The victims of Vauxhall's Luton closure have plenty of candidates for blame, from the high pound and the relative ease of British shutdowns to the hire-and-fire mentality of the American overlords. But the real cause runs deeper through decades of managerial mishaps.
The British managers bear some responsibility for the underlying, persistent weakness of the Vauxhall brand. But that's as nothing compared with the monumental mistakes of parent General Motors, at home and abroad. Entangled in bureaucracy, paralysed by inaction, drowning in excess costs, GM has wasted tens of billions on learning how not to run a mega-corporation.
Very few other car managements are in a position to hurl the first stone. Consider the present scene of devastation. Chrysler, quite recently the most profitable US carmaker by far, is bleeding millions so fast that its purchaser, Daimler-Benz, is buckling at the knees. Daimler not only overpaid ridiculously, but compounded this sin by heavy-handed and typically unsuccessful long-distance interference.
BMW is still licking its wounds from the inept takeover of Rover Group. But there is no comfort for British management in these foreign fiascos. Not only Rover but also its sister Land Rover were found wanting in fundamental management and manufacturing skills by their new owners. So, in spades, was Jaguar. The first American sent to the rescue by Ford declared its plant the worst he had ever seen, with the possible exception of the Gorki factory outside Moscow.
In fact, the list of ineptitudes is as long as the M1. Is there some pattern here? The carmakers have all that managers could desire: huge financial resources, vast expertise, armies of well- versed executives and specialists, global markets and public demand. How could they get so much so wrong?
The first answer is that this industry is highly inbred, dominated by company veterans who, like all their colleagues, adore playing with motors. Infusions of outside talent are rare, and so is jobhopping at the highest level. When jobs are hopped, as when a miffed Lee Iacocca quit Ford for Chrysler, the results can be electrifying. But Chrysler was a basket case then, as now. Others with bigger market shares, larger cash flows and greater conceit, which is endemic among car managers, are unlikely to place their heads on somebody else's block.
The conceit is compounded by a second fault - autocracy. The Western industry was originally created by all-powerful entrepreneurs. Their heirs can't match their genius, but grasp for their power. A bitter boardroom battle at Daimler thus ousted the company's top car man and left total control to Jürgen Schrempp, the mastermind (if that's the word) of the Chrysler fiasco. It's unfair to blame Schrempp for other flops, like the original instability of the A-cars or sluggish sales of the unsmart Smart. But he's certainly responsible for the halved share price and the sadly reduced reputation.
The misfiring of Mercedes is a textbook study in top-down management. Because of autocratic traditions, Western car firms have lagged behind the management trend towards self-managed teams whose leaders have genuine autonomy.
When the new approach has prevailed - as when Ford launched the Taurus in the US - the results have been spectacular. But the industry reverts to past form at the flip of a throttle. Even Ford forgot the Taurus lessons, rediscovering them in the Nineties with renewed success.
That exemplifies a third fault, cyclical mismanagement. Periodically one car firm leaps ahead of the pack. It's hard to believe, but for several years GM Europe was a star performer, clobbering a money-losing Ford. The usual reaction is to rejoice over the success, remove its architects to head office, and complacently watch while the star rapidly loses its lustre. In the process, basic errors are made, like allowing models to run too long before renewal (witness Vauxhall's battered Vectra).
That damages not only the model but the brand. A few years back, a top GM executive announced enthusiastically that his company had neglected its brands, and was now pouring effort into their nurture. That's like a football coach revealing that his club has discovered the importance of scoring goals. All GM's brands have lost power. One, Oldsmobile, has now died as a result. It was suicide. A fourth defect provides apparent excuse for these lapses. Schrempp's defenders would argue that the not-so-little local difficulties are mere blips in a long-term scheme for turning Mercedes into a full-line global manufacturer, competing in every market and segment.
Ford, another long-termer, is in the throes of a second major reshaping, while GM has started yet another. This addiction to upheavals disorients good managers and makes bad ones worse, while unwanted secondary evils often outweigh good results.
The British, like the Vauxhall workers, are injured bystanders. The insularity and narrow-mindedness of the long-gone native manufacturers barred Britain from sharing in the fast-growing markets and laid companies bare to foreign competition. The consolation used to be that modern, well-managed foreigners - first Ford and GM, then the Japanese - kept the UK in car manufacturing, even though on a relatively humble scale. Expanding Japanese presence, led by Nissan's achievements at Sunderland, sparked a genuine recovery in output.
But poor parental performance, in a Japanese industry dominated by Toyota and Honda, is to blame. Now the Luton closure, Dagenham's withdrawal from making Fords, and the darkened prospects for Sunderland are sounding another retreat. It's too late to stop this slide. But managers in other industries - and politicians in government - had best take notice. Without growing customer franchises, indigenous research and product development, autonomous local managers and genuinely world-class management, the automotive debacle will be repeated elsewhere - up to and including the star industries of the New Economy.
