‘Once Upon a Car’ recounts how the Big Three veered off course
In 2006, Carlos Ghosn, chief executive of Renault and Nissan and one of the car industry’s longest-serving bosses, held exploratory talks on an alliance with General Motors.
Kirk Kerkorian, the Beverly Hills billionaire investor, had built a large stake in GM and won a board seat at a company that he thought was drifting but that Ghosn could help get back on course.
But the talks with GM — whose then-CEO, Rick Wagoner, considered Kerkorian a gadfly — went nowhere. GM demanded a $2-billion “equalizing contribution” from Renault and Nissan for the privilege of forming a partnership.
An infuriated Ghosn was insulted by the notion that he should pay GM to become its partner. “Very courteous, very polite, very nice people, but in a certain way, they don’t listen,” he commented.
A year later, GM was veering toward disaster, clearly recognizable later as karmic retribution for its managers’ fecklessness. As gas prices soared, Americans deserted its big trucks and utility vehicles; the U.S. car market would slump from 16 million vehicles in 2007 to 10 million by the end of 2008. With GM heading for a massive financial loss, Wagoner would join Chrysler then-CEO Bob Nardelli and Ford Motor’s Alan Mulally on an excruciatingly poorly staged trip to Washington to beg for a bailout.
“Once Upon a Car: The Fall and Resurrection of America’s Big Three Auto Makers — GM, Ford, and Chrysler,” a new book by Bill Vlasic, a veteran reporter on the Detroit automotive beat, traces the story of the U.S. carmakers we used to call the Big Three from the first inklings of trouble in 2006 to GM’s and Chrysler’s government-bankrolled reorganizations in bankruptcy in 2009.
There are some extraordinary stories along the way. They include Daimler’s fast-track disposal of control of Chrysler to Cerberus, the New York private equity group that claimed it could restore the company to greatness but fumbled so badly that President Obama’s administration seriously considered letting it liquidate to help GM and Ford.
In this account, the actors come vividly to life: GM’s well-mannered but maddeningly detached Wagoner; Fiat’s Sergio Marchionne, the black-sweatered, boisterous Canadian-Italian who was to take Chrysler off its receivers’ hands; Ford’s Mulally, the infectiously upbeat architect of Detroit’s strongest turnaround who avoided a bailout and restored the company to its financial health today.
The book, published by William Morrow, is a deeply reported, full-on narrative in the style of “Barbarians at the Gate” or “Game Change.” As in those titles, the characters scheme privately — their motivations described by the omniscient narrator — and sometimes shout, dropping swear words liberally. “Do you think I’m … stupid?” the account has Marchionne yelling at a United Auto Workers official as they negotiate wages for a post-bankruptcy Chrysler. “We need to come up with a competitive wage rate and structure here!”
The book is extraordinary in what it reveals about the extent to which Detroit’s then-CEOs were extemporizing as disaster approached.
One of its many scoops has Wagoner calling up Bill Ford, chairman of GM’s arch rival, to propose a merger borne of desperation. “I’d like to get together. You know, I think it’s really time we put our companies together,” Wagoner tells a baffled Ford, who quickly rebuffs his offer.
Do Americans still care about Detroit, or the fate of the car industry? Apparently, not much. The bailout, though now credited with staving off a broader industrial collapse and helping restore the U.S. industry to global competitiveness — was unpopular with most Americans.
Should you care enough to read this book? Absolutely. Vlasic offers what will probably become the definitive retelling of the crisis that nearly felled America’s three car-making icons.
The story is a page-turner, and begs a sequel about the Detroit Three’s renaissance as smaller and fitter companies in an intensely competitive global car market. This reader assumes and hopes Vlasic is already hard at work on that.
Reviewer John Reed is the motor industry correspondent for the Financial Times of London, in which this review first appeared.
