“The Big Three in the auto industry stood virtually alone, possessors of what was in effect a shared monopoly, for the price of entry was too great for any start-up company. In an environment like that, power moved steadily from the product men, who took risks but were normally the creators of market share, to finance whose agents knew how to maximize the profits of an existing share in a static industry. Since competition within the auto industry was mild, there was no impulse to innovate; to the finance people, innovation not only was expensive but seemed unnecessary.
When engineers, especially foreigners, made breakthroughs like disk brakes and radial tires and fuel injection, it would be years, sometimes many years, before Detroit finally went ahead and added them either as standard equipment or as options. Why bother, after all? In America’s rush to become a middle-class society, there was an almost insatiable demand for cars. It was impossible not to make money, and there was a conviction that no matter what the sales were this year, they would be even greater the next. So there was little stress on improving the cars. From 1949, when the automatic transmission was introduced, to the late seventies, the cars remained remarkably the same. What innovation there was came along reluctantly.
Indeed, change, in the later part of that era, was contrived not to improve but in the most subtle way to weaken each car model, year by year. The company, in its drive for greater profit, would take the essential auto structure of the year before and figure out ways to increase the profits by reducing the cost of some of the parts. Not a lot was subtracted. From the outside the car might seem much the same as its forerunner, but Detroit saved $1 million here and $2 million there by cutting tiny corners.”
— David Halberstam (1986, pp. 244-245)
RE:SOURCES
- Halberstam, David; 1986. The Reckoning. William Morrow & Co., New York, NY.
ADVERTISING & BROCHURES
- oldcaradvertising.com: Ford Pinto (1977)
Also see ‘Antitrust regulations: Lack of enforcement fueled U.S. industry’s decline’
Halberstram hit the nail on the head with his description of what we now commonly refer to as decontenting, something for which I believe GM was the worst practioner of. Imagine returning a defective car back to the dealer the way we can return a defective appliance to Walmart… the stockpile of “junk” cars would overwhelm the automakers and government would surely have to step in to ensure better built vehicles.