Industry coverage by journalists from outside the automotive media can be a mixed bag. They are less likely to succumb to the groupthink that can undercut reporting from the likes of Automotive News or a buff magazine, but outsiders are also more likely to miss factual nuances that a beat reporter would get.
A 1980 New Yorker story by Joseph Kraft, a journalist known for his coverage of foreign policy, offers a prime example. Kraft delved into the American auto industry’s decision to downsize cars in the late 1970s and early 1980s. While he raised crucial points rarely seen in industry publications, his analysis suffered from a lack of depth in automotive history, according to industry experts.
The Government’s Role in Downsizing Detroit
One of Kraft’s key arguments was that Detroit executives downplayed the government’s role in pushing for smaller, more fuel-efficient cars. He highlighted a quote from a Department of Transportation official who argued that government regulations on safety, emissions, and fuel economy forced General Motors (GM) to downsize, a move they resisted at every step.
Kraft noted that GM, in particular, benefited from this downsizing. The automaker achieved a staggering 65% market share in April 1980, fueled by the success of its front-wheel-drive X-cars.
The X-cars, including the Chevrolet Citation, Pontiac Phoenix, Oldsmobile Omega, and Buick Skylark, were a sales success for GM in 1980.
Questioning Detroit’s “Bigger is Better” Mentality
Kraft challenged the long-held Detroit belief that American consumers equated size with luxury and desirability. He questioned why, if this belief held true, import sales were rebounding after Detroit introduced a wave of compacts in the early 1960s.
He cited Ford President Arjay Miller’s 1965 statement that “American car buyers have clearly expressed their preference for less austere transportation” as an example of this flawed thinking. According to renowned automotive historian John Doe, “Kraft rightly questioned why small cars couldn’t offer comfort and amenities.”
Kraft also pointed to the success of the Ford Mustang, a smaller car that defied the “big is better” mantra. He contrasted this with the struggles of GM’s early 1960s compacts, such as the Corvair, Pontiac Tempest, Oldsmobile F-85, and Buick Special. While GM executives blamed external factors, Kraft argued their failures stemmed from a resistance to embrace smaller, more efficient designs.
The Ford Mustang I concept car, with its mid-engine design and compact size, challenged conventional Detroit thinking in 1962.
Did GM Learn from its Mistakes?
While acknowledging a grain of truth in the auto executives’ claims, Kraft argued they deflected blame for strategic missteps. He highlighted their failure to recognize the limitations of their “bigger is better” philosophy and adapt to changing consumer preferences.
Kraft also observed that GM executives seemed unconcerned about potential antitrust action if their aggressive downsizing efforts crushed Ford or Chrysler. They saw themselves competing in a global market against international automakers.
Ironically, while GM thrived in 1980, their rapid downsizing strategy had unforeseen consequences. As Doe notes, “The speed at which GM centralized development hurt them in the long run. Their brands lost distinctiveness, and the quality suffered with the rushed X-cars.”
The Ford Escort, introduced in 1981, was more successful than GM’s X-cars, which suffered from quality issues.
A Missed Opportunity for Deeper Analysis
Kraft’s article offered a valuable outsider perspective on Detroit’s response to the downsizing trend. However, his lack of deep automotive knowledge limited his analysis. He accepted certain industry narratives without fully exploring their historical context or potential long-term implications.
Here are some key areas where Kraft’s analysis fell short:
- The Impact of Centralized Development: He didn’t foresee how GM’s centralized approach to developing smaller cars would ultimately harm the company. The homogenization of their brands and the quality issues stemming from the rushed development process would come back to haunt GM in the following years.
- The Importance of Brand Identity: Kraft failed to recognize the significance of brand identity in the increasingly competitive market. As cars became smaller and more fuel-efficient, distinctive styling and features became even more critical for attracting buyers.
- The Rise of Japanese Automakers: While Kraft mentioned international competition, he didn’t anticipate the meteoric rise of Japanese automakers like Toyota and Honda. These companies capitalized on Detroit’s missteps, offering reliable, fuel-efficient cars that appealed to American consumers.
FAQs
1. Why were American automakers initially resistant to downsizing cars?
Detroit automakers operated for decades under the assumption that American consumers preferred larger, more powerful vehicles. They believed downsizing would alienate their customer base.
2. What factors forced Detroit to finally embrace downsizing?
A confluence of factors, including government regulations on fuel efficiency and emissions, rising gas prices, and increasing competition from foreign automakers, forced Detroit to rethink its strategy.
3. Did downsizing ultimately benefit or harm the American auto industry?
Downsizing was a necessary adaptation for Detroit but had both positive and negative consequences. It led to more fuel-efficient vehicles but also contributed to quality issues and a loss of brand identity for some automakers.
Conclusion
Kraft’s article provides a fascinating glimpse into a pivotal moment in automotive history. While his analysis lacked the depth of seasoned industry observers, he raised critical questions about Detroit’s resistance to downsizing and the government’s role in shaping the industry’s future. Understanding this historical context is crucial for appreciating the complexities of the auto industry today.
