Customer Reviews

The End of Detroit: How the Big Three Lost Their Grip on the American Car Market

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"The End of Detroit" covers a very timely subject - the long slide and decline of the market share of the Big Three, as well as the decline of their ability to effectively compete.
Micheline Maynard covers the successes of Japanese and Korean automotive manufacturers in great detail, as well as BMW as an example of European manufacturers. A particularly worthwhile read are the areas covering the the North American manufacturing plants that the import brands have built - covering not only the obvious financial advantages but also their long term strategic benefits. She also covers the state of the big Three in detail - the focus on high-profit trucks and it's inevitable backfire, and especially the overhead costs of the very powerful (and very entrenched) labor force: uncompetitive (costs and work rules), overpaid, excessive benefits, and enormous financial overhead both when working, when laid off, and continuing on through retirement. All of these labor issues competitively impact the bottom line of the Big Three - not only in the price of the vehicle, but in their ability to drive down costs (both manufacturing and labor) to be competitive in the market.

I actually finished this book and then went back to review it again a couple of months later. Its a very timely book, and I highly recommend it. However, I can't say I agree with everything the author states, and I do feel that several of the topics deserve more detailed attention.

For example:

- Nissan has made some very serious errors, almost going out of business. Now the recovery is well underway, and the product lineup is very aggressive and bold (too much so in some cases?). However, there are some serious quality issues in some of the cars (the many issues of 350Z owners comes to mind).

- Mitsubishi is a real sad sack - with one or two exceptions (a brilliant exception in the case of the Evo) the lineup is dull and pointless, offering nothing to distinguish itself. With the exception of the Evo, you can literally ask yourself "would anybody notice of they disappeared"?. The sorry state of their dealers (terrible service reputation) isn't covered at all. And, the recent issues with bad car loans is barely covered at all (although to be fair much of that information fully came to light after the book was published).

- Mazda has had an interesting history in the last 10-15 years, again almost driving themselves out of business. Now they're doing well - innovative products and growing sales. Although major issues remain: lack of differentiation between the Tribute and the Escape, poor service reputation of some dealers, and the lack of dealers in certain prime market areas. What's particularly interesting, though, is the fact that Mazda's recovery was led by Ford executives over the last several years - and not by "old-style" managers from traditional Detroit, but by internationally experienced executives from other worldwide locations. This alone ought to be the subject of an entire book, and it didn't even rate a chapter here.

- Ford's success with it's Premier Automotive Group (made up entirely of formerly fiercely-independent European brands) is a very interesting topic that was all but ignored. While not particularly profitable at first (each had it's own problems, such as Jaguar with it's aged manufacturing plants and stubborn labor force), it's blossomed in the past two years and is now a very clear winner for Ford. Contrast that with GM's own experience with Saab (amounting to little more of a strategy than simple rebadging of corporate platforms - even a technologically backwards American SUV!). Neither were covered in any significant detail in this book.

- The Korean manufacturers are growing quickly. However, they were (at least) initially propped up by Korean government subsidiaries - a fact she missed entirely and a prime example of unfair competition. She does cover some of their initial (and very serious) quality issues. She barely covers how they are in the process of taking over the extreme low end of the market - edging the Japanese into higher (and lower volume) markets areas - areas which of course are at great risk in times of economic troubles. And there is very little discussion of the Chinese, who could very well end up dominating the lower end of the market and taking it entirely away from the Japanese as well as the Koreans - leaving both countries with an aging and very expensive workforce (sound familiar?).

- She believes that one of the Big Three will cease to exist by the end of the decade. I completely disagree with this for several reasons:
- the Big Three are improving their ability to compete, although very very slowly (a: have to learn how; b: the UAW is still in the way).
- this book - whether you agree with it all or not - helps raise these issues in the public eye - and the entire issue of American labor is slowly (but not quickly enough) becoming a campaign issue. This issue is also directly related to outsourcing issues in the software industry, as well as to the Government's ridiculous (and ultimately dangerous) meddling in Microsoft's ability to innovate. The dominance of the Unites States in nearly every facet of the software industry is also at risk. We've also seen some serious issues in the ability of Boeing to compete in the worldwide aerospace industry recently. Better awareness and discussion of the entire range of American competitiveness could help better position us in the world economy.
- the industry is shifting - slowly but surely - into alternative powerplants. Each of the Big Three has a somewhat different strategy here (Ford is probably the best positioned), although again the ability to execute is the major issue (it will be interesting to see if the benefits of the upcoming 2005 Hybrid Escape are fully realized - assuming of course the quality and reliability of it's all-new powerplant are fully delivered as well). This area by itself will take until well after the end of the current decade to fully play out. Toyota is certainly best positioned worldwide.

Automotive enthusiasts will find many of these topics to be familiar ones. I follow the industry closely and certainly are very familiar with them all. However, the book is still a very worthwhile and interesting read because this is a topic which hasn't been focused on by the general public, it's an interesting read for followers of the software industry because it's a preview of what could happen to it one day, and it's a timely read given the upcoming 2004 Presidential election. Certainly this is the type of topic that should be focused on, rather than the continual and bombastic grasping for ways to hurt our President over the Iraq topic.

The book is indeed more than a bit meandering, and you may not agree with with every point the author makes. However, this can be a very polarizing topic - the more you explore it the more you find that it's a lot more complex than simple 1-or-0 answers. It's not solely the fault of the unions. It's not solely the fault of the executives. Etc. Etc. Furthermore, because the book was published several months ago, it is not able to address the "Year of the Car" theme in this year's North American International Auto Show. While I certainly don't believe that a shift back to cars and away from trucks is actually under way in any measurable way, shape, or form, I would certainly like to see her reaction to this years theme. Better yet, I'd like to find a serious discussion forum where I could discuss all of these issues in greater detail.

This book is essentially an expansion on several newspaper columns related to the thriving Japanese automakers and the struggling "Big 3". I expected to gain insight into management systems and perhaps a comparison of the methods used at various automakers to understand why honda and toyota continue to gain market share and impress their customers. Instead, the book uses quotes from sources like Edmunds and company literature to demonstrate the writer's point and really tells very little about how these companies work.

Certainly with the problems facing the Big Two of Detroit and the company formerly known as Chrysler, I was looking forward to an enjoyable read while attempting to add one more person's perspective on Detroit's problems and whether or Ms. Maynard's reporting of the same might well be insurmountable, in turn leading to disaster for one or more of our American manufacturers.
Sadly, Ms. Maynard should have asked the Society of Automotive Historians if they would volunteer their time to proof read her book, as the numerous little factual errors built up to become a huge disappointment to me.
Additionally, Ms. Maynard falls into the trap that so many would be automotive analysts do, oversimplification of the issues at hand. By claiming that Japanese companies like Toyota never make mistakes in determining want the customers want in new products or overstating the German's abilities to capture the mood of the American public's automotive desires, she overlooks vehicles such as the Toyota Echo or Volkswagen's "soon to come to America" Phaeton.
As an automotive analyst and historian and a very harsh critic of many of Detroit's missteps along the way, I'm always on the lookout for another person's viewpoint on the present crisis. However, Ms. Maynard's book sheds little new light on the subject and many of her conclusions are simply wrong.
That doesn't mean that Detroit isn't in serious trouble, but by my analysis, the current situations that are likely to cause permanent damage to the American automobile industry has little to do with her oversimplification of the market dynamics and how Detroit is reacting to them. And because of her many small but significant mistakes in factual items that should have been corrected by a knowledgeable proofreader, I found it impossible to continue on to finish her book.
(For those who don't recall, Brock Yates wrote a similar book on Detroit's problems in the early eighties, only to find his entire thesis discredited within three years of publication by Detroit's resurgence in the market place.)

I was very excited about receiving this book as a gift and eagerly dug into reading it. Unfortunately, I am quite disappointed with most elements of the book and think that Ms. Maynard missed a great opportunity to dig deep into the downfall of an American-led industry.

The book is written from a journalistic viewpoint rather than from a business strategist/analyst viewpoint. The proof of Japan's successes or Detroit's failures was recalled via anecdotes instead of concrete sales results and trends. The anecdotes provide nice human interest stories, but provide little business proof for success or failure. She does interject a little profit margin data over time, but doesn't acknowledge that profit margins in all industries decrease as the industry matures.

Additionally, at different points in the book, Ms. Maynard contradicts her previous conclusions. For example, early in the book, she emphasizes that Japan's success is getting cusotmers to return and buy another Japanese nameplate; however, later she chastizes Detroit for the same thing, indicating that they are not focused on capturing additional marketshare (which is hard to do when you have greater than 50%).

The book does provide a nice history review for those that are interested, but feels like a TQM book from 15 years ago.

This book provides a helpful overview of the major problems and challenges that the American auto-makers are currently encountering. Its breadth is impressive, covering everything from automotive history to market analysis to profiles of and leadership anecdotes from Toyota, Honda, Nissan, Hyundai, BMW, and others in addition to the Big Three.

But at only 310 pages (hardcover), what it has in breadth it lacks in depth. Books like Turnaround (about Ghosn's revival of Nissan) and Car (about the design of the Ford Taurus), both cited by Maynard as sources, provide more direct insight on automotive industry leadership. And Halberstam's The Reckoning, although it's twenty years old, makes a more compelling and analytical argument as to why Detroit should worry about the imports.

Maynard's allegations are nothing new: Detroit has huge pension and health care burdens; it overestimates its understanding of the American market; it relies too much on emotion and nostalgia, not enough on engineering, research, and quality; its hands are tied by UAW contracts; it relies on huge discounts to motivate buyers; it's suffering brain drain to the import companies; it has too much corporate inertia. And while there is some background information to support each claim, much of it is anecdotal and cherry-picked. For example, while much is made of Nissan's ability to reinvent itself, Chrysler's multiple successful revivals are used only as an example of its inability to be consistent. And although the American companies have improved their vehicle quality dramatically in the last decade, Maynard focuses on the negative and profiles on a handful of individual consumers who happened to buy American lemons.

While I didn't find it especially insightful or interesting, I think it's still a worthwhile read for those who want to build automotive industry knowledge.

Others have already noted the various factual errors and sweeping generalizations. The thing that really irked me about this book is that its title leads you to believe that most of the reading will be about the US car industry....in fact, you read chapter after chapter about imports, with references to how Detroit compares to the imports.

One whole chapter on Camry, one whole chapter on Hyundai/BMW, one whole chapter on the ENTIRE history of Toyota & Honda, etc. gets pretty boring, as I really could do without a complete history lesson of the major import manufacturers. The book should have focused on what has been going on at the Big Three (decisions made, models produced, sales info, market trends, quality/reliability) and how consumer preferences have led to the imports' increased market share in the US......

There was just too much emphasis on specific imports with too little relevant content as pertains to the title of the book.

I was disappointed when I first started reading Ms. Maynard's book. I had expected to delve into the details of the manufacturing process and appreciate Japan's robotic genius. If you are interested in the technology then look elsewhere.

But Maynard is a pretty good storyteller. She tells stories about the founders of Toyota and Honda. She chronicles their cars, the Camry and Accord, and the engineers behind their success. If I have any complaint about her book, it's that she writes more about the import companies and their leadership then she writes of Detroit, her home town.

Perhaps she is hoping that the CEO's of GM, Ford and (Daimler)Chrysler will read her book and take a lesson or two from their competition:
1. Listen and learn from your customers. Had Ford paid more attention, Taurus might still be the number one selling sedan.
2. Respect your workforce. Toyota and Honda are demanding of their workers, in Japan and in America. But they also value and actively seek their suggestions for improving the production process. (Whether the United Auto Workers hinders this communication in Detroit is left unclear.)
3. Stay humble and hungry.

In the end I'm impressed with the case Ms. Maynard makes for leaderhip. Poor decision making by the Big Three Execs explain much of the reason that Detroit matters less in the automotive world than it used to.

The Big-Three have not been able to compete with the imports. That was exactly Pres. Bush's response on the news of GM's latest loss, one of its largest.

While many reviewers attack some of the details as some kind of proof that the overall thrust of this book is wrong, the numbers of declining market share and consumer trust do not defend them.

Growing up in the 50s and 60s, I firsthand can testify to the Big-Three's arrogance to the market. Big cars are it. We don't care where this small car demand is coming from. And they didn't. They did not respond in time to this threat. It allowed the Japanese who initially as this book reports did not do well in the marketplace initially, but the American arrogance and back turning on the marketplace allowed them time and space to continue. Continue they have, winning millions of loyal customers.

My family is such. Now they won't even consider American makes. The Japanese they have had for years are too reliable, too valuable at resell. Squawking about the past glory or waving the flag won't help.

What will help is retaining current customers. This will take some yomen work. Union problems. Upper management musical chairs. Failed new product launches. Huge contiual recalls. Incentives which cut customer's resell.

The Big Three are a mess at the top. They are not in touch with the market. They are driven by other things: short term profit, stock price and braggidocio about each litte success they have. All the time the imports cut into their market share. They haven't learned to compete.

Compete will take time. It will take different thinking and products. It will take some kind of reformation of the union dominated factory. It will take consistent, tough, market driven upper management. Don't know if Detroit has the moxy to do this.

They shoot themselves in the foot too often, and seem to enjoy it so much they do it again and again. How many "new" chief execs do they enjoy having, who say just wait, we're regrouping and then announce huge win campaigns which betray declining market shares. Market shares don't lie. Neither do massive stagnant inventories. Nor do low resell, and massive recalls.

Worst of all, the momentum is swinging against them. It will get worse unless it is stopped first. Then started in the other direction.

Significant point this book makes which most overlook is the public attitude difference in the American vs. Import pr. American's like to make big splash, while Japanese are reserved. Why can't American learn from their mistakes?

They are not driven by the market. Their execs are out of touch. Seems few of them even know what their potential customers who are turned off with their offering for over two decades, and even know some are defecting care about.

Many would like to see the Big Three truly be that. Will they compete?

This was a really cool book that gives a good overview of how the Imports took over the Auto industry. The biggest issue is that the last update of the book was in Nov 2004 so there is almost 5 years that isnt covered. This should be revised asap since the book talks about this and that will happen by 2010, etc and it turned out to be fairly prophetic. Maybe just an update to the epilogue.

This is a very good book for an overview of the state of the automotive business world. Note if you are a total gear head, work in one of these companies, etc.. this book will probably not be of interest to you as it doesn't ever go that deep.

I especially enjoyed reading about Hyundai (the make of my own car), as well as BMW. Also enjoyable in the book is it's interesting descriptions of the automotive factories in the south (foreign makes). I've always thought the whole buy American notion was silly given that cars are made here anyways and this book only reaffirmed that believe for me.