The End of Detroit Read Free Page A

time, the way the best foreign companies approach growth, simply was too slow. Throughout the 1990s, GM and Ford poured billions of dollars into a variety of foreign companies, from Fiat at GM, to Jaguar and Volvo at Ford, with disappointing results. Daimler-Benz’s purchase of Chrysler was supposed to provide the German company with a cash machine and easy access to the American mass market. Instead, DaimlerChrysler wound up being bogged down in cultural clashes and product delays, suffering huge losses that set back its competitive drive for years.
    Deals, not product development, have driven GM, Ford and Chrysler in the past decade—and no wonder. With only occasional exceptions, Detroit executives have traditionally been finance men who look at vehicles themselves as an end result of a great enterprise, rather than critical products to which the utmost attention should be paid. There has long been a saying in Detroit that General Motors, with its huge credit, financing and mortgage operations, is less of a car company than a bank that builds cars. Indeed, three of the last four GM chief executives, including its current CEO, G. Richard Wagoner, came up through its New York finance staff. Although William Clay Ford, Jr., is the fourth generation of his family to run the auto company that bears his name, he is yet another finance executive, schooled at Princeton and Wharton. Only Dieter Zetsche, the Turkish-born German executive in charge at Chrysler, can claim an engineering background, and it is Zetsche, in fact, who is trying hardest to shift his company away from being seen as a Detroit carmaker. He is fully aware of what imports have done to Detroit’s hold on the American industry and the unebbing erosion that lies ahead. Among all the executives in Detroit, it is Zetsche who is acting the most urgently to help Chrysler avoid that fate, at the same time fully aware that Chrysler’s legacy of substandard quality is its biggest obstacle to success.
    The companies that threaten Detroit are led by men who understand vehicles inside and out, who have dedicated their careers to meeting their customers’ needs. There is Fujio Cho, the ebullient chief executive of Toyota, who spent years in charge of Toyota’s giant manufacturing complex in Georgetown, Kentucky, where he walked the long assembly lines daily and spent endless hours getting to know his employees. When other executives at the company doubted that American Toyota workers could match the quality of Toyota’s vehicles in Japan, Cho insisted that they could, and oversaw an expansion of the plant that brought workers the chance to build large sedans and minivans. A modest man—a rarity among CEOs—Cho is taking that same determination now to Toyota on a global scale. By the year 2010, he wants Toyota to sell 15 percent of automobiles worldwide, which would make it the world’s biggest player, exceeding General Motors, which has been the world’s leading car manufacturer since the 1920s.
    Helmut Panke, the chief executive at BMW, is another such determined executive. He has made sure that his company has the clearest brand image among the world’s automakers. Tall, lanky, with silver hair and bright eyes, Panke was trained as a nuclear engineer and began as a corporate consultant with McKinsey & Company. He was hired by BMW as it was looking to shift its image from specialty carmaker, with a narrow appeal, to a company all kinds of people could admire. Panke is holding a delicate balance between preserving the German company’s tradition for performance automobiles and seizing upon ideas to enhance BMW’s position. While running BMW’s American operations during the 1990s, Panke heeded his dealers’ cry to develop a luxury sport utility vehicle that would be among the fastest on the road. Panke also saw the promise that the Mini Cooper offered in attracting younger buyers, and he turned the 1960s icon into a smash hit for the new millennium. That