Crash Course: The American Automobile Industry's Road to Bankruptcy and Bailout-and Beyond Paperback – January 11, 2011

I have to say that there are other excellent reviews posted here and I enjoyed reading them. I will just make a few points. The Big Three dominated the era after World War II when most of the rest of the world's industry was prostrate with war damage. They had the field to themselves. A similar story is the US healthcare system which has become a sluggish monolith with no compunction about seeking government help when necessary. The unions and the GM management, in particular, colluded (although that is probably too strong a word) to keep each other happy. The UAW did not strike and the GM management gave them what they wanted. The only party who was left out was the car buyer. The Big Three concentrated on style and ignored quality. I'm old enough to remember when nobody expected a car to last more than three years. Many people bought a new car every year. Before you turn pale at the thought of the expense, be aware that I bought my second new car in 1968, a red Mustang convertible, for $3050. I paid $50 down and signed a contract for $95 a month at my credit union. In three years, the car was paid for. My first new car was a Volkswagen bus, bought with money from my father and it cost $1700 in 1965. The Mustang was our second car. By that time I was a resident physician on the grand salary of $1500 per month.It's not clear if the short life span of those cars was an example of planned obsolescence or if the union just built crummy cars that looked good. I drove that Mustang for four years and sold it. I wish I hadn't because they are classics now. Ford had another problem. In the 1970s, in a story not well covered in the book, Ford was taken over by the financial people. The men who made cars, from design to the shop floor, were delegated to a back seat. Many large companies did the same thing, maybe to cope with the Carter inflation or the deep recession that followed the painful medicine to stop inflation. It ruined some of them for a while. One was Xerox.Then came the Japanese car makers. It is an interesting story how the Japanese had to respond to government attempts to prop up the US auto industry and hold the Japanese back. Each step the Japanese were forced to take made them more formidable competitors. It was punitive import duties that drove them to build factories in the US. They found that the newly energetic South was eager for the jobs so they located there. They expected to be unionized but found they had settled in a part of the country that was not pro-union. This story is very well told in the book. When GM started the Saturn to compete with the imports on quality, they built a plant in the South, and the UAW chief at the plant happened to be a rare union leader who wanted to adopt new methods and study the Japanese quality circles and other innovations in labor management cooperation. Saturn was sabotaged by both the GM management, who resented the implication that their cars were inferior, and by UAW leaders as the president of the union at that time, Stephen Yokich, was fiercely anti-management and uninterested in innovation. The project failed but shouldn't have. This is the best part of the book.I think the author has given the UAW too much of a pass and soft pedaled the Obama administration's rape of the bond holders. He implies they were predatory hedge funds that thought the GM bonds were a buy because the law places secured creditors first in a bankruptcy. The administration stiffed the bondholders, many of whom turned out to be auto industry pensioners and their pension funds. The effect of that act, a gift to the UAW for their support, will come to hurt bond sales in the future since contract law was violated for political purposes. Countries like Argentina do that, not the US, at least until now.Aside from that quibble the book was excellent.

One must not expect perfection from any writer, especially a journalist, but having said that I must point out two of the most glaring shortcomings of this work -1.) Paul Ingrassia assigns no blame to the federal government for its role in bringing the Big Three to their knees. This is laughable in-as-much as Ingrassia does acknowledge (repeatedly) that the 1936-1937 UAW Flint Sit-Down Strike was a watershed in the coalescence of union power in the auto industry, and of course that strike was made possible by FDR and his fellow Democrat's passage of the 1935 National Labor Relations Act. Moreover, while taking no sides on the issue, Ingrassia certainly has no quarrel with the notion that President Obama's $750 billion American Recovery and Reinvestment Act of 2009 is sufficient to stimulate American business, but he makes only one small remark about how high energy costs from 2005-2008 (oil peaked at $147.30 in July 2008) negatively impacted the Big Three. In fact, the high cost of oil cost Americans about $750 billion extra in the July 2007 to July 2008 period alone, depressing, not stimulating the economy. And of course everyone knows that it is Democrats who have consistently opposed policies that would have led to more oil, and lower oil prices, in 2005-2008. The Democrat "energy tax" of 2005 to 2008 probably did more to damage the Big Three than all the management ineptitude and labor greed that Ingrassia claims is what really did-in the Big Three.2.) Ingrassia, throughout this book, seems to take the point of view that the federal government is like God, in that it is a wise, all powerful, forgiving father who waits patiently behind the scenes to bail-out wayward American corporations, and that now that the federal government has stepped in, we can all rest at peace about the future of American auto-making, as long as those automakers follow "father's" sage advise. Ingrassia likes to contrast the folly of business managers and union workers operating in the free market, with the all-knowing, wise judgments of the federal government which intervenes when private enterprise goes awry. Ingrassia seems to be oblivious to the fact that the reason the federal government got big and powerful to begin with is, in part, because of the tax revenues collected over the last 100 years from big auto companies. The federal government's $100 billion intervention in the auto industry in 2008-2009 won't make the Big Three profitable again - it will be whether or not the Big Three can make, at a profit, cars people want. The government, and especially a President with a resume as a community organizer, will have precious little to do with that.More than anything, for the thinking reader, this book is a testament to the need to unleash the forces of free enterprise sans unions and sans federal regulations, allowing the Big Three to build exactly the cars people want with labor costs that make sense. Those two ingredients - freedom to design and competitive labor rates - are what made the Big Three what they were until liberals and Democrats with their CAFE standards and organized labor sympathies sowed the seeds of the Big Three's destruction.

I normally don't write my opinions of books; everyone has their own personal tastes. I grew up in Milford, Mi, home of the GM Proving Grounds. Like so many others around me during those days, their lives were directly related to the Big Three. "As goes GM, so goes America" we used to hear when we were younger. This is not a book written from a particular political point of view . It is an excellent documentary / historical account of what has gone on in the Motor City and the entire auto industry over the past 50+ years. The growth years, the Corvair, the muscle cars, the foreign invasion, the gas crisis, Pinto and Vega, strikes, revivals, the Saturn experiemt, etc. It's all here in chronological order. It runs right up to the first year after the bankruptcy of GM & Chrysler. Very timely! It was very hard to put it down at night. There were so many times I found myself saying, "Oh yeah, I remember that!" This is the fifth book in a row I've read about Detroit and the auto industry. Definitely Top Two! I must admit Ben Hamper's "Rivethead: Tales From the Assembly Line" was laugh out loud funny, (yet reading it you knew that these were some of the quintessential reasons for the collapse) and if you didn't laugh while reading it, then you didn't grow up in Michigan!If you follow the auto industry, grew up in a town that heavily depended on an auto plant, had family members or friends affected by what "this thing of ours" in Detroit was and what it is now, this book explains a lot. The author takes EVERYONE to task and also points out the good times and the good things that happened as well. Very fair and balanced & an easy read too.

I really enjoyed this book, excellent history of the automobile industry in the US. The writer has a very good pen. First I had read My years at General Motors by Alfred Sloan jr, and wanted to pursue my interest in the big three (GM, Chrysler and Ford) after Sloan’s book ended in the 1960’s.While GM was a success story under Alfred Sloan jr, it went mostly downhill under new management, and many lessons can be learned from the various missteps later. GM was a success story for a long time, but could not keep it up. It is also interesting to compare GM to another American success story; Southwest Airlines (described in the book «the Southwest Airlines way» - another great book), a company which is still a success story after close to 50 years of operational history.

I bought this book, mainly because I am a car enthusiast, as well as a keen businessman.This book ably covers both fields, and is a must-read.

if you have any interest in the modern American auto industry this book is a must, the details of presidential meetings, international deals and union agreements make very good reading. Thoroughly recommend it.

Great book. Could not believe how far back it went. Cannot believe how crazy the decisions made in Board Rooms can be. Facts, $$$, Egos.

J'avais déjà lu "Engines of change" du même auteur et je savais que j'étais en territoire sûr avec ce nouvel ouvrage. Et, effectivement, il s'agit d'un récit complet qui analyse une bonne partie de l'histoire de l'industrie automobile américaine. Grâce à l'auteur, on comprend pourquoi Detroit a pu tomber de si haut.C'est un ouvrage très détaillé, très documenté mais on ne s'ennui jamais en le lisant.