In a first-rate blend of journalism and history, New York Times Detroit bureau chief Vlasic (co-author: Taken for a Ride: How Daimler-Benz Drove Off with Chrysler, 2000) rides the perfect storm that only yesterday threatened to undo America’s auto industry.
It was a perfect storm indeed: A bad economy met declining levels of quality in the Big Three’s (Ford, General Motors and Chrysler) products, while demographics collided with a toxic corporate culture. We all know about the bad economy, and anyone who’s driven an American car made in the 1990s very likely has a long list of complaints. On that latter point, Vlasic’s account opens with an unlikely moment in automotive history—namely, Ford’s wooing of Jim Farley, who had been working at Toyota, steadily raising the foreign automaker’s presence in the U.S. and pushing the Scion to hipsters, making Toyota dealerships “cool, pressure-free boutiques for these interesting little Japanese cars with funky designs and small engines.” Thanks to what Vlasic deems “institutional arrogance” and poor judgment, meanwhile, the Big Three had been overproducing gas-guzzling SUVs that sat on dealership floors as gas prices went through the roof. The demographics are the less-well-known part of the story, and here Vlasic shines, dispassionately taking apart the impossible numbers by which pension and health-insurance plans made it impossible for Detroit to see present or future profitability: “Every two seconds, GM paid for a prescription somewhere in the United States; every second it paid for some medical procedure. And there was no end in sight.” Inevitably, the automakers could do nothing other than declare bankruptcy in exchange for a bailout that, under Presidents Bush and Obama, put the U.S. government in the car business.
Vlasic’s tale unfolds urgently, even suspensefully, and it shows why heads had to roll in order to make the “clean and pristine” new companies of today.