Hey there, folks! My name is Barry O., and I'm not gonna mess around. Your GM franchise is under new management. Let me say it as plainly as I can: If you buy a car from Chrysler or General Motors, you'll be able to get your car serviced and repaired, just like always. Your warranty will be safe. In fact, it'll be safer than it's ever been. Because starting today, the U.S. government will stand behind it. So come on down! The deals are unbelievable. Just look for the giant gorilla hanging from the roof.
Okay, I'm kidding about that last part. But the pitch was pretty irresistible. After all, how often does the President of the United States promise to look after your power train? He did everything but throw in a set of floor mats and a free oil change. Anything to get Americans buying American cars again.
Barack Obama even threw in a sacrificial victim, GM boss Rick Wagoner. The public will like that. One lesson he learned from the banking mess is that, when taxpayers are pumping billions into bailouts, they want heads to roll.
I can think of another reason for turfing out Mr. Wagoner (apart from the fact that GM lost more than $80-billion when he ran it): the auto workers union. Back to the bargaining table, boys! If you thought you'd sacrificed enough, you still don't get it. Despite the nice things Mr. Obama said about you (not your fault, you're all hard-working people, yadda yadda yadda), he wants your first-born. Or, at the very least, your health-care benefits.
"This industry is, like no other, an emblem of the American spirit; a once and future symbol of America's success," said the car salesman-in-chief. But no matter what he says, there are millions and millions of people who will never buy a Chevy as long as they draw breath. One is my husband. He switched to foreign cars 30 years ago. His first Honda was a little rustbucket on wheels, but the price was right.
"What would you want one of those things for?" a Big Three auto executive sneered at him one day. "They'll never sell."
In fact, the car industry is an emblem of America. It used to be an emblem of America's inventiveness, ingenuity and manufacturing prowess. Today, it is an emblem of stagnation, industrial bloat, myopia and entrenched interests.
Just a few days before Mr. Wagoner got the boot, perhaps the most important new car of the decade was being launched in New Delhi, halfway around the world. The Tata Nano is aimed at the exploding middle classes of emerging nations, such as India and Brazil. It has a rear engine like a sewing-machine motor and its wheels are the size of dinner plates. The basic model has no air conditioning or power windows. But it seats four, has ultra-low emissions and gets amazing mileage. The cost is $2,230 (U.S.), less than half the cost of any other entry-level car yet made.
The market for such entry-level cars is poised to be the biggest automotive market in the world. It's inconceivable that Detroit would have thought of trying to develop such a car. In fact, the consensus in Detroit was that such a car was impossible. Arindam Bhattacharya, a partner in the New Delhi office of the Boston Consulting Group, recalls making presentations on the Nano to Western car manufacturers a few years ago. "They would all laugh and say that it couldn't be done," he told The New York Times.
The Nano itself may not succeed. But other auto makers are hot on the trail. And even if Detroit uses all that bailout money to slim down and smarten up, its destiny is as a much smaller player in a much bigger, hungrier, more competitive world. Tata's engineers are already at work on a U.S. version of the Nano. And even the car salesman-in-chief can't do anything about it.Report Typo/Error