E-mail a friendDan Neil
airdate January 25, 2006
Dan Neil is the first and only automobile columnist ever to win the Pulitzer Prize. Described as having a "wicked way with words," he also has a passion for cars. Neil is a native of North Carolina, where he began his professional writing career as a copy editor. His weekly column in the Los Angeles Times, "Rumble Seat," won the Pulitzer for Criticism in '04. He's written for numerous newspapers and magazines, including AutoWeek magazine and The New York Times, and was a contributing editor for Car and Driver.
Dan Neil
Tavis: Tonight, a look at the troubled state of the U.S. automotive industry with Dan Neil. He is the Pulitzer Prize-winning automotive columnist for the "Los Angeles Times." Also a frequent contributor to the Sunday 'LA Times Magazine.' Dan, nice to have you on the program.
Dan Neil: Hi, Tavis, nice to be here.
Tavis: Glad to have you. I'm always honored to meet a Pulitzer Prize winner, especially for automotive writing.
Neil: Yeah, it was a weak year, I think. It was some sort of clerical error. I think I got some...
Tavis: No, not at all. You must be a heck of a writer to win a Pulitzer writing about cars.
Neil: Well, everybody loves cars. Except those who don't have cars, in which case they love buses.
Tavis: Why do we love cars so much?
Neil: Well, that depends on where you are. But it's clearly some fixation of aspirational culture. It's where we want to be. And there's the mobility and the status and the sexuality of cars. It's core to the American experience.
Tavis: Speaking of which, we have all, by now, seen the cover of 'Time' magazine, featuring Bill Ford. Would you buy a new car from this man? Bill Ford has big ideas how to save his company, and the endangered U.S. auto industry. How he is trying to give Motown back its mojo. We all sort Ford on the cover, so tell me what we are to make of the trouble that we hear, at least, that Ford is in.
Neil: Well, Ford and General Motors both are going through kind of a purifying fire. Both of these companies are really too large for the place they occupy in the market now, and they have to right size or downsize and maintain some sense of order while they do that. They've got a lot of problems. They've got tremendous cost overruns. They've got too much capacity.
They've got legacy costs and healthcare costs from deals they made with the UAW stretching back many years. And they have a gas crisis. The gas has gone up to three, and we may even be looking at four dollars a gallon. And they don't have the products that people want to buy North America.
Tavis: All right, you just put a whole lot out there. Let me go back and try to pick some of that stuff apart. I feel like I'm playing Jeopardy. I'll take gas for $500. So, tell me about the gas issue, and how that really has impacted the drama that the industry is experiencing right now.
Sure. You could say, let's say in the decade of the nineties, the U.S. automakers made a lot of money building SUVs and big trucks. One of the reasons these vehicles were attractive to the manufactures is because they skirted the café regulations that said that fleet, that the cars they made had to have an average fuel economy.
SUVs and trucks were outside that government-installed regime, and so they could get poor gas mileage. And they were big and people loved them, and gas was cheap. I remember gas in California was a buck fifty, a buck twenty five a gallon. So everybody knew this couldn't last, and sure enough, it didn't. And when gas prices went up, it added to the economic slowdown of 9/11.
And then gas prices went up last year. Suddenly, these vehicles lost their cache. People began to turn away from them in droves. You may also credit kind of a cultural change. They became kind of unfriendly and unlovable.
There were absolute campaigns against SUVs.
Neil: Absolutely. There were people burning SUVs, and throwing and throwing blood on them, and no blood for oil. It's interesting how these issues got to be conflated so quickly and so emotionally in a superheated political environment.
Tavis: So we both live here in LA. We see these SUVs all over the place in LA. So what is the answer to the crisis that the SUV has put us in?
Neil: Well, the answer is that the market is going to lead the way. The full-size SUVs are very soft. The demand them. The demand for smaller cars is growing. Also, there's the emerge of something called the cross-over SUV, or CUV, which is a smaller vehicle that offers much of the off-road capacity or ability, and the high seating position, and the cargo space and passenger, all that stuff can be negotiated with engineering.
The problem is that the car companies did not take massive profits they made in those years and reinvest them in new product. So now they're playing catch-up. General Motors and Ford both coasted on those profits for far too long.
Tavis: So speaking of product, the other suggestions or ideas in your lineup of things that that caused this crisis to be created, two products. How weak is U.S. product as compared to the other stuff?
Neil: Well, one of the ironies is that American automakers make some great cars. (laugh) They make some terrific cars. And speaking specifically about Ford, the Ford Fusion, which is a competitor to the Camry and the Honda Accord, this is a terrific automobile.
Tavis: You know what you're saying sounds oxymoronic.
Neil: It does.
Tavis: The American auto industry makes great cars, and yet they're broke. Or crying broke, at least.
Neil: Well, exactly right. What is this? This is a crisis of confidence. Really what we're talking about is whether the American consumer can have faith in these companies.
Tavis: I feel like Lee Iacocca's gonna walk out any minute now.
Neil: Yeah, right, exactly. Lee Iacocca had a campaign back, I forget when it was. It was in the eighties, when Chrysler was staring down bankruptcy. And he had to come out and say the B-word to the public and say, look, we're not gonna go bankrupt. We're not gonna go away. Today, General Motors, in particular, is contemplating a similar kind of PR offensive.
A guy named Mark LaNeve, he's the VP of GM, is thinking about doing a campaign just to keep people, the consumers in the game. They don't want consumers to abandon them. And the irony is that the automakers make some terrific products.
Tavis: Well, don't forget Lee did make a comeback with Snoop, Foshizzle My Nizzle.
Neil: That was very strange. (laugh) I didn't know what to make of that. I thought, and by the way, did we ever find out how Snoop played golf? Is he good at golf or, no?
Tavis: Yeah, no, I never figured this out. I don't know, yeah, I never figured it. (laugh) The other thing in your list were unions. And I don't want to parse your words. And the way you phrased it, which I don't wanna attempt to quote you verbatim. But the way you phrased it, I wasn't sure whether you were indicting the auto industry for the deals they made with unions, or whether you were indicting unions for whatever. Overreaching.
Neil: Can I have one of column A and one of column B?
Tavis: You're a Pulitzer Prize winner; you can say what you want to say.
Neil: Well, this was certainly an inept conspiracy between the two agencies. Between the car makers and the UAW. And really, both parties were operating more or less in good faith. They were fat times. Money was flowing. It's easy to understand how the UAW became accustomed to the kind of compensation packages that they did.
Now, of course, one in four auto workers in the U.S. are non union, and the union keeps those other companies, mostly Asian transplants building factories in the U.S., honest. Listen. I'm totally for unions. I am a big union person. But any large organization can get carried away, and I think that's the case.
Now, it's a question of whether they can politically hold themselves together to make a deal that will save, will help preserve these companies, so they don't have to go through bankruptcy.
Tavis: I keep reading, and even in columns like yours, obviously, that what's driving this crisis in particular, fundamentally where unions are concerned in this industry, is healthcare. Talk to me.
Neil: Well, this is a big subject. It comes down to this. The United States has no concerted policy of industrial competitiveness. All of the other industrial countries we deal with or we compete with have national health care. This puts our manufacturing at a tremendous disadvantage. And in my view, the manufactures missed an opportunity to form a bond of good will with labor eight years ago when labor was backing a Democratic candidate who was talking seriously about national health care.
At that time, it seemed like sort of a leftist, collectivist rhetoric. But what it really is is a key to American competitiveness in a globalized marketplace. Because our competitors have it, and our companies are saddled with these extra costs.
Tavis: So are you suggesting to me, then, that if we were to have universal health care in this country, it might turn auto industry completely around?
Neil: It couldn't hurt. And I'm not the only one suggesting it now. See, now, there's, well, I don't want to put myself, in any way compare myself to, but observers of the industry have long suggested this would be a good idea. And now you have executives of the big car companies going to Washington, like Bill Ford, and saying look, this is what we need.
And we need to have a serious conversation about these macro issues. Fuel costs, greenhouse gases and global warming, healthcare costs. How about this? How about stock market reform? The way the market values these mature companies is all about what kind of returns they can get on investments. Market cap is a terrible way to evaluate these big companies that are not going to have twenty percent growth.
Tavis: Finally, I couldn't let you leave here without asking about new products, speaking of product. Did I read somewhere that there's a car, is it the Bugatti?
Neil: Yeah, the Bugatti Veron.
Tavis: The Bugatti Veron. They cost?
Neil: Well, it costs one point two five million dollars
Tavis: One point two five million dollars for a car.
Neil: I think the floor mats are extra.
Tavis: (laugh) But the funny part about the car, well, tell the story. The funny part about the car, it gets, like, so many. It gets, like, nothing, yeah.
Neil: Well, at top speed, it gets three miles to the gallon.
Tavis: Three miles to the gallon at top speed.
Neil: So at top speed, it runs out of gas in 12 minutes. Now, the good news is that the tires would melt in a half an hour. So it's really kind of a safety feature. You run out of the gas before the tires burn up.
Tavis: That sound like one point two five for a lemon.
Neil: Oh, no. It's a smoking ride. It's totally, yeah. Oh, yeah. You'd like it a lot. By the way, what do you drive?
Tavis: Well, I'm going to get me a Bugatti. That's what I'm gonna get.
Neil: All right, excellent.
Tavis: Yeah, I could afford it. Hey, I'll get two or three of them.
Neil: I could tell by this set, man. It's fantastic.
Tavis: (laugh) Nice to have you on the program.
Neil: A pleasure. All right.
Tavis: Glad to have you. Up next on this program, actor Martin Lawrence. Stay with us.
Back to January 25, 2006