Of all the missing-the-forest-for-the-trees, rose-colored glasses stories I’ve read, hell, probably even written, this story in the NY Times Friday about the Big Three auto makers is one of the worst offenders I’ve seen in a long time.
Start with the headline, “Detroit Goes From Gloom to Economic Bright Spot.” When I first saw that, I thought, the city of Detroit? They have got to be kidding. The city of Detroit is the most depressed American city I’ve ever been in, and I live outside Newark, N.J. I haven’t been to the Motor City since the 2007 auto show, but last time I was there it shocked me how abandoned downtown was. I am not kidding, I’ve seen Third World cities more vibrant than Detroit.
But, no, they weren’t talking about the city of Detroit. They were talking about the car companies: GM, Ford and Chrysler.
After a dismal period of huge losses and deep cuts that culminated in the Obama administration’s bailout of General Motors and Chrysler, the gloom over the American auto industry is starting to lift.
You know what? I’d be feeling pretty un-gloomy too, if the government gave me $50 billion and shepherded me through bankruptcy court. Covered my mortgage, paid my grocery bills, let me lay off the kids, then bring them back at half wages (that’s John’s joke, by the way.) I mean, come on, let’s get real here. Don’t sell me some fairy tale about the Phoenix-like rise of the scrappy American auto industry. It’s just not happening, Jack.
Jobs are growing. Factory workers are anticipating their first healthy profit-sharing checks in years. Sales are rebounding, with the Commerce Department reporting Friday that automobiles were a bright spot in July’s mostly disappointing retail sales.
“Jobs are growing.” Sure, at half wages. The workers got raked over the coals here, just to keep the jobs they kept. Forget the ones that got laid off. Hey, the taxpayer got raked here too, for that matter. I’ll be honest, I’ve got two GM cars in my driveway, and I think the new Camaro is the hottest car out of Detroit in 30 years. But, Good Lord, I’m supposed to feel grateful somehow? I’d like a little more for my $50 billion, please.
The nascent comeback is far from a finished product. Foreign competitors are leaner and stronger, accounting for more than half of all car sales in this country. The sputtering economic rebound is spooking investors and consumers alike, threatening to derail some of Detroit’s gains. And talks next year on a new contract with the United Automobile Workers could revive old hostilities.
Still, the improving mood here reflects real changes in how Detroit is doing business — and a growing sense that the changes are turning the Big Three around, according to industry executives and analysts tracking the recovery.
So, fine, there is a cautionary graf. But the story just ignores the painful reality that these companies are literally shells of their former selves. Once upon a time, back when Detroit was a thriving city, GM had a 50% market share of the global auto industry. Think those happy days are here again? GM has only about 20% of the U.S. market, forget the globe. After 77 years, GM was supplanted by Toyota as number one.
Once upon a time the auto makers were probably the most important companies in America. Even if GM CEO Charles Wilson never actually said in 1953 “What’s good for GM is good for the country,” the fact that a myth grew up around the statement to that effect shows how powerful the company really was. It had that kind of power, because it employed so many people, directly and indirectly, because it drove so much industry.
We are not a big manufacturing nation anymore, and this story ignores that reality and the reality that is no more Big Three. Those days are long, long gone. Sayonara, as they say in the Land of the Rising Sun. These are shrunken, denuded companies. What we’ve got today is a Big Six, as my old boss Paul Ingrassia once wrote, and three of them have headquarters in Japan.
I’ll believe “Detroit” is coming back when the city comes back. I’m not holding my breath.