Keeping the X(-Car) in Xmas

Keeping the X(-Car) in Xmas

To: G. Richard Wagoner, CEO, General Motors Corporation;
Robert L. Nardelli, CEO, Chrysler, LLC;
Alan R. Mulally, CEO, Ford Motor Company



Some teenage boys have been known to wish for a car for Christmas. Apparently, they grow up to become CEOs of car companies who wish the American taxpayers would give them an entire competitive U.S. auto industry for Christmas.

There was a time when the Big Three controlled 70 percent of the American automobile market. Cars were seen as a symbol of American manufacturing might and innovation. As teenagers, we waited expectantly for each new model to be “leaked” in photographs. It’s hard to remember, but in 1957 Dinah Shore (from the “See the USA in your Chevrolet” television commercials) drove a special Chevy, which had air suspension and fuel injection. Cadillac—a word that is still synonymous with luxury—featured automatic headlight dimmers, power windows, and air suspension. There was even a special 50-year celebration Cadillac made out of stainless steel. This was the era when General Motors CEOs were engineers, not accountants.

In 1960, General Motors’ share of the domestic market was 66 percent; today, in the 100th year of the company’s existence, that share has fallen to less than 22 percent. In just the last year, General Motors, a company that has built more than 445,000,000 vehicles, has seen its sales decline by more than 30 percent. Ford and Chrysler have seen one-year sales declines in excess of 40 percent.

Thirty years ago, when the Big Three were concerned about facing competition from foreign manufacturers (about the same time that car dealers started flying ever-larger U.S. flags), General Motors promised that it would beat back these foreign invaders with its new X-Car. The X-Car, like the “people’s Cadillac” (called the Cimarron), was a dud. Similarly, the experiment with a new way to manufacture cars and relate to customers, inexplicably called Saturn (in reference to a large, gaseous body?), has also been less than profitable. Even the venerable Oldsmobile has been dropped from production to join the likes of the DeSoto, Mercury, and Gremlin.

General Motors is often described as a pension plan that occasionally makes cars. The company has not been able to sell a car to Americans at a profit for 22 years, but has had a great deal of success selling Buicks in China (perhaps because the last emperor of China drove a Buick). And while today’s Buick is not your emperor’s car anymore, it will be retained over Pontiac, primarily due to demand in the Chinese market.

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