By Peter M. DeLorenzo
Detroit. As is tradition here at AE, we’ve devoted the issue after the Super Bowl to reviewing the various car spots on the game. Not this year. Briefly, the Audi spot was overrated and tedious (as all Audi spots have tended to be of late); the same for Mercedes-Benz as in really, that’s all you got? The Toyota Supra spot was predictable and soporific (it looked ten years old), and the Kia Telluride spot was really good for maybe 45 seconds – too bad it was twice that long. Oh well, I have a few more comments on the ads in this week’s “On The Table.”
As for FCA, it spent all its money on YouTube videos – because being unplugged is so desperately hip right now and Olivier “I’m a genius just ask me” Francois is the King of the Desperately Hip – but if they’re not going to bother to show up on the big stage, I’m not going to bother to write about them. All you need to know about their videos is that there were Jeeps and Ram Trucks galore doing Jeep and Ram Truck things.
This week, however, I’m going to write about the Motor City Haze that’s overwhelming this business and the city as well. If you’re not from around here, it’s not something you’d easily see when you step off the plane at Metro. It isn’t on the various billboards coming into the city, and there’s not a neon sign on the Big Tire on I-94, either.
No, it’s an indefinable aura. A palpable feeling that creeps in throughout the Auto Thing in southeast Michigan. It starts with the lingering reality that this business – as defined here in the Motor City – has been governed by an ugly MO for decades, and it’s called lowest-common-denominator thinking.
Lowest-common-denominator thinking has nothing to do with the resident True Believers; it’s anathema to them, in fact. No, “LCDT” came from a slow but sure grip on the business by the financial types over the decades. It created a go-along to-get-along culture, where good enough was good enough and if you saved a few bucks while doing it you’d look good to the overlords at the higher rungs of the company in question. This was most evident in the interiors of the vehicles coming out of the Motor City, where saving a few bucks showed up in interiors that looked cheap and unfinished when compared to the competition, because this just in: they were. But it was all good, as mediocrity turned into bliss in the Motor City, because cut corners yielded big profits.
That is until serious competitors started to decimate Detroit with value offerings with real quality on the low end, and excellence and distinctiveness on the luxury high end. And the inevitable result was declining market share each and every year, with excuses and weak justifications becoming the raison d’etre for the executives in the Motor City.
But even in the face of burgeoning competition in all segments, lowest-common-denominator thinking combined with the most virulent strain of short-term thinking that this business has ever seen to put the collective “Detroit” at a decided disadvantage at every turn (there’s a third dimension to this, too, but more on that later). Yes, of course, there were pockets of true brilliance practiced here, especially in trucks and in high-performance cars, but the common refrain of “it won’t be long” until Detroit was back in its rightful place at the front of this business became the lingering haze that permeated everything.
You would think that the traumatic bankruptcies and national public shaming of two of what was left of the “not-so-big-three” would have been enough for everyone in these environs to straighten up and get religion, and they sort of did, at least in fits and starts. But it always dissolved into a warped cadence of two steps forward and three back, with every positive story coming out of the Motor City counterbalanced by a cold, hard, unrelenting negative that added up to a giant bowl of Not Good.
And where are we today? The Chinese market remains the golden opportunity, with untold riches and almost limitless potential, except when that market heads into a downturn, and then the “untold riches” thing has to be put on hold. The decision by the Chinese government to go all-in for Battery Electric Vehicles, combined with the ultra-green-tinged European nations embracing BEVs with almost equal fervor, is changing this industry at a furious rate. Make that dictating to the industry at a furious rate.
This is leaving some auto companies – especially in Detroit – at a distinct disadvantage, while others (VW, Toyota) are pushing their considerable financial advantage with a staggering commitment to BEVs whether the general consumer public is ready, or not.
In the midst of all of this is the full-on frenzy to develop autonomous vehicle technology, with otherwise sane executives throwing cash at anything that moves in an effort to get in on the game, driven by an overriding fear of somehow being left behind.
And “Detroit”? It’s doubling down on giant, luxurious $75,000+ trucks and more and more SUVs, because that’s what keeps the whole enterprise in cash flow and that’s what it does best, and it’s what consumers want, at least for now. And then there are the high-performance machines from GM, Ford and FCA, because when they put their minds to it, their True Believers can compete with anyone in the world.
But how long can this continue? The auto companies here are preparing for a downturn. How deep and how long that downturn is remains the question of this day and every day. But the halcyon days of people overspending their bank accounts for the latest wonder truck are coming to an end, and when that happens, watch out.
Which brings me to the third dimension to this lingering Motor City Haze. And that is the sinking feeling that the pall hanging over everything around here has an “End of Days” quality to it. That whatever happens from this day forward the collective “Detroit” will be swallowed up by changing market conditions and deep-pocketed competitors in a world with no interest in history, or legacy brands, or anything else for that matter. And that if the Detroit-based car companies survive, they will do so with a drastically reduced footprint, with all of the associate negatives that entails.
And that’s the High-Octane Truth for this week.