by Richard T. Stuebi
as published to Huffington Post
Lately, I’ve been listening a lot on my iPod to a number of pop songs from the late 1960’s: “Wichita Lineman”, “Love Is Blue”, “Everybody’s Talkin’”, “To Sir With Love”, “Classical Gas” and so on. These are some of the AM radio songs of my youth, sitting in the back seat of the car while watching the scenery go by.
My parents’ cars were always big and always American – Detroit steel. Although we did own a few Ford cars, my dad generally favored General Motors products: typically Chevy Impalas in my earliest memories, escalating to Cadillacs by the end of his too-short life.
In addition to the music from forty years ago, I remember most of those long-ago cars very well. For some reason, circa 1968, I vividly recall the first time I saw a seat belt, whose buckle was ornamented with the blue rectagonal GM logo, and its motto “Mark of Excellence”.
At the time, partly because of my dad’s loyalty to their cars (how could he be wrong?), I assumed that GM indeed did make superior automobiles. But as the 1960’s gave way to the 1970’s, as I grew from child to adolescence, it became clear to me that Detroit autos – and GM cars in particular – were generally of very poor quality and design.
During that lamentable decade (remember leisure suits, everyone?), between the cars my family owned and the cars we rented on trips, we experienced innumerable lemons during the 1970’s. These cars sometimes didn’t start, they would often sputter and stall, their bodies would rust through, trim pieces would be mismatched or fall off, and electronics wouldn’t work. My brother’s 1971 Chevy Vega was particularly laughable: it died an early death after but a couple of years and maybe 30,000 miles – the cylinder head blowing up one morning when he tried to start the engine.
As a senior in high school in 1979, my parents gifted me with a rust-colored 1975 Toyota Corolla with 75,000 miles on it (a lot of miles for a car in those days). It was butt ugly, and had no carpeting. It couldn’t outrun a tortoise off the line, nor outcorner a garbage truck. It was by no means a chick-magnet (or perhaps that was my problem?).
But, that car didn’t pretend to be anything it wasn’t. It had no stupid gimmicks or features. It got pretty good gas mileage (~25 mpg), was cheap to keep running, and it was damned reliable – as hard as I tried to make it unreliable, with misguided attempts to do my own maintenance (why did I even think about rebuilding the carburetor?)
As utterly unexciting as even that old beater Toyota Corolla was, I much preferred driving it to my parents’ 1979 Cadillac Sedan DeVille, which had the most god-awful bordello velour bench seats and a hideous vinyl roof that started peeling off within months. That awful land yacht clinched it: I had come to intensely dislike GM products, and vowed never to own one. And, I never have, and probably never will. I even avoid renting cars from Avis and National, because their fleets are heavily populated by GM vehicles.
I speak of my personal experience, but I think it is the experience of a significant segment of my generation: we walked away — no, ran away — from Detroit, by our choice. And even though American cars have improved dramatically, imported cars seized the opportunity of the 1970’s and have consistently stolen market share for decades. The brands were broken; Detroit couldn’t win us back.
A radical rethink is happening now across the U.S. auto industry, pushed in large part by the Obama Administration’s policy proposals, but it seems to be all too late for GM. The day of reckoning is now at hand.
The talk today is of the imminent bankruptcy of GM, with outpourings of grief throughout the Midwest, as if the company were dying just now. But, in my view, the company became terminal long ago, when a whole chunk of the U.S. population turned away from American to imported cars. And, the autopsy offers interesting lessons for the future industrial economy of the U.S.
Management was at fault, for designing and offering lousy products in which style trumped substance, and for dragging their feet on advancements in safety and efficiency. Labor was at fault too, for setting unreasonable wage rates, benefits packages and work rules, and for being so inattentive to the quality of the product coming off the line.
It’s impossible to date exactly when both management and labor started travelling down the slippery slopes, and when the decline became irreversible. However, something tells me that the late 1960’s represents something of a turning point — when U.S. industrial hegemony was seemingly permanent, and big American beasts powered by thirsty V-8’s roamed the newly-opened highways across our seemingly endless landscapes.
And while it’s embarrassing to reflect on the outright arrogance of thinking and feeling as if we ruled the world, it’s nevertheless still seductive to remember those sepia-toned days. Today’s economic difficulties, and the possible death (and certain major restructuring) of GM, intensify the bittersweetness of those 1960’s tunes, as we look backward in the rearview mirror to naively happier – though patently unsustainable – days.
In life, I have learned to find more satisfaction when looking through the windshield, to the future. In moving forward – rebuilding the U.S. auto industry, and growing the cleantech and green energy industry at large – we need to bear in mind the sobering lessons of the demise of GM, so as not to plant the seeds of future collapse.
Management teams cannot consistently insult the intelligence of their customers by offering crappy products with poor value. Labor must also keep the customer in mind, by not demanding unreasonable agreements that inflate prices or by producing inferior products. Management and labor must work together in much better harmony – and the unifying theme must be technological leadership to produce customer satisfaction.
If we want to build a sustainable economy, it means we need both economic and environmental sustainability. We need sustainable businesses, producing environmentally sustainable products with an economically sustainable business model – and economic sustainability only comes when management and labor work together to serve the customer well by superior product innovation.
Interestingly, many of today’s behemoth energy corporations – electric utilities and oil companies – are in a situation similar to GM’s 40 years ago. With little competition from alternative supply sources, token efforts to portray their meager technological diversification as leadership, and sometimes haughty disdain for their customers, their brands are weak: customers can’t wait to leave once a compelling option is presented to them.
When that day comes, many of today’s gargantuan energy companies may follow the same fate as we’re seeing now with GM.
Will the U.S. public care then? Will Houston follow Detroit? Will today’s kids be yearning for the songs of “American Idol”?
Richard T. Stuebi is the Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also the Founder and President of NextWave Energy, Inc. Later in 2009, he will also become Managing Director of Early Stage Partners.