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Thursday, December 04, 2008

Saturn Orbits the Drain

What can you say about the state of the American automotive industry other than it being a gargantuan exercise in denial? As far back as the 1970's, when the arab oil embargo ignited the country's interest in fuel efficiency, American car manufacturers have done everything they can to ignore reality, preferring instead to play golf while their markets deteriorated.

Now, sadly, body parts of all three car makers lie strewn about the economy. Oldsmobile is gone. Plymouth is poof. And all of American Motors brands, save Jeep, were buried long ago. Apparently, the next major brand with its head on the block is Saturn, which is too bad, because General Motors had long been touting it as "a different kind of car...a different kind of car company."

As it turns out, Saturn was anything but a different kind of anything, subject to the same kinds of denial and bloat that are bringing the Not So Big Three down to their knees. And that's really too bad, considering that Saturn could have been -- should have been -- the hallmark of a new era for GM. The country had been waiting for a new kind of American car since 1973 -- longer than most of you reading this have been alive. Even at that time, the Japanese knew what was up. Prior to 1973, Datsun (now Nissan), Toyota, Mazda, Subaru and others were barely a blip on the automotive radar.

Now, they own the radar.

I might add that the Japanese didn't succeed primarily because they made better machines. Look back and you'll find plenty of Mazdas that averaged 10 miles per gallon and Toyotas whose transmissions dropped out. No, the real reason why Japan succeeded is that American automobiles failed, becoming progressively worse in quality and responsiveness to the public's wants and needs.

In other words, more whistling past the junkyard.

Saturn was supposed to change all that. But it didn't, mainly because GM treated its "new" concept with its "business as usual" attitude. In case you're wondering how such highly paid incompetents could mismanage billions of dollars over decades, you have to look long and hard at the one thing they don't like to look at: reality.

The reality of the situation is that the chief executives of these companies are no smarter than you or me. In fact, they're not terribly bright at all. Oh, they look smart in their expensive suits and such. But believe me, there's not a lot of horsepower in those engines. Secluded in their old white boy networks, they reinforce each others' psychoses, assuring each other that there simply has to be more fat in the land on which they can live. Don't believe me? Then ask yourself how anyone in his right mind could hire Robert Nardelli as CEO of Chrysler.

Nardelli, as I've written here previously, is the clown prince of mismanagement, gaining just about all of his employment through the old boy favor network. Never one to leave a company better than he found it, it was Nardelli who nearly drove a once hugely-profitable Home Depot into the ground -- and then left with a $210 million severance package.

Just how dumb are these managers? Well, the firm that privatized Chrylser (itself a dubious decision) brought Nardelli aboard to "turn Chrysler around." Amazing. That's like hiring Osama bin Laden to conduct Yom Kippur services. Chrysler got what it paid for, though. And there's Nardelli, sitting in a crater across from Congressional bean counters, begging for money.

So Saturn, the brand that should have -- and could have -- gotten the American auto market back on the road, will likely get its plug pulled, while the guys whose plugs should have been pulled will live to see another day. Probably at another American company who can't get enough of that good old American Old Boy Ineptitude.

4 Comments:

Blogger barry said...

The problem with the American auto makers is that they made vehicles that the American people wanted. Namely SUV's and let the car manufacturing go to the Import brands.
Chrysler was screwed up by Daimler Benz. Mr Nardelli doesn't have a good history but just below him is someone from Toyota.
I'm tired of everyone blaming the AMERICAN AUTO MANUFACTURERS for everything.
When your job gets outsourced to China or India then you can stand in the unemployment line with the workers of the auto industry!
Give wall street 700 billion and they want to buy each other out. Give the automotive industry 35 billion and you save jobs.
Think about it people

Barry

2:44 PM  
Blogger Rob Frankel said...

Barry, that's the whole problem: American business didn't think it through. If they really wanted to save jobs, they would have re-tooled American plants the way they've done overseas, where all three brands do well with more efficient cars!

Even if "giving the people what they want" was the right thing to do (and it isn't), why not give Americans what they gave the rest of the world -- more efficient cars -- especially since all three companies are doing far better with those outside North America?

Nope. This was harikri American style. The only difference between these American executive managers and institutional inmates is that their uniforms fit better.

3:16 PM  
Blogger HiltonAndy said...

As I've been saying all week, any company that thinks Buick is a viable brand and wants to kill Saturn and Saab, is just too far gone to be saved. This might sound crazy, but I truly believe they should have killed Buick instead of Oldsmobile, but rebranded Oldsmobile as "Aurora" as had been floating around the rumor mill. Besides Saturn, Oldsmobile was the only GM brand even attempting to make credibly compete head-to-head with the Japanese brands, with the extremely innovative Olds Aurora and well-designed Intrigue. Instead, they kept grandmotherly Buick and tried to position it against Lexus (ha!), and cheap-o Pontiac and tried to position it against Nissan and BMW (as if!). And they've done everything possible to bastardize the Saab brand, from rebadging a giant Chevy SUV as a Saab, to giving a very good but totally unstylish car (Subaru WRX) a barely-there makeover and calling it a Saab. I don't have any faith that Chevrolet has any brand value, but maybe I'm too West Coast-elitist to see it. Cadillac? OK, maybe. But other than that, GM is just one giant, epic fail.

2:19 PM  
Blogger Rob Frankel said...

All pretty true, Andy, and as you know, I can't excuse their incompetence OR their denial. From what I understand, Buick is actually a very popular brand in China (of all places) and that may provide a clue: There's already talk about loosening those little-known restrictions and regulations that forbids the Big Three from importing their more successful, efficient cars from other markets into North America.

I have faith in the brands, but not their managers. But hey, I'm a Cadillac man....

3:06 PM  

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