Dark Days for American Manufacturers – Then and Now

Consumers deserted the new-car lots of the Big Three in droves during the Seventies and Eighties because the American manufacturers didn’t sell what a large part of the public wanted. Will this current market shift produce a similar result?

By Brendan Moore

07.08.2008

The American auto manufacturers are in a very bad way right now, and their distress may continue for years to come.

Because I’m old, like a fossil, there are times when I can’t help but think of the long stretch of very bad times the domestics went through during the Seventies and Eighties in comparison. That was when, beset by the demons of new federal safety, fuel mileage and emissions regulations, a large spike in gasoline prices, a shift in customer preferences and competition from foreign automakers, they simply floundered in the marketplace. They not only lost money, reputation and market share, the cars they made were mostly crap and they lost a whole generation of potential new buyers to the Germans and the Japanese manufacturers. I lived through it, and it was brutal.

I owned a lot of cars (and some trucks) in the 1970’s and 1980’s. Almost every car I owned was made before 1972 or foreign. Sometimes the vehicle was in both those categories, but not very often. The lines of demarcation were pretty rigid; the American cars made in the Seventies and Eighties just didn’t interest me at all for the most part, so I owned a lot of domestic iron from the Fifties and Sixties, and also owned many then-current German cars.

I loved the way the American cars from the Fifties and Sixties looked and I loved the horsepower. The trade-off was putting up with lazy handling and the terrible brakes, but it was worth it in order to get the visual excitement of their designs and the straight-line horsepower the cars offered.

The domestic offerings of the Seventies and Eighties (and into the Nineties, to be fair), on the other hand, looked almost universally awful, had no power, had lousy handling and brakes, and, to top it all off, had indifferent engineering and poor build quality. So I just didn’t buy any of those cars.

I didn’t buy any Japanese cars, either. I had (and still have) a lot of respect for their engineering and build quality, but there was not a lot of performance available in most Japanese vehicles, and there was very little visual style to be had from the Japanese during that time, so I passed on the cars from the Land of the Rising Sun. There was nothing there for me – it was strictly Dullsville. It’s a little different story now.

I bought contemporary German cars along with the classic American cars. The German cars were austere in their styling, but attractive, the engineering and the build quality was top-notch for the time, and the overall performance was class-leading for the era.

I’ll give you an example of how this panned out in the real world.

These are some of the American cars I owned from 1975 – 1995:

1953 Cadillac Deville
1955 Cadillac Fleetwood Sixty Series
1963 Cadillac Eldorado
1966 Cadillac Deville
1970 Cadillac Deville
1955 Chrysler Imperial
1966 Chrysler Imperial
1956 Desoto Adventurer
1955 Dodge Pickup
1970 Dodge Coronet 440 Coupe
1971 Dodge Dart Swinger 340
1967 Thunderbird Coupe
1968 Mustang GT 390
1968 Shelby Mustang GT350
1968 Ford F-100 Pickup
1980 Ford F-100 Pickup
1970 International Pickup
1978 International Scout
1966 Jeep Super Wagoneer
1977 Jeep CJ-7
1954 Mercury Monterey Coupe
1965 Mercury Comet Coupe 289
1966 Oldsmobile Toronado
1967 Oldsmobile Toronado
1954 Packard 400
1956 Packard Patrician
1955 Studebaker Champion
1962 Studebaker Champ Pickup
1963 Studebaker Lark
1964 Studebaker Lark V8

These are all of the German cars I owned during the same period:

1970 BMW 2002
1974 BMW 2002 tii
1976 BMW Bavaria
1979 BMW 530i
1984 BMW 533I
1984 BMW 633I
1994 BMW 540I
2003 BMW 325
1967 Mercedes-Benz 220 Sedan
1977 Mercedes-Benz 6.9 Sedan
1982 Mercedes-Benz 380SEC
1991 Mercedes-Benz 300E
1971 NSU 1000 TT
1973 Porsche 911
1976 Porsche 911
1958 VW Beetle
1967 VW Beetle
1972 411 Type 3
1981 VW Jetta Coupe
1981 VW Golf Coupe
1984 VW Golf GTI
1980 VW Golf Sedan
1991 VW Golf Sedan

First, let me just say that I know what you must be thinking, and the answer is, yes, I do have a serious sickness. I have a type of car sickness and it’s not the kind that makes you puke, it’s the kind that makes you spend a lot of money that you’ll never get back on cars in various mechanical states. It also makes your wife want to kill you, especially if you happen to have many cars simultaneously.

That aside, the obvious conclusion is that as an enthusiast, I bought the cars I wanted to buy, the ones that appealed to me, whether they were new, old or really old. Why? Because I could – I had lots of choices.

This makes me wonder about the prospects for the American car companies going forward.

If the domestic companies have to do a 180° turn and start churning out four-cylinder cars instead of what they currently do best, and then have to start producing hybrids, plug-in hybrids (PHEVs) and electric vehicles (EVs) in just a couple of years, are they going to be able to make something as good as the Japanese, Germans, Koreans, and soon, the Chinese and the Indians? Will the years between 1995 and 2010 be viewed by domestic car enthusiasts as “golden years” much as I viewed the Fifties and Sixties cars from my vantage point in the Eighties? Will the foreign car companies take even more market share from the domestic car companies as buyers vote with their wallets and increasingly ignore the domestics, much as I did for decades during their previous slump?

I don’t have the answers to these questions, just the questions. But I will point to some major differences between now and the early Seventies concerning the manufacturers. First, the people running the domestics are much better prepared and much more battle-hardened than their predecessors decades ago. Second, the playing field is more level in terms of engineering and technology, and most importantly, the willingness of the domestics to employ it in their vehicles. Third, the domestics are willing to let their stylists and designers do their thing, which which almost never the case in those dark years of the Seventies and Eighties. It was frequently the case that a very talented designer would come up with a great design and by the time it made it through the committees and the clinics, it had just been dumbed down to death and it looked like hell. Fourth, the quality is now there in most American cars, as opposed to the previous decades, when it could only be accurately described as shoddy.

From the enthusiast perspective, it’s tough to see how any vehicle that is powered by a gasoline engine is going to be a cherished daily driver 10 or 20 years from now if gasoline is, for instance, 10 or 15 dollars a gallon. Of course, if a lot of people move over to some type of vehicle whose motive power is fully or mostly electric, then maybe gasoline will get cheaper because its market will have shrunk. Then again, maybe not. Maybe it will be 20 dollars a gallon because we will be almost out of it. Hard to say since I don’t know what the percentage of non-gasoline cars in the world will be 10 or 20 years from now. If it’s only 10% in ten years and 90% of the cars in the world are still burning gasoline in 2018, then my guess is that gasoline will be very, very expensive.

But one good thing about really expensive gasoline is that it makes cars that are really thirsty really cheap in the used car market. There is ample evidence of this right now in the form of the wildly plummeting values of the formerly desirable type of vehicle called the SUV. The corollary is that in the mid and late Seventies you could buy muscle cars from the Sixties for ridiculously low prices (and I did) because no one wanted to pony up the money for the gasoline to make those things go. Big luxury cars with big engines were even more of a bargain than the muscle cars. If you didn’t drive them much, then cars like that provided cheap thrills because the purchase price was so low, even if the gas was expensive. And today’s crop of muscle cars don’t have the faults of the cars from the Fifties and Sixties – they’re good all around.

So, what is going to happen? Are the American car companies going to go into meltdown like they did in the Seventies because they can’t cope with all this rapid change? Are auto enthusiasts going to shy away from Detroit’s future products and hoard the performance cars being made now and in the last couple of years? Or will the Motor City say, collectively, “We’ve seen this movie before, and we know how it ends, and we are not going to let that happen to us again”, as they pivot quickly and make cars that consumers want just as much as they want the ones from other countries?

I still don’t have the answers, just the questions. But we will all find out which way it will shake out in the next few years.

COPYRIGHT Autosavant.net – All Rights Reserved

Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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8 Comments

  1. The new Challenger, the current Mustang, the new Camaro, the current 300C, the current G8 are all eamples of cars that will be prized later as we are soon to be offered the equivalent of automotive electric shavers as a new car purchase. Don’t be so naive to think gasoline is going away anytime soon, gasoline will around to power cars for decades to come, even if it is more expensive. How much do you want to bet we are still driving gas-powered cars 50 years from now?

  2. I really don’t know how you can look at Detroit and think they are well prepared to do anything.

    When you look at the announced cars coming from Asia and Germany, you have to really wonder how Detroit can compete in 2011, if they are still around.

  3. The demise of the once-massive British car industry is the preview of the American car industry’s future. Some of the cars they make now may very well be classics and sought-after in the future, but that fact doesn’t change their current trajectory.

  4. I think Ford and GM will make it and Chrysler will get parted out.

  5. I agree with alley: GM will somehow get its act together, Ford is doing so already, and each of them has an extensive and successful international presence. Chrysler is stuck having to go the partnership route with other carmakers, so it’s a matter of time before Chrysler is sold off, merges, whatever.

  6. Some nice rides in there

  7. Chyrsler is a lame-duck proposition and it is not long for the world in present form. Jeep is the best brand they have and even that has seen a knock-down in value since gasoline has zoomed up.

    In terms of whether this will be seen as a golden age, I think it will indeed be seen as a great time for cars, but only for a little while until people start doing wonderful things from a design and performance perspective with hybrids and electric vehicles.

  8. Everyone in Detroit seems to be a simpleton, so I don’t know how you could expect them to get anything positive going anytime soon. By the time they can circle the wagons it will be all over and the fat lady will be singing. Their time is well past and it’s a new world. A world without the gas hog SUV and “personal use” pickup truck.

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