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Sixty to Zero: An Inside Look at the Collapse of General Motors--and the Detroit Auto Industry
An award-winning journalist's insights into the auto industry, the decline of once-great companies, and the failures of management
The collapse of General Motors captured headlines in early 2009, but as Alex Taylor III writes in this in-depth dissection of the automaker’s undoing, GM’s was a meltdown forty years in the making. Drawing on more than thirty years of experience and insight as an automotive industry reporter, as well as personal relationships with many of the leading players, Taylor reveals the many missteps of GM and its competitors: a refusal to follow market cues and consumer trends; a lack of follow-through on major initiatives; and a history of hesitance, inaction, and failure to learn from mistakes. In the process, he provides lasting lessons for every executive who confronts the challenges of a changing marketplace and global competition. Yet Taylor resists condemning GM’s leadership from the privileged view of hindsight. Instead, his account enables the reader to see GM’s decline through the eyes of an insider, with the understanding that corporate decision-making at a company as large as General Motors isn’t as simple as it may seem. Taylor’s book serves as a marvelous case study of one of the United States’ premier companies, of which every American quite literally now holds a share.
The collapse of General Motors captured headlines in early 2009, but as Alex Taylor III writes in this in-depth dissection of the automaker’s undoing, GM’s was a meltdown forty years in the making. Drawing on more than thirty years of experience and insight as an automotive industry reporter, as well as personal relationships with many of the leading players, Taylor reveals the many missteps of GM and its competitors: a refusal to follow market cues and consumer trends; a lack of follow-through on major initiatives; and a history of hesitance, inaction, and failure to learn from mistakes. In the process, he provides lasting lessons for every executive who confronts the challenges of a changing marketplace and global competition. Yet Taylor resists condemning GM’s leadership from the privileged view of hindsight. Instead, his account enables the reader to see GM’s decline through the eyes of an insider, with the understanding that corporate decision-making at a company as large as General Motors isn’t as simple as it may seem. Taylor’s book serves as a marvelous case study of one of the United States’ premier companies, of which every American quite literally now holds a share.
272 pages, Hardcover
First published March 13, 2010
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Displaying 1 - 10 of 10 reviews
June 28, 2014
The book jacket tells us that this is "an inside look at the collapse of General Motors and the Detroit auto industry." Mr Taylor did not work for GM, but he has covered the auto industry for many years for FORTUNE magazine. He doesn't insert himself into the story as much as some writers have, but he does include remarks about articles he wrote at the time, his own thoughts and opinions, and whether he got it right: graciously admitting when he did not. Overall, I found the personal perspective valuable only when he was giving his firsthand impression of CEOs and other GM heavy hitters.
In the 1950s GM was so dominant that it threatened to become a monopoly and was actually under the scrutiny of the federal government for that reason, rather than the recalls which seem to plague it nowadays. Harlow Curtice, a charismatic figure and the CEO was TIME magazine's Man of the Year. The slow motion downhill slide began at about the time that Curtice left, and the author lays much of the blame on the first two CEOs to follow him: Fred Donner and Dick Gerstenberg, both trained as accountants, tended to look more at the bottom line and savings rather than trying to design exciting and well-performing vehicles. Under their leadership GM decided to leave a $15 stabilizing bar off the notorious Corvair, with subsequent performance and safety problems, leading to Senate hearings and a best-selling book by Ralph Nader.
Later, under Roger Smith, whom Taylor portrays as the worst CEO that GM ever had, a well-meaning attempt to shake up the staid GM culture, or "frozen middle," as Smith called it, led to massive spending without results. Among Smith's more colorful failures were his call for "shared sacrifice" while demanding bonuses for himself; the failed Saturn experiment; and the notorious "factory of the future" in Hamtramack, Michigan, where assembly line robots spray-painted each other rather than the cars. To this reader, Smith comes across as a highly imaginative manager who couldn't quite get his big ideas to really work. He is, of course, better known to many of us as the Roger in Michael Moore's film "Roger and Me."
Rick Wagoner's terrible performance at the congressional hearings in Washington and his belief that GM had to get bigger rather than smaller in order to meet its considerable financial obligations were the last things we saw before the bankruptcy, but, as the author convincingly points out, it had been a long time in the making.
Key factors in the ruination of one of the world's most powerful companies were the insular and conservative culture at GM, the unimaginative product, and its relations with the United Auto Workers.
Anyone visiting GM's headquarters was struck by the sense of isolation and silence and the lack of spontaneity. Gray men in gray suits worked under a committee and meeting system which moved with woeful slowness. An emphasis on being a team player cultivated a culture of yes-men. The board was stocked with GM insiders; outside points of view were seldom welcomed or encouraged. An 18-month promotion system damaged rather than increased any sense of continuity. Cobbled together in the early 20th century from several diverse companies, GM seemed to be competing with itself. There was also much division overlap; at one time GM had 27 separate purchasing departments. The company seemed to value procedures over results, and the clumsy giant never found a way to compete with innovative foreign imports.
In a 1988 interview with the author, Lee Iacocca said that GM would never have hired him: "They would have said to me, 'We can't use you because you haven't had at least 40 years at GM, gone to General Motors Institute, come up through the ranks, and stepped on every rung of the ladder. We never go to the outside for executives because that's an admission that we didn't build our people right."
This cloistered culture had an negative effect on the product. One observer is quoted as saying that Gm "has not had a significant technological innovation since the automatic transmission." Economy of scale led to lookalike products and division overlap. The XUV is portrayed as being "perfect for hauling around tall plants but little else." The Aztec is called "one of the ugliest cars of all time." At GM design was opposed to engineering and both were opposed by accounting, leading to "brilliantly executed mediocrity" that could not hold the loyalty of the American consumer.
The UAW always had an antagonistic interest with GM, determined to get as much for its members as possible without concern for the long-term outcome. This practice ultimately led to unfunded pensions and healthcare benefits. In 2004 healthcare for GM workers added $1500 to the cost of every car they manufactured. Inflation in the healthcare sector caused an 8.5% jump in GM's costs that same year. GM had 2.5 retirees for every active worker. GM's retirement obligations were unsustainable.
Taylor closes with the observation that Great Britain, once a profitable auto manufacturer, now has all of its brands owned outside the country. Could the same thing happen to the "Big Three" of the US, or will fluctuations in the global economy swing things the other way?
In the 1950s GM was so dominant that it threatened to become a monopoly and was actually under the scrutiny of the federal government for that reason, rather than the recalls which seem to plague it nowadays. Harlow Curtice, a charismatic figure and the CEO was TIME magazine's Man of the Year. The slow motion downhill slide began at about the time that Curtice left, and the author lays much of the blame on the first two CEOs to follow him: Fred Donner and Dick Gerstenberg, both trained as accountants, tended to look more at the bottom line and savings rather than trying to design exciting and well-performing vehicles. Under their leadership GM decided to leave a $15 stabilizing bar off the notorious Corvair, with subsequent performance and safety problems, leading to Senate hearings and a best-selling book by Ralph Nader.
Later, under Roger Smith, whom Taylor portrays as the worst CEO that GM ever had, a well-meaning attempt to shake up the staid GM culture, or "frozen middle," as Smith called it, led to massive spending without results. Among Smith's more colorful failures were his call for "shared sacrifice" while demanding bonuses for himself; the failed Saturn experiment; and the notorious "factory of the future" in Hamtramack, Michigan, where assembly line robots spray-painted each other rather than the cars. To this reader, Smith comes across as a highly imaginative manager who couldn't quite get his big ideas to really work. He is, of course, better known to many of us as the Roger in Michael Moore's film "Roger and Me."
Rick Wagoner's terrible performance at the congressional hearings in Washington and his belief that GM had to get bigger rather than smaller in order to meet its considerable financial obligations were the last things we saw before the bankruptcy, but, as the author convincingly points out, it had been a long time in the making.
Key factors in the ruination of one of the world's most powerful companies were the insular and conservative culture at GM, the unimaginative product, and its relations with the United Auto Workers.
Anyone visiting GM's headquarters was struck by the sense of isolation and silence and the lack of spontaneity. Gray men in gray suits worked under a committee and meeting system which moved with woeful slowness. An emphasis on being a team player cultivated a culture of yes-men. The board was stocked with GM insiders; outside points of view were seldom welcomed or encouraged. An 18-month promotion system damaged rather than increased any sense of continuity. Cobbled together in the early 20th century from several diverse companies, GM seemed to be competing with itself. There was also much division overlap; at one time GM had 27 separate purchasing departments. The company seemed to value procedures over results, and the clumsy giant never found a way to compete with innovative foreign imports.
In a 1988 interview with the author, Lee Iacocca said that GM would never have hired him: "They would have said to me, 'We can't use you because you haven't had at least 40 years at GM, gone to General Motors Institute, come up through the ranks, and stepped on every rung of the ladder. We never go to the outside for executives because that's an admission that we didn't build our people right."
This cloistered culture had an negative effect on the product. One observer is quoted as saying that Gm "has not had a significant technological innovation since the automatic transmission." Economy of scale led to lookalike products and division overlap. The XUV is portrayed as being "perfect for hauling around tall plants but little else." The Aztec is called "one of the ugliest cars of all time." At GM design was opposed to engineering and both were opposed by accounting, leading to "brilliantly executed mediocrity" that could not hold the loyalty of the American consumer.
The UAW always had an antagonistic interest with GM, determined to get as much for its members as possible without concern for the long-term outcome. This practice ultimately led to unfunded pensions and healthcare benefits. In 2004 healthcare for GM workers added $1500 to the cost of every car they manufactured. Inflation in the healthcare sector caused an 8.5% jump in GM's costs that same year. GM had 2.5 retirees for every active worker. GM's retirement obligations were unsustainable.
Taylor closes with the observation that Great Britain, once a profitable auto manufacturer, now has all of its brands owned outside the country. Could the same thing happen to the "Big Three" of the US, or will fluctuations in the global economy swing things the other way?
October 7, 2021
Couldn't bring myself to finish it
January 16, 2019
In summary, a journalist goes back over his old articles about GM (and other car companies) and relates the stories back to you, in some kind of chronological order. Story summary, GM declines and nothing anyone does has any impact. Why, well it does quite get into it, maybe they changed to fast, not fast enough? The book never gets into enough detail to really understand.
November 26, 2012
Worth of skimming, but not reading in detail.
Basically a good book for understanding the personalities and auto companies, and how a combination of hubris and lack of imagination led to their fall. Very easy to pick up and dive right into, which was both a blessing and a curse. Salacious details about company management and leadership kept my attention but I also felt that Taylor seemed to criticize without any beliefs of his own. Basically, Taylor would criticize a numbers oriented leader for failing to understand that the car business required you to make models people wanted to buy. But when a new CEO would step in, who gave thought to creating attractive models, Taylor would find fault for not making the company profitable. I think he did get core reason for the Detroit automaker's collapse right, basically a failure in the culture combined with unsustainable business/management practices. Seems like a antidote/book for anyone who is naturally attracted to the idea that big business is somehow more efficient/effective than big government.
Basically a good book for understanding the personalities and auto companies, and how a combination of hubris and lack of imagination led to their fall. Very easy to pick up and dive right into, which was both a blessing and a curse. Salacious details about company management and leadership kept my attention but I also felt that Taylor seemed to criticize without any beliefs of his own. Basically, Taylor would criticize a numbers oriented leader for failing to understand that the car business required you to make models people wanted to buy. But when a new CEO would step in, who gave thought to creating attractive models, Taylor would find fault for not making the company profitable. I think he did get core reason for the Detroit automaker's collapse right, basically a failure in the culture combined with unsustainable business/management practices. Seems like a antidote/book for anyone who is naturally attracted to the idea that big business is somehow more efficient/effective than big government.
June 6, 2010
I usually don't read business books - enough of that kind of reading at work, but a recent review caught my interest. This is an interesting story written by a magazine journalist so, easy and fast reading. The demise of the auto industry leading to its collapse in the past year was a long time coming and evident to the casual observer. But the insights into the personalities and how self destructive the industry really was made this an interesting story...especially to someone that hasn't owned a car in years!
May 16, 2010
Breezy, insider view of the GM, Chrysler, and Ford debacles from the long-time auto writer from Fortune magazine. From the Unions to the CEOs, the "smartest guys in the room" through decades of greed, ennui, arrogance and incompetence, ultimately outsmarted themselves and their stockholders.. Taylor, friendly with many of them, is kinder than he might have been.
July 19, 2012
Simply put, Americans should know the history of the Detroit Big 3 and the reasons behind their downfall. This is a terrfic summary from a business writer, though I hoped for a bit more techical mumbo jumbo. Now, there just needs to be a post-Obama supplement.
May 2, 2010
Good overview of what lead to the auto crisis. Looks not only at GM, but also at Ford and Chrysler, from the perspective of a long-time writer for Fortune mag.
October 12, 2010
I was right it wasn't the unionized workers fault, it was the people making the real money, bonuses for nothing
April 2, 2019
Ever want to learn how bean counters can destroy an innovative and design-centered culture of excellence and turn it into something that produces - the Aztec? Please read.
Displaying 1 - 10 of 10 reviews