In the D part three: decline of the American auto industry

In this post I'll be looking at the declining fortunes of the American auto industry brought about by a combination of external factors and an inability to move with the times.

When the best is too good - advanced technology in the US motor industry

Rover's P5B Coupe - British style with American V8 power

One of the most successful engines in the history of the British motor industry was the Rover V8. It entered service in 1967 and added some power to the stylish looks of the Rover P5B coupe and the newer, technologically advanced P6. Perhaps more importantly, it was the high performance engine of choice for a variety of small sports car manufacturers, as well as being used by many enthusiasts to upgrade the power-plants of project cars.

For it's time the Rover V8 was an advanced design - a very compact unit with all-aluminium construction making it one of the most lightweight V8's ever made. If you're familiar with the Rover K-Series engine, this sounds exactly like the kind of engine that Rover would have designed, however it was actually an American design that Rover bought the rights to. Buick had introduced the engine in 1963 but was finding it expensive to produce and it was suffering from reliability issues due to bad maintenance from customers and mechanics who weren't used to dealing with all-aluminium engines. The US steel industry was also unhappy about the use of aluminium for engine production and had considerable political and economic influence at the time.

Buick reverted back to older cast-iron engines and sold the engine design to Rover, where it remained in production for over 35 years. When production finally ended, it had become so iconic that the BBC's Top Gear filmed a tribute to the engine and showed all the cars that it had powered over the years.

The story of the Buick/Rover V8 is one example of how the American auto industry was unquestionably capable of producing advanced technology, but other factors held back this ability and the cars that entered production often played it safe compared to their European and Asian competitors.

In a similar vein, Ralph Nader wrote a groundbreaking book in 1965 called Unsafe at Any Speed that detailed how US manufacturers paid little attention to safety factors and preferred to spend money on annual restyling of their model range to maintain sales. Many of the improvements in standard safety equipment and fuel efficiency that were implemented over the last 50 years only arrived after US Government legislation mandated it.

It's often the case that to stay in business you need to make competitive products, while investing in R&D to make sure those products are still competitive in the future. If that process is constrained, it will almost inevitably cause problems somewhere down the line...

Energy crisis hits

The first oil crisis of the 1970's began in October 1973 and lasted until March of the following year, resulting in fuel rationing across the USA. At it's worst period in February, 20% of petrol stations were empty. Attempts were made to distribute fuel across the states based on estimated requirements, but this wasn't completely successful and long queues at petrol stations were commonplace.

The shortages brought the heavy fuel consumption of American cars into stark reality - the average fuel economy for an American-made car of this era was about 13.5mpg, and the price of crude oil had increased fourfold to $12 a barrel. Highway speed limits were lowered to 55mph to try and reduce fuel usage but it was only a small step in the right direction - it was estimated that Americans were wasting 150,000 barrels of oil a day idling their engines while queuing for hours at petrol stations.

The bigger they are...

The oil crisis arrived at a time when the cars being built in Detroit were monsters of the road. As an example, the 1971 Cadillac Eldorado was 5.7 metres long. To put this into perspective, even a modern BMW 7-series is only around 5 metres in length. The Caddy weighed 2.5 tonnes and was powered by an 8.2 litre V8. Exact fuel economy figures are unavailable but are estimated at between 6 and 8 miles per gallon.

Despite its big block V8 the performance of the Eldorado was seriously impacted by its weight – 0-60 in just under 12 seconds and a top speed of around 120mph. Although the Eldorado is an extreme example, cars of lower US size classifications like mid-size and even compacts were far bigger than their European and Asian equivalents.

Cadillac Eldorado convertible

Prior to the oil crisis US manufacturers had an 80% share of the home market and GM alone owned half of that share, but the American public’s new-found concerns over fuel economy had a dramatic effect on sales as they looked at European and Japanese imports. In 1975, US production fell 24.5% on the previous year while the market share of imports started to build quickly.

The scramble to respond

The AMC Pacer - not as small as it might look, it had
a 3.8 V6 under the bonnet

American manufacturers rushed to downsize their models in response to changing consumer tastes, but this proved difficult. It was a massively expensive process to redesign the entire model range, and almost all engines available were of the large, torquey, low-revving variety – the kind that are very heavy on fuel. Some progress was made though - by the end of the decade the big Cadillac Eldorado above was 70cm shorter and had shed half a tonne in weight, but attempts to produce a genuinely small car were still somewhat at odds with the rest of the world. The AMC Pacer is a well known example from this era and was still 4.3 metres long and powered by a 3.8 litre V6!

The US auto manufacturers had been completely blindsided by the oil crisis and the dramatic effect it had on the priorities of its customers. As demand and production fell, huge job losses and plant closures took place across the industry throughout the 1970’s. Detroit was heavily dependent on the car plants for jobs and tax revenues so was particularly hard-hit by the decline.

A second oil crisis

Problems in Iran led to another oil crisis in 1979 and again the price of a barrel of crude oil increased massively, this time from $15 to $40. By this time imported cars were starting to use fuel-saving technology such as four valves per cylinder and multi-point fuel injection, in contrast to the pushrod valves and carburettors still used by large-capacity US engines. The downsized full-size models being sold by Chrysler, Ford and GM were proving unpopular with domestic customers, and Japanese and European brands continued to gain acceptance with the American public.

Auto design - what the hell went wrong?

Rising fuel costs ended the era of stunning muscle cars, and the revised smaller models just didn't hit the mark. There appeared to be a major loss of optimism and confidence across the industry. It wasn't just weight and engine power that these new models  lost, it was the entire sense of purpose, attitude and style. What is most surprising is how similar different makes and models ended up looking throughout the 1980's, considering the very strong individual identities of earlier models.

Bland and indifferent American car design lasted throughout the 1980's (with a few exceptions) and still continues today to some extent. It's only very recently that the Mustang has regained it's identity and road presence, with others like the Chevy Camaro and Dodge Challenger following suit - but this has been achieved by harking back to the classic designs of the 70's muscle-cars.

Fighting back against the unions

As well as falling demand, job losses were also caused by the historical bad deals made by the manufacturers and unions back when times were good and there was no end in sight for the motor city heyday. Under Walter Reuther, unions were spectaculary successful in negotiating employer-paid pensions, medical insurance and generous unemployment benefits. Agreements made on pensions in particular were short-sighted because they were a concession that could be made without affecting current profits - it was a deferred benefit - but eventually these concessions would become due and the industry could no longer afford it. The end result was the strategic migration of manufacturing from the US to countries like Mexico with non-unionised workforces that would accept less pay and benefits.

Manufacturers also aimed to mitigate their expensive labour costs via investment in automated production facilities, with robots eventually reducing human involvement in car assembly by more than half. As migrant workers arrived in Detroit in the late 1950's expectant of well-paid manufacturing jobs, the entry level posts they were seeking were already starting to disappear due to outsourcing and automation.

Rounding it all up

Packard plant, Detroit
(closed since 1958)

The sledgehammer blows of falling sales, international competition, uncompetitive product ranges and an expensive workforce made life very difficult for the US auto industry, but what were the direct effects on Detroit and the surrounding area?

Well, the Dodge Main plant in Hamtramck once employed 30,000 people but was shut down in 1980 - 18 months ahead of schedule due to disastrous sales. Ford's River Rouge plant in Dearborn was so large it once had 90,000 workers but continued heavy job losses have reduced the workforce to only a few thousand today.

Despite being the birthplace of the factory assembly line when Henry Ford moved Model T production there in 1910, Ford's Highland Park is now just another of the many shuttered and decaying manufacturing plants that occupy the city. The building is now recognised as historically important and there is a campaign to turn it into a museum to commemorate it's unique contribution, but funds have yet to be made available.

60 miles away from Detroit, down the Telegraph Road (yes, the Telegraph Road as made famous by the Dire Straits song) is the city of Flint where 30,000 jobs were lost in a series of GM plant closures in the late 1980's. In a city of 150,000 residents this was a huge blow and happened at a time when General Motors were announcing record profits. This apparent contradiction made headlines around the world and was the subject of Michael Moore's début documentary - Roger and Me. Since 1989 many more auto industry jobs have been lost in Flint, bringing the total to 80,000.

It wasn't just the big three manufacturers who closed up shop - component suppliers like Fisher Body and AC Spark were also forced to cease production.

The effects on Detroit have been devastating. Hospitals, schools, cinemas, theatres, train stations and thousands of residential properties all lie empty within the city, just like the car plants the city once thrived on.

In my next post in this series I'll cover the present-day state of the city in more detail, and look at whether there may be any reason for optimism amongst the urban decay.

In the D part two: Detroit burns in the 1967 riots

In a previous post I covered the remarkable rise to power and glorious heyday of Detroit, fuelled by the booming motor industry. In this post we'll take a look at how it all started to go wrong.

Down on the Street

In the early hours of the morning on July the 23rd 1967, the Detroit police force arrived at a small unlicensed downtown venue where a party had been taking place. They were expecting around two dozen revellers to be there and the plan was to arrest them all, but they found the situation was not what they had expected and over 80 people were present. In spite of this, the police dug in their heels and placed 82 people under arrest. The scene attracted a small crowd outside while the officers waited for transports to arrive to take their detainees away.

So how did a raid on an unlicensed bar lead to city-wide rioting? Well, race relations in 1960's America were still imperfect and black people across the country were campaigning for equal rights, often complaining of police brutality and lack of respect from shopkeepers and employers. Against that backdrop it's easier to see how the raid provoked tensions because all 82 people arrested were black.

After the police left the scene, a small group of young black men who had watched and been angered by the arrests began looting a nearby shop. This single act ignited a wave of riots across the city that lasted for five days. In the early stages the media didn't report on events to try and maintain calm and prevent copycat action, but this had a marginal effect. Fighting, looting and arson spiralled out of control and completely overwhelmed the Detroit police force. The State Police and then the National Guard were brought in to assist, and the situation became so serious that President Johnson brought the military into the city.

By the time everything was over the devastation was immense - Wikipedia records forty-three deaths, 467 injuries, over 7,200 arrests, and more than 2,000 buildings destroyed by arson. So many people were arrested that there was nowhere to put detainees and various makeshift facilities had to be used. At one point on the second day of the riots, 40 National Guard personnel were pinned down by snipers : 26 people armed as snipers were arrested during the riots.

It isn't quite accurate to call the 1967 riots 'race riots' - the causes are more complex but can be categorised as social unrest - itself brought about by factors such as the lack of affordable housing and the changing demographics of Detroit with it's massive influx of African Americans attracted by the availability of jobs in the auto industry.

Impact of the riots on Detroit

What is clear is that the aftermath of the riots certainly had lasting and serious implications for race relations. Residents of the inner city were terrified by the scale and intensity of the rioting and this massively accelerated a social phenomenon that was already affecting Detroit and other US cities called white flight. This is the name given to the migration of white people from inner cities to the suburbs where racially-restrictive housing policies made it hard for back people to live. The construction of interstate freeways across America was the enabler for this demographic change - allowing suburbanites to easily commute to their jobs in the city.

Changing demographics in Detroit

The effects of the declining auto industry and lingering issues from the riots have had a dramatic effect on the city and reversed the population from a white majority to a black majority in within 40 years. The black population within the city became trapped, initially by regulations that prevented them from moving to the suburbs, and in later decades by the falling value of property driven by increased crime and urban decay.

The second important point to note from the table above is that as well as the demographic change there has been a severe overall decline in the population of the city - the 2000 population figure shows a drop of over 40% from the number of residents in the city in 1960. A million whites left the city in this period, but the black population only increased by 350,000.

Whether the city could ever recover from what happened in July 1967 is difficult to say, but it didn't get an opportunity to because just around the corner was the 1973 and 1979 oil crises which caused a terminal decline in the Detroit auto industry, resulting in huge job losses throughout the next two decades. I'll be covering this in my next post.

In the D part one: Detroit - the American dream

This is the first part of a series of posts I'll be writing about a city with a unique story to tell.

If you've seen the Eminem film 8 Mile, you've seen the reality of Detroit. Despite being a mainstream film, it's gritty depiction of present-day motor city isn't taking an awful lot of artistic license. That is actually how it is, or how it was when 8-Mile was made in 2002. Things have possibly got worse since then. The history of Detroit is a roller-coaster ride starting with a small settlement in the 1700's and by no means ending with it's present day incarnation as a bewildering example of de-industrialisation.

A long time ago, came a man on a track...

Detroit was born as a French military outpost founded in the early 1700's, chosen for it's favourable location on the Detroit river - part of the Great Lakes system. By the late 1800's it was quickly becoming a hub for pharmaceutical, tobacco and other industries who set up large scale production and manufacturing facilities.

Coal from the south, iron ore from the north and water from the great lakes made Detroit the perfect place for production of iron and steel goods.

In 1910, Henry Ford's Highland Park car production plant opened which marked the start of a decades long heyday of automobile manufacturing in the Detroit area. Fisher, General Motors and Chrysler soon followed Ford in setting up production. This massive increase in industrial output had huge manpower requirements and the population of the city increased from 265,000 in 1900 to 1.5 million by 1930.

To represent the huge numbers of manual labourers working in the city, the Union Auto Workers was founded in 1935 and in it's early years bitter disputes opened up between the union and the car companies. The legendary sit-down strikes in nearby Flint nearly ended in military intervention but succeeded in forcing Ford, Chrysler and General Motors to officially recognise the unions.

During the Second World War, Detroit became known as the "Arsenal of democracy", with car production was suspended in favour of building tanks, jeeps and aircraft for the war effort. The union made a no-strike-action pledge to ensure that industrial action could not jeopardise the manufacturing capability of the USA while the country was at war.

War is over

At the end of the Second World War in 1946, Detroit returned to car production, and a new UAW president called Walter Reuther was appointed who presided over the longest and most prosperous period in the history of American auto workers, which lasted until his death in 1970.

Throughout the 1950's and 60's Detroit flourished and the auto workers benefited in turn, receiving generous pay rises and excellent healthcare and pension provisions. The car companies could afford this because they were making excellent profits from the loyal American car-buying public, and it seemed like it would last forever. The era produced some stunning examples of car design, featuring large tail fins, lashings of chrome and prominent grills. Models like the Ford Mustang and Thunderbird, Pontiac GTO and Dodge Charger defined the muscle car category that is still ultra-cool today.

Along with it's status as the car production capital of the world, Detroit became a major cultural force - legendary in the music scene for the Motown record labels, which produced 110 top ten hits in the decade 1960-1970 from artists such as Stevie Wonder, Marvin Gaye, The Supremes, The Four Tops, and The Jackson 5.

Detroit is also home to one of my personal favourite bands - The Stooges. After they disbanded, their front man Iggy Pop recorded a spectacular tribute to the city's industrial complex with a song called Mass Production on his classic 1977 album The Idiot.

It's a spectacular success story - but in the next post in this series I'll cover how simmering racial tensions and the multiple oil crises of the 1970's inflicted damage on the city that it could never recover from.

Telegraph Road

In relation to our parents, we always like to think of ourselves as individuals. The truth is that they pass on certain personality traits and tastes whether we like it or not. When it comes to music, I inherited a closet liking for Dire Straits. My father (whose liking for them was not closet in any way) played them endlessly, and with the Love Over Gold album I can clearly remember him being blown away by it as a piece of work.

Telegraph Road is a song that I find exceptional for an unusual reason in music - the sheer scope of what it covers. If a film started with a single man creating a settlement in the Old West, and ended centuries later with the failure of the huge industrial machine that grew up from that settlement, it would be impressive stuff. But Telegraph Road achieves this in a song. That's unheard of. By the standards of radio friendly singles, it's an epic with a 14 minute running time, but considering the story it tells, it's a work of genius.

One thing I was ignorant of about Telegraph Road is the inspiration for the song, and when I found out the story, it surprised me to learn that it is a place I'd already been fascinated by for the last few years - Detroit. This is a huge topic and something I will keep for future posts, but the stories from this troubled city are incredible. Apparently Mark Knopflier was in a tour bus on US Highway 24 (also known as Telegraph Road), when the inspiration for the song arrived. He certainly hit the mark with the story, and the latter verses of an unhappy man looking romantically back on the good old days are still hugely relevant to Detroit nearly 30 years later.

Bootnote: Love Over Gold also includes a song called Industrial Disease. Although it sounds like it could also be about Detriot, it's apparently about early 1980's Britain - our industrial decline and the associated social problems. The song is humourous rather than serious, but remains surprisingly relevant. One line in particular says 'these are classic symptoms of a monetary squeeze'.