Car Guys vs. Bean Counters - Bob Lutz [83]
I reminded Wagoner of Lee Iacocca back in the late 1970s, when Chrysler wanted federal loan guarantees. Iacocca faced congressional hostile questioning. One inquisitor asked (this isn’t an exact quote, but a reconstruction from memory), “Mr. Iacocca, why should we ask this of the American taxpayer? Wouldn’t the money be better allocated to new rail systems and subways? Those, Mr. Iacocca, are affordable transportation for the masses!” In one nanosecond, Iacocca shot back, “And what the hell do you think the Chrysler Corporation is?” That shut that congressman and others up, and the tone of the questioning became much friendlier. Chrysler got the loan guarantees, paid everything back early, brought a return of over $40 million to the U.S. taxpayer, and went on to decades of success.
But my argument was to no avail. The December 4, 2008, hearings were, if anything, even worse. Senator Richard Shelby (R-Ala.), in particular, spewed venom at the domestics, his state being the location of major Mercedes-Benz facilities which he mistakenly believed to be immune to the crisis. (After all, the foreigners are so much smarter.) I was hard-pressed to suppress a feeling of immature glee when, months later, Mercedes-Benz announced the layoff of a shift and other drastic production cuts at their Alabama facility due to the stalled sales of the vehicles produced there.
The low point for me came when Wagoner cast his gaze downward and mumbled an abject apology for having overemphasized the production of full-size trucks to the detriment of small cars. Here then was the spectacle of a browbeaten CEO apologizing for building the vehicles the public wanted. Vehicles that filled the coffers.Vehicles that, several years earlier, the pundits had criticized GM for not creating to the successful degree that Ford and Chrysler had (“GM misses market trend toward SUVs and trucks!”). Vehicles that European and Asian customers didn’t want because their governments had had the courage to raise fuel prices gradually to over six dollars per gallon.
Let me assure the reader of one thing: even at gunpoint, nobody could have gotten me to make that false admission. I might have blown the temporary loans we ultimately received. I might have drawn down the wrath of the entire Congress, even been cited for contempt. But my profound awareness of the injustice being heaped on the company simply would have prevented me from uttering those words. I might even have found myself saying, “I’m sorry we produced so many SUVs the American public wanted due to unreasonably low U.S. fuel prices, and then suddenly stopped wanting when pump prices more than doubled.”
The hearings, mercifully, ground to an end. I suppose the majority of the uninformed public saw them for what they were intended to be: our elected representatives beating on the greedy CEOs of America’s failed automotive industry. Anyone with even a scant knowledge of the facts saw them as the sorry, demeaning spectacle they were. Maybe humility, silence, and abject apologies were the right strategy, but I would have been incapable of executing it. I believe that those hearings caused profound and widespread damage to an American industry that still employs more people, directly and indirectly, and adds more value, than any other in the country.
But the worst was yet to come: Without my knowledge or consent (not unusual, since I was, at the time, not in charge of marketing, external communications, or government relations), GM produced a full-page print ad in which we, as a company, once again apologized for our failed product strategy and our emphasis on full-size trucks, accompanied by a promise to do better in the future.
Disgusted, I found my enthusiasm,