When Detroit Stopped Spinning Its Wheels

During the 1980s, each of the U.S. auto makers came perilously close to disaster, and each found its own way to pull out of the skid. Chrysler Corp.'s brush with death--before it blazed back with an arsenal of hot vehicles--is but the best-known story. As each of the Big Three battled back from the brink, players with Cadillac-size egos struggled to learn new ways to compete.

Comeback: The Fall and Rise of the American Automobile Industry wraps a dozen years of turmoil into a compelling saga. One irony of the turnaround, contend authors Paul Ingrassia and Joseph B. White, is that "while Detroit decried free trade as a threat to its existence, free trade...saved Detroit by forcing it to improve." Toyota Corp. and Honda Motor Co. raised the bar on efficiency and quality, while Lexus and Infiniti dramatically improved customer service. Detroit had to follow suit.

The heroes of Comeback are the American managers who awoke early to the changing climate and fought for years to get their companies to adapt. The most jarring revelation may be just how many General Motors Corp. managers realized as much as 10 years ago that GM was veering off course but were frozen out by hidebound bosses and peers.

Ingrassia and White, who won a Pulitzer for their Wall Street Journal coverage of GM's 1992 management upheaval, spin a yarn that will entertain readers beyond the industry. Yet there is enough fresh information about well-known events to rivet auto insiders. There is, for instance, the untold story of GM executive Robert J. Eaton's unlikely recruitment as Lee A. Iacocca's successor--engineered by his best friend, a Chrysler middle manager.

There are also new details about the abrupt 1989 "retirement" of Ford Motor Co. Chairman Donald E. Petersen. The authors say the darling of the business press and B-school professors failed to match his behavior--marked by outbursts of temper--to his preachings about enlightened management. He ran afoul of the Ford family and was forced out by his board--though it took separate visits by three directors to get the message across.

Such personality struggles, White and Ingrassia say, drove as many of the Big Three's major initiatives as rational business plans. Nowhere is the destructive role of rampant ego clearer than in GM Chairman Roger B. Smith's mid-'80s spending binges on technology and diversification. The authors also make a gripping tale of GM's 1992 board coups. Former Chairman Robert C. Stempel, often depicted as a victim of leaks by disgruntled directors, is seen here as a guy who stubbornly ignored GM's need for immediate change.

To make sense of 12 years in this complex, rapidly changing industry, the authors focus on a series of key episodes. Individuals--as famous as Iacocca or as obscure as Steve Bera, a middle manager toiling on GM's joint venture with Toyota--figure in stories that exemplify broad trends.

The result is highly readable, though it can't be called comprehensive. Discussion of Japanese carmakers' exploits on U.S. soil is sketchy. And those who really felt the pain of Detroit's follies are conspicuously absent. We read how Smith's blunders and Stempel's dithering rattled GM's board and Wall Street. But there's little about the workers whose lives were shattered.

Comeback is divided into two sections: "Old Lions," about the postwar generation of managers who never lost their sense of Detroit's invincibility, and "Young Lions," about the new wave leading Motown's resurgence. The Old Lions get two-thirds of the book--and it's the juiciest part. Woven into the largely familiar history of Detroit's marketing and manufacturing gaffes are entertaining anecdotes about such colorful characters as Lee Iacocca and the "Gang of Ford" who followed him to Chrysler. Here's now-Chrysler President Bob Lutz growling at rival Dick Dauch: "You may be a former football player. But I'm a former Marine, and I'm trained to kill."

As Comeback nears the present, the tales, though enlightening, are less outrageous. The new leaders may lack the swagger of the old guard. And, no doubt, sources were most candid about events safely in the past. Still, the chapter on GM's purchasing czar, J. Ignacio Lpez de ArriortPound a, is disappointingly dry. There's a fascinating chronology of the duplicity involved in his defection to Volkswagen, allegedly with reams of GM secrets. But even though his departure is portrayed as a stunning personal betrayal of his "hero," current Chairman Jack Smith, there's little insight into why Lpez turned his coat and why no one at GM saw it coming.

Ingrassia and White wind up with stories illustrating how each of Detroit's Big Three is changing. They end on a note of wary optimism about the American auto makers' newfound success and humility, but evince understandable concern about whether the companies will revert to their arrogant, profligate ways.

Chrysler's continuing struggles to improve quality and GM's to master its intransigent bureaucracy certainly warrant caution. Besides, the rising yen and recession in Japan have helped Detroit nearly as much as its own efforts. And recent plot twists--notably Ford's global reorganization--make long-range forecasts risky. This story isn't over yet.

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