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When cars were America's idols

June 01, 2009|Dan Neil

If you were to walk up to a typical New York executive in the 1960s -- think Don Draper in AMC's "Mad Men" -- and tell him that General Motors Corp. would be in bankruptcy by 2009, he would have thought you were delusional, or perhaps a Communist. GM was more than just the world's largest and most admired corporation; it was the final vindication of the American Way, the perfected and even divinely inspired example of democratic capitalism that stood opposed to the airless atheism and nullity of the Soviet system.

Or imagine that you were somehow able to drag Nikita Khrushchev from the United Nations podium into the street to confront -- no, behold -- a 1959 Cadillac Eldorado Biarritz. Nearly 19 feet long from its Jayne Mansfield-like bumpers to its rocket-like tail lamps, a lyric in steel and mirrored chrome, as bright and beautiful as a ripe plum is sweet, and yet just ever so slightly obscene. Khrushchev would have dropped his shoe.

Surely a company, a country, that could produce such an object would last forever.

At the height of its power, GM represented 10% of the national economy. It controlled more than 50% of the light-vehicle market. Its products, research and management methodologies were the standard of the world. Along the way, GM had, rather accidentally, invented American consumerism. Longtime Chairman Alfred Sloan's program of "planned obsolescence" -- making annual, often minor changes in the products in such a way as to make last year's model hopelessly unfashionable -- put Americans on the acquisitive treadmill they are panting on yet today.

For The Record
Los Angeles Times Wednesday, June 03, 2009 Home Edition Main News Part A Page 4 National Desk 1 inches; 41 words Type of Material: Correction
GM history: A timeline on the history of General Motors and an accompanying photo caption in Monday's Section A said that Cadillac introduced the first car with air conditioning in 1953. The first car with air conditioning was a 1940-model Packard.
For The Record
Los Angeles Times Saturday, June 13, 2009 Home Edition Main News Part A Page 4 National Desk 1 inches; 37 words Type of Material: Correction
Vintage car photo: In the June 1 Section A, a photo caption that accompanied a column by Dan Neil about General Motors' history identified a car as a 1958 Cadillac Eldorado. The car's model year is 1957.

Another of Sloan's big ideas was the "Ladder of Success," whereby the company's brands -- Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac -- corresponded to ascending social status. The Ladder of Success was, in fact, an automotive caste system, a program of class stratification. Armed with the power of modern scientific marketing and advertising, GM was able to weld an existential link between who we are and what we drive.

A society obsessed with mobility had found its muse. Chollos and homeboys cherished that '62 Impala. Redneck country boys had to have that 400-cubic-inch Trans Am. Texas moms loved their blot-out-the-sun Suburban. Playas rode up on Escalades and Hummers with 22-inch wheels. The diversity of GM's product offerings became a lens through which to diffract American life, which is another way to say GM traded in automotive identity politics.

When GM President Charles Wilson lightly said in 1953 (during his confirmation hearings for secretary of Defense) that "what was good for the country was good for GM, and vice versa," he synthesized a very big idea: GM and the U.S., each vast conglomerates, each general and united in their own ways, had undergone a de facto merger.

The final chapter of that merger plays out this week as GM weathers a reorganization that will leave the federal government owning 70% of the company. In the midst of the deepest recession since the 1930s, it's hard not to see GM's bankruptcy as a signal moment in a larger history. If mighty GM can fail, cannot also the United States? And the answer is, absolutely.

This is the lesson of GM's bankruptcy, and it has little to do with market share and miles per gallon. It's a rebuff of the notion of exceptionalism. Any organization that fails to sufficiently safeguard its means of self-correction and reform, that forsakes long-term investment for short-term gain, that piles up debt year after year, will eventually fail, no matter how grand its history or noble its purpose. If you don't feel the tingle of national mortality in all this, you're not paying attention.

Many will step forward this week to recite the familiar litany of complaints against GM: It treated its customers poorly; it built boring and awful cars that alienated generations of buyers; it built binge-drinking dinosaurs and murdered the electric car. It bet the farm -- or at least southern Michigan -- on America's lust for big iron, trucks and SUVs, which left GM undefended when gas prices peaked at around $4 a gallon last year. Its executive leadership was myopic and insular, its board packed with thumb-twiddling cronies. If corporate mismanagement were a crime, you could lock up every one of these guys and throw the key in the Detroit River.

In his book "The Fifties," David Halberstam described what many regard as the moment of GM's original sin: In 1958, after a long-standing prohibition, it became permissible to discuss the company's stock price in management meetings.

From there, it was only a matter of time before the company twisted in Wall Street's wind and strategic decisions were calibrated according to dividend pennies.

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