GM envy

GM envy is a tendency of other automakers — first domestic and later foreign — to slavishly copy the basic structure and strategy used by General Motors in its heyday.

This has occurred despite General Motors’ sharp decline in recent decades. This behavior has also occurred even when it has not been advantageous to the copier, either because it was too small, the market was already saturated or they had already achieved meaningful success with a very different approach.

So why has GM envy been so pervasive? The phenomenon started because GM was extraordinarily successful up through the 1980s. However, GM envy became increasingly dysfunctional because of managerial groupthink in the automobile industry. This was fueled by industry consolidation in the United States after World War II and globally since the 1980s.

Also see ‘GM envy distorts how we view a once and future auto industry’

Key elements of GM envy include an aggressive international expansion effort, a hierarchy of multiple brands and an emphasis on planned obsolescence.

A key element of the automaker’s product strategy could be summed up by the mantra, “bigger, glitzier, more powerful.” In other words, product planning is heavily weighted toward styling and marketing considerations over practical qualities such as efficient design, engineering innovations, and quality of manufacture and customer support. Frequent redesigns are marked by chronic increases in size, gimmickry and horsepower to the point where they can become ridiculously excessive.

GM envy overlaps with “Detroit Mind,” a term automotive journalist Brock Yates (1983) used to describe domestic automakers’ fixation with size and flashiness over quality and road-worthiness in the post-war era.

A market dominated by GM envyists — and Detroit Mind — is marked by a rapid succession of fads. Like a school of fish, major players will dart around to follow whatever new fad catches fire sales-wise. Invariably the field is deluged with too many competitors and the market shifts. This can result in late-comers failing to earn an adequate return on their investment.

This cycle has been endlessly repeated throughout the American auto industry’s history despite its questionable record of profitability — particularly for smaller participants.

GM envy dominated domestic automakers from the mid-50s to the late-70s. The Ford Motor Company and the Chrysler Corporation repeatedly tried to compete head-on with General Motors in a broad range of markets.

For example, in the mid-50s both invested heavily in expanded ranges of premium-prized and luxury cars that attempted to outdo GM in size, glitz and power. With the helping hand of a recession, those efforts failed spectacularly, but within a few years the cycle was repeated in these and other fields.

It is easy to assume that the auto industry has become considerably more diverse over the last four decades as Asian automakers have forced dramatic changes in the way American as well as European firms design, build, market and service their products. Consumers can choose from a bewilderingly large number of models produced by more automakers than at any time since the Roaring Twenties. Even so, the range of corporate philosophies has dramatically narrowed compared to the 1970s. The reason why is that a new kind of GM envy has consumed even formerly iconoclastic foreign automakers.

The main difference between the post-war period and recent years is that instead of building ever-larger passenger cars, the 21st Century auto industry has doubled down on big sport-utility vehicles and trucks that put drivers of small cars at a marked safety disadvantage (Bradsher, 2002). Meanwhile, nobody has offered a simple subcompact truck in years.

In addition, pretty much all of the foreign automakers have fully embraced planned obsolescence. For example, leading Asian automakers strive to restyle their major products every four years, even when such redesigns result in only modest practical improvements.

Asian manufacturers have also rushed to copy Alfred Sloan’s hierarchy-of-brands strategy. In the late-80s Honda introduced the upscale Acura, Toyota the Lexus and Nissan the Infiniti. More recently Hyundai launched the Genesis brand.

What is particularly revealing about the Asian forays into the premium-priced field is the degree to which they mimic each other. A modest but telling point: After an initial spasm of creativity, every Asian luxury car eventually sported a radiator grille that for years was strikingly similar to the increasingly generic American and European grilles. Why did American consumers need to choose from almost a dozen different premium-priced brands when their products were becoming almost indistinguishable?

To be fair, in recent years Toyota has tried to push the styling envelope with its Lexus brand. Its giant maws may be radically different than the more understated grilles of yore, but the gimmicky look takes a page from Cadillac’s pioneering of tail fins and chrome-laden front ends.

Harley Earl, GM’s chief stylist in the 1950s, would fit right in at today’s Lexus.

GM envy has so overtaken the global auto industry that even manufacturers long viewed as incorrigible oddballs have fallen in line. Volvo, which long prided itself on eschewing planned obsolescence, has shifted to frequent redesigns that traded stolid efficiency for trendy looks.

This conformity is dangerous for economic as well as environmental reasons. Now that almost all foreign automakers have production facilities in the U.S., a significant number of American jobs hinge on their continued market success. Fads are more dangerous than in the post-war period, when imports mostly acted as a countervailing force to domestic fare. Today, industry conformity is so great that if the market shifts, almost everyone is negatively impacted because their product lines are so similar.

Perhaps more importantly, the new conformity that pervades the global auto industry is endangering efforts to reduce the automobile’s negative impacts in such areas as climate change. It took a new entry into the automotive field, Tesla, to help push U.S. automakers to get serious about electric vehicles.

Recent hand-wringing about whether the market exists for “green” cars bears a striking resemblance to the Big Three’s cautious entrance into the front-wheel-drive small car field in the 1970s. David Halberstam explained how one industry observer saw the problem:

“The three main Detroit companies believed that they were fiercely competitive with each other, and in a sense, he thought, they were, though mostly on trivial matters. The more important the issue, the less they competed and the longer they waited for someone else to take the first step, lest it be a mistake.” (Halberstam, 1986; p. 22)

This is why governmental regulations have usually been the prime instigator of major changes by firms consumed with GM envy. Detroit’s belated move to front-wheel-drive technology was driven more by the need to meet CAFE fuel economy standards than it was to counteract booming sales of Japanese cars in the late-70s and early-80s.

Nevertheless, regulations in isolation don’t work very well as long as the industry operates with such conformity that it resists change as a bloc. Detroit’s grudging acquiescence to federal emission control standards in the 1970s was influenced by Mercedes-Benz and Honda announcing that they could meet new standards without undue burden (Cray, 1980).

Thus, the duality. Regulations have proven essential to changing the behavior of the auto industry, but success has been heavily based upon whether the industry was diverse enough to challenge the more conservative automakers such as General Motors, which has usually whined, “It can’t be done.”

This is why GM envy undercuts a more competitive and socially responsible automobile industry.

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RE:SOURCES

• Bradsher, Keith; 2002. High and Mighty: SUVs — The World’s Most Dangerous Vehicles and How They Got that Way. Public Affairs, New York, NY. 
• Cray, Ed; 1980. Chrome Colossus: General Motors and its Times. McGraw-Hill Book Co., New York, NY.
• Halberstam, David; 1986. The Reckoning. William Morrow & Co., New York, NY.
• Yates, Brock; 1983. The Decline and Fall of the American Automobile Industry. Empire Books, New York, NY.