Cars Often Come Along With Jobs in the Auto Industry
William Hoglund, one of the rising stars at General Motors, was once asked whether he thought it was wrong for GM executives to receive free cars from the company every few months, and then have them washed, serviced and filled with gasoline free of charge each day at the executive garage.
Wouldn’t GM executives learn more about the problems that customers face, he was asked, if they had to drive used cars and deal with repair problems like everyone else.
Hoglund seemed genuinely perplexed; he apparently couldn’t understand why people would want top corporate leaders to waste their time on such mundane matters.
“You can’t waste an engineer’s time by having him go out to take his car to a carwash in the middle of the day,” Hoglund said.
GM and other auto industry executives have been getting free cars lovingly attended to by an elite corps of mechanics for nearly as long as they have been making cars in Detroit.
And, despite a decade of upheaval brought on by new competition from imports, Hoglund’s response shows just how closely executives still guard their access to company fleets.
Still, Wednesday’s indictment of Chrysler and two of its officials--for allegedly selling cars as new even though they had been covertly driven by company managers--raised new questions about the industry’s deeply ingrained practice of providing executives with free, well-groomed cars.
Ironically, the federal indictment issued Wednesday dealt with one of the most trivial aspects of Detroit’s freebie tradition--overnight test-drives of new cars by middle managers at assembly plants.
Chrysler selects 25 to 35 vehicles from each plant to be tested each day by management personnel, who then evaluate the quality and submit a written report.
A Chrysler spokesman said the cars are driven an average of 40 miles during each test-drive, which usually is completed in one night.
“The whole emphasis of the program is on building a quality product,” said Chrysler spokesman Doug Nicoll.
Every major U.S. auto maker now conducts similar tests, and all label the vehicles as having been driven as part of quality programs.
The big difference, however, is that Chrysler, unlike Ford and GM, until recently allowed its managers to disconnect the odometers during the test-drives. It was that aspect of the Chrysler’s program that led in part to Wednesday’s indictment.
Chrysler’s program is also not as democratic as some; assembly line workers at GM’s Pontiac Fiero plant in Pontiac, Mich., for instance, take cars home overnight just as frequently as do management personnel.
Nicoll said that as many as 240,000 Chrysler cars have been involved in the company’s quality assurance program over the last decade, but he stressed that not all had their odometers detached during their test-drives.
Still, there are much better freebies available in Detroit than test-drives.
At GM, for example, Chairman Roger B. Smith and the four other members of the auto maker’s executive committee commute in chauffeur-driven company cars. Smith and several thousand other top GM staffers are also eligible to receive a new GM car every 3,000 miles, which they evaluate in regular written quality reports.
To qualify for the free cars, executives must also buy one other GM car each year--but they can purchase them at steep discounts, equivalent to the dealer’s invoice.
Company managers can also qualify for discounted leasing arrangements, and all employees now are eligible for discounts on cars they purchase at GM dealerships.
GM spokesman James Crellin said those cars driven by executives and those leased by other managers are often sold to GM employees through a special program or are sold at auction as used cars to GM dealers. “We never sell them to the public as new cars,” he added.
In addition, the top 4,000 to 5,000 GM executives who qualify for the coveted parking spots in executive garages at GM facilities around the world have access to first-class treatment for their cars. Each garage--heated, of course--has a staff of mechanics and service personnel who wash and repair the cars daily and also top off their fuel tanks before the executives leave at night.
At Ford, a select group of top executives, along with members of the board of directors, are given a new car every year outright, said Ford spokesman Tom Foote. Lower-level managers are also eligible for favorable leasing arrangements. Managers and production workers are also eligible for deep discounts on purchases of Ford cars and trucks.
At American Motors, executives get a new car every 5,000 miles; they must also submit quality reports on the vehicles. Those executives also are qualified for a favorable lease on a second car, and AMC pays the insurance on the leased vehicle.
Chrysler, meanwhile, also offers leased cars for managers and provides top executives with free cars if they submit quality evaluations. All employees also can get corporate discounts on Chrysler products.
But Detroit’s auto makers aren’t the only ones handing out free cars. Nissan, for instance, provides free cars to many of its top managers at its U.S. headquarters in Carson. Managers there can also get leased vehicles for wives; 500 cars in a corporate pool are pre-assigned to individuals, a spokesman said.
Honda’s managers in the United States also qualify for favorable leasing arrangements, and discounts on car purchases as well, a Honda spokesman said.