Q&A: Can the 'Big Three' automakers survive?

Michele Maynard is the author of 'The End of Detroit: How the big Three Lost Their Grip on the American Car Market' (Currency Doubleday). She discussed the intense international competion Detroit faces and the future of the US auto-market with csmonitor.com's Jim Bencivenga.

I guess you can't live in Michigan and not be interested in the auto industry and the Big Three automakers. Have you always been interested in cars?

No. I was an airline child. My dad worked for American Airlines. I grew up flying first class and having to dress neatly when I traveled with my parents (the inside term is "flying non-rev," short for non-revenue). In retrospect, that gave me a healthy appreciation for good customer service.

I began covering the auto industry in the early 1980s for United Press International. I was a legislative reporter in Lansing, Mich., when the auto writer's job came open in Detroit. I applied for it and was turned down, because the editors thought the United Auto Workers union wouldn't deal with me. I appealed the decision and got a six-month tryout. I am definitely not a "gear head" but I am very interested in all aspects of the industry, because it is so important to the American scene.

What is the root cause of the decline of the US auto industry?

Actually, the US auto industry isn't in decline. We now have two American auto industries: the traditional industry, led by Detroit's Big Three, and the new industry, dominated by foreign companies. It's sad to see the traditional industry lose ground, but the emergence of the new industry has only been to the benefit of customers. And I believe the traditional industry is getting more efficient, thanks to the presence of foreign competition.

In a global market, does it matter that the Big Three American automakers are not as dominant as they once were? Consumers have plenty of choices for the type of car they can drive. After all, isn't the prediction of the demise of one of the Big Three a little artificial now that Chrysler is already owned by Daimler?

In a sense, the American-based Big Three companies vanished when Daimler-Benz acquired Chrysler in 1998. GM, Ford, and Chrysler are the Big Three in terms of size only - and given Toyota's rise, that is being threatened, too. The great thing is that customers can buy vehicles made in America by American workers in some of the most advanced factories in the world. The problem for Detroit is that those vehicles are built by foreign companies, those workers aren't represented by the UAW, and those factories are for the most part in the South. One of the places that has benefited most is Alabama, which now has three automotive assembly plants, two big engine plants, and would love to land more.

When it comes to finger-pointing, who bears the most responsibility for the decline of the US auto industry: management, the unions, foreign carmakers doing a better job than US automakers, US government trade policies? Or, like a perfect storm, a combination of all of the above?

I'd blame the unions less than you might think. Remember that on every contract, there are two signatures: one from the company side, one from the union. Whenever you think that the unions are greedy, or that health care costs and pensions are too generous, well, somebody from the company had to agree. I don't think it's fair to lay blame solely at the unions' feet. They were protecting their members - with the companies' cooperation, despite their competitive challenge.

It is better to look at the situation as a combination of issues, just as you suggest. In my book, I say that Detroit companies are sometimes viewed as banks that make cars, run by MBAs. The foreign companies, by contrast, are generally run by engineers and manufacturing experts. Fujio Cho, who is CEO at Toyota, was in charge of its factory in Georgetown, Ken., in the late 1980s. Helmut Panke at BMW is a nuclear engineer and Carlos Ghosn at Nissan is another engineer who specialized in manufacturing when he was at Michelin and Renault.

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