She Speaks, and Detroit Listens : Maryann Keller, a highly respected auto industry analyst, takes GM to the woodshed in her new book.


Maryann Keller is miffed at General Motors.

She had agreed to give the company’s public relations people an advance look at her new book on GM to check its accuracy. But almost as soon as she did, it seemed that everyone in Detroit had copies of “Rude Awakening"--long before its late September publication. GM’s copying machines apparently were working overtime.

“I couldn’t believe it,” complains Keller. “I sat next to one guy on an airplane before it came out, and he said, ‘I enjoyed your book.’

“I had to ask him, how did you get it?”


But while Keller may be upset by this breach of trust, GM’s overly eager interest in her first book really represents the highest form of flattery the company could bestow. It indicates how deeply the leaders of the world’s largest auto maker care about what Keller has to say.

They are not alone. At age 45, Keller is one of the world’s most influential independent observers of the automotive industry.

As an auto industry analyst at the small Wall Street firm of Furman, Selz, Mager, Dietz & Birney, she has become a media darling, constantly sought after by reporters for her thoughts on the latest developments in Detroit or Tokyo.

A severe critic of the Big Three--and of GM in particular--Keller nonetheless frequently speaks before rapt gatherings of Detroit executives.


She commands respect within the industry because she is tough and does her homework. Keller doesn’t just accept the company line fed to analysts by the major auto makers. Rather, she gets out to buttonhole engineers and executives, studies new products and works the phones, much like a reporter, tracking down leads and trends in arcane areas ranging from insurance costs to raw material usage rates.

Armed with such information, Keller usually comes back with bad news; she has long played the role of Detroit’s Cassandra. Notably, Keller was one of the first to warn that the Japanese threat was far more serious than the Big Three were willing to admit.

Yet she has saved some of her most biting criticism for her new book, an overview of the disastrous history of GM in the 1980s, for which the auto maker gave her almost unlimited access to its executives.

In “Rude Awakening,” aptly subtitled “The Rise, Fall and Struggle for Recovery of General Motors,” Keller pulls no punches and doesn’t seem to worry what GM will think about her book. Instead, she offers a devastating portrait of a giant industrial power that has squandered much of its inheritance.


Her book certainly has flaws. Some of her juiciest inside information on GM’s strategic planning in the early 1980s comes from her husband, Jay Chai, a top executive with a Japanese trading company who acted as middleman in helping to put together GM’s car-building joint venture with Toyota in Fremont, Calif. But she fails to identify him as her husband in the book. “I wasn’t trying to keep it a secret,” Keller says.

Many other sections of the book, covering areas in which her husband was not involved, provide less vivid detail.

Still, she has written a merciless history of a company that has stumbled every time it has tried to change. And she emphasizes that GM has yet to recognize one of its biggest flaws--that it is run by isolated, ticket-punching top executives, so coddled that they never even have to put gasoline into the perfectly maintained, new cars they receive for free every few months.

GM is “a lazy, permissive parent to its out-of-control children,” Keller scolds in her book, “sheltering its people from the hard knocks of the real world.”


Never Faced Bankruptcy

GM executives, quickly moved from one job to another before the consequences of their actions become clear, are never held accountable for their performance, Keller adds. As a result, GM has a “no-risk management system,” in which executives care most about “making themselves look good” so they can be promoted.

Keller believes that GM’s executives have failed to change their ways largely because they have never gone through gut-wrenching brushes with bankruptcy as did their counterparts at Ford and Chrysler experienced in the early 1980s.

“The problem is that the people in a position to make policy at GM have really not seen their life style, compensation or the demands on their time change,” Keller said in an interview.


Keller wasn’t always so down on GM. In the early 1980s, in fact, she thought GM’s enormous financial resources were sure to give it an edge over smaller domestic rivals in the race to catch the Japanese. Like everyone else on Wall Street, she praised GM Chairman Roger B. Smith for his campaign to introduce high technology to help GM regain its competitive edge. “I was a big supporter of Roger Smith’s, and I thought what he was doing was revolutionary,” Keller says.

Indeed, she wrote the book--with ghost-writing help--to find out why Smith’s strategies of the early 1980s went so wrong in the mid-1980s, when GM’s market share began to plunge. “By 1985 and 1986, everything was unraveling at GM,” Keller recalls. “And I wanted to know why it was unraveling.”

Such curiosity fueled Keller’s rise as an analyst. A native of Perth Amboy, N.J., and a chemistry major at Rutgers University, Keller got a first-hand look inside a big company when she started out at Celanese Corp.

Yet even then she loved Wall Street, spending lunchtime watching the ticker tape. Finally, tired of the boom-bust cycles in a big company, Keller left for the stock market in 1970, when she joined the New York brokerage of Donaldson, Lufkin & Jenrette.


By 1972, while still working on her MBA at night, she moved to Kidder, Peabody & Co. to become the first woman auto analyst on Wall Street, covering one of the most clubby, male-dominated industries in America.

Named Top Analyst

At first, she knew nothing about cars. But she asked a lot of questions and was willing to get out of her office in New York--where many auto analysts don’t even drive a car to work--and soon became a virtual commuter to Detroit, and, later, Tokyo.

The work paid off. By 1979, she was named Wall Street’s top auto analyst by Institutional Investor magazine, and her pay and stature started to soar. In 1980, Paine Webber wooed her away to become its top auto analyst, and in 1983 she moved to a small investment house, Vilas-Fischer, to become a portfolio manager.


But she always kept her hand in automotive research. Since 1986, she has commuted into the Manhattan offices of Furman Selz from her home in suburban Scarsdale, N.Y., driving either her Audi Quattro or her husband’s Isuzu Trooper; Chai, her second husband, is now an Isuzu director.

Keller isn’t sure she has another book in her. But if she does write one, it will be on the Japanese--who obviously represent the auto industry’s future.

And on that score, she offers one more warning for Detroit: “We shouldn’t be hoping that the Japanese are going to become more like us just because they have more money and are starting to get more leisure time.

“That’s not going to affect their quality. That’s not going to be our salvation.”