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The End of Detroit: How the Big Three Lost Their Grip on the American Car Market
An in-depth, hard-hitting account of the mistakes, miscalculations and myopia that have doomed America’s automobile industry.
In the 1990s, Detroit’s Big Three automobile companies were riding high. The introduction of the minivan and the SUV had revitalized the industry, and it was widely believed that Detroit had miraculously overcome the threat of foreign imports and regained its ascendant position. As Micheline Maynard makes brilliantly clear in THE END OF DETROIT, however, the traditional American car industry was, in fact, headed for disaster. Maynard argues that by focusing on high-profit trucks and SUVs, the Big Three missed a golden opportunity to win back the American car-buyer. Foreign companies like Toyota and Honda solidified their dominance in family and economy cars, gained market share in high-margin luxury cars, and, in an ironic twist, soon stormed in with their own sophisticatedly engineered and marketed SUVs, pickups and minivans. Detroit, suffering from a “good enough” syndrome and wedded to ineffective marketing gimmicks like rebates and zero-percent financing, failed to give consumers what they really wanted—reliability, the latest technology and good design at a reasonable cost. Drawing on a wide range of interviews with industry leaders, including Toyota’s Fujio Cho, Nissan’s Carlos Ghosn, Chrysler’s Dieter Zetsche, BMW’s Helmut Panke, and GM’s Robert Lutz, as well as car designers, engineers, test drivers and owners, Maynard presents a stark picture of the culture of arrogance and insularity that led American car manufacturers astray. Maynard predicts that, by the end of the decade, one of the American car makers will no longer exist in its present form.
In the 1990s, Detroit’s Big Three automobile companies were riding high. The introduction of the minivan and the SUV had revitalized the industry, and it was widely believed that Detroit had miraculously overcome the threat of foreign imports and regained its ascendant position. As Micheline Maynard makes brilliantly clear in THE END OF DETROIT, however, the traditional American car industry was, in fact, headed for disaster. Maynard argues that by focusing on high-profit trucks and SUVs, the Big Three missed a golden opportunity to win back the American car-buyer. Foreign companies like Toyota and Honda solidified their dominance in family and economy cars, gained market share in high-margin luxury cars, and, in an ironic twist, soon stormed in with their own sophisticatedly engineered and marketed SUVs, pickups and minivans. Detroit, suffering from a “good enough” syndrome and wedded to ineffective marketing gimmicks like rebates and zero-percent financing, failed to give consumers what they really wanted—reliability, the latest technology and good design at a reasonable cost. Drawing on a wide range of interviews with industry leaders, including Toyota’s Fujio Cho, Nissan’s Carlos Ghosn, Chrysler’s Dieter Zetsche, BMW’s Helmut Panke, and GM’s Robert Lutz, as well as car designers, engineers, test drivers and owners, Maynard presents a stark picture of the culture of arrogance and insularity that led American car manufacturers astray. Maynard predicts that, by the end of the decade, one of the American car makers will no longer exist in its present form.
368 pages, Paperback
First published January 1, 1965
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August 10, 2009This book was out of date a week after it was printed. I tend to think it's oversimplified as well. It's more like it was written by an outsider instead of someone involved in the industry at all.
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September 26, 2014- financial engineering can only go so far with underlying operation issues
- Taurus was an example of Ford's shortsightedness
- Taurus was an example of Ford's shortsightedness
March 9, 2008
Long review below, so...BOTTOM LINE UP FRONT: Interesting book if one likes cars. More of a state of the industry circa late 2002. Covers the period 1980-2002 pretty well, to the point that I came to consider this as a sequel to Halberstam's THE RECKONING. Decently written, but not well sourced. Reads like a series of magazine pieces. Valuable for the short background histories of nearly every major import manufacturer selling to the American public today. Doesn't cover the big issues affecting the Detroit-based companies in as much depth as I'd like, especially the union and pension challenges. Mainly focuses on car research, design, and manufacturing experiences for the companies covered.
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My full review:
An interesting history of what's happened to the "American" automotive industry in the late 80's, 1990's, and early years of the present decade. The period covered by the book ends in late 2002, as it was published in 2003. By "American," I do not mean to suggest that author Micheline Maynard focuses only on the activities of the Detroit Big 3 (General Motors, Ford, and Chrysler). Rather, she focuses on the efforts of just about every car manufacturer in the world to:
(1) - introduce new cars into the American car-buying market that appeal to the current and future market segments of American consumers. This is about 60% of the book.
(2) - create car-manufacturing plants in America to build those cars (subplot here: can Americans be trained to build cars that are of the same level of quality as cars manufactured in Asian and European nations? Author's answer: yes, if the UAW is not allowed to unionize the plant [personally, I'd like to see more info on her answer, though).
(3) - develop the concept of cars that don't run on gasoline AND try to see if Americans will buy them (Toyota and Honda are convinced they will, and are working hard to develop this segment of the market. GM - not so much).
For me, the most valuable aspects of this book were the capsule histories of how nearly all of the major foreign car companies got started, and the adventures they went through in their efforts to penetrate the American consumer market. David Halberstam has covered this in more depth with Toyota in his wonderful car-industry book THE RECKONING, published back in 1986. But author Maynard covers almost every company, and uses their origin stories and/or their crisis event stories to try and identify philosophies that mark each company to this day.
Author Maynard writes well, and includes many humorous anecdotes, which I always appreciate in a business history or current events book. She definitely traveled all over to see for herself much of what she reports, and it looks like she did her best to secure interviews with as many people involved in these events as possible so as to get both sides of the story.
No surprise there, as the back flap bio on author Maynard informs us that she is a New York Times reporter covering the auto industry. For me, this means that I can expect fairly deep reporting, and pretty good writing. But the various chapters read like extended magazine pieces. The author includes a tiny selected bibliography of nine books, two of which are previous books by Maynard herself and two of which were published by the auto companies Toyota and Honda.
She has about three pages of source notes, averaging about four per chapter, which are nearly all newspaper articles.
One wonders what she left out. To be fair to author Maynard, this is more of a current events book than a business history, and so i understand that she needs to protect sources, many of whom could be fired or face career limitations at their company or in the industry for making honest yet critical remarks (especially those folks working for the Detroit Big 3 companies). Not to mention that she'll want to use them for the inevitable sequel book she'll likely write in a few years.
But this is a huge topic, one that affects nearly all Americans who have the discretionary income to be able to decide what kind of car they want, not to mention the millions employed in the industry. The book could have been a lot longer and better sourced, but it is a good start for anyone interested in a perspective of the state of the American car manufacturing and design industry.
But I don't think it's the last word on the subject. The thesis from the outset seems to be that the Detroit Big 3 are eventually doomed, and that they are the creators of their own woes. Personally, I think she's right on that score. After the Delphi parts debacle of last year and GM's liability for creating that situation, I think it increasingly unlikely that any of the Detroit Big 3 will survive as independent companies. I am sure they will be bought by car companies headquartered in a foreign country within at least 20 years (that's my opinion - the author does NOT introduce that concept). This already seems to have happened with Chrysler, although it seems to me that Daimler-Benz gave it back or spun it off after this book was published.
And that highlights a fundamental issue for the Detroit Big 3 that author Maynard keeps coming back to...GM, Ford, and Chrysler have management philosophies that seem to channel these huge companies' activities, and especially their design of new cars, to the whims of whoever their CEO happens to be. When that CEO leaves, then Ford or GM will change direction on what types of car they'll build. But they never take the time to commit their companies to building really reliable cars that Americans buyers are satisfied with, and so Americans with discretionary income who live on the coasts have a poor opinion of ANY car GM or Ford makes (Chrysler too, but they're small-fry compared to the Big 2). GM and Ford upper management are convinced that Americans buy cars based on emotion, so the fundamental issue is the design of the car. Their key question is: will American car buyers be excited by how this car looks/accelerates?
That's not how the Asian and European based companies think. Design is important to them, but they have staked their reputation among American car-buyers on quality and reliability, and they are committed to maintaining that edge over the Detroit based companies.
As for how American really think, author Maynard primarily uses anecdotal evidence. Many chapters start with a "personal experience" story by some guy or lady Maynard found who had a good experience with an import car or a bad recent experience with a GM or Ford car. These get the chapter started off pretty well, but I would like more statistical information (and well-sourced, well-documented information) on how this guy's or gal's experience is representative of an entire market segment of the American car-buying public. Author Maynard reports car-sales numbers, but I'd have to think there's more detailed information out there than what's provided here. I mean, each of these companies spends years and millions of dollars designing and building these cars...I would to think in a world where I get survey calls at home out of the blue from pizza companies (hard to screw up that recipe) that each car manufacturer has a ton of market research that the author might have tapped into if she had the time.
But that's the challenge, I think. The author probably didn't have the time. The chapters kind of read like extended magazine articles, and I wouldn't necessarily expect the level of depth I was hoping for from this book in that media forum. But this being a book with a pretty provocative title, I have a right to expect it, I'd think. And since it's not here, I again wonder: What's been left out?
------------------------------------------------------
My full review:
An interesting history of what's happened to the "American" automotive industry in the late 80's, 1990's, and early years of the present decade. The period covered by the book ends in late 2002, as it was published in 2003. By "American," I do not mean to suggest that author Micheline Maynard focuses only on the activities of the Detroit Big 3 (General Motors, Ford, and Chrysler). Rather, she focuses on the efforts of just about every car manufacturer in the world to:
(1) - introduce new cars into the American car-buying market that appeal to the current and future market segments of American consumers. This is about 60% of the book.
(2) - create car-manufacturing plants in America to build those cars (subplot here: can Americans be trained to build cars that are of the same level of quality as cars manufactured in Asian and European nations? Author's answer: yes, if the UAW is not allowed to unionize the plant [personally, I'd like to see more info on her answer, though).
(3) - develop the concept of cars that don't run on gasoline AND try to see if Americans will buy them (Toyota and Honda are convinced they will, and are working hard to develop this segment of the market. GM - not so much).
For me, the most valuable aspects of this book were the capsule histories of how nearly all of the major foreign car companies got started, and the adventures they went through in their efforts to penetrate the American consumer market. David Halberstam has covered this in more depth with Toyota in his wonderful car-industry book THE RECKONING, published back in 1986. But author Maynard covers almost every company, and uses their origin stories and/or their crisis event stories to try and identify philosophies that mark each company to this day.
Author Maynard writes well, and includes many humorous anecdotes, which I always appreciate in a business history or current events book. She definitely traveled all over to see for herself much of what she reports, and it looks like she did her best to secure interviews with as many people involved in these events as possible so as to get both sides of the story.
No surprise there, as the back flap bio on author Maynard informs us that she is a New York Times reporter covering the auto industry. For me, this means that I can expect fairly deep reporting, and pretty good writing. But the various chapters read like extended magazine pieces. The author includes a tiny selected bibliography of nine books, two of which are previous books by Maynard herself and two of which were published by the auto companies Toyota and Honda.
She has about three pages of source notes, averaging about four per chapter, which are nearly all newspaper articles.
One wonders what she left out. To be fair to author Maynard, this is more of a current events book than a business history, and so i understand that she needs to protect sources, many of whom could be fired or face career limitations at their company or in the industry for making honest yet critical remarks (especially those folks working for the Detroit Big 3 companies). Not to mention that she'll want to use them for the inevitable sequel book she'll likely write in a few years.
But this is a huge topic, one that affects nearly all Americans who have the discretionary income to be able to decide what kind of car they want, not to mention the millions employed in the industry. The book could have been a lot longer and better sourced, but it is a good start for anyone interested in a perspective of the state of the American car manufacturing and design industry.
But I don't think it's the last word on the subject. The thesis from the outset seems to be that the Detroit Big 3 are eventually doomed, and that they are the creators of their own woes. Personally, I think she's right on that score. After the Delphi parts debacle of last year and GM's liability for creating that situation, I think it increasingly unlikely that any of the Detroit Big 3 will survive as independent companies. I am sure they will be bought by car companies headquartered in a foreign country within at least 20 years (that's my opinion - the author does NOT introduce that concept). This already seems to have happened with Chrysler, although it seems to me that Daimler-Benz gave it back or spun it off after this book was published.
And that highlights a fundamental issue for the Detroit Big 3 that author Maynard keeps coming back to...GM, Ford, and Chrysler have management philosophies that seem to channel these huge companies' activities, and especially their design of new cars, to the whims of whoever their CEO happens to be. When that CEO leaves, then Ford or GM will change direction on what types of car they'll build. But they never take the time to commit their companies to building really reliable cars that Americans buyers are satisfied with, and so Americans with discretionary income who live on the coasts have a poor opinion of ANY car GM or Ford makes (Chrysler too, but they're small-fry compared to the Big 2). GM and Ford upper management are convinced that Americans buy cars based on emotion, so the fundamental issue is the design of the car. Their key question is: will American car buyers be excited by how this car looks/accelerates?
That's not how the Asian and European based companies think. Design is important to them, but they have staked their reputation among American car-buyers on quality and reliability, and they are committed to maintaining that edge over the Detroit based companies.
As for how American really think, author Maynard primarily uses anecdotal evidence. Many chapters start with a "personal experience" story by some guy or lady Maynard found who had a good experience with an import car or a bad recent experience with a GM or Ford car. These get the chapter started off pretty well, but I would like more statistical information (and well-sourced, well-documented information) on how this guy's or gal's experience is representative of an entire market segment of the American car-buying public. Author Maynard reports car-sales numbers, but I'd have to think there's more detailed information out there than what's provided here. I mean, each of these companies spends years and millions of dollars designing and building these cars...I would to think in a world where I get survey calls at home out of the blue from pizza companies (hard to screw up that recipe) that each car manufacturer has a ton of market research that the author might have tapped into if she had the time.
But that's the challenge, I think. The author probably didn't have the time. The chapters kind of read like extended magazine articles, and I wouldn't necessarily expect the level of depth I was hoping for from this book in that media forum. But this being a book with a pretty provocative title, I have a right to expect it, I'd think. And since it's not here, I again wonder: What's been left out?
December 5, 2018
Much has changed since the writing of this book, and yet the material and information presented still holds value. Micheline Maynard is thorough and exact in presenting information , making this a good read for anyone actively involved in the auto industry...or for anyone studying consumer markets.
January 12, 2021
Not bad, could also be titled how Toyota figured it out and Detroit did not....
January 31, 2014
A few caveats: the copyright is 2003 so in an industry as fast-moving as automobiles it's a bit dated. In particular, the book came out before the crisis and bailout of 2008-2010. On a smaller scale the author, who does not appear to be a fan of large SUVs, nevertheless praised General Motors for the buzz it created with the Hummer, but by May 2010 the Hummer was dead. Similarly, the author believed the DaimlerChrysler merger was probably a good thing, but by 2007 the merger was dissolved.
I was surprised that Maynard never mentions Detroit's initial foray into small cars -- Vega, Pinto, Gremlin and the like. Those horrible little cars demonstrated that Detroit was either incapable of building a decent small car or so contemptuous of the small car buyer that it refused to.
Maynard nevertheless recognizes Detroit's contempt for the customer, and puts it at the center of her critique. Her comparison of Ford's Taurus with Japan's family sedans is a useful guide to what went wrong in Detroit. She documents that Toyota's Camry and Honda's Accord remain highly regarded and profitable mainstays of the companies' lineups even after something like 40 years on the market. She contrasts that with the Taurus, which, although it reigned for several years as the best-selling car in the US, was discontinued in 2006 after only 20 years.
Maynard says the Taurus showed that a US company could build a family sedan that customers wanted and argues that customers didn't so much abandon the Taurus as Ford did, chasing the higher profit margins afforded by the SUV craze. (Ford has since reintroduced the Taurus.) I'm not sure how well she proves this point. She derides Ford's 1996 upgrade of the Taurus, but it wasn't clear to me what her complaint was about the new Taurus.
Maynard also barely mentions the Europeans' failure to penetrate the small car market at precisely the point when the American love affair with the road yacht was coming to an end. The craze for the Beetle never carried over to the small cars imported back then by Peugeot, Audi, Renault, and the like.
So there's a bit of damned if you do, damned if you don't in the book. US companies are chided for chasing the SUV craze; Japanese companies are praised for being sufficiently nimble to react to fads.
I was surprised that Maynard never mentions Detroit's initial foray into small cars -- Vega, Pinto, Gremlin and the like. Those horrible little cars demonstrated that Detroit was either incapable of building a decent small car or so contemptuous of the small car buyer that it refused to.
Maynard nevertheless recognizes Detroit's contempt for the customer, and puts it at the center of her critique. Her comparison of Ford's Taurus with Japan's family sedans is a useful guide to what went wrong in Detroit. She documents that Toyota's Camry and Honda's Accord remain highly regarded and profitable mainstays of the companies' lineups even after something like 40 years on the market. She contrasts that with the Taurus, which, although it reigned for several years as the best-selling car in the US, was discontinued in 2006 after only 20 years.
Maynard says the Taurus showed that a US company could build a family sedan that customers wanted and argues that customers didn't so much abandon the Taurus as Ford did, chasing the higher profit margins afforded by the SUV craze. (Ford has since reintroduced the Taurus.) I'm not sure how well she proves this point. She derides Ford's 1996 upgrade of the Taurus, but it wasn't clear to me what her complaint was about the new Taurus.
Maynard also barely mentions the Europeans' failure to penetrate the small car market at precisely the point when the American love affair with the road yacht was coming to an end. The craze for the Beetle never carried over to the small cars imported back then by Peugeot, Audi, Renault, and the like.
So there's a bit of damned if you do, damned if you don't in the book. US companies are chided for chasing the SUV craze; Japanese companies are praised for being sufficiently nimble to react to fads.
March 24, 2009
The Big Three started losing the global auto game in the 70s and 80s when they turned out pure junk and sold them as cars. This opened the door for imports. When they focused on high profit SUVs in the 90s it was the begining of the end for Detroit
November 16, 2007
Very competent book.
August 26, 2008
Interesting stories about Honda/Toyota. It does have some very good points, but it is a little one sided.
February 6, 2012
It's funny how outdated this little love affair with Toyota and Honda has become...
July 28, 2015
I expected this to be more about the American car makers than it actually was. I was disappointed.
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