1 00:00:04,400 --> 00:00:07,800 Speaker 1: Welcome to tech Stuff, a production from I Heart Radio. 2 00:00:12,119 --> 00:00:14,960 Speaker 1: He there, and welcome to tech Stuff. I'm your host, 3 00:00:15,160 --> 00:00:18,479 Speaker 1: Jonathan Strickland. I'm an executive producer with iHeart Radio and 4 00:00:18,480 --> 00:00:22,319 Speaker 1: I love all things tech. And this is Part three, 5 00:00:23,160 --> 00:00:26,520 Speaker 1: the part three and final parts so far of my 6 00:00:26,640 --> 00:00:29,920 Speaker 1: series about General Motors. So if you're just tuning in, 7 00:00:30,160 --> 00:00:33,160 Speaker 1: you might want to seek out the first two episodes 8 00:00:33,240 --> 00:00:36,280 Speaker 1: in this series that published over the last two weeks. 9 00:00:36,520 --> 00:00:40,280 Speaker 1: In those episodes, I explain how William C. Durant started 10 00:00:40,440 --> 00:00:44,640 Speaker 1: General Motors by first buying Buick, then creating a holding 11 00:00:44,680 --> 00:00:48,120 Speaker 1: company called General Motors, and then by buying up a 12 00:00:48,120 --> 00:00:51,959 Speaker 1: whole bunch of other car companies like Oldsmobile and Cadillac, 13 00:00:52,240 --> 00:00:55,200 Speaker 1: as well as other companies that specialized in making various 14 00:00:55,280 --> 00:00:58,160 Speaker 1: parts that were used in cars. I also talked about 15 00:00:58,160 --> 00:01:01,120 Speaker 1: how Durant's investors kicked him out of the company for 16 00:01:01,160 --> 00:01:04,360 Speaker 1: accruing debt, and how Durant was able to buy his 17 00:01:04,440 --> 00:01:07,479 Speaker 1: way back into the company, and then how he got 18 00:01:07,560 --> 00:01:11,759 Speaker 1: kicked out of it again. Then I talked about Durant's successor, 19 00:01:12,080 --> 00:01:16,080 Speaker 1: Alfred Sloan, who was skilled in reducing costs and increasing 20 00:01:16,080 --> 00:01:21,160 Speaker 1: efficiency and maximizing profits, but was very much not interested 21 00:01:21,200 --> 00:01:25,120 Speaker 1: in stuff like, you know, worker conditions and compensation. I 22 00:01:25,160 --> 00:01:28,360 Speaker 1: also talked about gms controversial activities leading up to World 23 00:01:28,360 --> 00:01:31,360 Speaker 1: War Two, and how the company appeared to play at 24 00:01:31,400 --> 00:01:34,560 Speaker 1: least some part in helping Hitler's war machine get started 25 00:01:34,600 --> 00:01:38,319 Speaker 1: in Germany before doing the same thing in the United States. 26 00:01:38,560 --> 00:01:42,080 Speaker 1: So today we're going to pick up post World War Two. 27 00:01:42,240 --> 00:01:44,959 Speaker 1: For the most part, we're gonna do some backtracking. I 28 00:01:45,000 --> 00:01:49,000 Speaker 1: apologize for that. It's just it's a complicated story. Anyway. 29 00:01:49,080 --> 00:01:52,560 Speaker 1: While Sloan definitely had some qualities that I personally find 30 00:01:52,800 --> 00:01:56,480 Speaker 1: pretty distasteful, there was no denying that he was brilliant 31 00:01:56,600 --> 00:02:00,600 Speaker 1: at managing a company. Sloan had organized General Motors not 32 00:02:00,720 --> 00:02:04,280 Speaker 1: by function, so it wasn't like it was organized by 33 00:02:04,320 --> 00:02:07,840 Speaker 1: sales and then marketing and then manufacturing across all the 34 00:02:07,880 --> 00:02:11,400 Speaker 1: different brands. Instead, he organized it by division, and so 35 00:02:11,480 --> 00:02:15,680 Speaker 1: each division would oversee a specific brand of cars. So 36 00:02:15,919 --> 00:02:18,919 Speaker 1: the Buick line had its own sales department, its own 37 00:02:18,919 --> 00:02:22,639 Speaker 1: marketing department, it's own manufacturing departments, so on, and Cadillac 38 00:02:22,720 --> 00:02:26,400 Speaker 1: was the same in Pontiac and Oldsmobile, etcetera. So each 39 00:02:26,440 --> 00:02:29,400 Speaker 1: division had its own general manager, who was responsible for 40 00:02:29,480 --> 00:02:34,000 Speaker 1: keeping down costs and maximizing profits, and Sloan essentially created 41 00:02:34,120 --> 00:02:38,839 Speaker 1: the model that many, if not most, modern big industrial 42 00:02:38,919 --> 00:02:43,000 Speaker 1: corporations followed today. Much of the design he brought over 43 00:02:43,120 --> 00:02:45,640 Speaker 1: from DuPont. He had kind of picked that up from 44 00:02:45,760 --> 00:02:49,960 Speaker 1: DuPont's businesses, but he added his own elements to it 45 00:02:50,040 --> 00:02:52,480 Speaker 1: as well. And as such, in business, there are a 46 00:02:52,560 --> 00:02:57,040 Speaker 1: lot of people who study Sloan's you know, leadership strategy 47 00:02:57,080 --> 00:03:01,880 Speaker 1: and organizational strategy. In fact, if you remove people from 48 00:03:01,960 --> 00:03:06,440 Speaker 1: the equation, if you forget that people exist, then Sloan's 49 00:03:06,480 --> 00:03:09,600 Speaker 1: models are really effective. It's kind of like looking at 50 00:03:09,600 --> 00:03:12,760 Speaker 1: a logic puzzle where you need to reduce one component 51 00:03:13,120 --> 00:03:15,799 Speaker 1: in this case that would be you know, loss or cost, 52 00:03:16,480 --> 00:03:20,359 Speaker 1: and maximize another component that would be profit. But trouble 53 00:03:20,440 --> 00:03:22,760 Speaker 1: starts to pop up when you happen to think of 54 00:03:22,800 --> 00:03:26,760 Speaker 1: things like salaries as part of your costs and people 55 00:03:27,000 --> 00:03:31,280 Speaker 1: as assets. That kind of thinking where you have removed 56 00:03:31,280 --> 00:03:35,480 Speaker 1: yourself from thinking about the human condition. Uh, that doesn't 57 00:03:35,480 --> 00:03:37,920 Speaker 1: always end well. It tends to lead to things like 58 00:03:38,040 --> 00:03:42,040 Speaker 1: unionization and strikes as people say, hey, we aren't just 59 00:03:42,120 --> 00:03:45,360 Speaker 1: numbers on a spreadsheet now. General motors certainly found this 60 00:03:45,440 --> 00:03:47,600 Speaker 1: to be true. And while the company didn't employ the 61 00:03:47,640 --> 00:03:52,320 Speaker 1: same violent tactics that say Ford did, the disputes with 62 00:03:52,440 --> 00:03:56,960 Speaker 1: organized workers were pretty dramatic. But let's push forward, and 63 00:03:57,000 --> 00:03:59,320 Speaker 1: that means having to go back a bit. See One 64 00:03:59,360 --> 00:04:02,840 Speaker 1: of the really important people in General Motors history whom 65 00:04:02,880 --> 00:04:06,760 Speaker 1: I have not mentioned yet is Harley Earl, a professional designer. 66 00:04:07,120 --> 00:04:10,960 Speaker 1: He was born in eighteen ninety three in Hollywood, California. 67 00:04:11,400 --> 00:04:15,400 Speaker 1: His father, Jacob W. Earl, was a coach builder in 68 00:04:15,440 --> 00:04:19,160 Speaker 1: the nineteenth century, and he owned a business called fittingly 69 00:04:19,320 --> 00:04:23,120 Speaker 1: enough Earl Coach Works. Oh And while Harley would call 70 00:04:23,240 --> 00:04:27,120 Speaker 1: California home, Jacob was actually from somewhere else. He was 71 00:04:27,200 --> 00:04:31,800 Speaker 1: from Cadillac, Michigan. Because when we talk about automotive efforts 72 00:04:31,800 --> 00:04:35,000 Speaker 1: in the United States, it always comes back to Michigan, 73 00:04:35,440 --> 00:04:38,680 Speaker 1: and Jacob's son, Harley, would be a huge influence on 74 00:04:38,760 --> 00:04:43,720 Speaker 1: Cadillac's as well as Michigan and other parts of General 75 00:04:43,760 --> 00:04:46,400 Speaker 1: Motors as well. So after the turn of the century, 76 00:04:46,720 --> 00:04:49,599 Speaker 1: Jacob began to expand his business a little bit. While 77 00:04:49,640 --> 00:04:52,839 Speaker 1: he had started out repairing and building horse drawn coaches, 78 00:04:53,279 --> 00:04:56,760 Speaker 1: he branched out by working on early automobiles and it 79 00:04:56,839 --> 00:04:59,479 Speaker 1: was clear to him that the car was going to 80 00:04:59,520 --> 00:05:03,080 Speaker 1: replace the older forms of transportation. So with that in mind, 81 00:05:03,560 --> 00:05:09,120 Speaker 1: Jacob founded Earle Automotive Works, a custom shop in Hollywood, California, 82 00:05:09,160 --> 00:05:13,200 Speaker 1: where the main customers were producers and movie stars and studios. 83 00:05:13,440 --> 00:05:16,280 Speaker 1: In fact, a lot of of the company's early customers 84 00:05:16,279 --> 00:05:20,120 Speaker 1: were producers who needed specialty vehicles for the motion pictures, 85 00:05:20,160 --> 00:05:25,120 Speaker 1: like horse drawn vehicles, like like like Roman chariots. So 86 00:05:25,160 --> 00:05:28,520 Speaker 1: there's nothing like really getting into the early automotive industry 87 00:05:28,520 --> 00:05:32,520 Speaker 1: and still having to put aside time to design, you know, 88 00:05:32,720 --> 00:05:36,120 Speaker 1: a chariot or two. Harley Earl would work in his 89 00:05:36,240 --> 00:05:39,360 Speaker 1: father's shop after school, where he got hands on experience 90 00:05:39,520 --> 00:05:42,880 Speaker 1: learning about mechanical systems. But he was also a keen 91 00:05:42,960 --> 00:05:47,919 Speaker 1: academic student and he attended Stanford University. Didn't complete it, 92 00:05:48,080 --> 00:05:51,279 Speaker 1: but he went there and he had a major in engineering. 93 00:05:51,640 --> 00:05:53,760 Speaker 1: He also would occasionally get into a bit of trouble 94 00:05:53,920 --> 00:05:57,040 Speaker 1: by apparently borrowing cars as dad had been working on, 95 00:05:57,520 --> 00:06:00,680 Speaker 1: and then racing those cars without his dad knowledge, and 96 00:06:00,720 --> 00:06:04,080 Speaker 1: frequently winning. There's a story that goes that his dad 97 00:06:04,120 --> 00:06:07,880 Speaker 1: found out about this after reading an article in a 98 00:06:07,920 --> 00:06:14,160 Speaker 1: local newspaper that detailed Harley Earl's victorious run with a 99 00:06:14,200 --> 00:06:17,080 Speaker 1: car that most certainly did not belong to Harley Earl. 100 00:06:17,880 --> 00:06:22,360 Speaker 1: By eighteen, Earl's automotive companies business was really booming, and 101 00:06:22,440 --> 00:06:25,159 Speaker 1: Harley Earl decided to drop out of college in order 102 00:06:25,200 --> 00:06:27,720 Speaker 1: to work at the shop full time. He became known 103 00:06:27,760 --> 00:06:31,400 Speaker 1: for working on and designing custom made car bodies that 104 00:06:31,520 --> 00:06:34,760 Speaker 1: really stood out, particularly in a world where the model 105 00:06:34,839 --> 00:06:37,920 Speaker 1: t Ford had created a sort of uniformity in the 106 00:06:37,960 --> 00:06:42,480 Speaker 1: automotive industry. In nineteen nineteen, a man named Don Lee, 107 00:06:42,839 --> 00:06:46,400 Speaker 1: the owner of the Don Lee Coach and Body Works company, 108 00:06:46,440 --> 00:06:50,240 Speaker 1: acquired the Earl Automotive Company, but he kept Jacob and 109 00:06:50,560 --> 00:06:53,560 Speaker 1: Son in charge of it. And now I suddenly want 110 00:06:53,600 --> 00:06:57,159 Speaker 1: to sing Andrew Lloyd Weber lyrics for Jacob and Son. 111 00:06:57,320 --> 00:07:01,480 Speaker 1: But anyway, Harley Earl became the chief designer for this 112 00:07:01,560 --> 00:07:05,159 Speaker 1: branch of Lee's company, and Lee was the leading distributor 113 00:07:05,360 --> 00:07:08,880 Speaker 1: of General Motors Cadillac line on the West Coast. So 114 00:07:08,960 --> 00:07:11,880 Speaker 1: by the mid nineteen twenties, Harley Earl was quite the 115 00:07:11,880 --> 00:07:15,640 Speaker 1: figure in Hollywood. He had made friends with various celebrities 116 00:07:15,640 --> 00:07:18,480 Speaker 1: and studio heads through his work on custom car bodies, 117 00:07:18,880 --> 00:07:23,240 Speaker 1: and he was kind of living the celebrity lifestyle. One 118 00:07:23,280 --> 00:07:26,160 Speaker 1: thing Harley Earl adopted early on that would set him 119 00:07:26,160 --> 00:07:28,880 Speaker 1: apart from other designers is that he would design a 120 00:07:28,920 --> 00:07:31,480 Speaker 1: car body and then he would sculpt his design in 121 00:07:31,600 --> 00:07:34,520 Speaker 1: three dimensions using clay. Now, at this time in car 122 00:07:34,600 --> 00:07:39,360 Speaker 1: design that just wasn't standard operating procedure, but Earl proved that, 123 00:07:39,440 --> 00:07:42,640 Speaker 1: you know, realizing designs and three dimensions really helped him 124 00:07:42,680 --> 00:07:46,000 Speaker 1: create evocative body designs, and no doubt it helped him 125 00:07:46,160 --> 00:07:49,600 Speaker 1: close numerous deals as well when clients got a chance 126 00:07:49,640 --> 00:07:52,560 Speaker 1: to see the model and then imagine themselves tooling down 127 00:07:52,600 --> 00:07:56,480 Speaker 1: Sunset Boulevard and a full sized version. Earl's approach would 128 00:07:56,480 --> 00:07:59,080 Speaker 1: be the one that would see widespread adoption throughout the 129 00:07:59,120 --> 00:08:03,880 Speaker 1: car industry. Moving forward. In nive Larry Fisher, the head 130 00:08:03,960 --> 00:08:07,360 Speaker 1: of the Cadillac division at General Motors, tapped Harley Earl 131 00:08:07,440 --> 00:08:10,800 Speaker 1: to design the companion make to the Cadillac. This one 132 00:08:10,920 --> 00:08:14,960 Speaker 1: was called the Lassalle. So if you remember, GM had 133 00:08:15,000 --> 00:08:18,600 Speaker 1: identified that there were price gaps between their different brands 134 00:08:18,680 --> 00:08:21,960 Speaker 1: that they could target, but they didn't want to make 135 00:08:22,040 --> 00:08:25,640 Speaker 1: certain brands more expensive or other brands less expensive because 136 00:08:25,640 --> 00:08:27,960 Speaker 1: that could change the perception of the brand. So instead 137 00:08:28,280 --> 00:08:32,840 Speaker 1: they introduced companion brands to fill in those gaps. Lisalle 138 00:08:33,320 --> 00:08:38,360 Speaker 1: was the slightly less expensive version of Cadillac, not really version, 139 00:08:38,400 --> 00:08:42,480 Speaker 1: I should say companion to Cadillac. They were distinct. So 140 00:08:42,520 --> 00:08:45,920 Speaker 1: Earl agreed and he created four different Clay models. He 141 00:08:46,000 --> 00:08:49,240 Speaker 1: had a touring car, a sedan, a roadster, and a coupe, 142 00:08:49,720 --> 00:08:53,200 Speaker 1: and Alfred Sloan would approve all four of those models 143 00:08:53,240 --> 00:08:57,640 Speaker 1: for production. In ninety seven, Earl joined General Motors as 144 00:08:57,640 --> 00:09:00,000 Speaker 1: the head of a design division at that time called 145 00:09:00,240 --> 00:09:03,640 Speaker 1: Art and Color. He was one of the earliest, perhaps 146 00:09:03,679 --> 00:09:07,920 Speaker 1: first professional designers to work in the automotive industry. Now, 147 00:09:08,000 --> 00:09:10,480 Speaker 1: I'm not going to go through all the different designs 148 00:09:10,480 --> 00:09:15,160 Speaker 1: that Earl created, because again, that would be an exhaustive podcast. 149 00:09:15,240 --> 00:09:17,480 Speaker 1: Also wouldn't be very effective because I don't know if 150 00:09:17,480 --> 00:09:20,719 Speaker 1: you noticed, but this is an audio podcast, and you 151 00:09:20,720 --> 00:09:23,120 Speaker 1: should really spend your time looking at some pictures of 152 00:09:23,160 --> 00:09:26,600 Speaker 1: cars that Earl had a hand in designing. That would 153 00:09:26,640 --> 00:09:29,280 Speaker 1: be far more effective. I should also point out that 154 00:09:29,720 --> 00:09:33,040 Speaker 1: as his career went on, he spent less time hands 155 00:09:33,080 --> 00:09:37,400 Speaker 1: on designing vehicles and more time overseeing teams of designers 156 00:09:37,400 --> 00:09:40,319 Speaker 1: who were doing that. Although he still had the authority 157 00:09:40,360 --> 00:09:44,760 Speaker 1: to approve or deny any style changes. It's important to 158 00:09:44,800 --> 00:09:47,880 Speaker 1: know that it was these designs that Earl came up 159 00:09:47,880 --> 00:09:51,520 Speaker 1: with that aligned with Alfred Sloan's vision of bringing new 160 00:09:51,600 --> 00:09:55,400 Speaker 1: styles of cars to market year after year, thus creating 161 00:09:55,440 --> 00:09:59,920 Speaker 1: almost a kind of planned obsolescence approach to the auto industry. Now, 162 00:10:00,000 --> 00:10:02,440 Speaker 1: it wasn't that the cars would just poop out after 163 00:10:02,640 --> 00:10:05,680 Speaker 1: a year of operation. They didn't. They were, for the 164 00:10:05,720 --> 00:10:09,920 Speaker 1: most part, reliable machines if you maintain them properly. It 165 00:10:09,960 --> 00:10:13,839 Speaker 1: was more that by creating a signature style that would 166 00:10:13,920 --> 00:10:17,720 Speaker 1: change over time, GM also created an incentive to buy 167 00:10:17,800 --> 00:10:20,680 Speaker 1: new cars, at least for the people who could afford 168 00:10:21,040 --> 00:10:23,800 Speaker 1: to do that kind of thing. You know, cars have 169 00:10:23,840 --> 00:10:26,959 Speaker 1: always been tied to status symbols, and having a car 170 00:10:27,040 --> 00:10:29,760 Speaker 1: with a distinctive modern look as a real sort of 171 00:10:29,840 --> 00:10:33,120 Speaker 1: social cachet to it. Earl ushered in a new era 172 00:10:33,440 --> 00:10:37,640 Speaker 1: in industrial design, creating an approach to integrated design that 173 00:10:37,800 --> 00:10:41,440 Speaker 1: used a single team to work on all aspects of 174 00:10:41,480 --> 00:10:45,320 Speaker 1: a specific product, from the way it looks to how 175 00:10:45,360 --> 00:10:48,960 Speaker 1: it operates and handles, to how it's marketed and priced. 176 00:10:49,440 --> 00:10:52,440 Speaker 1: This unified method meant that everyone was on the same 177 00:10:52,480 --> 00:10:55,080 Speaker 1: page when it came to the project. There was no 178 00:10:55,160 --> 00:10:58,080 Speaker 1: worry about handing this off to a different team and 179 00:10:58,080 --> 00:11:00,520 Speaker 1: then seeing all of your hard work get is handled 180 00:11:00,559 --> 00:11:03,720 Speaker 1: by them. It was Earl who designed features that would 181 00:11:03,800 --> 00:11:07,360 Speaker 1: later become iconic in the automotive world, such as the 182 00:11:07,400 --> 00:11:10,520 Speaker 1: curled tail lights on Cadillacs in the late nineteen forties 183 00:11:10,920 --> 00:11:14,240 Speaker 1: or the fins on Cadillacs not long after. Those were 184 00:11:14,360 --> 00:11:17,960 Speaker 1: from Harley Earl. Earl was also an early pioneer in 185 00:11:18,040 --> 00:11:21,440 Speaker 1: concept cars. So, for those unfamiliar with that term, a 186 00:11:21,520 --> 00:11:25,720 Speaker 1: concept car is a showcase vehicle. It's not intended to 187 00:11:25,800 --> 00:11:28,960 Speaker 1: go into production. It's not meant to be a vehicle 188 00:11:29,000 --> 00:11:32,360 Speaker 1: that the common person could purchase at some point, so 189 00:11:32,400 --> 00:11:34,840 Speaker 1: you should never expect to see a concept car in 190 00:11:35,080 --> 00:11:38,200 Speaker 1: a line in a car dealership, parking lot or anything 191 00:11:38,240 --> 00:11:42,400 Speaker 1: like that. Rather, these cars show off design elements and 192 00:11:42,440 --> 00:11:46,720 Speaker 1: technologies that might find their way into later production vehicles. 193 00:11:46,840 --> 00:11:50,400 Speaker 1: And often these concept cars wouldn't even be street legal 194 00:11:50,600 --> 00:11:54,920 Speaker 1: as designed, so it's meant to show possibility, but not 195 00:11:55,360 --> 00:11:57,600 Speaker 1: you know, a guarantee that this is what you're going 196 00:11:57,640 --> 00:12:00,720 Speaker 1: to see in the dealerships the following year. It's a 197 00:12:00,880 --> 00:12:03,160 Speaker 1: way to get ideas off the ground and get the 198 00:12:03,160 --> 00:12:06,520 Speaker 1: automotive world excited about those ideas. So one of the 199 00:12:06,559 --> 00:12:11,080 Speaker 1: earliest concept cars, in fact, uh it's often cited as 200 00:12:11,120 --> 00:12:16,800 Speaker 1: the first concept car was the Buick Wide Job from 201 00:12:16,920 --> 00:12:20,199 Speaker 1: nineteen thirty eight. It was one that Hurly Earl worked on. 202 00:12:20,679 --> 00:12:23,679 Speaker 1: The Wide Job was a two door convertible, had some 203 00:12:23,679 --> 00:12:27,040 Speaker 1: pretty cool features like wrap around bumpers, and even had 204 00:12:27,040 --> 00:12:30,600 Speaker 1: electric windows, which was pretty novel for the time, and 205 00:12:30,640 --> 00:12:32,840 Speaker 1: many of the cars features would find their way into 206 00:12:32,880 --> 00:12:35,960 Speaker 1: future production cars. As for the Wide Job itself, Earle 207 00:12:36,200 --> 00:12:39,640 Speaker 1: would drive it around for many many years. Uh it 208 00:12:39,760 --> 00:12:42,760 Speaker 1: belongs in the museum and now it's in one. It 209 00:12:42,840 --> 00:12:45,480 Speaker 1: is not an exaggeration to say that the big reason 210 00:12:45,559 --> 00:12:48,079 Speaker 1: GM was able to overtake and hold onto the number 211 00:12:48,120 --> 00:12:50,760 Speaker 1: one car company in the United States was in large 212 00:12:50,800 --> 00:12:54,480 Speaker 1: part thanks to Earl's design team. By nineteen forty, that 213 00:12:54,559 --> 00:12:57,520 Speaker 1: team had grown large enough to warrant a new facility, 214 00:12:57,559 --> 00:13:01,320 Speaker 1: But World War Two changed things dramatically. GM would initially 215 00:13:01,360 --> 00:13:04,560 Speaker 1: resist the push to switch over to wartime production, but 216 00:13:04,640 --> 00:13:08,640 Speaker 1: once it did, nearly all of the company's manufacturing capabilities 217 00:13:08,720 --> 00:13:12,960 Speaker 1: were redirected to building vehicles, engines, and other material for 218 00:13:13,040 --> 00:13:16,080 Speaker 1: the US war effort, at least in this country. To 219 00:13:16,120 --> 00:13:20,240 Speaker 1: hear about how GM's subsidiary Opal played a part producing 220 00:13:20,280 --> 00:13:23,720 Speaker 1: material for the Access Powers, you should listen to the 221 00:13:23,840 --> 00:13:27,560 Speaker 1: previous General Motors episode. Harley Earl made waves in the 222 00:13:27,600 --> 00:13:30,839 Speaker 1: business world in general, and the automotive industry in particular 223 00:13:31,200 --> 00:13:34,520 Speaker 1: when he began hiring women designers starting in the early 224 00:13:34,640 --> 00:13:37,320 Speaker 1: nineteen forties. Not at the time such a thing was 225 00:13:37,440 --> 00:13:40,920 Speaker 1: unheard of, but Earl insisted on it. And you could 226 00:13:40,920 --> 00:13:43,559 Speaker 1: also make at least some argument that a little bit 227 00:13:43,559 --> 00:13:45,840 Speaker 1: of this might have been by necessity, because a lot 228 00:13:45,920 --> 00:13:48,840 Speaker 1: of male engineers were drafted to support the United States 229 00:13:48,880 --> 00:13:52,160 Speaker 1: in World War Two. But Earl's efforts to bring women 230 00:13:52,320 --> 00:13:55,440 Speaker 1: onto teams didn't end with World War Two, and he 231 00:13:55,520 --> 00:13:58,760 Speaker 1: even formed an all women team of designers to work 232 00:13:58,760 --> 00:14:02,960 Speaker 1: on vehicles in the night teen fifties, which was so 233 00:14:03,040 --> 00:14:07,680 Speaker 1: newsworthy that it's embarrassing because it just points out how 234 00:14:08,040 --> 00:14:10,480 Speaker 1: much of a disparity there was between men and women 235 00:14:10,640 --> 00:14:14,360 Speaker 1: in the workplace in the nineteen fifties. He maintained that 236 00:14:14,480 --> 00:14:17,600 Speaker 1: including multiple points of view really helps the best ideas 237 00:14:17,720 --> 00:14:20,280 Speaker 1: rise to the top, which is a philosophy I happen 238 00:14:20,360 --> 00:14:22,480 Speaker 1: to share. It's one of the big reasons that I 239 00:14:22,480 --> 00:14:26,440 Speaker 1: feel inclusion and diversity are great things to embrace, because 240 00:14:26,480 --> 00:14:29,720 Speaker 1: not only does it help address inequities that have existed 241 00:14:29,720 --> 00:14:32,680 Speaker 1: for far too long, but we all benefit when everyone 242 00:14:32,720 --> 00:14:35,320 Speaker 1: gets a chance to contribute. Anyway, let's get back to 243 00:14:35,400 --> 00:14:38,800 Speaker 1: General Motors, because now we're at the point where World 244 00:14:38,840 --> 00:14:41,600 Speaker 1: War two has ended, so we're caught up now. In 245 00:14:41,760 --> 00:14:46,080 Speaker 1: nineteen forty six, Alfred P. Sloan stepped down as CEO 246 00:14:46,200 --> 00:14:49,120 Speaker 1: of General Motors. He was, however, still chairman of the 247 00:14:49,160 --> 00:14:52,200 Speaker 1: board and he would remain so until nineteen fifty six, 248 00:14:52,400 --> 00:14:55,480 Speaker 1: and even then he was elected honorary chairman, which was 249 00:14:55,520 --> 00:14:58,120 Speaker 1: a position he held until he passed away a decade 250 00:14:58,240 --> 00:15:02,680 Speaker 1: later at the age of ninety. In ninety seven, General 251 00:15:02,720 --> 00:15:06,960 Speaker 1: Motors opened a new automobile factory in Van Nuys, California. Now, 252 00:15:06,960 --> 00:15:10,320 Speaker 1: originally this plant would be in charge of manufacturing trucks 253 00:15:10,400 --> 00:15:14,040 Speaker 1: under the Chevrolet brand, but later it would produce iconic 254 00:15:14,200 --> 00:15:18,440 Speaker 1: cars like the Camaro, the ol Camino, the Firebird, the 255 00:15:18,480 --> 00:15:22,160 Speaker 1: Monte Carlo, and more. The plant remained in operation for 256 00:15:22,200 --> 00:15:25,440 Speaker 1: about forty years, but GM would shut it down in 257 00:15:25,600 --> 00:15:30,000 Speaker 1: nineteen two. Now, I think we could mark nineteen fifty 258 00:15:30,080 --> 00:15:33,640 Speaker 1: as sort of being the beginning of the Golden Age 259 00:15:33,680 --> 00:15:37,800 Speaker 1: of automobiles, or at least the automobile industry. Cars represented 260 00:15:37,840 --> 00:15:41,600 Speaker 1: the platform upon which most of the cutting edge technology sat. 261 00:15:42,200 --> 00:15:45,440 Speaker 1: That's where you would see cool tech was in cars. 262 00:15:45,520 --> 00:15:49,280 Speaker 1: That was like the number one spot. Detroit, Michigan was 263 00:15:49,320 --> 00:15:52,760 Speaker 1: the technological center of the United States at this point 264 00:15:52,760 --> 00:15:55,440 Speaker 1: in history, and it would remain so for a couple 265 00:15:55,480 --> 00:15:58,400 Speaker 1: of decades until some eggheads out in California began to 266 00:15:58,440 --> 00:16:03,000 Speaker 1: create what would become Silicon Valley. In nineteen fifty, Michigan 267 00:16:03,160 --> 00:16:06,640 Speaker 1: had more millionaires in it than any other state in 268 00:16:06,680 --> 00:16:11,040 Speaker 1: the United States, mostly thanks to the automotive industry. Cars 269 00:16:11,280 --> 00:16:14,400 Speaker 1: were king. When we come back, we'll learn about what 270 00:16:14,560 --> 00:16:17,520 Speaker 1: happened to GM over the following decades, with a few 271 00:16:17,520 --> 00:16:21,760 Speaker 1: shoutouts to some specific makes and models. But first let's 272 00:16:21,800 --> 00:16:32,680 Speaker 1: take a quick break. We're back and heading into the 273 00:16:32,760 --> 00:16:36,680 Speaker 1: nineteen fifties. GM was one of the largest employers in 274 00:16:36,720 --> 00:16:39,600 Speaker 1: the world at that time. It was certainly the biggest 275 00:16:39,640 --> 00:16:43,040 Speaker 1: employer in the United States. It had more than five 276 00:16:43,200 --> 00:16:48,440 Speaker 1: hundred seventy five thousand employees in nineteen fifty five. That 277 00:16:48,480 --> 00:16:52,760 Speaker 1: meant it employed twice as many people as the next 278 00:16:52,960 --> 00:16:57,320 Speaker 1: largest company in the US, which was US Steel. The 279 00:16:57,400 --> 00:17:00,400 Speaker 1: next car company on the list that year would top 280 00:17:00,400 --> 00:17:03,080 Speaker 1: out at number four, That was Chrysler, with a hundred 281 00:17:03,200 --> 00:17:08,879 Speaker 1: sixty seven thousand or so employees. GM was dominating. In fact, 282 00:17:08,920 --> 00:17:11,960 Speaker 1: in nineteen fifty five, the company reported that after taxes, 283 00:17:12,160 --> 00:17:14,160 Speaker 1: it would take in a profit of more than one 284 00:17:14,440 --> 00:17:17,639 Speaker 1: billion dollars, the first U S company to hit a 285 00:17:17,800 --> 00:17:21,280 Speaker 1: billion dollar profit in a year. They would also become 286 00:17:21,320 --> 00:17:23,960 Speaker 1: the first company to have to pay a billion dollars 287 00:17:24,000 --> 00:17:27,240 Speaker 1: in taxes, which will be an interesting fact to reflect 288 00:17:27,240 --> 00:17:30,000 Speaker 1: on when we get to the early two thousands and beyond. 289 00:17:30,840 --> 00:17:34,679 Speaker 1: That's foreshadowing something else that loomed over GM in the 290 00:17:34,720 --> 00:17:39,639 Speaker 1: nineteen fifties was an escalating legal battle. In nineteen forty nine, 291 00:17:39,680 --> 00:17:43,320 Speaker 1: the federal government sued the E. I. DuPont, de Nemour 292 00:17:43,520 --> 00:17:47,879 Speaker 1: and Company. Now you might remember way back in part 293 00:17:47,920 --> 00:17:51,400 Speaker 1: one of this series that the DuPont family was largely 294 00:17:51,440 --> 00:17:56,280 Speaker 1: responsible for helping GM founder William Durant return to GM, 295 00:17:56,320 --> 00:17:59,440 Speaker 1: only to subsequently forced Durant out once it appeared that 296 00:17:59,520 --> 00:18:03,520 Speaker 1: Durant was going to continue accruing debt well the DuPonts 297 00:18:03,560 --> 00:18:07,880 Speaker 1: remained major investors in GM, and by nineteen forty nine 298 00:18:07,880 --> 00:18:10,879 Speaker 1: they owned around twenty three percent of the company. The 299 00:18:10,960 --> 00:18:14,600 Speaker 1: US government alleged that the DuPonts were using this ownership 300 00:18:14,640 --> 00:18:18,480 Speaker 1: to leverage GM to purchase paint and fabric primarily from 301 00:18:18,600 --> 00:18:22,400 Speaker 1: DuPont owned businesses, meaning that the DuPonts were making use 302 00:18:22,480 --> 00:18:26,560 Speaker 1: of anti competitive practices. In fact, by nineteen forty seven, 303 00:18:26,600 --> 00:18:30,320 Speaker 1: nearly seventy percent of all the paint GM purchased was 304 00:18:30,359 --> 00:18:34,160 Speaker 1: from DuPont and nearly of all the fabric was from 305 00:18:34,240 --> 00:18:37,480 Speaker 1: DuPont as well. The lawsuit in nineteen forty eight was 306 00:18:37,520 --> 00:18:41,960 Speaker 1: a big publicized deal. Harry Truman's administration had filed the suit, 307 00:18:42,040 --> 00:18:44,679 Speaker 1: and nineteen forty eight was an election year in the US, 308 00:18:45,040 --> 00:18:50,080 Speaker 1: so Truman's platform included a strong stance against monopolies and trusts, 309 00:18:50,119 --> 00:18:53,720 Speaker 1: and GM and DuPont were kind of in his sights. Now, 310 00:18:53,720 --> 00:18:57,000 Speaker 1: The initial case failed to bring out any indictments, but 311 00:18:57,080 --> 00:19:01,040 Speaker 1: then the US filed a civil case against DuPont in 312 00:19:01,160 --> 00:19:04,399 Speaker 1: nineteen forty nine, and GM was a co defendant in 313 00:19:04,440 --> 00:19:08,000 Speaker 1: that case. That case didn't actually go to trial until 314 00:19:08,080 --> 00:19:12,800 Speaker 1: nineteen fifty two because Justice moves at a certain pace 315 00:19:13,400 --> 00:19:16,960 Speaker 1: here in the US. The trial stretched on for more 316 00:19:17,000 --> 00:19:20,600 Speaker 1: than a year. It ended in December nineteen fifty three, 317 00:19:20,680 --> 00:19:23,800 Speaker 1: and it wasn't until the following year when Judge Walter 318 00:19:24,000 --> 00:19:27,720 Speaker 1: Labi ruled in favor of the defendants in favor of 319 00:19:27,840 --> 00:19:31,600 Speaker 1: DuPont and GM, but the US government appealed this ruling 320 00:19:31,640 --> 00:19:34,440 Speaker 1: to the Supreme Court. By this time we're talking about 321 00:19:34,520 --> 00:19:38,880 Speaker 1: the Eisenhower administration. That Truman administration has long gone by now, 322 00:19:39,480 --> 00:19:42,719 Speaker 1: and over two days in nineteen fifty six, both sides 323 00:19:42,760 --> 00:19:45,280 Speaker 1: got to argue their case in front of the Supreme Court, 324 00:19:45,600 --> 00:19:48,359 Speaker 1: and in nineteen fifty seven the court ruled in favor 325 00:19:48,480 --> 00:19:52,160 Speaker 1: of the US government, so they reversed the decision. At 326 00:19:52,200 --> 00:19:55,639 Speaker 1: that stage, this case went back down to the district courts, 327 00:19:55,680 --> 00:19:58,080 Speaker 1: which were now tasked with the duty of figuring out 328 00:19:58,440 --> 00:20:02,280 Speaker 1: how were the DuPonts going to extricate themselves from their 329 00:20:02,320 --> 00:20:06,840 Speaker 1: ownership of that of General Motors. This trial happened in 330 00:20:06,920 --> 00:20:11,280 Speaker 1: nineteen fifty nine. Once again we have Judge Labay overseeing 331 00:20:11,320 --> 00:20:14,560 Speaker 1: the case. This included arguments that selling off the large 332 00:20:14,680 --> 00:20:17,480 Speaker 1: number of shares of General Motors could cause the value 333 00:20:17,640 --> 00:20:22,000 Speaker 1: of the company's stocks to plummet, and because GM was 334 00:20:22,040 --> 00:20:25,560 Speaker 1: such a huge employer in the United States, that in 335 00:20:25,600 --> 00:20:29,680 Speaker 1: turn could lead to a general recession and layoffs and 336 00:20:30,480 --> 00:20:34,840 Speaker 1: essentially doomsday. So Labi ruled that the DuPonts wouldn't have 337 00:20:34,920 --> 00:20:37,320 Speaker 1: to get rid of their stake in GM if they 338 00:20:37,320 --> 00:20:41,680 Speaker 1: passed the voting rights for their shares to DuPont shareholders 339 00:20:42,040 --> 00:20:45,800 Speaker 1: and then maintain a greater distance from GMS activities. But 340 00:20:45,960 --> 00:20:48,640 Speaker 1: that wasn't good enough for the US government, which by 341 00:20:48,640 --> 00:20:52,000 Speaker 1: this time was going into another election year, and so 342 00:20:52,200 --> 00:20:55,600 Speaker 1: the US government appealed this decision to the Supreme Court, 343 00:20:56,000 --> 00:20:59,720 Speaker 1: which heard the case again or this new case connected 344 00:20:59,760 --> 00:21:03,240 Speaker 1: to the previous one, and the court determined that, contrary 345 00:21:03,280 --> 00:21:07,520 Speaker 1: to Laby's ruling, DuPont had to be forced to divest 346 00:21:07,840 --> 00:21:11,960 Speaker 1: all GM stocks entirely. Congress, meanwhile, helped ease this a 347 00:21:11,960 --> 00:21:15,080 Speaker 1: little bit by scaling back the tax burden on the 348 00:21:15,119 --> 00:21:18,440 Speaker 1: sale of stocks, which otherwise could have cost the DuPonts 349 00:21:18,480 --> 00:21:22,320 Speaker 1: about a billion dollars just in you know, selling those stocks. 350 00:21:23,119 --> 00:21:27,520 Speaker 1: So the DuPonts divested themselves of that stake gradually in 351 00:21:27,800 --> 00:21:32,399 Speaker 1: various sales that concluded in nineteen sixty five, with the 352 00:21:32,480 --> 00:21:36,680 Speaker 1: final two point three million shares they still owned in GM, 353 00:21:36,720 --> 00:21:39,960 Speaker 1: so from start to finish, this whole process took more 354 00:21:40,160 --> 00:21:44,520 Speaker 1: than fifteen years. Now in those fifteen years, a lot 355 00:21:44,680 --> 00:21:48,159 Speaker 1: was also happening at General Motors. The company introduced the 356 00:21:48,200 --> 00:21:52,159 Speaker 1: Corvette at the Motorama Auto Show in nineteen fifty three. 357 00:21:52,480 --> 00:21:56,920 Speaker 1: This car had fiberglass body panels, which was new, had 358 00:21:56,960 --> 00:22:00,720 Speaker 1: a six cylinder engine under the hood, which is not 359 00:22:00,880 --> 00:22:03,680 Speaker 1: as powerful as a lot of people were hoping for. 360 00:22:04,240 --> 00:22:07,960 Speaker 1: The original model was at two speed automatic transmission, and 361 00:22:08,080 --> 00:22:12,240 Speaker 1: GMS Chevrolet made three hundred of the original Corvettes, all 362 00:22:12,280 --> 00:22:15,639 Speaker 1: of them with white exteriors and red interiors. Out of 363 00:22:15,640 --> 00:22:18,960 Speaker 1: those three hundred, GM was able to sell one three 364 00:22:18,960 --> 00:22:23,520 Speaker 1: of them. The Corvette start wasn't exactly auspicious, but obviously 365 00:22:23,560 --> 00:22:27,600 Speaker 1: the company didn't just abandon the idea. Unlike the experience 366 00:22:27,640 --> 00:22:30,919 Speaker 1: of driving a later Corvette, it took a while for 367 00:22:31,000 --> 00:22:33,720 Speaker 1: the actual brand to get up to speed, and to 368 00:22:33,760 --> 00:22:36,320 Speaker 1: be fair, the old six cylinder Corvettes took about eleven 369 00:22:36,359 --> 00:22:39,720 Speaker 1: seconds to accelerate to six emiles per hour around seven 370 00:22:39,800 --> 00:22:43,879 Speaker 1: kilometers per hour. The following year, GM moved production to 371 00:22:43,920 --> 00:22:47,919 Speaker 1: a manufacturing facility in Missouri with the capacity to produce 372 00:22:47,960 --> 00:22:50,840 Speaker 1: ten thousand vehicles per year, but due to low demand, 373 00:22:51,040 --> 00:22:54,280 Speaker 1: it only produced around three thousand, six hundred cars in 374 00:22:54,400 --> 00:22:58,600 Speaker 1: nineteen fifty four. Then GM switched gears, so to speak, 375 00:22:58,960 --> 00:23:01,760 Speaker 1: in nineteen fifty five five, and the new Corvettes would 376 00:23:01,800 --> 00:23:05,640 Speaker 1: have V eight engines, which boosted the car's horsepower considerably 377 00:23:06,000 --> 00:23:08,439 Speaker 1: and also the performance so it drove more like a 378 00:23:08,480 --> 00:23:11,760 Speaker 1: true sports car. And the nineteen fifty six model would 379 00:23:11,760 --> 00:23:14,720 Speaker 1: have a newly designed front end and sides that had 380 00:23:14,760 --> 00:23:17,960 Speaker 1: scalped curves, and it gave the Corvette a really sleek 381 00:23:18,040 --> 00:23:21,560 Speaker 1: and futuristic kind of appearance. And each subsequent year the 382 00:23:21,600 --> 00:23:25,160 Speaker 1: car would get redesigns, and frequently those redesigns also included 383 00:23:25,200 --> 00:23:29,280 Speaker 1: ways to boost the car's horsepower, which transformed the Corvette 384 00:23:29,320 --> 00:23:32,560 Speaker 1: from a sub standard sports car to a decent sports 385 00:23:32,560 --> 00:23:35,080 Speaker 1: car to one of the premier sports car lines in 386 00:23:35,119 --> 00:23:39,399 Speaker 1: the United States in general, the nineteen fifties saw GM 387 00:23:39,480 --> 00:23:42,560 Speaker 1: introduce a lot of daring and iconic designs thanks to 388 00:23:42,720 --> 00:23:46,080 Speaker 1: Harley Earl's teams. Those tail fins we associate with the 389 00:23:46,160 --> 00:23:49,639 Speaker 1: nineteen fifties come from there. In fact, my favorite car 390 00:23:49,760 --> 00:23:53,920 Speaker 1: from GM ever came out during this time period. It's 391 00:23:53,920 --> 00:24:00,159 Speaker 1: the nineteen fifty nine Cadillac Fleetwood Series SEV. This ing 392 00:24:01,000 --> 00:24:05,240 Speaker 1: is an enormous monster of a vehicle. Huge, it's heavy, 393 00:24:05,320 --> 00:24:08,440 Speaker 1: it's got the fins. But the reason why I love 394 00:24:08,520 --> 00:24:12,040 Speaker 1: it is because it happens to be Doc Hopper's car. 395 00:24:12,160 --> 00:24:14,760 Speaker 1: In the Muppet movie. Doc Hopper was the bad guy, 396 00:24:15,160 --> 00:24:18,359 Speaker 1: and I always thought his Cadillac was just the most 397 00:24:18,400 --> 00:24:23,720 Speaker 1: incredible looking car anyway. Harley Earl retired from General Motors 398 00:24:23,760 --> 00:24:25,960 Speaker 1: in nineteen fifty eight when he reached the age of 399 00:24:26,000 --> 00:24:29,639 Speaker 1: sixty five. It was a mandatory retirement, and his successor 400 00:24:30,160 --> 00:24:34,800 Speaker 1: was William or Bill Mitchell. Mitchell had joined Harley's team 401 00:24:34,840 --> 00:24:37,480 Speaker 1: of designers in the nineteen thirties. He had become a 402 00:24:37,520 --> 00:24:40,480 Speaker 1: director level executive in the nineteen fifties and became a 403 00:24:40,600 --> 00:24:43,960 Speaker 1: vice president in charge of all styling at GM in ninety. 404 00:24:44,840 --> 00:24:48,240 Speaker 1: Under Mitchell's guidance, GM began to move a little away 405 00:24:48,320 --> 00:24:51,560 Speaker 1: from the more flashy and ornamental aspects that had become 406 00:24:51,960 --> 00:24:55,760 Speaker 1: part of various car designs under Earl's leadership. Not that 407 00:24:55,920 --> 00:24:59,480 Speaker 1: all the cars produced during his tenure ended up being 408 00:24:59,600 --> 00:25:02,560 Speaker 1: purely utilitarian. I don't want to give you that impression. 409 00:25:02,840 --> 00:25:06,399 Speaker 1: There were some standout flashy cars, like the nineteen sixty 410 00:25:06,480 --> 00:25:09,919 Speaker 1: three Corvette sting Ray, which is quite the profile if 411 00:25:09,920 --> 00:25:13,840 Speaker 1: you ever look it up. The Corvette Stingray three one 412 00:25:13,880 --> 00:25:17,760 Speaker 1: also has a split back windscreen, so the back windshield 413 00:25:17,880 --> 00:25:20,399 Speaker 1: is is split. There's a divider, a metal divider in 414 00:25:20,440 --> 00:25:23,760 Speaker 1: the center um, which looks really cool, but you know, 415 00:25:23,800 --> 00:25:25,800 Speaker 1: it's probably not the most convenient feature if you want 416 00:25:25,800 --> 00:25:29,560 Speaker 1: an unfettered rear view out of your rear view mirror. 417 00:25:30,080 --> 00:25:32,919 Speaker 1: Later models would ditch that split windshield. It would go 418 00:25:32,960 --> 00:25:35,919 Speaker 1: for a single piece wind shield instead. One of the 419 00:25:35,960 --> 00:25:38,840 Speaker 1: things that GM vehicles were built upon was the fact 420 00:25:38,880 --> 00:25:43,520 Speaker 1: that fuel in the fifties and sixties was cheap and plentiful. 421 00:25:43,920 --> 00:25:47,600 Speaker 1: You could have these huge cars that guzzled gas because 422 00:25:48,000 --> 00:25:50,080 Speaker 1: gas was easy to come by and it didn't cost 423 00:25:50,280 --> 00:25:53,280 Speaker 1: very much. And so American car companies were churning out 424 00:25:53,320 --> 00:25:56,399 Speaker 1: these big, inefficient cars through the fifties and sixties and 425 00:25:56,480 --> 00:25:59,639 Speaker 1: into the seventies. And GM was not the only manufacturer 426 00:25:59,680 --> 00:26:02,400 Speaker 1: to do this. It was pretty common across the industry 427 00:26:02,400 --> 00:26:06,000 Speaker 1: in America. Well, that would all change due to a 428 00:26:06,080 --> 00:26:10,600 Speaker 1: massive energy crisis. And to understand that crisis, we have 429 00:26:10,680 --> 00:26:14,120 Speaker 1: to learn about a conflict in nineteen seventy three that 430 00:26:14,320 --> 00:26:17,240 Speaker 1: had several names. It was called the Arab Israeli War 431 00:26:17,359 --> 00:26:20,760 Speaker 1: of October nineteen seventy three. Sometimes it's called the yam 432 00:26:20,840 --> 00:26:24,560 Speaker 1: Kapoor War, and sometimes it's called the Ramadan War. The 433 00:26:24,640 --> 00:26:27,640 Speaker 1: primary nations involved were in Egypt and Syria on one 434 00:26:27,680 --> 00:26:31,159 Speaker 1: side and Israel on the other. But of course the 435 00:26:31,200 --> 00:26:33,879 Speaker 1: allies of these countries were kind of pulled in at 436 00:26:33,960 --> 00:26:37,280 Speaker 1: least at a diplomatic level and a support level, and 437 00:26:37,720 --> 00:26:41,160 Speaker 1: that ended up being pretty intense because those allies included 438 00:26:41,200 --> 00:26:44,920 Speaker 1: the Soviet Union, which was allied with Egypt and Syria, 439 00:26:44,960 --> 00:26:48,200 Speaker 1: and the United States, which was allied with Israel. At 440 00:26:48,240 --> 00:26:51,160 Speaker 1: the heart of the matter was that the Arabic nations 441 00:26:51,320 --> 00:26:55,520 Speaker 1: wanted to have land that Israel had claimed in a 442 00:26:55,600 --> 00:27:00,640 Speaker 1: previous war. Released they wanted Israel to rule enguish those 443 00:27:00,720 --> 00:27:04,879 Speaker 1: territories that it had occupied after a previous war from 444 00:27:04,920 --> 00:27:08,919 Speaker 1: a few years earlier, and Israel declined to acquiesce to 445 00:27:08,960 --> 00:27:13,679 Speaker 1: the request. Now, the war lasted most of that October 446 00:27:13,960 --> 00:27:16,920 Speaker 1: while the United Nations was putting pressure on all parties 447 00:27:16,920 --> 00:27:21,800 Speaker 1: to stop the hostilities. While the countries signed a ceasefire 448 00:27:21,840 --> 00:27:25,600 Speaker 1: agreement in November of that year, tensions remained high. The 449 00:27:25,720 --> 00:27:28,000 Speaker 1: U n sent in a peacekeeping force to kind of 450 00:27:28,000 --> 00:27:31,480 Speaker 1: act as a buffer between Israel and Egypt, and ultimately, 451 00:27:31,560 --> 00:27:34,439 Speaker 1: in nineteen seventy nine, Israel and Egypt came to an 452 00:27:34,440 --> 00:27:39,600 Speaker 1: agreement that saw Israel withdraw from the Sinai Peninsula. Anyway, 453 00:27:40,200 --> 00:27:43,920 Speaker 1: one of the many consequences of these hostilities is that 454 00:27:44,240 --> 00:27:48,600 Speaker 1: the Arabic nations in the Organization of the Petroleum Exporting 455 00:27:48,680 --> 00:27:53,080 Speaker 1: Countries or OPAQUE, decided to penalize countries like the United 456 00:27:53,119 --> 00:27:55,520 Speaker 1: States and much of Western Europe. You know, these were 457 00:27:55,680 --> 00:27:59,879 Speaker 1: parties that had aligned with Israel. The Arab countries voted 458 00:27:59,880 --> 00:28:05,880 Speaker 1: to prohibit exports oil exports to those countries, which plunge 459 00:28:05,960 --> 00:28:09,159 Speaker 1: that part of the world into an oil shortage. This 460 00:28:09,280 --> 00:28:13,479 Speaker 1: coincided with a general market recession crisis and made it, 461 00:28:14,119 --> 00:28:17,480 Speaker 1: let me check my notes here, um, a billion times 462 00:28:17,520 --> 00:28:21,719 Speaker 1: worse for those countries. Now that's hyperbole, it's my hyperbole, 463 00:28:21,880 --> 00:28:24,679 Speaker 1: but you get the point. All of a sudden, it 464 00:28:24,720 --> 00:28:28,679 Speaker 1: became imperative for countries like the United States to change course. 465 00:28:28,920 --> 00:28:32,719 Speaker 1: No longer could the country just burn through oil without reservation. 466 00:28:33,200 --> 00:28:36,119 Speaker 1: Oil was hard to come by there were gas shortages 467 00:28:36,160 --> 00:28:39,440 Speaker 1: across the United States. It was suddenly a very bad 468 00:28:39,520 --> 00:28:43,560 Speaker 1: idea to be in the business of building fuel hungry automobiles. 469 00:28:44,240 --> 00:28:47,720 Speaker 1: As such, companies like GM had to make a hard pivot. 470 00:28:48,080 --> 00:28:51,880 Speaker 1: While OPEC would lift the oil embargo in nineteen four, 471 00:28:52,400 --> 00:28:55,160 Speaker 1: the economic damage had already been done. The value of 472 00:28:55,200 --> 00:28:58,959 Speaker 1: the US dollar was down, oil prices remained really high, 473 00:28:59,240 --> 00:29:02,959 Speaker 1: So while the US could import oil, it was expensive. 474 00:29:03,200 --> 00:29:06,560 Speaker 1: So gone were the days of plentiful and cheap oil 475 00:29:06,720 --> 00:29:09,240 Speaker 1: of the fifties and sixties. This is also when you 476 00:29:09,280 --> 00:29:13,040 Speaker 1: started seeing national security strategists point out that a heavy 477 00:29:13,080 --> 00:29:17,480 Speaker 1: dependence on outside entities for fuel is a pretty enormous 478 00:29:17,600 --> 00:29:23,000 Speaker 1: security flaw, always in hindsight right. A secondary oil crisis 479 00:29:23,000 --> 00:29:26,560 Speaker 1: in nineteen seventy nine really reinforced this problem. This one 480 00:29:26,960 --> 00:29:30,240 Speaker 1: was a crisis brought about due to a revolution in Iran. 481 00:29:30,760 --> 00:29:33,720 Speaker 1: So what was going on with the car companies. Well, 482 00:29:33,760 --> 00:29:36,480 Speaker 1: one thing that happened in nineteen seventy three at GM 483 00:29:36,600 --> 00:29:39,360 Speaker 1: was that one of the company's executives was leaving, not 484 00:29:39,720 --> 00:29:43,160 Speaker 1: specifically due to the crisis, although he would later say 485 00:29:43,200 --> 00:29:46,320 Speaker 1: that he felt that GM had kind of sealed its 486 00:29:46,320 --> 00:29:51,720 Speaker 1: own fate by not pursuing projects that would involve producing 487 00:29:51,760 --> 00:29:56,040 Speaker 1: more small and midsized vehicles. He had headed up the 488 00:29:56,080 --> 00:29:59,360 Speaker 1: Pontiac and then later the Chevrolet divisions in the late 489 00:29:59,440 --> 00:30:02,320 Speaker 1: nineteen six He was also thought to be a potential 490 00:30:02,360 --> 00:30:05,320 Speaker 1: contender for the CEO position in the future. But the 491 00:30:05,360 --> 00:30:07,920 Speaker 1: funny thing about the future is that it's impossible to 492 00:30:07,960 --> 00:30:11,960 Speaker 1: predict unless you happen to have been to the future already. That, 493 00:30:12,160 --> 00:30:14,320 Speaker 1: by the way, is my coy way of saying. This 494 00:30:14,440 --> 00:30:20,480 Speaker 1: particular GM executive was John Z. DeLorean, the same man 495 00:30:20,760 --> 00:30:22,840 Speaker 1: who would be behind the d m C twelve a 496 00:30:22,960 --> 00:30:25,960 Speaker 1: k a. The Dolorean used in the Back to the 497 00:30:26,000 --> 00:30:29,480 Speaker 1: Future movies. Yep, he was a GM executive before he 498 00:30:29,600 --> 00:30:32,200 Speaker 1: moved on. He was also part of the team that 499 00:30:32,280 --> 00:30:35,200 Speaker 1: had made the g t O in the early sixties, 500 00:30:35,280 --> 00:30:38,560 Speaker 1: which ushered in the era of the muscle car. And again, 501 00:30:38,640 --> 00:30:41,680 Speaker 1: muscle cars not really viable in a world where you 502 00:30:41,720 --> 00:30:45,040 Speaker 1: can't just feed them endless amounts of gasoline. So when 503 00:30:45,040 --> 00:30:47,440 Speaker 1: de Lorean left, he said that one of the things 504 00:30:47,440 --> 00:30:50,000 Speaker 1: that convinced him to go, And I should add there 505 00:30:50,000 --> 00:30:52,240 Speaker 1: are some accounts that say he didn't actually have a 506 00:30:52,320 --> 00:30:54,840 Speaker 1: choice in the matter, that he was forced to leave 507 00:30:54,880 --> 00:30:58,400 Speaker 1: GM as opposed to he chose to leave, but that's 508 00:30:58,440 --> 00:31:01,000 Speaker 1: a story on its own anyway. He said that one 509 00:31:01,040 --> 00:31:03,240 Speaker 1: of the reasons he left was because he felt that 510 00:31:03,360 --> 00:31:06,960 Speaker 1: GM had stopped innovating. He claimed that there had been 511 00:31:06,960 --> 00:31:10,920 Speaker 1: no real significant technological innovation since power steering had been 512 00:31:10,960 --> 00:31:14,040 Speaker 1: introduced in the late nineteen forties, and that the company 513 00:31:14,080 --> 00:31:17,440 Speaker 1: was just focused on styling changes from year to year, 514 00:31:17,920 --> 00:31:20,800 Speaker 1: and it was more about moving little pieces of metal 515 00:31:20,920 --> 00:31:23,880 Speaker 1: around on a car in order to try and sell 516 00:31:24,200 --> 00:31:27,880 Speaker 1: the same thing the following year, but just change up 517 00:31:27,960 --> 00:31:32,000 Speaker 1: the appearance, and not about actual innovation. But GM's problems 518 00:31:32,080 --> 00:31:36,400 Speaker 1: extended beyond the oil crisis and a flamboyant executive leaving 519 00:31:36,400 --> 00:31:39,120 Speaker 1: the nest. The U s. Automotive industry was about to 520 00:31:39,120 --> 00:31:43,320 Speaker 1: face some pretty big competition from overseas. I'll explain more 521 00:31:43,640 --> 00:31:54,320 Speaker 1: after we take this quick break. In nineteen seventy four, 522 00:31:54,480 --> 00:31:57,320 Speaker 1: The New York Times published an article that said, quote, 523 00:31:57,520 --> 00:32:01,680 Speaker 1: probably no American company has offered so swift and stunning 524 00:32:01,720 --> 00:32:05,080 Speaker 1: a blow from the energy crisis as the General Motors 525 00:32:05,120 --> 00:32:09,000 Speaker 1: Corporation end quote. The article stated that GM had seen 526 00:32:09,040 --> 00:32:12,840 Speaker 1: a thirty five percent decline in sales and had fallen 527 00:32:12,880 --> 00:32:16,880 Speaker 1: from being the most profitable industrial company in the US. Instead, 528 00:32:16,960 --> 00:32:22,000 Speaker 1: taking its place was the Exon Corporation, an oil company 529 00:32:22,120 --> 00:32:25,480 Speaker 1: that's probably another company I should cover at some point 530 00:32:25,480 --> 00:32:29,160 Speaker 1: in the future. So GM shut down most of its 531 00:32:29,160 --> 00:32:32,719 Speaker 1: assembly plants, and partly this was a cost saving measure, 532 00:32:32,760 --> 00:32:35,680 Speaker 1: but mostly it was because the company needed to do 533 00:32:35,760 --> 00:32:39,600 Speaker 1: some serious retooling of its manufacturing lines in order to 534 00:32:39,640 --> 00:32:44,120 Speaker 1: switch over to producing smaller, more fuel efficient vehicles. Since 535 00:32:44,160 --> 00:32:48,640 Speaker 1: the nineteen fifties, the German auto company Volkswagen had found 536 00:32:48,640 --> 00:32:52,680 Speaker 1: success exploring the Volkswagen Type one, better known as the 537 00:32:52,760 --> 00:32:57,160 Speaker 1: Volkswagen Beetle or bug here in the US and Japanese 538 00:32:57,160 --> 00:33:01,040 Speaker 1: companies began to join the club in the early nineteen seventies, 539 00:33:01,400 --> 00:33:05,080 Speaker 1: but by nine seventy two, all foreign cars added up 540 00:33:05,120 --> 00:33:10,240 Speaker 1: together made up only share of the US automotive market. 541 00:33:10,720 --> 00:33:13,880 Speaker 1: The cars were mostly smaller, and many of them were 542 00:33:13,960 --> 00:33:17,080 Speaker 1: less expensive than American cars, but they didn't get much 543 00:33:17,080 --> 00:33:21,720 Speaker 1: attention in general until we had an oil crisis. People 544 00:33:21,760 --> 00:33:24,760 Speaker 1: still needed to get around, but they didn't want frequent 545 00:33:24,840 --> 00:33:28,960 Speaker 1: stops at gas stations siphoning away their cash. Imports from 546 00:33:28,960 --> 00:33:31,520 Speaker 1: Germany and Japan began to see greater success in the 547 00:33:31,600 --> 00:33:35,600 Speaker 1: US market, and they really established themselves, and now American 548 00:33:35,720 --> 00:33:39,000 Speaker 1: companies suddenly had competitors that up to that point hadn't 549 00:33:39,040 --> 00:33:42,640 Speaker 1: really been all that competitive. GM rushed to try and 550 00:33:42,680 --> 00:33:47,080 Speaker 1: make small cars, but the results weren't always successful. This 551 00:33:47,120 --> 00:33:49,440 Speaker 1: is around the time where people would start pointing out 552 00:33:49,960 --> 00:33:53,960 Speaker 1: some production quality issues with GM vehicles in general in 553 00:33:54,000 --> 00:33:57,920 Speaker 1: the various lines uh And I think we can attribute 554 00:33:57,920 --> 00:34:00,840 Speaker 1: that to a lot of different factors, but a big one, 555 00:34:00,840 --> 00:34:05,600 Speaker 1: I would say, is this incredibly rushed need to completely 556 00:34:05,720 --> 00:34:09,239 Speaker 1: change the way you went about making cars in order 557 00:34:09,239 --> 00:34:13,719 Speaker 1: to make cars that would would be in line with 558 00:34:13,840 --> 00:34:16,760 Speaker 1: new fuel economy standards that the US government had set. 559 00:34:17,719 --> 00:34:20,680 Speaker 1: It was one of those things that really put the 560 00:34:20,680 --> 00:34:24,480 Speaker 1: company on notice. Now, I want to be clear, this 561 00:34:24,800 --> 00:34:28,880 Speaker 1: same thing was true for all American car manufacturers, not 562 00:34:29,040 --> 00:34:32,400 Speaker 1: just GM. The U S Government had passed these laws 563 00:34:32,480 --> 00:34:35,680 Speaker 1: to create new fuel economy standards, so everyone had to 564 00:34:35,760 --> 00:34:37,640 Speaker 1: rush in order to try and meet them as best 565 00:34:37,680 --> 00:34:42,200 Speaker 1: they could or else pay really big fines. But this 566 00:34:42,280 --> 00:34:46,279 Speaker 1: meant that the real innovations that would emerge due to 567 00:34:46,360 --> 00:34:49,040 Speaker 1: these new restrictions would be a few years down the road. 568 00:34:49,120 --> 00:34:52,560 Speaker 1: As engineers tackled the problem and began to work up solutions. 569 00:34:52,880 --> 00:34:56,000 Speaker 1: So in the meantime, companies were really just cutting corners 570 00:34:56,160 --> 00:34:59,920 Speaker 1: anywhere they could to either meet these standards or they 571 00:35:00,000 --> 00:35:02,520 Speaker 1: would have to pony up and pay fines. So GM's 572 00:35:02,600 --> 00:35:06,640 Speaker 1: leadership was making some questionable decisions. For example, in order 573 00:35:06,680 --> 00:35:10,880 Speaker 1: to create a smaller sedan marketed towards a prospective Cadillac buyer, 574 00:35:11,160 --> 00:35:14,239 Speaker 1: which is you know again, Cadillac is the luxury end 575 00:35:14,840 --> 00:35:19,120 Speaker 1: of the GM brands. GM introducing model called the Cimarron 576 00:35:19,520 --> 00:35:22,560 Speaker 1: in the early nineteen eighties. That's c I M A 577 00:35:22,920 --> 00:35:25,160 Speaker 1: R R O N. I always want to say cinnamon 578 00:35:25,760 --> 00:35:29,680 Speaker 1: when I see it. But the Cimarron looked a lot 579 00:35:30,360 --> 00:35:33,520 Speaker 1: like a Chevrolet Cavalier. Now, if you've been listening to 580 00:35:33,560 --> 00:35:38,160 Speaker 1: all these episodes, you know that GM's brands, Chevrolet is 581 00:35:38,200 --> 00:35:40,479 Speaker 1: the lower tier. That's kind of like the entry level. 582 00:35:40,520 --> 00:35:44,440 Speaker 1: It's it's the the budget priced vehicles. That that was 583 00:35:44,560 --> 00:35:48,160 Speaker 1: that brand, Chevrolet, and then Cadillac is on the opposite 584 00:35:48,200 --> 00:35:49,840 Speaker 1: end of the spectrum, right, that's supposed to be the 585 00:35:49,920 --> 00:35:54,080 Speaker 1: luxury brand. This led several journalists to compare the Cimarron 586 00:35:54,160 --> 00:35:57,479 Speaker 1: to the Cavalier and say that there was effectively very 587 00:35:57,600 --> 00:36:02,080 Speaker 1: little difference, at least externally, but doing the two besides 588 00:36:02,239 --> 00:36:06,280 Speaker 1: a several thousand dollar stick at price jump for the Cadillac, 589 00:36:06,400 --> 00:36:09,719 Speaker 1: Like they say, well, you could buy a Cavalier for 590 00:36:09,800 --> 00:36:13,560 Speaker 1: several thousand dollars less and it looks the same as 591 00:36:14,000 --> 00:36:16,480 Speaker 1: as the cimer On. That's what they were essentially saying. 592 00:36:16,680 --> 00:36:19,480 Speaker 1: It didn't fare very well in reviews, and the sales 593 00:36:19,520 --> 00:36:23,400 Speaker 1: were not great either. Cadillac would end the line of 594 00:36:23,440 --> 00:36:27,040 Speaker 1: the cimar On in and it became one of those 595 00:36:27,040 --> 00:36:29,480 Speaker 1: examples that people would cite when they wanted to talk 596 00:36:29,520 --> 00:36:32,920 Speaker 1: about the missteps that General Motors made during this era. 597 00:36:33,560 --> 00:36:37,719 Speaker 1: In N one, Roger B. Smith became the CEO of 598 00:36:37,760 --> 00:36:41,720 Speaker 1: General Motors. Smith would lead GM for a decade, stepping 599 00:36:41,760 --> 00:36:45,640 Speaker 1: down in n So how did he do well? Let 600 00:36:45,640 --> 00:36:48,200 Speaker 1: me put it to you this way. When people make 601 00:36:48,400 --> 00:36:52,320 Speaker 1: top ten lists of the worst CEOs of all time, 602 00:36:53,280 --> 00:36:57,520 Speaker 1: Roger Smith frequently secures a spot on that list. While 603 00:36:57,520 --> 00:37:00,799 Speaker 1: he was in charge, GM went from hold nearly half 604 00:37:00,880 --> 00:37:04,640 Speaker 1: the automotive market in the US down to thirty five percent. 605 00:37:05,280 --> 00:37:07,520 Speaker 1: So what the heck happened? Well, a lot of those 606 00:37:07,560 --> 00:37:11,239 Speaker 1: decisions didn't necessarily look terrible at the time, and some 607 00:37:11,320 --> 00:37:14,160 Speaker 1: of them might have actually been pretty good decisions, but 608 00:37:14,239 --> 00:37:18,560 Speaker 1: they were executed poorly. One huge decision, however, was to 609 00:37:18,640 --> 00:37:23,959 Speaker 1: reverse Alfred Sloan's organizational design of having each brand under 610 00:37:24,040 --> 00:37:28,360 Speaker 1: GM operating autonomously. So you might remember Sloan set it 611 00:37:28,440 --> 00:37:31,400 Speaker 1: up so Buick operated almost like it was an independent 612 00:37:31,440 --> 00:37:35,680 Speaker 1: company compared to say Oldsmobile, compared to say Cadillac, and 613 00:37:35,719 --> 00:37:39,680 Speaker 1: so on. Smith reorganized the company, bringing things back to 614 00:37:39,719 --> 00:37:42,960 Speaker 1: a more centralized approach. You could argue kind of the 615 00:37:43,000 --> 00:37:46,200 Speaker 1: way Durant had it going when things were messy and 616 00:37:46,239 --> 00:37:51,520 Speaker 1: difficult to manage. Smith essentially declared that Chevrolet and Pontiac, 617 00:37:51,719 --> 00:37:56,759 Speaker 1: as well as GM's Canadian arm, would end up focusing 618 00:37:56,760 --> 00:38:01,200 Speaker 1: on building smaller cars, and that the u Wick, Oldsmobile, 619 00:38:01,320 --> 00:38:05,920 Speaker 1: and Cadillac brands would focus on building larger cars. But 620 00:38:06,040 --> 00:38:10,640 Speaker 1: Smiths approach to reorganizing disrupted processes that had decades of 621 00:38:10,719 --> 00:38:14,360 Speaker 1: momentum behind them, and just like with a physical object 622 00:38:14,440 --> 00:38:16,960 Speaker 1: in motion, if you disrupt something that has a lot 623 00:38:16,960 --> 00:38:20,960 Speaker 1: of momentum, it frequently leads to a big, crashed mess. 624 00:38:21,640 --> 00:38:25,760 Speaker 1: The reorganization was supposed to streamline processes, but it often 625 00:38:25,840 --> 00:38:29,920 Speaker 1: had the opposite effect. Things got far more complicated, and 626 00:38:30,040 --> 00:38:33,200 Speaker 1: more layers of managerial staff were thrown into the mix 627 00:38:33,520 --> 00:38:36,279 Speaker 1: in order to sort things out. But I think a 628 00:38:36,320 --> 00:38:38,839 Speaker 1: lot of us have had experience in corporate America where 629 00:38:39,200 --> 00:38:43,400 Speaker 1: adding more managers is like the opposite of a solution. 630 00:38:43,520 --> 00:38:46,960 Speaker 1: It just makes the problem even more complex. Uh So, 631 00:38:47,000 --> 00:38:50,960 Speaker 1: the company became really bloated, at least on the managerial level, 632 00:38:51,120 --> 00:38:55,160 Speaker 1: and the company began sharing more parts and designs between divisions. 633 00:38:55,600 --> 00:39:00,640 Speaker 1: That led to very similar cars coming out marketed as 634 00:39:00,719 --> 00:39:04,600 Speaker 1: different makes and models. So at a casual glance, you 635 00:39:04,600 --> 00:39:07,200 Speaker 1: could have three or four different cars in front of you, 636 00:39:07,680 --> 00:39:11,280 Speaker 1: and when you look at them, just you know, casually, 637 00:39:11,800 --> 00:39:13,640 Speaker 1: they may all seem to be the same vehicle. And 638 00:39:13,680 --> 00:39:15,160 Speaker 1: then you go around the back and you see that 639 00:39:15,239 --> 00:39:18,640 Speaker 1: every single one of them has a different badge on them, 640 00:39:18,640 --> 00:39:22,320 Speaker 1: a different brand. So one's a Buick, and one's a Cadillac, 641 00:39:22,360 --> 00:39:25,279 Speaker 1: and one's an Oldsmobile, but they all kind of look 642 00:39:25,400 --> 00:39:28,560 Speaker 1: the same. That was a problem that GM was running into, 643 00:39:28,800 --> 00:39:31,279 Speaker 1: and it hurt the company's image. It was that whole 644 00:39:31,320 --> 00:39:36,359 Speaker 1: Simmern and Cavalier problem from earlier writ large. Smith also 645 00:39:36,400 --> 00:39:40,440 Speaker 1: wanted to modernize and automate assembly plants, which isn't necessarily 646 00:39:40,480 --> 00:39:43,560 Speaker 1: a bad idea. That the goal was to create a 647 00:39:43,600 --> 00:39:46,560 Speaker 1: really efficient process that would cut down on costs and 648 00:39:46,600 --> 00:39:49,800 Speaker 1: it would eliminate the need for as many employees, which 649 00:39:50,360 --> 00:39:53,239 Speaker 1: was something that the Auto Union wasn't too keen on 650 00:39:53,360 --> 00:39:57,520 Speaker 1: for obvious reasons. The company would end up spending billions 651 00:39:57,640 --> 00:40:00,920 Speaker 1: of dollars in an effort to modernize their areous assemblies, 652 00:40:01,520 --> 00:40:04,080 Speaker 1: but the move was a little bit ahead of its time. 653 00:40:04,200 --> 00:40:06,480 Speaker 1: The robots didn't work out so well. There are some 654 00:40:06,560 --> 00:40:10,719 Speaker 1: famous stories about robots failing to perform up to expectation, 655 00:40:11,280 --> 00:40:14,240 Speaker 1: and these ended up being very costly mistakes that didn't 656 00:40:14,280 --> 00:40:18,760 Speaker 1: just impede progress, they hurt the company in general. Smith 657 00:40:18,920 --> 00:40:23,320 Speaker 1: also saw GM acquire the company Electronic Data Systems from 658 00:40:23,719 --> 00:40:28,719 Speaker 1: former presidential candidate Ross Perou. That was a deal that 659 00:40:28,880 --> 00:40:31,960 Speaker 1: costs more than two and a half billion dollars. Pero 660 00:40:32,160 --> 00:40:35,759 Speaker 1: also would become a major stakeholder in General Motors as 661 00:40:35,800 --> 00:40:38,320 Speaker 1: part of this deal. In fact, he owned more shares 662 00:40:38,360 --> 00:40:42,400 Speaker 1: than any other single shareholder in the company. Then, Pero, 663 00:40:42,760 --> 00:40:45,959 Speaker 1: in his unique style, spent a good deal of time 664 00:40:46,080 --> 00:40:49,600 Speaker 1: dragging Smith's name in the mud in the media, criticized 665 00:40:49,680 --> 00:40:53,040 Speaker 1: various executive level decisions, which I mean it sounds like 666 00:40:53,080 --> 00:40:56,400 Speaker 1: there was a lot of AMMO there to use. Pero 667 00:40:56,760 --> 00:40:59,440 Speaker 1: and Smith would have many battles in the press and 668 00:40:59,520 --> 00:41:02,960 Speaker 1: in board rooms. In nineteen Smith and the board of 669 00:41:02,960 --> 00:41:08,040 Speaker 1: directors were able to buy out Perot's share of General Motors, 670 00:41:08,080 --> 00:41:12,640 Speaker 1: but Pero would still comment on the progress or lack thereof, 671 00:41:12,840 --> 00:41:16,360 Speaker 1: of the company for the next couple of years. Smith 672 00:41:16,480 --> 00:41:21,520 Speaker 1: also oversaw another big acquisition, the Hughes Aircraft Company. That 673 00:41:21,560 --> 00:41:25,080 Speaker 1: one cost five point two billion dollars, and these moves 674 00:41:25,160 --> 00:41:27,080 Speaker 1: led people to say that he was paying far too 675 00:41:27,160 --> 00:41:31,200 Speaker 1: much attention to diversifying GM's businesses, but not enough to 676 00:41:31,560 --> 00:41:34,560 Speaker 1: the core automotive business, which was really in kind of 677 00:41:34,560 --> 00:41:37,719 Speaker 1: a mess. Smith did see the formation of a new 678 00:41:37,800 --> 00:41:41,520 Speaker 1: line of cars marketed as Saturn. That brand developed a 679 00:41:41,640 --> 00:41:45,080 Speaker 1: kind of cult like following, which isn't a joke. Our 680 00:41:45,120 --> 00:41:48,839 Speaker 1: first new car, my partner and I our first car 681 00:41:48,960 --> 00:41:52,440 Speaker 1: was a Saturn, and the experience of buying it felt 682 00:41:52,520 --> 00:41:56,120 Speaker 1: kind of like we were being indoctrinated. It didn't stick 683 00:41:56,360 --> 00:41:59,799 Speaker 1: with us because it turns out we're too lazy to 684 00:41:59,840 --> 00:42:03,239 Speaker 1: be good cult members, So we just drove the car 685 00:42:03,560 --> 00:42:06,160 Speaker 1: until I want to say the alternator gave out and 686 00:42:06,200 --> 00:42:09,799 Speaker 1: we got rid of it anyway. Smith's leadership led to 687 00:42:09,880 --> 00:42:13,960 Speaker 1: Michael Moore releasing a documentary. It was his first film. 688 00:42:13,960 --> 00:42:17,120 Speaker 1: This film focused on the impact of Smith's decisions on 689 00:42:17,160 --> 00:42:20,960 Speaker 1: the automotive industry in general and on Flint, Michigan in particular. 690 00:42:21,480 --> 00:42:24,480 Speaker 1: That film is called Roger and Me, and it includes 691 00:42:24,640 --> 00:42:28,760 Speaker 1: scenes of GM workers calling for Smith's resignation, which would 692 00:42:29,080 --> 00:42:31,680 Speaker 1: actually happen the following year. The year after Roger and 693 00:42:31,719 --> 00:42:36,279 Speaker 1: Me came out, Smith voluntarily resigned as CEO. In the 694 00:42:36,320 --> 00:42:40,000 Speaker 1: movie also focuses on how GM was shifting more work 695 00:42:40,120 --> 00:42:44,520 Speaker 1: to Mexico, so more jobs were going to Mexican assembly 696 00:42:44,560 --> 00:42:48,040 Speaker 1: plants where GM vehicles were being made. That way, the 697 00:42:48,080 --> 00:42:50,840 Speaker 1: company didn't have to deal with unions. They didn't have 698 00:42:50,960 --> 00:42:54,560 Speaker 1: unions in Mexico, whereas that's something that was kind of 699 00:42:54,560 --> 00:42:57,799 Speaker 1: a thorn in the company's side here in America. This 700 00:42:57,920 --> 00:43:02,720 Speaker 1: was not a good look for Generals. Smith left a CEO, 701 00:43:02,880 --> 00:43:05,760 Speaker 1: but he stayed on with the Board of directors until nineteen. 702 00:43:06,960 --> 00:43:10,880 Speaker 1: His successor, Robert Stemple, had been with GM since nineteen. 703 00:43:11,960 --> 00:43:16,080 Speaker 1: He had begun as an engineer with Oldsmobile, but General 704 00:43:16,120 --> 00:43:19,720 Speaker 1: Motors was in really bad shape, and it was exacerbated 705 00:43:19,760 --> 00:43:23,160 Speaker 1: by the oil crisis of the seventies. Smith's leadership in 706 00:43:23,200 --> 00:43:26,200 Speaker 1: the eighties, and then there was an economic recession in 707 00:43:26,239 --> 00:43:30,320 Speaker 1: the early nineties. As a result, GM was losing money, 708 00:43:30,600 --> 00:43:33,640 Speaker 1: so Smith led the board into voting Stemple out in 709 00:43:33,760 --> 00:43:38,960 Speaker 1: nineteen I don't know if Stimple was actually doing a 710 00:43:39,000 --> 00:43:41,080 Speaker 1: bad job or not. There's not a whole lot I've 711 00:43:41,120 --> 00:43:43,239 Speaker 1: seen written about him. I'm sure there are books on 712 00:43:43,239 --> 00:43:46,080 Speaker 1: the subject, but I didn't encounter them in my research. 713 00:43:46,760 --> 00:43:48,680 Speaker 1: But it seems to me like there were a lot 714 00:43:48,880 --> 00:43:54,880 Speaker 1: of external factors that were impacting General Motors, and it 715 00:43:54,960 --> 00:43:58,240 Speaker 1: might not have mattered who was in leadership at that moment, 716 00:43:58,960 --> 00:44:00,840 Speaker 1: it still would have been a really rough time for 717 00:44:00,880 --> 00:44:03,920 Speaker 1: the company because of those external factors. But that's just 718 00:44:04,040 --> 00:44:09,200 Speaker 1: me kind of armchair analyzing based on the research I 719 00:44:09,239 --> 00:44:12,160 Speaker 1: came in contact with. It could be totally inaccurate, and 720 00:44:12,200 --> 00:44:16,719 Speaker 1: I acknowledge that anyway. Roger Smith would actually step down 721 00:44:16,800 --> 00:44:20,280 Speaker 1: from the board of directors in nineteen and at that point, 722 00:44:20,640 --> 00:44:24,520 Speaker 1: the fourteen member board of directors only had two people 723 00:44:24,640 --> 00:44:29,239 Speaker 1: on it who actually worked for General Motors. The new 724 00:44:29,360 --> 00:44:34,279 Speaker 1: CEO of the company was John Jack Smith, Jr. And 725 00:44:34,400 --> 00:44:37,320 Speaker 1: he would remain CEO for the rest of the nineties. 726 00:44:38,160 --> 00:44:41,160 Speaker 1: In that time, General Motors began to recover from the 727 00:44:41,239 --> 00:44:45,440 Speaker 1: various recessions and problems of the seventies, eighties, and early nineties. 728 00:44:45,880 --> 00:44:49,240 Speaker 1: A dispute with unions would lead to another big strike 729 00:44:49,360 --> 00:44:54,760 Speaker 1: in which had economic group percussions beyond the automotive industry itself. 730 00:44:55,080 --> 00:44:59,200 Speaker 1: But the next really truly big crisis to hit GM 731 00:44:59,320 --> 00:45:03,040 Speaker 1: came in the way of a developing economic recession and 732 00:45:03,120 --> 00:45:07,120 Speaker 1: the terrorist attacks on September eleventh, two thousand one. At 733 00:45:07,160 --> 00:45:10,720 Speaker 1: that point, the head of GM was Richard Wagoner Jr. 734 00:45:10,800 --> 00:45:14,719 Speaker 1: He succeeded Jack Smith when Jack Smith stepped down in 735 00:45:14,800 --> 00:45:17,840 Speaker 1: two thousand. Now remember when I said that Roger Smith, 736 00:45:17,920 --> 00:45:20,359 Speaker 1: the guy from the eighties, often gets put down on 737 00:45:20,400 --> 00:45:25,120 Speaker 1: a top ten worst CEO list. Well, Wagoner often gets 738 00:45:25,120 --> 00:45:28,240 Speaker 1: on those lists as well. See it was while Wagoner 739 00:45:28,320 --> 00:45:31,719 Speaker 1: was CEO that GM hit a truly low point. It 740 00:45:31,840 --> 00:45:36,239 Speaker 1: lost nine percent of its market valuation under his leadership 741 00:45:36,600 --> 00:45:40,000 Speaker 1: and in fact went bankrupt. It lost more than eighty 742 00:45:40,080 --> 00:45:44,160 Speaker 1: two billion dollars, so the US government had to come 743 00:45:44,160 --> 00:45:49,000 Speaker 1: in and bail it out, effectively nationalizing General Motors, which 744 00:45:49,040 --> 00:45:52,560 Speaker 1: means that for a while GM was a state run 745 00:45:52,719 --> 00:45:56,200 Speaker 1: business here in the United States. At the same time, 746 00:45:56,480 --> 00:46:00,440 Speaker 1: Wagoner pushed GM to adopt higher standards of vehicle quality. 747 00:46:00,680 --> 00:46:04,319 Speaker 1: He also pushed for improvements to operational processes. He did 748 00:46:04,360 --> 00:46:09,000 Speaker 1: oversee some pretty massive layoffs and plant closures at the 749 00:46:09,040 --> 00:46:12,640 Speaker 1: same time. Based on things I've read, it sounds like 750 00:46:12,680 --> 00:46:18,000 Speaker 1: he really resisted making harder decisions, bigger cuts, which some 751 00:46:18,040 --> 00:46:20,880 Speaker 1: analysts say he just didn't have what it takes to 752 00:46:20,960 --> 00:46:23,960 Speaker 1: keep the business afloat. He didn't have the the guts 753 00:46:24,000 --> 00:46:27,560 Speaker 1: to make those hard decisions. But I would also posit 754 00:46:27,680 --> 00:46:31,279 Speaker 1: that these decisions were really super hard, particularly if you're 755 00:46:31,280 --> 00:46:35,839 Speaker 1: actually thinking about the impact they have on people and communities. 756 00:46:36,200 --> 00:46:40,880 Speaker 1: I mean, Flint, Michigan was hit incredibly hard during the eighties, 757 00:46:41,239 --> 00:46:45,000 Speaker 1: and Smith's run as CEO contributed a great deal to that. 758 00:46:45,080 --> 00:46:47,960 Speaker 1: So it must have been a pretty hefty responsibility to 759 00:46:48,000 --> 00:46:51,080 Speaker 1: be in charge of this massive company that affects so 760 00:46:51,120 --> 00:46:54,880 Speaker 1: many people's livelihoods, not just the people who worked directly 761 00:46:55,000 --> 00:46:58,520 Speaker 1: for General Motors, but their families and the communities they 762 00:46:58,560 --> 00:47:01,600 Speaker 1: live in. But whether Gonna deserves to be listed as 763 00:47:01,600 --> 00:47:04,960 Speaker 1: one of the worst CEO s or not, The fact 764 00:47:05,200 --> 00:47:09,880 Speaker 1: is that General Motors entered into a downward spiral. In 765 00:47:09,920 --> 00:47:14,000 Speaker 1: two thousand four. GM chose to discontinue the Oldsmobile brand 766 00:47:14,480 --> 00:47:17,920 Speaker 1: because oldsmobili kind of slid into unprofitability. I think a 767 00:47:17,960 --> 00:47:20,239 Speaker 1: lot of people just established it as that's a car 768 00:47:20,320 --> 00:47:23,920 Speaker 1: for old people. It's called Oldsmobile, forgetting that it was 769 00:47:24,320 --> 00:47:27,800 Speaker 1: named after Ransom Old's the guy who founded the company. 770 00:47:27,840 --> 00:47:31,239 Speaker 1: But that legacy car brand had to drive off into 771 00:47:31,280 --> 00:47:34,279 Speaker 1: the sunset in two thousand four. The financial crisis of 772 00:47:34,320 --> 00:47:38,759 Speaker 1: two thousand seven, the hits just keep on coming. It 773 00:47:38,840 --> 00:47:42,120 Speaker 1: had a domino effect that also hit the automotive industry 774 00:47:42,239 --> 00:47:45,879 Speaker 1: about a year later. Another energy crisis earlier on had 775 00:47:45,920 --> 00:47:49,560 Speaker 1: shifted the market toward favoring fuel efficient cars, which hurt 776 00:47:49,680 --> 00:47:52,680 Speaker 1: big American companies that had kind of gone really hard 777 00:47:52,680 --> 00:47:56,600 Speaker 1: with big trucks and suv models which are known for, 778 00:47:56,719 --> 00:48:01,240 Speaker 1: you know, not being fuel efficient. The financial recession also 779 00:48:01,280 --> 00:48:04,080 Speaker 1: affected prices of raw materials that in turn took a 780 00:48:04,120 --> 00:48:07,359 Speaker 1: big bite out of profit margins. Now you could try 781 00:48:07,440 --> 00:48:10,200 Speaker 1: to deal with that by adjusting the asking price for 782 00:48:10,320 --> 00:48:12,960 Speaker 1: vehicles and making them more expensive, but then you're in 783 00:48:13,040 --> 00:48:15,520 Speaker 1: danger of pricing yourself out of the market, so it 784 00:48:15,560 --> 00:48:19,360 Speaker 1: was really rough. The US government then steps in. Now 785 00:48:19,400 --> 00:48:22,160 Speaker 1: it wasn't just to rescue a company, but also the 786 00:48:22,200 --> 00:48:26,080 Speaker 1: people who depended upon that company as an employer. GM 787 00:48:26,160 --> 00:48:28,480 Speaker 1: was not the only company to get bailed out by 788 00:48:28,520 --> 00:48:31,799 Speaker 1: the US government. Chrysler was another one, and Ford got 789 00:48:31,840 --> 00:48:34,520 Speaker 1: a line of credit. Although Ford had already gone through 790 00:48:34,560 --> 00:48:38,440 Speaker 1: some major restructuring, it wasn't a better financial position to 791 00:48:38,480 --> 00:48:43,239 Speaker 1: whether the crisis compared to General Motors or Chrysler. As 792 00:48:43,280 --> 00:48:46,680 Speaker 1: part of this streamlining process to get things back under control, 793 00:48:47,000 --> 00:48:51,319 Speaker 1: General Motors discontinued to other brands. One was Saturn, which 794 00:48:51,360 --> 00:48:54,920 Speaker 1: had been around in some forms it's though it had 795 00:48:54,960 --> 00:48:58,600 Speaker 1: never really been profitable despite all the cult stuff, And 796 00:48:58,640 --> 00:49:02,240 Speaker 1: the other was Pontiac, the companion brand to the old 797 00:49:02,280 --> 00:49:06,880 Speaker 1: Oakland line, which itself had long since been discontinued. Oh In, 798 00:49:06,880 --> 00:49:10,320 Speaker 1: General Motors had been the company behind the Hummer brand 799 00:49:10,360 --> 00:49:14,000 Speaker 1: of SUVs based off the military hum V that was 800 00:49:14,080 --> 00:49:19,320 Speaker 1: first introduced in the two thousand nine. Changes led GM 801 00:49:19,360 --> 00:49:23,040 Speaker 1: to pursue selling off the brand to another company, but 802 00:49:23,160 --> 00:49:26,880 Speaker 1: ultimately all of those deals fell through, so General Motors 803 00:49:26,880 --> 00:49:31,560 Speaker 1: instead mothbawled the brand in though last year the company 804 00:49:31,600 --> 00:49:34,640 Speaker 1: began to show teasers of a truck and an SUV 805 00:49:35,000 --> 00:49:38,160 Speaker 1: with the Hummer name attached to them. Uh not separately 806 00:49:38,200 --> 00:49:42,160 Speaker 1: branded as Hummer. They are GMC branded vehicles, but they 807 00:49:42,160 --> 00:49:46,680 Speaker 1: have Hummer in the name. While GM initially explored divesting 808 00:49:46,719 --> 00:49:50,440 Speaker 1: itself of Opal back in two thousand nine, that actually 809 00:49:50,640 --> 00:49:56,520 Speaker 1: wouldn't happen until, along with Vauxhall, the UK based car 810 00:49:56,600 --> 00:50:00,880 Speaker 1: company that GM had also owned for decades, the Group 811 00:50:01,000 --> 00:50:03,920 Speaker 1: p S, a company, acquired both of those in seventeen. 812 00:50:04,440 --> 00:50:08,480 Speaker 1: The US government invested more than fifty billion dollars into 813 00:50:08,560 --> 00:50:11,040 Speaker 1: GM in order to bail it out for this crisis 814 00:50:11,480 --> 00:50:15,120 Speaker 1: in the U s. Treasury Department began to sell off 815 00:50:15,160 --> 00:50:18,600 Speaker 1: the stake it had purchased in General Motors and eventually 816 00:50:18,719 --> 00:50:22,240 Speaker 1: netted thirty nine point seven billion dollars as a results. 817 00:50:22,320 --> 00:50:26,400 Speaker 1: So it spent fifty billion to acquire those shares and 818 00:50:26,440 --> 00:50:29,959 Speaker 1: made thirty nine point seven billion selling them off, which 819 00:50:30,000 --> 00:50:33,560 Speaker 1: is a net loss of eleven point three billion dollars. 820 00:50:34,440 --> 00:50:36,440 Speaker 1: Along with the other bailouts, it would turn out that 821 00:50:36,480 --> 00:50:39,080 Speaker 1: around ten and a half billion dollars would get passed 822 00:50:39,080 --> 00:50:43,200 Speaker 1: on to taxpayers. That's what the average citizen was helping 823 00:50:43,239 --> 00:50:47,000 Speaker 1: pay for with their taxes, their federal taxes. Uh. Was 824 00:50:47,160 --> 00:50:51,080 Speaker 1: those bailouts of those big companies. That whole process actually 825 00:50:51,080 --> 00:50:56,080 Speaker 1: stretched on for several years. The bailout didn't conclude until fourteen. 826 00:50:56,840 --> 00:51:00,880 Speaker 1: GM emerged from bankruptcy as two separate companies. The old 827 00:51:01,160 --> 00:51:04,000 Speaker 1: GM was the one that was saddled with all the debt. 828 00:51:04,640 --> 00:51:08,439 Speaker 1: So this blows my mind that you can do this 829 00:51:09,080 --> 00:51:12,719 Speaker 1: and and business. You can have two new companies or 830 00:51:12,760 --> 00:51:15,640 Speaker 1: two companies come out of it. You know, one company enters, 831 00:51:15,680 --> 00:51:18,799 Speaker 1: two companies leave. One of those two companies is the 832 00:51:18,840 --> 00:51:22,360 Speaker 1: one that actually has all that massive debt that caused 833 00:51:22,400 --> 00:51:24,640 Speaker 1: you to go into bankruptcy in the first place. The 834 00:51:24,719 --> 00:51:28,520 Speaker 1: newer GM had all the assets, although it also did 835 00:51:28,560 --> 00:51:31,600 Speaker 1: have seventeen billion dollars in debt itself. So yeah, there 836 00:51:31,680 --> 00:51:33,759 Speaker 1: was a lot of debt going on here. But the 837 00:51:33,800 --> 00:51:37,640 Speaker 1: new GM was able to get rid of most of 838 00:51:37,680 --> 00:51:40,480 Speaker 1: that debt and it was able to move forward with 839 00:51:40,600 --> 00:51:45,560 Speaker 1: just four brands at that point, Chevrolet, Cadillac, Buick, and 840 00:51:45,719 --> 00:51:50,360 Speaker 1: the GMC truck and suv lines. One of the consequences 841 00:51:50,400 --> 00:51:53,640 Speaker 1: of all that debt is the effect on general motors 842 00:51:53,800 --> 00:51:58,319 Speaker 1: requirement to pay federal taxes, so it largely doesn't, at 843 00:51:58,400 --> 00:52:01,360 Speaker 1: least again not on the federal and that's because the 844 00:52:01,400 --> 00:52:05,759 Speaker 1: company can actually count the losses against all earnings, and 845 00:52:05,800 --> 00:52:10,400 Speaker 1: so it frequently pays very little in federal tax even 846 00:52:10,440 --> 00:52:13,719 Speaker 1: if the company has had a really profitable year, which 847 00:52:13,880 --> 00:52:17,080 Speaker 1: might not seem fair, but it gives GM the chance 848 00:52:17,120 --> 00:52:20,800 Speaker 1: to set a new foundation for its business without those 849 00:52:20,800 --> 00:52:23,560 Speaker 1: extra costs in the form of taxes, and that tax 850 00:52:23,600 --> 00:52:27,200 Speaker 1: relief doesn't last forever. I mean, we were talking about 851 00:52:27,280 --> 00:52:30,880 Speaker 1: losses of eight two billion dollars that provided a lot 852 00:52:30,960 --> 00:52:34,439 Speaker 1: of cushioning for GM too, you know, kind of get 853 00:52:34,480 --> 00:52:39,680 Speaker 1: things moving again. So by two or three these those 854 00:52:39,680 --> 00:52:43,240 Speaker 1: past losses will have essentially been accounted for and GM 855 00:52:43,239 --> 00:52:48,719 Speaker 1: will effectively be working with a blank slate. So there's 856 00:52:48,760 --> 00:52:52,920 Speaker 1: a lot more that we could say about General Motors. UH. 857 00:52:53,040 --> 00:52:57,560 Speaker 1: For example, the company is, like many automotive companies, really 858 00:52:57,640 --> 00:53:01,600 Speaker 1: focusing on hybrids and electric vehicles at this stage, which 859 00:53:01,640 --> 00:53:04,560 Speaker 1: is really cool, really exciting stuff. It's also interesting to 860 00:53:04,680 --> 00:53:09,160 Speaker 1: point out that previous GM executives have often said that 861 00:53:09,200 --> 00:53:11,480 Speaker 1: one of the biggest mistakes they made was not making 862 00:53:11,520 --> 00:53:15,480 Speaker 1: an earlier, you know, investment in electric vehicles. Some of 863 00:53:15,480 --> 00:53:18,160 Speaker 1: them have said, well, yeah, I wish we had done it, 864 00:53:18,360 --> 00:53:20,400 Speaker 1: not because I think it would have moved the bottom line, 865 00:53:20,560 --> 00:53:22,520 Speaker 1: because it probably wouldn't, but it would have been a 866 00:53:22,600 --> 00:53:27,360 Speaker 1: much better image issue, UM, which also matters. It's crazy 867 00:53:27,440 --> 00:53:30,000 Speaker 1: to think that sometimes you do things just because it 868 00:53:30,040 --> 00:53:32,680 Speaker 1: looks good for the optics. In other words, a phrase 869 00:53:32,719 --> 00:53:36,239 Speaker 1: that I hate, but in our world it does make 870 00:53:36,239 --> 00:53:39,239 Speaker 1: a difference. So like it or not, it's the world 871 00:53:39,320 --> 00:53:42,319 Speaker 1: we live in. But that wraps up our series on 872 00:53:42,400 --> 00:53:45,479 Speaker 1: general motors. UM. There's probably stuff that we could dive 873 00:53:45,600 --> 00:53:47,960 Speaker 1: much deeper into, Like I didn't even talk about how 874 00:53:48,000 --> 00:53:52,040 Speaker 1: power steering works. I just mentioned it, but we'll leave 875 00:53:52,120 --> 00:53:55,040 Speaker 1: that for future episodes. If there are any specific things 876 00:53:55,040 --> 00:53:57,160 Speaker 1: you would like me to really dive into, let me 877 00:53:57,239 --> 00:54:00,160 Speaker 1: know I'll consider it. Or there's some other topic you 878 00:54:00,200 --> 00:54:02,360 Speaker 1: would love for me to tackle in a future episode 879 00:54:02,400 --> 00:54:04,880 Speaker 1: of tech Stuff, drop me a line on Twitter. The 880 00:54:04,920 --> 00:54:09,040 Speaker 1: handle I use is text stuff hs W, and I'll 881 00:54:09,080 --> 00:54:17,839 Speaker 1: talk to you again really soon. Tech Stuff is an 882 00:54:17,840 --> 00:54:21,560 Speaker 1: I Heart Radio production. For more podcasts from I Heart Radio, 883 00:54:21,880 --> 00:54:25,040 Speaker 1: visit the I Heart Radio app, Apple Podcasts, or wherever 884 00:54:25,120 --> 00:54:26,640 Speaker 1: you listen to your favorite shows.