The Pulitzer Prize winner examines the synonym of Detroit and the auto industry, as detailed in Engines of Change, and weighs in on whether the U.S. is doomed for a double-dip recession.
Journalist Paul Ingrassia
Tavis: Paul Ingrassia is a Pulitzer Prize-winning journalist and former Detroit bureau chief for “The Wall Street Journal.” He’s now the deputy editor-in-chief at Reuters and author of a terrific read for the summer, “Engines of Change: A History of the American Dream in 15 Cars.” He joins us tonight from New York. Paul, good to have you back on the program.
Paul Ingrassia: Hey, Tavis, glad to be back.
Tavis: Before I go inside the text, let me start by asking what your sense is of how Detroit is going to factor in this race for the White House between now and November.
Ingrassia: Well, I think it’s going to be important in Michigan and maybe the upper Midwest that the Obama program really saved the Detroit auto industry, so that’ll be a plus in Obama’s camp. There still are a lot of Americans out there who are sort of angry at all the bailouts, though. Not just the Detroit bailout, but the bank and the Wall Street bailouts and that sort of thing.
So it’s going to cut both ways, but I think on balance it’s going to be a plus for the president.
Tavis: You gave your assessment of President Obama. What’s your sense of how Mitt Romney has played this issue, particularly given the role that his father played in Detroit years ago?
Ingrassia: Well, I think he’s tried to draw a fine line here, perhaps a little too fine, to be honest with you, Tavis. He said that he opposed the bailout but he was for saving Detroit. He just wanted a private plan to do it.
The problem was, if you go back in 2008, 2009, there really wasn’t any private money available to come out and put into the auto industry. The money would have had to come basically from the banks or private equity people, and no one was coming forward to put up the money.
Tavis: When you say President Obama saved Detroit with his plan, give me an assessment of how Detroit is doing as we speak.
Ingrassia: Well, I think it’s doing pretty well. Sales are good, profits are good. Look, all three companies are still around. Detroit, you have General Motors, Ford and Chrysler. I think one of the big things they did was they, they closed factories they didn’t need, they changed a lot of the antiquated work rules in the factories, and that was a really big deal.
It used to be that if you could only change a light bulb, for example, your job classification was electrician. So even if you were qualified to change the light bulb, you had to wait for some guy way across the other side of the factory to come do that sort of thing.
Well, that kind of stuff is pretty much gone now. I don’t think Detroit is going to be – it’s not going to blow the Japanese or Korean car companies out of here. You have a much more balanced market now. But the Detroit companies are holding their own.
Tavis: Balance is one thing; ingenuity, innovation, creativity is another. Where does Detroit rank now vis-à-vis the competition for creativity, for innovation, for style, for that kind of thing?
Ingrassia: Well, it depends on what you’re talking about, really, but I think in terms of getting – let’s pick one area. Let’s get in consumer electronics into automobiles. Electronics that make the driving experience easier, more enjoyable and that sort of thing. Detroit’s doing very well on that.
For example, Ford for several years has had this SYNC voice recognition system where you can basically give your radio or you can give your CD player or give your heater and your air conditioner verbal commands. Now it’s not perfect, no doubt about that, but I think Ford has really led the way in this one area of getting consumer electronics, into automobiles.
Alternative engine technology is sort of a more balanced game. Toyota really has led the way with the Prius. Now there’s other cars out there, there’s hybrids. GM has the Volt. But the truth is, hybrids aren’t selling all that well except for the Prius these days, and that’s because the price of gasoline has really got to go to $6, $7 a gallon before it makes sense for most people.
Tavis: We’ll come back to the Toyota Prius in just a second, and that’s not a shout out to Toyota. It is to suggest that one of the 15 cars that you talk about in “Engines of Change,” cars that have really defined America, automotively, at least, is the Toyota Prius, and we’ll come back to that in a moment.
Before I get to that and these other cars on the list, at least some of the cars on the list, you mentioned a moment ago the notion of changing a light bulb and what you were really talking about, really, were union rules. You were talking around that, essentially.
Tavis: What’s, again, your take on how the unions have been impacted by what’s happened to Detroit over the past few years, and whether or not there’s been – my language, not yours – irreparable damage done to unions in Detroit.
Ingrassia: Well, I’m not sure if there’s been irreparable damage done to unions by the bailout of the car companies. I think unions have been on a long-term decline. For example, the United Auto Workers Union only has about one-third of the membership it had back in 1970, Tavis.
But I think what’s happened here, really, is that there’s been more responsible behavior by management and by the union alike to really forge a more sensible working relationship in the last few years, ever since the bankruptcies of General Motors and Chrysler.
Just one example – a year and a half or so ago several workers at a Chrysler factory went outside during their lunch hour and smoked dope and came back in and started building cars again. They were fired by Chrysler and the union chose not to battle those firings. That’s a big change from the past.
Tavis: Is the worst behind us? I ask that because there are some economists, as you know, concerned now about whether or not the country across the board may be in danger of a double-dip recession. If the economy goes into a double-dip recession, that obviously would have impact on Detroit. So is the worst behind Detroit at this point?
Ingrassia: Well, it would have to get awfully bad before it gets worse than it did in 2008 and 2009 for the Detroit car companies. These companies are poised to be profitable or at least to break even on much, much lower sales volumes than they were four or five years ago. Now that said, I don’t think that there’s going to be clear sailing. I do think the worst has passed in the sense that it’s not going to get as bad as 2008, 2009.
But there’s a lot of trouble going on in Europe, as you know, with the Eurozone crisis, and is the European currency going to stay together, the euro. All that uncertainty has a big impact on the American economy, including on Detroit. General Motors and Ford have huge businesses in Europe, and Chrysler is joined to the hip with Fiat. Fiat, of course, is a European company.
Tavis: I don’t know that you’ve been writing about this, and so I may be asking a question out of school, but let me ask anyway, and that is your sense of how the industry is starting to rebound, but at least as I’ve read, the signs for the city of Detroit and the people there.
Obviously, this industry is made up of people. These are everyday Americans who go to work. Many of them have lost their jobs. Any read on how this rebound in the industry is impacting the residents of the city.
Ingrassia: Well, the city’s being left behind in this rebound of the industry, frankly, but look, I’m not sure it’s the industry’s fault. I don’t mean to imply that. In fact, I don’t think it’s at all the industry’s fault. Detroit has suffered from decades of financial and civic mismanagement.
You had the past major in jail, you had the past city council chairman in jail. You have a lot of really bad stuff that’s gone on. The schools have been a failure. A couple years ago, when a very wealthy individual wanted to donate, just give, $200 million to the school system to start charter schools, the teachers unions and the school boards there vetoed it.
So I think that Detroit has had some real problems and I think it’s going to be a while before the city of Detroit can break out of these problems. The problems, frankly, are not unlike those in Greece. It’s a city that’s been sort of living on largesse of other units of government, and it’s really got to basically get on a self-sustaining economic basis.
Now, that being said, there is some hope. In the downtown area there’s a small movement of 20-somethings that are moving into Detroit, professional people. There’s a few companies that are downtown. So it’s not without hope, but I’m just saying it’s got to be a fundamental change. I think Mayor Bing, Dave Bing, the current mayor, has really got his heart in the right place on this.
Tavis: We will see what happens to the city of Detroit in the coming days. I hope that that city, as we all do, will experience a renaissance as the auto industry is starting to rebound in the city of Detroit.
Tavis: So inside this text, “Engines of Change,” 15 cars in the book that you talk about specifically, I referenced earlier the Toyota Prius made your list. Tell me what you are trying to get us to understand about these 15 cars and how these cars made the cut.
Ingrassia: I was trying to take automobiles as a lens through which to view the ebbs and flows of American culture, if you will, Tavis. If you step back away from cars, American culture is this sort of longstanding tug-of-war between the practical, the pretentious, the ordinary and the ostentatious.
All those swings in our national psyche are reflected through these 15 cars. For example, the first two cars in the book, the Model T Ford, introduced in 1908, was a very practical car. Henry Ford – it was the first people’s car. Henry Ford’s favorite joke was about the farmer that wanted to be buried in his Model T Ford because the car got him out of every hole he’d ever been in. (Laughter)
That sort of said it all. The Model T Ford could go anywhere, but it wasn’t stylish. So it had a great run for 20 years. By the early ’20s you could buy it for as low as $260. It led to the moving assembly line and the $5 day.
But after 20 years, people wanted style, a little sex appeal in their cars, and the Roaring ’20s came along. 1927 the Model T is discontinued and GM introduces this brand to go along with Cadillac called the LaSalle. The LaSalle was the first yuppie car, the first mass-market designer car done by Harley Earl.
If you remember the old introduction to the “All in the Family” show, the sitcom on TV in the ’70s, the fourth line was, “Gee, our old LaSalle ran great.” That’s what Archie and Edith Bunker sang. The LaSalle was that car.
So it was sort of this yin and yang, and that continues. If you go into the ’50s you have the Chevrolet Corvette, introduced in 1953, the same year that Hugh Hefner started “Playboy” magazine, that Elvis started recording music, and you had this whole generation of Americans that had grown up knowing Depression and then war.
The war was finally over, the Korean War ended in 1953, and this whole generation of Americans wanted to let loose a bit. Later in the decade, you have the ’59 Cadillacs with the biggest tailfins ever, and they were originally, believe it or not, sold as safety devices.
I was astonished to find out, going through the old sales brochures, they were called “graceful directional stabilizers.” (Laughter) I know, you couldn’t make that up, could you, really?
Tavis: Yeah. (Laughs)
Ingrassia: So again, that’s the really pretentious thing. Then as the Cadillac tailfins are reaching their peak we swing back to the practical with the Volkswagen Beetle and the Microbus, and it’s remarkable. You have these cars starting in Germany in the pre-World War II era, they were Hitler’s cars, sponsored by the Fuhrer, and in the post-war era, in the ’60s, they became the hippie icons.
You move further on and you have the Mustang, which really captured the youth era of the ’60s, the whole Kennedy thing, and later on in the decade you have the Pontiac GTO, John DeLorean’s car, which was the bad-boy car. So the early ’60s were sort of the good part of the decade. They were all about civil rights; they were all about the Beatles and all about the Mustang.
Then came the darker part of the ’60s. You had urban riots, you had the Rolling Stones as opposed to the Beatles, and you had the Pontiac GTO, the whole muscle car growling thing as opposed to the fun and free-spirited Mustang. So all these ebbs and flows continue throughout our culture, even to the present day.
Tavis: I’ll close on that note, the present day. So the Prius is the most current car to make the list. What does that say, the hybrid nature of the Prius, what’s it say about our future where cars are concerned.
Ingrassia: Well, I think it shows we’re very adaptable, and look, the Prius, in a way, is a reaction to the gas-guzzling SUVs that are also in the book, because the whole Jeep thing is very much a part of the American automotive saga and journey.
But one of my favorite stories about the Prius is in 2007 a guy was arrested on the freeway in the Bay Area going more than 100 miles an hour in his Prius. It came to the attention of the newspaper reporters because this guy was Steve Wozniak, the co-founder of Apple computer.
They shot him an email and said, “Was it true you were going 105 in your Prius,” and he said, “Not true – 104.” (Laughter) Then all this dialogue goes back and forth. I said to him, “What do you think of the Prius? How did it handle going 104 miles an hour,” and Steve Wozniak shot back this email that said, “You know, it wasn’t bad. It was kind of like my Hummer.”
So here the guy has a Hummer and a Prius in the same garage – go figure that one out. He’s probably got a Mac and PC, too.
Tavis: (Laughter) The new book from Paul Ingrassia is called “Engines of Change: A History of the American Dream in 15 Cars.” Paul, thanks for your work. Good to have you back on the program.
Ingrassia: Well thank you, Tavis, always a pleasure.
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