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Octafish

(55,745 posts)
Wed Mar 18, 2015, 01:27 PM Mar 2015

Detroit - Why the domestic Auto Industry 'collapsed'



I want to make plain why Detroit's number one business, cars, went into the toilet, taking jobs and the good times with it.



How the Press Helped Destroy the Auto Industry

Detroit's Collapse: the Untold Story

By EAMONN FINGLETON
CounterPunch, July 3-5, 2009

For decades East Asian competition has played a controversial role in the decline of the American car industry. Both Japan and Korea have long been accused of unfair trade and closed markets. For their part Japanese and Korean officials have argued that their markets are open and that an incompetent and heedless Detroit doesn't make the sort of cars their consumers want.

In all the charges and countercharges, little of the remarkable truth of Detroit's trade problems has come out. To see how well -- or rather how badly -- you understand the background, try this quiz:

1. What was the Detroit companies' share of the Japanese market in 1930? (a) About 90 per cent. (b) About 20 per cent. (c) Less than 4 per cent.

2. How many models do the Detroit corporations currently make with the steering wheel on the right (the standard configuration for Japan)? (a) More than 40. (b) 12. (c) 3.

3. What was the combined share of all foreign makers – American, European, and Japanese – in the Korean car market in the last decade? (a) Less than 2 per cent. (b) Around 15 per cent. (c) More than 70 per cent.
The correct answer in each case is (a).


If you flunked, don't feel bad. Just cancel your newspaper subscription.

For decades American press coverage of global car industry competition has been abysmal. Reporters and commentators have almost never dug below the surface and their idea of fact checking has too often consisted merely of "accurately" recycling previous observers' errors. Worse many commentators have displayed an almost venomously elitist bias against Detroit. In short, readers of the American press have been fed a diet of falsehoods, while key facts that give the lie to the foreign trade lobby’s special pleading have been swept under the carpet.

Much of the most egregious press coverage moreover has emanated from writers and editors at some of the most “respected” media organizations, not least the Wall Street Journal, the Economist, the Washington Post, and the New York Times. Reuters and Associated Press have not been far behind and even the automobile trade press has often unforgiveably spun the story to Detroit's great disadvantage.

CONTINUED...

http://www.counterpunch.org/fingleton07032009.html



What was missing from the news coverage? That Uncle Sam doesn't protect its own automotive industries, while Japan does.



What's Japan's Guiltiest Secret?: (Hint) It's Not The Comfort Women

by Eamonn Fingleton
Forbes, 4/20/2014

EXCERPT...

Top of the list is something that – at least for those of us who know Japan – is hidden in plain sight: the Japanese auto market. Fifty years after the Tokyo authorities ostensibly began opening to free trade, the Japanese auto market remains one of the world’s most closed. I don’t mean just that Detroit-made cars don’t get a look in. These are, with few exceptions, unsuitable for Japanese roads. But the Detroit Big Three’s subsidiaries in Europe, particularly subsidiaries of Ford and General Motors, make plenty of cars that – in a fair world – should do well in Japan. After all such cars compete, and in many cases compete strongly, against Japanese competition across Europe. They don’t have a prayer against Japan’s non-tariff barriers.

SNIP...

Of course, umpteen times over the years the problem of Japan’s closed market has been declared solved. Nobuhiko Ushiba, who served as Japan’s ambassador to Washington in the early 1970s, once told reporters: “There is no example in recent history of a nation liberalizing trade policy as fast as Japan.” Meanwhile in 1982, Japanese foreign minister Yoshio Sakurauchi assured a meeting of the GATT that Japan “is one of the most open markets in the world.”

A particularly impressive-sounding assurance came from President Bill Clinton in 1995. Speaking in the White House Briefing Room, with Japanese Trade Minister Ryutaro Hashimoto looking on impassively, Clinton announced that Japan had agreed “to truly open its auto and auto parts markets to American companies.”

He added: “This agreement is specific. It is measurable. It will achieve real, concrete results … we finally have an agreement that will move cars and parts both ways between the United States and Japan. This breakthrough is a major step toward free trade throughout the world.”

It was all empty rhetoric, of course, as Clinton surely knew. The interesting thing is that the American press has never revisited the record, not even the reliably anti-Clinton Wall Street Journal. Anyone who knows the Tokyo news business knows why. The Japanese authorities keep the foreign press on a remarkably tight leash and, with virtually no exceptions, foreign correspondents are induced to censor themselves. As a practical matter, Tokyo wields a panoply of carrots and sticks in controlling what Japan-based foreigners say to the outside world and most long-term foreign residents are overt or covert agents for Japan’s public relations agenda. Foreign correspondents are no exception.

CONTINUED...

http://www.forbes.com/sites/eamonnfingleton/2014/04/20/whats-japans-guiltiest-secret-hint-its-not-the-comfort-women/



All this info on national trade policy and its impact on Detroit -- from where unions and the great American middle class emerged (let alone the Arsenal of Democracy) sprang -- is missing from the news. A very similar situation is arising today with the lack of coverage of TPP.

32 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Detroit - Why the domestic Auto Industry 'collapsed' (Original Post) Octafish Mar 2015 OP
Love the Diego Rivera mural. JEB Mar 2015 #1
Same here. . . BigDemVoter Mar 2015 #2
Rivera created a masterpiece for Rockefeller Center. Octafish Mar 2015 #4
There it is. JEB Mar 2015 #6
If you're planning a visit to Detroit... Octafish Mar 2015 #3
Would love to see any of the murals in person. JEB Mar 2015 #5
John Foster Dulles and Allen Dulles enjoyed the work of Diego Rivera. Octafish Mar 2015 #19
According to Kinzer, Rivera's original is in the storeroom of an art museum hifiguy Mar 2015 #24
Rivera painted it days after Kahlo's death. Octafish Mar 2015 #27
Message auto-removed Name removed Mar 2015 #7
Because they made really crappy cars for 25 years starting in the early 70's. Throd Mar 2015 #8
This is a major part of the issue. kwassa Mar 2015 #10
Good points. The thing is, socialism works great for the Titans of Wall Street... Octafish Mar 2015 #13
A few more factors that led to the collapse - leveymg Mar 2015 #9
also, the shift of manufacturing to outside of the Detroit area ... kwassa Mar 2015 #11
Good list. Add automation and robots. Octafish Mar 2015 #12
The media seems to believe it can survive on ad revenues, alone. Readers optional. leveymg Mar 2015 #16
Good list. Add also "Health insurance" the cost of which Japanese and German and S. Korean .... Scuba Mar 2015 #17
Shithead management cranking out inefficient, shitty cars tabasco Mar 2015 #14
Japanese 'competition kept up their game' thanks, in large part, to government support. Octafish Mar 2015 #18
Irrelevant tabasco Mar 2015 #22
It's hard to compete when one government subsidizes the work. Octafish Mar 2015 #25
Detroit's "collapse" was a bit more complex than Blue_Tires Mar 2015 #15
Absolutely. The main thing is ignorance, which the mass media are expert at. Octafish Mar 2015 #20
They started building crap cars when long lasting imports were coming in. SoLeftIAmRight Mar 2015 #21
I remember Munificence Mar 2015 #23
324,992 miles on my Subi SoLeftIAmRight Mar 2015 #31
Another TPP-pushing article. djean111 Mar 2015 #26
Sorry, I don't read it that way. It's how GATT shafted Detroit. Octafish Mar 2015 #28
Okay, sorry, I am just feeling twitchy about the TPP, the cheerleaders, IMO, are starting to djean111 Mar 2015 #29
Some views of the Rivera murals at DIA. longship Mar 2015 #30
Wow! Thanks for posting. JEB Mar 2015 #32

Octafish

(55,745 posts)
4. Rivera created a masterpiece for Rockefeller Center.
Wed Mar 18, 2015, 01:57 PM
Mar 2015

He made the mistake of (intentionally or accidentally) insulting his hosts by including an image of Lenin, as well as a member of the patron's family holding a cocktail. The mural was destroyed before completion. Rivera's career never really recovered in the U.S. Here's a version of what the work looked like, a mural he later created in Mexico City:



http://www.diegorivera.org/man-at-the-crossroads.jsp

 

JEB

(4,748 posts)
6. There it is.
Wed Mar 18, 2015, 01:59 PM
Mar 2015

I'm too slow and ignorant to get the actual image up. Thanks for all your efforts.

Octafish

(55,745 posts)
3. If you're planning a visit to Detroit...
Wed Mar 18, 2015, 01:52 PM
Mar 2015

It's a great time. The Detroit Institute of Arts is hosting a retrospective: "Diego Rivera and Frida Kahlo in Detroit" with about 70 works, including the original "cartoons" Rivera used to plan the murals. The Michigan Opera Theatre is performing "Frida!"and about 50 other institutions are hosting related events.

https://diaphotography.wordpress.com/2011/01/05/dias-photo-of-the-week-a-rare-portrait-of-frida-kahlo/

Standing in the middle of the court where the frescos stand alone is worth the trip. Everywhere you look, amazement.

Kahlo and Rivera also were amazing. Communists, they made friends everywhere in the land of capital, including Henry Ford.

 

JEB

(4,748 posts)
5. Would love to see any of the murals in person.
Wed Mar 18, 2015, 01:57 PM
Mar 2015

Probably not in the cards for me...so I enjoy looking in books and on the screen.
He did not please everyone.
http://en.wikipedia.org/wiki/Man_at_the_Crossroads

Octafish

(55,745 posts)
19. John Foster Dulles and Allen Dulles enjoyed the work of Diego Rivera.
Wed Mar 18, 2015, 04:42 PM
Mar 2015


Diego Rivera: Glorious Victory!

Mark Vallens
Art for Change
Friday, October 05, 2007

EXCERPT…

Painted in 1954, the mockingly titled Glorious Victory has as its subject the infamous CIA coup of the same year that overthrew Guatemala’s democratically elected government. At the center of the mural, CIA Director John Foster Dulles can be seen shaking hands with the leader of the coup d'état, Colonel Castillo Armas. Sitting at their feet is an anthropomorphized bomb bearing the smiling face of U.S. President Dwight D. Eisenhower - who gave orders to launch the military coup. In the background, a priest can be seen officiating over the massacre of workers, many of which can be seen lying slaughtered in the painting’s foreground.



The head of the Central Intelligence Agency at the time of the coup, Allen Dulles, and the U.S. Ambassador to Guatemala during the coup, John Peurify, are depicted handing out money to various Guatemalan military commanders and fascist junta officials, as Mexican Indian workers slave away at loading bananas onto a United Fruit Company ship. I might add that Allen Dulles was on the board of directors of the United Fruit Company when the U.S. overthrew the government of Guatemala.

CONTINUED…

http://art-for-a-change.com/blog/2007/10/diego-rivera-glorious-victory.html

"Allen was delighted with the way Glorious Victory portrayed him and proudly handed out small-format copies." -- Stephen Kinzer, "The Brothers: John Foster Dulles, Allen Dulles, and Their Secret World War"

https://books.google.com/books?id=LVb4-1l1gF4C&pg=PT393&lpg=PT393&dq=kinzer+the+brothers+dulles+diego+rivera&source=bl&ots=oAzpiYDehY&sig=f_qxzSRtbNna7xjgv6CoOpAMfMs&hl=en&sa=X&ei=duIJVbzFG_WCsQSY3IKABA&ved=0CEYQ6AEwBg#v=onepage&q=kinzer%20the%20brothers%20dulles%20diego%20rivera&f=false
 

hifiguy

(33,688 posts)
24. According to Kinzer, Rivera's original is in the storeroom of an art museum
Wed Mar 18, 2015, 06:19 PM
Mar 2015

in Russia, where he (Kinzer) saw it. Safe and sound but unseen.

Octafish

(55,745 posts)
27. Rivera painted it days after Kahlo's death.
Wed Mar 18, 2015, 06:54 PM
Mar 2015

According to Kinzer, the CIA overthrow of the democratically elected government of Guatemala had angered the two artists. Even though her health was failing, Kahlo and Rivera attended a large protest rally in Mexico City. She died 11 days later. Soon after, Rivera painted the work.

Thanks for the reminder, hifiguy! I hope the freaking Pushkin gives it back to Rivera's estate or at least Mexico.

Response to Octafish (Original post)

Throd

(7,208 posts)
8. Because they made really crappy cars for 25 years starting in the early 70's.
Wed Mar 18, 2015, 02:07 PM
Mar 2015

I say this as an American car enthusiast. Detroit got lazy and put the bean counters ahead of the designers and engineers. They put a gaudy grille on a crappy Chevrolet and called it the Cadillac Cimarron, thinking nobody would notice. Meanwhile, the Japanese kept advancing in quality. The big three lost a generation of car buyers and has never recovered.

kwassa

(23,340 posts)
10. This is a major part of the issue.
Wed Mar 18, 2015, 02:24 PM
Mar 2015

some of those 70s cars would rust through their bodies within one year.

and Detroit is built over a salt mine.

Octafish

(55,745 posts)
13. Good points. The thing is, socialism works great for the Titans of Wall Street...
Wed Mar 18, 2015, 02:51 PM
Mar 2015

...not at all for the common man and woman. The nation's press has been largely silent on that, too.

leveymg

(36,418 posts)
9. A few more factors that led to the collapse -
Wed Mar 18, 2015, 02:08 PM
Mar 2015

* Disinvestment in US operations and shift of production facilities outside North America
* Top management by beancounters not "car guys"
* Takeover of GM and Chrysler by the Vulture Capital Firm, Cerberus Capital Mgmt.
* Badge engineering, instead of the real thing.
* Planned obsolescence.
* "You'd rather have a truck" product planning and marketing.

kwassa

(23,340 posts)
11. also, the shift of manufacturing to outside of the Detroit area ...
Wed Mar 18, 2015, 02:25 PM
Mar 2015

taking all those jobs away to other parts of the country and the world, never to return.

A big part in the collapse of the city of Detroit.

Octafish

(55,745 posts)
12. Good list. Add automation and robots.
Wed Mar 18, 2015, 02:49 PM
Mar 2015

Stupid GM even made a commercial about a robot who lost its job and was contemplating suicide -- in 2007, before the poor people living beyond their means crashed Wall Street. When the public complained, they complained about the poor, mistreated robot on the tee vee. Don't recall hearing too many, if any, complaints about the people the robot replaced.

http://money.cnn.com/2007/02/09/news/companies/gm_robotad/

Regarding your list: All important. But they are superceded by Finnegan's main point: A pliant press never raised the questions about international trade, allowing Congress to do the bidding of the connected corporations, more than represent the interests of unions and working people.

leveymg

(36,418 posts)
16. The media seems to believe it can survive on ad revenues, alone. Readers optional.
Wed Mar 18, 2015, 03:32 PM
Mar 2015

Even the news is almost fully robotized, both on the supply and demand sides. With web content, it's just the number of counted page "hits" that count, and faking that can be automated, too. Human beings having been largely squeezed out of the process, readers optional.

 

Scuba

(53,475 posts)
17. Good list. Add also "Health insurance" the cost of which Japanese and German and S. Korean ....
Wed Mar 18, 2015, 04:00 PM
Mar 2015

... automakers don't have to tack on to their vehicles as their countries all have a form of universal health care.

 

tabasco

(22,974 posts)
14. Shithead management cranking out inefficient, shitty cars
Wed Mar 18, 2015, 02:52 PM
Mar 2015

while the competition kept up their game.

That's it in a nutshell, sports fans.

Octafish

(55,745 posts)
18. Japanese 'competition kept up their game' thanks, in large part, to government support.
Wed Mar 18, 2015, 04:17 PM
Mar 2015

In Japan, tariffs protect home markets. Here, not so much.

PDF with a lot of words from a US industry (Ford and GM) group:

How Japan has Maintained The Most Protected
and Closed Auto Market In the Industrialized World


http://americanautocouncil.org/sites/default/files/Japans%2BProtected%2BAuto%2BMarket.pdf

I don't blame Japan for protecting its markets. The opposite in fact: The policy is noble, for it protects Japanese workers and their jobs.

Octafish

(55,745 posts)
25. It's hard to compete when one government subsidizes the work.
Wed Mar 18, 2015, 06:49 PM
Mar 2015

Ask about pricing. In my own dear industry, the photographic, Japan was selling products in the United States for a fraction of what they were selling for in Tokyo. One store I frequented in Chicago had several Japan Air Lines pilots as clients.

The idea of the Japanese camera manufacturers was to gain as much market share as possible -- through price and quality (thank you, Dr. Deming) -- that the American camera makers would be unable to compete, which is what happened. Same for European makes, apart from the high end manufacturers Leica and Hasselblad, they're mostly gone too. And once all the American competitors were gone, the prices on cameras went up in Chicago, as did features, etc, which is nice.

And while much of the manufacturing is done in China, Malaysia and other nations, the bottom line is Japan today owns the global camera market.

PS: Agree about Detroit quality from the 60s to the 80s. Don't know about you, but I blame greed on the part of management more than anything.

Blue_Tires

(55,445 posts)
15. Detroit's "collapse" was a bit more complex than
Wed Mar 18, 2015, 03:16 PM
Mar 2015

simple imports/exports and market protectionism...Although I do agree that media coverage was just looking for simple reasons and easy "bad guys" to point the finger at...

Anyone interested in knowing the full story would do well to start reading the archives at Peter De Lorenzo's blog: http://www.autoextremist.com/

Octafish

(55,745 posts)
20. Absolutely. The main thing is ignorance, which the mass media are expert at.
Wed Mar 18, 2015, 04:46 PM
Mar 2015

Which is the problem we, as a nation, also face.

Thanks for the heads up on Autoextremist. A very fine writer, him, and blog, that.

I wonder how the Trans-Pacific Partnership agreement would impact US auto production?

 

SoLeftIAmRight

(4,883 posts)
21. They started building crap cars when long lasting imports were coming in.
Wed Mar 18, 2015, 04:55 PM
Mar 2015

Early 70's Duster... vs nice little Datsun

I never looked back

Munificence

(493 posts)
23. I remember
Wed Mar 18, 2015, 06:11 PM
Mar 2015

my parents going through American made cars in the late 60's and 70's, they'd maybe get 50-60K miles out of an American made vehicle, then along came the little Datsun trucks (and the VW bug they had was still going strong as a beater to drive around).

Japanese made cars back then were rust buckets but the mechanical systems /drive train works forever. In 1985 my father decided to buy a Chevy S10 as we lived in the north and needed a small 4x4 for winter - He babied it, engine blew up at 45K miles. I was a young man driving a Toyota truck and my old man said "Enough is enough" and he switched to Toyota and never looked back.

Flash forward 30 years later and this is what is in my yard:

1.) A 2001 Toyota 4Runner Limited with 200K+ miles (Only have changed brakes, tires and oil every 10K-15K miles) Still runs and operates like the day I purchased it new, everything works just like day one.

2.) A 2006 Toyota Sequoia Limited - Same as above, nearly 200K miles, everything is perfect like day one.

3.) A 1986 "Tankota" single cab 4x4 with 315K miles - All original and still passes Echeck. Has started every single time I ever tried to start it (besides for a few dead battery days)....still valued at about $5K-$6K. I use it on my hobby farm and around town if I need a truck to haul something or to take my dogs for a ride. Kids love going "mudding" in it on the back 40, they use it like one would a 4 wheeler.

Can't say I ever see myself getting away from Toyota, they are just that reliable. Oh, I may buy a Nissan one day.

We have not had a vehicle payment in years (6 I think and only on the Sequoia) and I'd say that in 6 years we have maybe averaged putting $500 a year into our vehicles (brakes, tires, oil changes). That's what most pay in a month for their payment on a car.






 

SoLeftIAmRight

(4,883 posts)
31. 324,992 miles on my Subi
Wed Mar 18, 2015, 07:39 PM
Mar 2015

new radiator - and normal maintenance. Colorado mountain driving. Got to love it.

 

djean111

(14,255 posts)
26. Another TPP-pushing article.
Wed Mar 18, 2015, 06:52 PM
Mar 2015

Let's see the WHOLE TPP before we are supposed to cheer for it, please.

Octafish

(55,745 posts)
28. Sorry, I don't read it that way. It's how GATT shafted Detroit.
Wed Mar 18, 2015, 06:56 PM
Mar 2015

I should have made it clear that we need more information about the TPP -- especially before it becomes law.

I'd written about TPP before, including this piece:

Obama calls critics of TPP secrecy 'Conspiracy Theorists'

Seeing how well NAFTA turned out, count me a critic.



Obama Blasted for Lumping Critics of Trade Deal Secrecy with 'Conspiracy Theorists'

'If the president is concerned that people don't know what's going on in the negotiations then the president should release the text and remove it from being a state secret.'

- Sarah Lazare, staff writer
Published on Friday, May 2, 2014 by Common Dreams

Critics of the highly-secretive Trans-Pacific Partnership negotiations responded with outrage after U.S. President Barack Obama charged they have a "lack of knowledge of what is going on in the negotiations" and dismissed their concerns as "conspiracy theories."

The president made the comments this week during a press conference in Malaysia—one of the stops on his Asia-Pacific tour, aimed at advancing the TPP and the U.S. military "pivot" to the region. His tour has been met with region-wide protests against the economic and military agenda of the U.S.

SNIP...

Bernadette Ellorin, Chairperson of BAYAN-USA—an alliance of Filipino organizations in the U.S., told Common Dreams, "President Obama lacks knowledge of how so-called 'free trade agreements' impact people on the ground. The push-back he has gotten over the TPP comes from people who have long-suffered from these impacts."

"He should go back and talk with the parent-less children in the region, whose parents had no choice but to look for work overseas because they couldn't find work in their own country due to these so-called 'free trade' agreements," she added. "He should go back and talk to the indigenous children whose parents were killed by paramilitary groups because greater foreign investment stipulations in these agreements have led to forced evacuations and militarization of their land for the purpose of large scale foreign mining."

CONTINUED...

http://www.commondreams.org/headline/2014/05/02-5

Cass Sunstein must be right: The United States government is incapable of lying or doing anything criminal.

The people in it, OTOH...

 

djean111

(14,255 posts)
29. Okay, sorry, I am just feeling twitchy about the TPP, the cheerleaders, IMO, are starting to
Wed Mar 18, 2015, 07:09 PM
Mar 2015

spin.

longship

(40,416 posts)
30. Some views of the Rivera murals at DIA.
Wed Mar 18, 2015, 07:11 PM
Mar 2015

First, an overview of the setting:


North side:


South side:


A detail:


Diego in action:


I know these murals since my childhood. I cannot count the time that I spent in this place just staring at them. Having grown up in the city, I know them very well, as well as the destruction of Detroit's auto industry.

That room is jaw-dropping because of those murals.

From the Arsenal of Democracy to bankrupt in my lifetime.
It is very sad.

longship
Cooley High School graduate, 1966.
R&K

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