Detroit two-step is a tired tango
Lest you think the Detroit two-step -- two forward then one back --
might become a blessed relic, reality comes roaring back to prove the
self-defeating boogie is alive and well.
I refer, of course, to the last week or so of auto news, more triumphs
of the real world over good ol' hometown hope:
We had Detroit's auto CEOs in Washington fighting against stiffer
federal fuel economy rules, which will be increased whether Detroit and
its backers want it or not. And if certain coastal politicians get their
way, Detroit will be out of business and it'll be all Detroit's fault.
But wait: How much more evidence do we need that the world has changed,
fundamentally, and with it the nation's economic politics?
In September, we'll be six years from 9/11. More years in Iraq than it
took the allies to fight World War II. Gas prices just off record highs.
China and India growing apace, sucking down global oil supplies. A bill
in California wants to slap a $2,500 gas guzzler tax on selected models,
and the governor there wants the feds to allow his state to regulate
In Washington, a bipartisan, critical mass in Congress is coalescing to
shove climate change legislation down the throat of the collective auto
industry -- including Toyota -- even though autos account for roughly 20
percent of emissions. Fair? No. But automakers are the path of least
resistance. Toyota can take it, and Detroit can take the tailpipe.
We had Chrysler, whose month-old ad campaign touts its vehicles as being
"engineered beautifully," admitting to its own people that it seriously
misjudged the U.S. market with its new Chrysler Sebring sedan and Dodge
Nitro SUV, which an internal memo described as "embarrassing 'misses.' "
Hello? Good enough is not good enough, and bad is terrible. Two steps
forward, one step (at least) back.
We had Ford Motor Co., flush with the good news that it had dominated
the latest J.D. Power initial quality surveys, showcasing its campaign
for the "new" Taurus. OK, but it's a mid-cycle tweaking of its
underwhelming Five Hundred sedan, and a chilling reminder of how out of
touch some Glass House marketers can be.
Every time I hear Ford's brass say Taurus is the third most recognized
Ford model name behind F-Series and Mustang, or that Taurus has 80
percent brand recognition so aren't we smart to bring it back, I want to
scream. And the first thing I want to scream is: Who killed the Taurus
name in the first place, and if they are still employed by Ford, why?
'Foolish' by any measure
Think about this: The storied brand name of the American car that
hammered the Japanese, the only thing Camry and Accord actually feared
from Detroit, was chucked to feed Ford's fetish for forced "F" model
names like Focus, Fusion and Five Hundred.
The most appropriate "F" word I can conjure to describe that kind of
over-thinking would be foolish. Two steps forward, one step back.
And we had General Motors Corp. Chairman Rick Wagoner telling
shareholders there are "no plans" to make like Chrysler and take the
General private. That may be, but that doesn't mean the private equity
shops (like Cerberus Capital) see it that way. They have the dough to go
big, real big.
The word at some of the highest levels in the industry is that private
equity's feast on Detroit may not be sated by gobbling Chrysler, taking
a majority bite of GM's GMAC finance arm and swallowing a collection of
suppliers large and small.
This buying-and-restructuring jag has not run its course. Not in
executive suites here. Or on Wall Street. Or in Washington. And not with
national union contract talks preparing to start.
Doing riffs on the Detroit two-step doesn't help. It only makes things
worse by reconfirming outdated notions -- and nagging, uncomfortable
truths -- that should be buried, but aren't. We just keep resurrecting