`We Can Compete': the Revival of the 'Big Three' Automakers

By , a news service specializing in the automotive industries.

COMEBACK: THE FALL AND RISE OF THE AMERICAN AUTOMOBILE INDUSTRY

By Paul Ingrassia and Joseph B. White

Simon & Schuster

Recommended: Could you pass a US citizenship test?

496 pp., $25

I WAS a green reporter, 15 years ago, covering a news conference at Chrysler Corporation which was facing the very real prospect of going broke.

As 100 reporters stared on in disbelief, Chairman Lee Iacocca declared that without massive concessions from bankers, suppliers, workers, and even the federal government, ``the pieces of the mosaic would fall off the wall.'' But even though Chrysler eventually won its bailout battle - the pieces did fall off the wall. The confidence that Detroit enjoyed, a sense of industrial manifest destiny, had been shattered, perhaps forever.

``The process of change isn't always smooth, and it isn't often pretty,'' says Paul Ingrassia who, with co-author Joe White, has documented a decade of change in a compelling new book, ``Comeback: The Fall and Rise of the American Automobile Industry.''

``Comeback'' bears impressive credentials: Ingrassia is the former bureau chief, White his former deputy, at the Detroit bureau of the Wall Street Journal. They began work on this book in 1992, and along the way, won the Pulitzer Prize for coverage of the boardroom shake-up at General Motors (GM). ``Comeback'' isn't just about machinery and statistics. It's about people. The book is divided into two sections, the ``Old Lions'' and the ``Young Lions.''

It opens at a July 24, 1990, ``pickle dish party,'' where retiring GM Chairman Roger Smith is saying his farewells. Smith had invested $70 billion in a high-tech spending spree hoping to position GM as the world's preeminent automaker. What he got for his money was a company so inefficient it would soon be losing a million dollars an hour.

Like Iacocca, Smith grew up in an era of prosperity and abundance, the book explains. ``If America in the fifties was the land of endless opportunity, Detroit was the place where dreams came true.'' But the game was rigged against the Old Lions, and as the book notes, this perception ``prompted a staggering series of miscalculations.''

Whether unwilling or unable, the Old Lions simply couldn't see the challenge from Japan. It would take a new generation. Innovators like Bob Marcell.

A week after Smith's retirement party, Marcell, an engineer at Chrysler, found himself pleading for his career. Conventional wisdom said Detroit simply couldn't make a cost- and quality-competitive small car, but he and his team were convinced otherwise.

As a skeptical Iacocca sat down in a darkened room, Marcell launched into his presentation, not with sketches of a new car, but slides of his hometown in northern Michigan, a community devastated by layoffs when the local copper mines closed.

We ``couldn't compete,'' Marcell kept repeating as he deftly turned the conversation from mining to carmaking. With small cars, he argued, ``We can reverse the long downhill slide. And prove to the world that we're not soft, we're not lazy, we're not dumb, and ... we can compete.''

The resulting car, the Neon, is proving Marcell's point and is one reason why Chrysler is earning record profits. The Big Three (Chrysler, Ford, GM), with a new generation of leaders, are now among the leanest and most efficient automakers in the world.

More than just another case study, ``Comeback'' is a compelling tale of that turnaround. It puts a human face on the people who make the machines. It offers a rare insight into why America nearly lost its manufacturing edge and it offers a glimmer of hope for the future. But it is hope tempered by caution.

``No problem is problem,'' warns Susumu Uchikawa, a manufacturing executive at Toyota. It appears that only by inbreeding a sense of constant crisis will Detroit's Young Lions be able to maintain their momentum.

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