but to the gubbamint, to carry Chrysler through its financial crisis. I think Jim Nance would have tipped his hat to ol' Lido. (Unfortunately, that same team wasn't very adept at managing their success, and neither was any that followed.)

I don't see any thing like that going on with GM. In fact, I heard that they recently eliminated all of their field service, parts, and sales positions and will be closing all of their Zone Offices. While the roots of GM's troubles go back to the 1970s, Roger B. Smith was probably the worst thing to ever happen to that company, and his legacy reaches far beyond his tenure.

While I can agree that Japanese imports were a bunch of rust buckets 20+ years ago (and would have never consider purchase of one back then), I'm seeing a lot of rust problem on GM vehicles NOW as state highway departments in the Penn-Ohio are appear to have reintroduced calcium chloride AND have added salt brine to the equation. However, I also belive that the material quality of GM's steel parts isn't as good as it was 20 years ago, but the prices for their vehicles are higher than ever.

Meanwhile, GM keeps coming out with a bunch of products that nobody was really looking for, while hot cars designed to attract people to showrooms show up "a day late and a dollar short". Another problem is too much emphasis on "skimming the cream", while neglecting the base markets. Somewhere along the 1990s, they decided to not worry about building entry-level cars and let used cars fill that need, which only ran shoppers off into the arms of their competition.

While GM's vast dealer network had been one of its strengths, it seems like the best and brightest dealers retired years ago. The recent drawdown in dealer count is GM's thinly-veiled way of getting rid of a lot of smaller dealers in rural markets (from a thwarted direct attempt to do so 15 years ago). Yet, all that does is make me drive past even more stores that offer competing brands. I now have to drive 15-20 miles from my hometown and past two Toyota and two Honda stores just to get to a Chevy dealer.

It's a sad situation when you consider that - except for the Packards - my family has owned nothing but GM product as daily drivers for decades, but those days are at an end. While those are just my personal reflections, I'd bet that I'm not alone in that regard.

But the japanese auto invasion SUCCEEDED!! The ONLY reason it succeeded was due to the synthesised 'fuel crisis' of 1970's era.

I don't really agree fully with that statement, though it did give them an accelerated entree to the market. I think more at play was (is) a fundamental difference in corporate attitudes between the Japanese (and the Germans) and US corporations, and not just the auto companies; I speak with some background in the corporate American chemical industry as well.

American corporations tend all-to-often to have a VERY short focus, often centered around the next quarter's results, consequent short-term returns to the stockholders, and of course to the executives bonus plans. This is even more detrimental when top and mid-range executives are cycled frequently to different position every few years and thus focus their plans to their own tenure and benefit and not on what may be in the best long-term interest.

The Japanese and other foreign companies, to their credit, make longer range plans and are willing to sacrifice short term gains in favor of longer term success. The Japanese decided and kept to a long term plan to continually improve quality as the path, albeit long, to gain customer loyalty and market share.

I believe the oil crisis helped get the Japanese in the door, but once they solved their quality issues, that's when they really took off. Their focus on quality and building a strong reputation for it really helped them.

Since this is a very complex issue, no single reason can be pointed to as the "smoking gun". Much of what has been said here is valid but I have to agree with Dave (O-D) most. I have spent almost 30 years in the chemical industry with the last 23 being in the sales and marketing side. There are very few (if any)management or executive level peolple left that have an enthusiasm or passion for the business. By the business I mean the product, the application, the customer, business relationships, etc. It's all about close the quarter. Finance runs everything and they wouldn't know a customer if one sat on their face. You could be selling cars, chemicals or widgets. It doesn't matter to them as long as you can monetize it.

Sorry for the brief rant but I see this in the company I work for as well as my customers. The last of the product/customer relationship focused people retired about 10 years ago. I believe this is why American industry in general has lost it's competitveness. And now it has spread to the service sector (banking) with disatorous results. "Make the money now and let someone else clean up the mess (or bail it out) when the music stops".

Hi Pack120c, it seems we've worked in the same industry and made the same observations, and it's always nice to have someone agree with our views on something.

I think back to the Zippo knock-off lighters than came from Japan in the 50s and 60s where the hinge pin failed in the first 20 flicks - terrible quality but Japan was under tremendous pressure to restore their economy and exporting anything was better than nothing, in the short term. And to help their manufacturing improve, we sent over quality experts like Deming and Peters, AND THEY LISTENED. But industry leaders in the country that spawned these quality experts were so sure they knew better that they, at best, paid just lip service to their expertise.

Yes, I remember when quality became all the rage in American industry in the mid-1980's. Sat through a lot of seminars and read books by Peters, etc. And for a while it looked like it would take hold. But then came the 1990's and the rise of the "markets". Investment bankers started buying companies and shareholder return became holy grail.

I heard someone say that "Everything rises and falls on leadership". Where are the Alvan Macauleys, George Masons, Roy Chapins or even Lee Iacoccas of today? Guys who could face adversity, roll up their sleeves, and get to work producing a quality product that the public wanted and have the patience to slug it out for 3-5 years to bring the company from the brink.

Oh well, as Jim Nance was quoted as saying in the Kimes book "....sooner or later everybody ends up at the bank".

I don't know if an "Iaccoca" could repeat the success, in this day and age, that Chrysler enjoyed back in the 1980s. I have a feeling that the scenario 30 years ago presented him with a perfect storm that matched his available resources.

I think an "Alfred P. Sloan", along with a total housecleaning of upper management and subsequent restructuring of management and staffing down to the bottom of the barrel, is what it would take to rescue GM now. GM probably has some of the greatest assets and technologies available to any automaker, but they just don't do a very good job with them.

Let's say that GM, Chrysler and Ford, starting tomorrow, all made cars of equal quality and sales appeal to the their foreign competitors. Try to answer this question: how many years of that equality do you think it would take before the mindset of the majority of American buyers that "foreign is good" and "US-made is bad" would change enough for them to begin to regain the market shares they once had?

I'm probably a bit overly pessimistic, but I think the answer to that is likely to be "never" because they'll never achieve parity on quality and design and cost control and sustain it over a long-enough period to broadly sway the public's buying habits. That's the real challenge they face, no question. GM and Chrysler may be "on the dole" for as long as the government is willing, and perhaps retreat to a few niche markets after that. Ford may make it on their own.

We've watched the same or similar thing happen to so many other industries where we once were paramount, consumer electronics, steel, glass, chemicals, small appliances, clothing, etc.

i think everyone will agree with BH's last paragragh and Owens statement of their "real challenge".

Historically, Gm,F and C were domestic automakers competing in the same environment. I see a big split coming in their mode of operation.

OWens comment about "real challenge" WILL apply primarily to F as F will remain a mostly domestic auto maker in a resemblance of traditioanal car companies, or at least will as compared to GM and C.

Gm will become something more like a holding company or middle man or contracting firm that will contract out the manufacturing to international production as well as marketing and sales. THis is something that Massey-Ferguson did during the late 80's and 90's and still does today.
For example, GM may design and prototype a particular model domestically but contract to any number of I'national manufaturers such as Isuzu or Subaru or ANY other company to produce the units. Much in the same way that Sears or Walmart contracts for merchandise or appliances to say Whirlpool or maytag or Amana.

Chrysler will look more like a Massey Ferguson company that is footballed around thru a variety of VC's or other business conglomerates.


All in all it has been a union or labour breaking strategy over the last 30 years and all 3hree of the companies (GM,Fand C) have succeeded very well at doing that.

I believe this is all the results of a combination of factors. Apathy on the job, ignorance given a free pass, misguided cost-cutting or greed, and a general sheepishness of the population in general.
I work in an American factory, making an American product. The only reason I still have a job is that we have no union here. My exact job couldn't exist in one. Most of the parts and even supplies we use here are imported, even the teflon pipe tape says made in India!
most of the management I've seen come and go don't care about the job they do. They just go through the motions and collect a check. We used to make lots of different products right here in the US, but people have voted time and time again with their wallets.
I was very young in the 70's, but my father ran a service station then. I heard of fights, stabbings and worse over cutting in line or getting the last bit from the pump when gas went up 25 cents! Yet, now it can go up a dollar overnight and nothing happens. I also remember a bumper sticker from then. It said "HUNGRY? EAT YOUR IMPORT"
just my few thoughts.