Ann Arbor/Ypsilanti Reads Event: Automotive Expert David E. Davis Discusses The 2010 Auto Show And The Future Of Michigan's Automobile Industry

Fri, 04/07/2006 - 1:14pm

When: January 16, 2010 at the Downtown Library: Multi-Purpose Room

What does the future hold for this industry in Michigan? What trends can be spotted from this year's Auto Show? David E. Davis, Jr. is an automobile journalist and magazine publisher whose career in the automotive industry spanned from race car driver, factory worker and car salesman to ad salesman with Road & Track and copywriter for Corvette advertisements before becoming a writer for Car and Driver magazine in 1962. He wrote for that publication until 1967 and later became its editor and publisher before leaving to found Automobile magazine. This event will be held in conjunction with Ann Arbor/Ypsilanti Reads 2010, which, this year focuses on the subject of Michigan.

Transcript

[00:00:29.59] KATIE RINGENBACH: I am Katie Ringenbach. I work in the Youth Department here at the Ann Arbor District Library, and it is my pleasure to introduce today's speaker, David E. Davis. He's an automotive expert, who Time magazine has called the "dean of automotive journalists." He has worked as a racecar driver, a factory worker, a salesman. He has been a writer, an editor, and a publisher, and is the founder of Automobile magazine. Today, Mr. Davis will be discussing the 2010 Auto Show and the future of Michigan's auto industry. So please join me in welcoming David E. Davis.
[00:01:23.78] DAVID E. DAVIS: My name is David E. Davis, Jr., and you might say that winding road was a metaphor for my entire life.
[00:01:39.65] [MUSIC PLAYING IN VIDEO MONTAGE]
[00:01:44.44] DAVID E. DAVIS: What you see here is me, earning a living. The car is an Audi RS4, and the roads run east from the north coast of California between Eureka and Mendocino.
[00:02:02.93] Some boys grow up wanting to be president. Some dream of careers in electronics or rocket science. Some yearn to become prodigies, who will pursue money the way others pursue music or the theater. Not me. I always dreamed of driving cool cars.
[00:02:31.85] I love automobiles and I love magazines, and for about 50 years, I've been able to combine those two passions as a writer and editor. It is the best job in the world. If I don't laugh out loud every day, I worry that my life has somehow gotten off the track. I love other things, too: good friends, good books, good shotguns, good whiskey, good jazz, good rock-n-roll, goofy hunting dogs, fine food and wine, rainy days, and the United States of America.
[00:03:14.80] I prefer style to fashion. Style will last you a lifetime. Fashion is what's happening, and you and I know that what's happening has already happened. I love wit, but I hate cynicism. Cynicism is a quick source of cheap laughs, but it's a corrosive force in human relationships. It hurts people.
[00:03:43.03] I believe in dreams, and I believe in dreamers. I believe in luck, and I believe in heroes. I've known racing heroes and war heroes and everyday heroes. They're all around us. Some of them are some of us.
[00:04:03.53] I was born November 7, 1930 in a house without running water or electricity on a hill called Tyree's Knob in Pulaski County, Kentucky. That was just about the time that Joe Venuti and Eddie Lang recorded this piece of music. I love the road movie that has been my life, and I wouldn't change a thing.
[00:04:31.10] [END OF VIDEO MONTAGE]
[00:04:34.33] DAVID E. DAVIS: That last shot of the corner of the globe was where I went off the road.
[00:04:38.04] [LAUGHTER]
[00:04:45.19] DAVID E. DAVIS: That was a lot of fun to do. I've been wanting to do something like that for a long time. I liked Rendezvous, the film that was put together to simulate a very, very fast racing car going through the streets of Paris early in the morning, and it turns out it was shot from a Mercedes S-class sedan, not a very fast racing car, and they dubbed the sound. But it was still a very exciting film. We used live sound and the real car.
[00:05:25.37] Last night was the opening of the 103rd Detroit Automobile Show, and nobody knows exactly what that portends. Whether there aren't going to be any more Detroit automobile shows or whether this may be the sort of turning point where the industry comes back and the auto show comes back, but I'm a little doubtful.
[00:05:56.33] The show is in the third-smaller space, many fewer cars. They had to bring aftermarket companies and electric car companies and one thing or another on the first floor in order to just use the truncated space. They'd already taken away a third of the floor, and they still didn't have enough new cars to fill the space so they brought in other products and things that filled it up. And I was reluctant to go, too, because they had the awfulest champagne in the world, and they pour it into dreadful little plastic champagne glasses with screw-on bases, which fall off while you're drinking the champagne.
[00:06:42.41] When Walter Hayes lived here in Ann Arbor and was the head of public relations for Ford, he lobbied long and hard to get Mr. Ford to let him take over Aston Martin, which he did. And when he came to the show as the chairman of Aston Martin, they had real champagne glasses and real champagne, and it was always a pleasure to go hang out with the Aston Martin people.
[00:07:08.89] Detroit has well and truly collapsed. This is a real tsunami of troubles for the automobile industry. General Motors is going to survive, but who knows in what form. Right now it's kind of a department of the United States Government, and it's hard to say. I like Mr. Whitaker, and unlike an awful lot of people with some advertising in their backgrounds, I liked the television commercial he did where he launched the idea of return the car in six months if you don't like it.
[00:07:51.58] The wise guys were all saying, my God, did you see that old fart? A terrible thing that he's out there talking, you know, drive it for 60 days, bring it back if you don't like it. It worked. Their attendance to their commercial went up dramatically over previous commercials, and the level of consideration by the people who saw that commercial worked. So Whitaker did get to some people who were in the market for cars, as few of them as there are out there. And the fact that he comes from AT&T doesn't bother me, particularly. He hasn't done anything incredibly stupid so far. I wish he would perhaps make a little better use of Bob Lutz.
[00:08:45.41] When they first formed the Automotive Task Force in Washington, I was contacted by the young woman through Bonnie Folster, who's sitting here, who was recruiting people for the congressional hearings, and she asked me if I was interested. And I said well, yeah, but I also gave her a list of names of really solid people that I thought might be good to testify, and I talked long and hard about Lutz and what he could contribute.
[00:09:17.65] And he finally did get down there, and I think he did make a pretty profound impression on them. And when he came back, he was kind of impressed himself. He said, you know, this might not be such a bad thing. For the first time, we're going to have people in Washington whose livelihoods depend on the future of the automobile industry. And we've always had people who had nothing to do with automobiles, who had nothing to do with the industry, held it in contempt because it's an old-fashioned smokestack industry. And he said now we've got some guys who are being paid specifically to bring this industry back. That's their role of government. And I think -- I trust Lutz, and I think that he's probably at least partially right about that.
[00:10:16.59] We've seen a number of changes in the people who are sort of at the car czar level, but nonetheless, it does seem that there are people in the Government who recognize the fact that their success or failure as a government apparatchiks is going to be hinged for some time on how they do with resurrecting this automobile industry, which isn't going to be easy, because the Koreans are coming on like nobody's business.
[00:10:46.90] Hyundai, right now by several measurements, could be described as the most successful car company in the world, and I take personal pride in that because my office is only about half a mile from their technical center, and so I feel personally responsible for any success they enjoy. I also like to drive by their place and look at the Canada geese that are standing on the lawn.
[00:11:19.26] But the show: Last night they had 8,300 people there, and they only had 6,000 year, so that's a sign that maybe things are looking up a bit. But the future of the automobile companies here: I think Chrysler is doomed. I think that for Fiat, for Mr. Marchionne, that success would be if Chrysler disappeared into Fiat, and Fiat became the company that has Dodge Truck and Jeep, and Fiat, and Alfa Romeo, and Ferrari. But I don't think he is particularly ambitious to be running the Chrysler Corporation that we've all known for our entire lives.
[00:12:10.60] Chrysler was a real honest-to-God car company when Lee Iacocca was running it. I love Iacocca. I think he's a wonderful figure, and when he was chairman and Bob Lutz was vice chairman, and Tom Gale was there, and Jerry Greenwald was there, it was a magic team. And Chrysler was building cars for less money than any other car manufacturer in North America, and they were doing a hell of a job. And they made the very bad mistake of getting into this alliance with Daimler-Benz, who raped them and walked away with as much money as they could get their hands on, and then they got handed over to Cerberus, which was like handing them over to a band of roving gypsies.
[00:13:10.44] First of all, Cerberus didn't have the foggiest clue what they were getting into. Some of you will remember when Henry J. Kaiser tried to get into the business after World War II. He had made a fortune building liberty ships, and he wanted to build cars, and he had a pocketful of money, and he ran through that money in less than a year. He was standing there looking at bankruptcy for the last months of his attempt to introduce the Kaiser and the Fraser in North America, and he had absolutely no idea how complex, how difficult, it was going to be or how much it was going to cost him. But he burned right through all the money that he made in World War II, as did Packard.
[00:14:00.00] Packard built the best -- the engine. I'm trying to think, Bill. The engine for the Spitfire. The Merlin engine. Packard built better Merlin engines than Rolls Royce did. The best Merlin engine you could have in your airplane was one built in Detroit by Packard, and they were broke essentially at the end of World War II.
[00:14:28.66] And at a press conference one day, some wiseguy raised his hand and asked the chairman of General Motors at that time if General Motors had had anything to do with the unwinding of the Packard Motor Car Company and all their troubles, and he looked at him very sternly and said, I believe that you should go see the gentlemen who run the Packard Motor Car Company and ask them what they did with all the money they made in World War II. And I thought that was a pretty good answer.
[00:15:03.81] I hated to see Packard go away. I hated to see DeSoto go away. I hated to see Kaiser and Fraser go away. I even hated to see the Henry J go away. I hated to see Studebaker go away. Nash is gone. There's a list of names as long as your arm of cars that were doing business in the United States in 1957 when I went to work for Road & Track magazine, and it's astonishing that they're all gone. And now there's a whole batch of new ones gone. Pontiac, of all the cars in the world, to be out of here.
[00:15:39.41] Buick: One of the great disasters of the automobile business in our lifetimes, I suppose, most of us, was the Edsel. And the reason the Edsel was built was that in 1953, Buick, with the Buick Special, attained third place in sales in the United States. It was just a mind-blowing experience to have Buick all of a sudden rocket up with the big guys in third place.
[00:16:14.81] The Ford Motor Company looked at that incredible success and said the future is in medium-priced cars, medium-sized cars. We've got to have one. And they built the Edsel, which was not at all where the future happened to be. The future had left town at that point, and Edsel was out there naked. Genuinely dumb car. But it happens. Everybody does a dumb one every once in awhile.
[00:16:49.95] Detroit got to be the automotive capital of the United States for some funny reasons. First of all, there's all this water, and at the time, at the turn of that century, 1900, we still relied very heavily on the Great Lakes for major industrial transportation, and Detroit was right there. Detroit seemed to have everything. They had all the lumber they needed, and in those days, lumber was a hell of an important component in automobiles. There was lots and lots of wood in cars of that era, and it was all right here in unlimited supplies. We would never run out of all the wood that they needed to build cars here in Michigan.
[00:17:36.51] We also had access to every kind of metal. It was a place just gifted by God to build cars, and they were able to attract a considerable number of trained people from the vast number of emigres who were coming to the United States at that time, and it became a really interesting city when you think that we had a wonderful Hungarian neighborhood and great Hungarian restaurants. We had a Polish neighborhood. We had everything imaginable.
[00:18:13.59] I lived in Royal Oak, and we had an English neighbor on our left, a French-Canadian neighbor on our right, a Polish lady on the corner who had a double lot, and one half of her double lot was a huge garden, and we had another six or seven nationalities within 125 yards of our house in two directions. And all of those people in that neighborhood were guys who had come over probably for Henry Ford's Five Dollar Day or some similar incentive, although there were no incentives as wonderful as the Five Dollar Day.
[00:19:00.23] But there were lots of reasons to come here and look for work because there was lots of work. And they came to Detroit. They worked on the line. They showed themselves to be industrious and reliable, and they made the move to the next level. They became timekeepers. They became quality-control guys. They became all kinds of lower middle-level managers, and they've moved out of the old neighborhood of Detroit to our neighborhood in Royal Oak, and it was fantastic. It was like the United Nations.
[00:19:36.09] And as a matter of fact, Dick [? Silagi ?] is here. He and I went to high school together in Royal Oak, and we were in HI-Y together, and HI-Y was involved in a program to raise money for a new YMCA, and I was one of the winners in their contest, and the prize was a trip to New York to the United Nations.
[00:20:03.80] We lived in a YMCA on the west side of New York on 34th Street, and every day we would go either to Lake Success or Flushing Meadow, and it was the most fabulous thing that ever happened to me. It was out of sight to be riding the subway, taking the train out to Flushing Meadow, doing all that stuff, and being in New York. I'd been a New Yorker reader since I was about 12. God, it was heaven. But that was an interesting time.
[00:20:39.31] Things started to go wrong in the Fifties. Detroit had a mayor who was crazy about the idea of urban renewal and thought longingly and hard about cleaning out a bunch of old neighborhoods and going in with high rises and housing projects and one thing or another. And the neighborhoods he cleaned out were full of Danes and Lithuanians and Germans and Irishmen, and all these people. And they all moved up to The Thumb or toward The Thumb.
[00:21:16.44] And now you go up to The Thumb, and there are Polish Catholic churches and Lithuanian Catholic churches. I mean, Friday night, it's like all those churches look like casinos. The parking lots are full. There are all kinds of people and there are all kinds of programs going on, and all that action, all that stuff that's happening up in The Thumb right now, will be happening this evening, used to happen here in Detroit, and it ain't happening anymore.
[00:21:49.75] My wife and I drove on my Bach sedan out to New Mexico. And our first night out, we were in Terre Haute, Indiana, and we pulled into a motel, got a room, and then went looking for a place to get something to eat. And in Terre Haute, they have a big chunk of their central city where absolutely nothing is going on. And they have kept the buildings clean. They haven't let the windows get broken. They look like they're ready to do business. The grass is cut. The streets are clean. There are no people there. The place is cleaned out, but the city fathers have decided that they're just going to keep going back in, week after week, month after month, and performing the maintenance on the buildings and one thing or another as a gesture of hope that one of these days the people are going to come back, and the businesses will come back, and they'll be in business again as a city. And it's very eerie, I must say, to drive through this sort of movie set of a town.
[00:23:08.17] I'm going to take a drink, if I may. They were nice enough to fill this with vodka for me. I've often thought that Detroit as an industry was really one big company. The Detroit corporations with Chrysler and General Motors and Ford and American Motors and a couple of others as subsidiaries within that corporation, and they all talked about ferocious competition and the fight for innovation. The deal with innovation was that everybody was absolutely determined to innovative, but not before the other guy innovated. And that was management.
[00:24:06.22] That unwillingness to take a chance before the other guy did it was like a management system controlling what they did. They were remarkably similar. They brought up people who looked and acted and talked just like the people at the other car companies. The Ford Motor Company guys were a little wilder. Probably there was a higher percentage of Ford guys running away with other Ford guys' wives than you found at General Motors or Chrysler. They were kind of sensationalist in that respect. General Motors, on the other hand, was a real bunch of stiffs. They never ran away with each other's wives.
[00:24:59.13] When I was working at Campbell-Ewald as creative director, one of my assignments was to take the senior executives into a little television studio that was in the building there at the General Motors building -- actually, it was in the Argonaut building, which is on the next street -- and prepare them for something like an appearance on Meet the Press, and Dick Gerstenberg was the chairman at that time.
[00:25:26.14] And so I had two or three of my guys, and we went in, and we grilled Dick Gerstenberg, preparing him for his appearance on Meet the Press. And my boss, Tom Adams, a great man, great athlete, great war hero, great chairman. Tom Adams had his annual Christmas party at the Bloomfield Hills Country Club, and I was in the receiving line meeting people as they came in. And Dick Gerstenberg and his wife came in, and his wife was like a fire plug. She's pink and cute and snow-white hair, and Dick's got her by the arm, and he says, Mother! Mother! Come down here! This is the young man who yells at me before I go on television.
[00:26:15.28] They didn't understand the business they were in. The guys, the crazy ones, the guys who started the business, were gone. They had started retiring around the end of World War II. And a lot of the old timers -- a lot of them had been kept around to have their skills available for the war effort, but then when the war was over, they passed out of the system.
[00:26:46.16] But there was quite a turnover at that time of management people, and the new managers weren't like the old guys. The new managers got MBAs, and they looked at the way the old guys had run the business, and they looked at the chances they took, and they looked at the bets they made on public opinion or the public taste, or that these guys didn't know how to build cars, they knew how to build cars, and they could put a bunch of money against that, and it would pay off. These guys weren't going to do that. They were going to do it all by the numbers.
[00:27:23.75] Robert S. McNamara was the king among those guys. Robert S. McNamara would spend hours studying the arcana of whatever subject was going to be the subject of the meeting that he was attending the following day and find questions that absolutely could not be answered. And then he would ask the questions in the meeting simply to embarrass the guys who were making the presentation.
[00:27:51.32] And Iacocca said that McNamara -- despite that, that McNamara taught him more about thinking on his feet, and going to his office the night before the meeting, and doing exactly what McNamara was doing in order to be ready to answer whatever stupid question McNamara had for him.
[00:28:16.41] The companies were in terrific trouble and they didn't know it. Sales were booming. They were making money. There were some things wrong, but they tended not to recognize what was wrong. They had a system on the sales and marketing side of bringing guys in from the field. And then some guy, who had never had any advertising or marketing in his life, who was working as the number three guy in the Atlanta zone, is suddenly brought into Detroit and put in charge of advertising, and he doesn't know his ass from third base about advertising.
[00:28:58.88] And what makes things even worse when you've been working with him for several months and he screwed up everything he touched, he quit smoking, and then for the next two months, he's not going to approve anything because he feels so terrible everyday when he comes to work, and he blames the agency. So it's been a funny business.
[00:29:21.33] When Bob Lutz became the vice chairman at General Motors, he went around to all the departments with which he would be involved and talked to them, straight from the shoulder, told them how he felt, how he had come up originally from General Motors through BMW, through the Ford Motor Company, and now he's back at General Motors again, and talked a little bit about his philosophy.
[00:29:53.82] One of the best thing Lutz would tell guys, and I've always appreciated this. Lutz would say, sit down, stretch your legs out in front of you, put your arms out like this, and everything that is happening between your two hands are the most important features of any new car. He said if you get that right and you turn that into an experience where the guy opens the door, sits down, and everything between there and there is wonderful, the guy's going to buy a car. And I loved that definition.
[00:30:36.50] He said something else. We had borrowed a car from him one night to come home from a party, and I called the next morning and said we're going to drop by and drop that car off. And he said, well, let's have a cup of coffee. I want to show you some stuff.
[00:30:51.57] So we drove out, went into one of the barns where he keeps his car collections, and there was a 1941 Chrysler presidential limousine in the garage, and he walked up to the rear quarter panel on the presidential limousine, and he put his hand on it, and he said this was the high-water mark for tool-and-die designers. He said this was the time when they could finally make anything a designer could draw. And he said when the war was over, it was already going away because the purchasing people wanted everything to be done in one hit on the press, and you couldn't do these beautiful compound curves and this wonderfully sophisticated stuff in one hit because it cost too much, and it went away in just in a couple of years. It was gone. They had the ability and they lost it, just purely for cost reasons and costs aren't important. It's the driver and everything they do. But they get it so wrong and they find so many other ways to waste money that you wish that they had kept some of it and put it back into the products.
[00:32:17.86] Every time they have some major cost-cutting wave, there's a press conference in New York or some kind of an activity in Los Angeles, and you fly out there and you're met at the airport by 16 people that they have hired from a travel incentive company, and they greet you, and they take you to the luggage claim, and some other people who work for that company get your luggage for you and take it out and put it in the car, and you go out to the car, and there's this guy standing there in a black suit, and he introduces himself as an off-duty sergeant detective in the New York City Police Department or the Los Angeles, California, Police Department, and he will be with you night and day for your time in the city. Twenty-four hours a day, sir. Don't worry about anything, Mr. Davis. Just call. I'll be ready to take you. And they're trying to save money. You know, police sergeants don't come cheap.
[00:33:22.21] Lutz, at the end of his talks with these people, would ask them to, you know, if you have thoughts on this, if there's something you'd like to tell me, something you'd like me to know, please drop me a note. I'd love to hear from you. I'd love to know what you know about this business.
[00:33:39.12] And he got a letter from a very bright young guy, who was at that time in marketing training. And the guy wrote a letter and said General Motors is a flyover company in flyover country. It's run by flyover people. General Motors is most comfortable being in flyover country and doing business with flyover people. General Motors is uncomfortable on the two coasts because they are so different from the Midwest and they are so complicated and it's so hard to kind of find your way through all that complication and all those different kinds of people.
[00:34:27.10] And he said those two coasts are where all the action is in the automobile business. Everything new that happens in the automobile business comes from one coast or the other, and General Motors isn't interested. General Motors doesn't know how to talk to those people. He said bring a General Motors guy out here and take him to a parking lot in the suburbs of Connecticut and show him what people are driving, and he won't believe it. He'll think the people are storing cars there or somewhere, that companies are storing them, but people don't buy all that stuff. People buy Chevrolets and Oldsmobiles and other former products.
[00:35:06.23] Bob Lutz was the general sales manager of Chevrolet. Then at one point, he was general manager of Chevrolet. The guy who wrote the letter about the flyover company and the flyover country was -- he was so bright, and Lutz went to his boss. And he said I want to know more about this guy. Tell me about him. And he said, well, I'll tell you what? He said he is a terrific guy. He's got about 50 ideas a week. And he says it's all we can do to control that son of a bitch and make a General Motors guy out of him. And that is literally true.
[00:35:56.15] I've mentioned Hyundai, and the other Hyundai product is Kia, and they may emerge as the biggest winners of all when all this thing shakes out because they're coming on like nobody's business. I mentioned Royal Oak High School and Dick [? Silagi. ?] I graduated from Royal Oak in 1949, and I went straight to the Ford Highland Park plant to work. And Ford Highland Park was one of those places that was famous because of the earliest days of the moving assembly line for cars. And I worked on one of those assembly lines on the fifth floor of the building, making armrests for 1949 Fords.
[00:36:49.67] The time study production target for armrests was 21 an hour, and if you had been unfortunate enough to lose a hand and your eyesight in World War II, you could do about 40. And so we would do our entire production before lunch, which was at 7 o'clock in the evening, and then we'd go up on the roof of the building with our Vienna sausage sandwiches and lie on the roof and listen to Harry Heilmann broadcast the Tiger games. And I thought that any business where you can work for four hours and then go lay on the roof and eat a Vienna sausage sandwich and listen to the ballgame was a pretty goddamn good business. So I opted for automobiles as a career.
[00:37:53.91] I enjoyed my work at Ford, but that was not long after the labor unions had managed to assert themselves and to get contracts from the manufacturers, and they were still feeling pretty much on the muscle. And at the end, I think, of 90 days, you were hit hard to join the union and start paying dues, and I immediately quit and went to another Ford plant and got a job and worked there for 90 days, and then they asked me to join the union and I quit and went to Briggs Manufacturing. And at Briggs Manufacturing, I was a stock chaser on the line that made Plymouth bodies. Some of us remember the Plymouth.
[00:38:45.84] I was running around the plant, getting stock and doing, you know, all the stuff you have to do to make sure that all the machines are loaded up and ready to go. And the foreman came and got me one day and he said, you know, you're a pretty bright guy. He said I've got some people coming tomorrow that I'd like you to talk to. There's quite an opportunity here in the plant, and you may be interested. And I thought, whoa, they've discovered me. I'm on my way.
[00:39:15.42] And the next day, he came and got me and he took me to an empty office, and there were two guys in there. One of them was the UAW committee man, and the other one was the Mafia guy. And they were offering me the job of numbers runner from my floor in the plant. And I was so scared, I nearly wet myself right on the spot, and I quit Briggs that afternoon, man. I was out of there because I could just see myself with this Mafia guy, pressing a 45 to my forehead and blowing me away.
[00:39:54.35] Just before I got married in 1955, I went to Fisher Body at Pontiac, and I got a promotion. I was running a one-man drill, and they moved me from assistant -- or yeah, they moved me from assistant to full-time operator, and I got a substantial raise. And four guys that I worked with showed up in the aisle next to my machine one day and said you're not going to take the job, are you? You don't want that promotion.
[00:40:35.97] And I said, well, God, I'm going to get married in another two months. I really need the money. And they said, well, nobody needs money bad enough to do this to the guys he works with. You don't want to take the money. And I said, well, yeah, I've thought about it, and first of all, I'm really excited to get the promotion, and second, I do need the money. They said, well, you know, this is a dangerous place to work and bad stuff happens to guys. I mean, you could leave here at 1 o'clock in the morning, head out in that parking lot. Goddamn, you know, a forklift could knock you down and kill you so fast. And I was out of there in nothing flat and wound up working for a landscaper until I got married.
[00:41:28.12] I got to California and lived in Manhattan Beach, which was paradise, and decided that I would take the MG I was driving and turn it into a race car I'd been racing here in the Detroit area, both with the MG Car Club and the Sports Car Club of America. And so I turned my MG into a racing car and went to Sacramento, California, and crashed when I was leading the race. The car hit a pile of hay bales on the -- it didn't hit it so much as it grazed it, but they had watered the hay bales down the night before because they were afraid that kids would sneak into the area and set fire to them. So when I hit the hay bale, it was like hitting a building and my left front wheel just walked right up the front of the hay bale, and I went up in the air.
[00:42:26.19] And somebody sent me -- some practical joker sent me an 8-millimeter film of my accident, and you see the nose of my MG coming out of a big cloud of dust and hay, and the car hangs there for a minute and then it comes down. It was upside down. I had my head caught between the back of the seat and the pavement. I didn't have a roll bar because that was the last year before roll bars became mandatory, and I wasn't going to put one in until I had to, and I lost my eyelids on the left side, the bridge of my nose, the roof of my mouth, all but 13, I think, of my teeth, and the roof of my mouth, which was tough.
[00:43:18.78] I was in the hospital three days later, really feeling sorry for myself, and my wife, my then wife, had gone out to get some lunch, and she came back, and she said you'll never guess who was in the restaurant across the street. And I should no. And she said Rodney Johnson. And Rodney Johnson was one of a pair of twins that I went to high school with. And I said, oh yeah? She said, well, he really wanted to see you, so he's outside and I'll tell him to come in if it's OK.
[00:43:56.89] And the last guy I wanted to see in the world was Rodney Johnson, but I said OK. And he comes in, and it turns out he's drunk as a lord. He was in the Air Force in Sacramento, California, and it was Saturday, it was his day off, and he is ripped. And he comes in and he says, hey, Dave, goddamn, Norma told me that you really hurt yourself and that you look like hell. You don't look so bad. And then he vomited on my feet. It was not a great day.
[00:44:38.43] I got hired by Road & Track magazine, kind of as a result of the accident. I was elected to the Board of SCCA in Los Angeles, and it happened that John R. Bond, who owned Road & Track, was on that board. One thing led to another and he hired me. And I had a terrific time at Road & Track. Elaine Bond, his wife, was the business manager, and she taught me everything I needed to know in a period of three years to run a magazine on the business side. And I still, to this day, do things the way Elaine taught me to do them, particularly when you're talking about planning a party or setting up a buffet or doing something. Elaine knew all that stuff and had very firm rules about how parties were supposed to go.
[00:45:36.95] She was very one way and very difficult, and she was constantly harassed by her husband, who, when he got upset about things, would never tell the people he was upset with. He'd tell her and treat her as though she was the person who was doing whatever was wrong, and as a result, when she was upset, she'd run her hands through her hair so her hair was always kind of oily, and whatever she had had done to it would disappear the first time John yelled at her about something. She'd start running her hands through her hair and everything would go to hell, and you would know that you were in for it.
[00:46:16.37] But we had a guy named Bernard Cahier who died not long ago, as our European correspondent. He was quite a good photographer and an absolutely lousy European correspondent. He spoke OK English and he wrote absolutely execrable English. And his wife, who was American, would retype his manuscripts so that we got an English-language manuscript that was at least understandable. But he wrote his captions for the photographs on the back of the photographs, and did them in his Franglais, which was really funny.
[00:47:01.78] And we had done a story on the Lime Rock 10-hour endurance race, and the headline on that story was "Little Lemans for Little Sedans, " and Elaine went berserk and sat us down and told us that Road & Track magazine NEVER taught people to mispronounce important European names. It was pronounced "Le Mah," and that blew the joke. And so they went out of town and when they came back, we had prepared another race story.
[00:47:44.97] Jean Behra, driving a Maserati, had won the Moroccan Grand Prix. And Cahier had photographed Behra as he crossed the finish line, and we took Behra -- we took his caption from the back of the photograph, which was just the most ridiculous English you can imagine, and we made a big headline out of that. And the name of the story was "Behra Clicks at the Grand Pricks," and under that, we had Cahier's caption on the picture of Behra, who came across the line going like this, with a big smile, and it said "Behra, Sniling and Relax, Comes at the Winner's Circle." And Elaine fired the art director and fired me awhile later for disloyalty and incompetence.
[00:48:50.52] And I came back to Michigan and went to work for Campbell-Ewald. And I was still paying off the bills from my accident. I had been laid up for 18 months, and there were all kinds of doctors and labs and one thing or another, who had not been paid, and I was sending out $10.00 here and $16.00 there, and trying to keep everybody happy. And what I have been told was if you just send a little money every once in awhile, they won't turn you over to a collection agency.
[00:49:19.11] So I was doing that, and I'm sitting with the administrator in the Creative Department at Campbell Ewald, praying that now that they're going to hire me, they will pay me at least $10,000 a year so I can continue to pay on my medical bills. And he's talking on the phone. He says, yeah, we got a new guy. He's going to write Corvette and we're going to pay him 16, and I just about fainted. It was all I could do to keep from bursting into tears. I was going to have $16,000! I was going to be able to pay the damn medical bills.
[00:49:53.47] And then he said we're going to put you with of our best guy. He's the most experienced person here, and he's going to show you the ropes. And he walked me into this guy's office, and there's a little guy in there with glasses on, and he was Elmore Leonard.
[00:50:12.64] And Elmore Leonard was then my mentor in the advertising business for the next three years. And when he decided to leave to become a serious full-time writer -- advertising agencies throw the best parties that ever happened. I mean, somebody leaves, somebody dies, somebody gets married, there's always an enormous party, and it's always really well done. And we threw the best party ever for Elmore because everybody really loved him.
[00:50:42.58] And I was talking to him during the middle of the party, and we had a buddy there from Grand Rapids named Phil Berglund, who was a Finn from the upper peninsula, and he's suffered the Finnish disease. He was drunk all the time. And he was drunk. And Elmore said, you know, I'm worried about Phil. He said he's really in bad shape. He said what I would like you to do is take the keys to my car. Take him outside. Get him into my car, and I'll take him home and put him to sleep at the house. I don't want him driving.
[00:51:20.41] So I went and got Phil. I took the car keys. Put him the back of the car. Dutch comes out, gets in the car, drives him home to Lathrop Townsight, and puts him on the daybed in the family room, and he's stretched out on the daybed in the family room. And in those days copywriters of advertising agencies wore topcoats and hats and neckties, and he was wearing all those things. He was white shirt, necktie, Chesterfield topcoat, and he's laid out like a dead person on this daybed.
[00:51:54.25] And he wakes up with the first light in the morning, and he opens his eyes, and he's still got his glasses on. And Dutch's son, six-year-old Billy Leonard, is right here. And he closes his eyes and he says, aw! And Billy peels off and raises up the stairs and runs into his parents' bedroom, and he wakes up Beverly Leonard, and he says, Ma! There's a Chinaman on our couch! And Phil, being Finnish could be mistaken for a Chinaman if you were six years old. And she says, how do you know he's Chinese? And he says, he's talking Chinese.
[00:52:43.79] Just about everything I've ever done in the automobile business has been fun. And I know that there are a whole bunch of businesses that are not as much fun. I can't imagine working in a bank. I worked in an insurance company once. I didn't like that. I don't want it to go away, and yet I'm afraid it's going to.
[00:53:04.36] I think that the imported car business may be the new automobile business in the United States, and I worked in three different automobile -- or imported car dealerships when I was not working in automobile factories so I'm at least partially responsible, as I have some responsibility as an automotive journalist. Because all of the automotive journalists, speaking loosely, we all came out in favor of imported cars in the late Fifties and early Sixties. And we all be beat that drum pretty hard, and we all have a certain responsibility for what's happened to the domestic industry. And it's very sad.
[00:53:50.66] I drive around this city. I see all the history that's there. I feel badly about it. I love that business. I love the cars. I love the guys, most of them, and it's going to be tough we don't have one.
[00:54:08.29] In 1941 when President Roosevelt declared war against the Japanese and the Germans and the Italians, there was an Oldsmobile plant just outside of Lansing that in 90 days switched from building automobiles to building tanks and had the first tanks coming off the line at the end of 90 days. And I wonder how quickly Fiat would've made the same transition or Hyundai or Toyota.
[00:54:48.21] I'm not sure they have our best interests at heart in these things, and some of the wiseguys who are on television every night don't seem to think we need heavy industry in the United States anymore. What good is it?
[00:55:00.62] And I'll tell you what: digital products are very, very helpful in prosecution of a modern war, but there's a whole bunch of other stuff that has to get built in something like an automobile plant if you're going to be successful at war. And I hate to think of facing a war with no arsenal of democracy. And since we've been at war practically my entire adult life, I don't see any reason not to expect that we're going to face something cataclysmic at some point before I die. That's really optimistic because I'm probably going to die this afternoon. But I am 79 years old so it could happen. But I am troubled by that.
[00:55:52.99] I think about my family members who fought in World War II. I think about Tom Adams. The proudest thing that Tom Adams had, my old boss at Campbell Ewald, was not the fact that he'd been a great athlete and he'd been talked about for all-American and all that stuff. He got a Navy Cross at the Battle a Lady Gulf, flying a TBM Avenger. The TBM was the Grumman Avenger that was built by General Motors, and Adams -- it was VERY important to Adams that he flew a General airplane when he got his Navy Cross at Lady Gulf.
[00:56:34.25] And I don't know. I don't want to see this country go down because idiots in Congress and smart guys on television don't believe we need companies that make things anymore, that we can get all the stuff we need from Korea and Japan and guys that we've already fought with once or twice and we may be fighting with again.
[00:57:06.01] So my parting shot on this as a writer, not an automotive pundit. The Nelson -- where are we here? I forgot the man's name. This is something that happens when you're 79.
[00:57:32.13] Nelson Algren was a great Chicago writer who wrote Man with a Golden Arm and made a good movie out of it. And he was invited to be the keynote speaker at a writer's conference. And he showed up for this affair, and he's a very hot writer at this time in his life, and he goes to the hotel where the big conference is taking place and he decides after he checks into his room that he ought to go down and see what's happening, get some idea of what these people are up to.
[00:58:08.32] And he gets down there and here are all these so-called writers, and they're talking about, is it OK to use a blue ribbon in the typewriter instead of a black ribbon? Can I send a carbon copy of a manuscript to a publisher, or does it have to be an original? Nobody's talking about writing. Nobody's talking about human experience. Nobody's talking about tragedy. They're talking about the mechanics of getting a manuscript sent.
[00:58:34.64] And Nelson Algren is so put off by this. And it didn't take a lot for Nelson, but in this case, he got fed up, and went and got drunk and stayed drunk until Friday night when he was going to give his speech. And he walks into the room with all these people, and he says, I only have three things to say to you people. One: Never trust a woman called mom. Two: Never play cards with a man named after a city. Three: Never sleep with anyone whose troubles are worse than your own. And he turned around and left.
[00:59:14.12] [LAUGHTER]
[00:59:18.07] DAVID E. DAVIS: So I've reached that point. And I think now we'll do some questions. Easy questions before you get into it.
[00:59:30.33] SPEAKER 1: Easy question. Well, maybe not. I drive an 18-year-old Pontiac Firefly. Anyone know what that is? It's a Geo Metro convertible, made by Suzuki and sold to me by Rampy Chevrolet. It's a two-seater, of course, but it has an unusually large trunk. It's one of my favorite cars I've ever owned, and it still gets 45 miles per gallon, and unlike the smart car, it does it on regular with a nice simple engine, not a hybrid engine, three cylinders, 1,000 ccs. I think it's a great car. Why can't anyone make something like that anymore, or why won't they?
[01:00:10.29] DAVID E. DAVIS: Well, this morning, Larry Crane, who is working with me on a book that I'm doing, and I went over to my office driving a Suzuki SX4, which does just about everything you just described and is a brilliant little driver, really sweet car. And Jim Hall, the analyst, told me about a year ago that I was going to love the SX4 and I do. That's a terrific car.
[01:00:37.41] But I'll tell you something else. My wife and I went to Florida to a Concours d'Elegance, driving a Volkswagen TDI Jetta. We never got less than 400 and some miles to a tank of fuel. We were always around 500. We never got less than 38 miles to a gallon, and it was a brilliant ride. Terrific midrange acceleration. We handled the interstate traffic all the way down and all the way back like a much larger, much more powerful car.
[01:01:13.99] They're all over the place out there. We've got some amazingly good small cars in the inventory right now and more coming.
[01:01:23.10] SPEAKER 1: What Suzuki was that?
[01:01:24.56] DAVID E. DAVIS: SX4.
[01:01:24.96] SPEAKER 1: [INAUDIBLE]
[01:01:27.14] DAVID E. DAVIS: Yes, yes.
[01:01:30.03] SPEAKER 2: David, I've been a car nut since I was just a little guy. My dad took me out of the second grade to take me up to the 1956 New York Auto Show. We lived in Philadelphia. And, you know, I bought a Datsun 240z. It was my first new car based on your recommendations. Rusted out in two years. Then I bought a Fiat 124, one of the most beautiful cars ever made, and if I drove it over 55, it was knocked out of tune, and I had to get it -- spend 200 bucks to get it tuned up so I traded that in. But David, I love you.
[01:02:19.56] [LAUGHTER]
[01:02:21.00] SPEAKER 2: I subscribed to Car and Driver when I was 12 years old. And then my company moved me from Minnesota to Michigan, and I had the option where to live in the state, and most everybody else had lived in Detroit. I picked Ann Arbor because this is where Car and Driver was. And you did Automobile magazine. I was one of the first ones to sign on. Believe me, I love you.
[01:02:49.18] DAVID E. DAVIS: God bless you, sir.
[01:02:51.13] SPEAKER 2: What I can't understand is here I am, I'm with one of my idols in life, and I paid nothing to come here. My wife says to me this morning, do you know David E. Davis? YEAH! Well, he's going to speak in the Ann Arbor Library today at 2 o'clock. Oh my goodness! Everybody else has to pay hundreds of dollars to see their idols, and here I am just a few feet from you. How did this happen?
[01:03:31.39] DAVID E. DAVIS: I've got some guys from New Jersey who are going to mug you.
[01:03:34.42] [LAUGHTER]
[01:03:35.70] DAVID E. DAVIS: When I went to work at Campbell Ewald the second time, my assignment was to write the marketing plan for the Chevrolet Vega, and I did that, and the Chevrolet Vega turned out to be the worst car General Motors ever built. And I spent the next four years of my life fearing that I would be walking down the street and some guy whose Vega had just expired on the Pennsylvania Turnpike would recognize me and beat my brains out with the jack handle.
[01:04:18.36] And that was a dark period in my life, and a lot of people who have said nice things about me and said they bought cars because of me, so far I've not had to give a speech to a bunch of former Vega owners, who would all come armed and bringing flame throwers and stuff like that. Sir?
[01:04:41.72] SPEAKER 3: Every automaker at the Detroit Auto Show this week has got some kind of an alternative fuel vehicle, a hybrid, an electric vehicle, something that's concept or going into production. There was an undercurrent at the show that some of the big automakers, the domestic automakers, probably they've got their electric vehicles, they're out there, but they may not really have their heart in the production of those because if they're successful with them, it could pull the rug out from under all the internal combustion engine lineup that they have. Any thoughts on that?
[01:05:13.09] DAVID E. DAVIS: Well, we don't have an automobile company in North America that isn't in some way beholding to the United States Government now, and they're going to do what they have to do, and that includes electric. I love hybrids and I hate electric. I don't like the idea that I'm driving something electric that doesn't burn any carbon fuel, but 65 miles away there is a power plant generating electricity using coal and it's blowing all kinds of crap into the air and making it possible for me to drive a nice, clean, electric car.
[01:06:06.27] When I drove my first hybrid in 1980 at Fiat, it was a diesel, and it had no muffler on it. There was just an exhaust pipe hanging under there for about four feet so the noise came right up under the seat. But I drove it, and I fell in love with it, and I thought, God, this is really good. It makes its own electricity. You don't have to stop after 29 miles and find someplace to recharge it. This has gotta be the way to go.
[01:06:37.98] And I feel that way today. I think that we're only on the leading edge of what's going on with -- or on the trailing edge of what's going on with hybrids. We're going to find other ways to make hybrids more efficient, better operating. But I'll tell you right now: Driving a hybrid is fun. The technology is interesting. It's such an unusual driving experience. It's entertaining. I get a kick out of driving them, and I would recommend one to anyone who was feeling as though he ought to do something, whereas smart cars are stupid.
[01:07:20.47] There is absolutely no reason to buy a smart car, and if you saw the picture of the smart car that had been impacted by the 18-wheeler on the internet, you really don't want to be driving that one. Or if you saw the safety bureau shots of the car-to-car crash with the smart car, it didn't fare too well either in that situation.
[01:07:51.52] I love the way it looks in A Good Year with Russell Crowe when he's driving around the roads of France in a smart card. It just looks so terrific, and you got one, and that'd be fun. No! It would not be fun. I mean, you know, to spend your life driving between Ann Arbor and Detroit in an angry overshoe is not my idea of --
[01:08:14.73] [LAUGHTER]
[01:08:17.27] DAVID E. DAVIS: Next.
[01:08:20.84] SPEAKER 4: I'm a Washtenaw County Democratic Party activist, also a former and sometimes current business writer with connections to the auto industry and other industries. if I were to propose opening a publication to compete with Car and Driver magazine this afternoon, it would be under the title of futuristic transportation. I would like ask a couple of questions and have your responses.
[01:08:56.26] First of all, I'd like to know if you agree. The attitudes and, indeed, planning of transportation in the United States has been too imbued with right-wing, selfish attitudes, attitudes that have precluded the development of affordable, effective public transportation in the country, and if there isn't a need for that in the closed auto companies could be and should be converted to designing and producing public transportation. And I'm wondering why you're omitting possibilities of other fuels, not only for power plants, but for vehicles, including hydrogen fuels. And I'd appreciate if you'd address any of those concerns. Thank you.
[01:09:57.46] DAVID E. DAVIS: First of all, the industry's response to these things has only been political in the sense that General Motors particularly has always been terrified of government interference on the basis of antitrust. And in the old days when General Motors was selling everything they could build, their number one concern every day of their lives was that we're going to sell so many cars that the government's going to come in, will get over 65% of the market, and we'll be put out a business.
[01:10:33.28] So that's the political aspect. It has nothing to do with Republicans and Democrats because, generally speaking, guys in the automobile industry at the upper levels tend to be sort of apolitical. They don't want to get trapped into a position. And the other thing is that they're very good public citizens in terms of the money they donate and the causes they support and one thing or another, but they're not very good citizens in terms of personal involvement in issues and too many events. They try to avoid that stuff. So I would say, in that sense, they were being apolitical by default. It wasn't because they're bad guys or good guys. They just tend to avoid that stuff because they don't want to get any on them.
[01:11:24.84] As far as other fuels are concerned, there isn't another fuel right now other than diesel, and the modern European diesels are just about the most wonderful engines you can drive. But beyond diesel, there's not much that's very promising. All those people who have been selling corn for an alcohol-based fuel are about to go back to the -- letting their fuels grow up and getting the government to pay them for not growing anything because corn-based fuels turn out not to be the answer. It costs more to generate -- to make the fuel, and it's not an answer. There are people who love it.
[01:12:17.71] Hydrogen: Twenty years ago, there was a big move. There was a belief on the part of a number of people, and particularly inside the automobile business, that a hydrogen fuel called hydrazine could be salvaged and extricated from the exhaust of nuclear power plants. And they all believed passionately, as I did, that we would be like France, that we would go nuclear, and all of our problems would be solved. And it turned out that here was this other wonderful aspect of it, hydrazine, where you could go into the wastewater from a nuclear power plant and extract a hydrogen-based fuel. And God, it sounded great. Didn't work. And then, of course, the people that you represent all wet their pants on the subject of nuclear.
[01:13:22.45] A wonderful option that has been taken off the table for purely political reasons, and not my politics, but I would dearly love to see nuclear come back into the picture. I would just wish that, in doing so, we could bring back Hyman Rickover and have him run it. Sir?
[01:13:46.01] SPEAKER 5: A car question. In September 2008, I was able to rent a Ford Fiesta diesel and drive it for nine hours on Scottish roads about the same width as that screen, and it was wonderful car. You wouldn't even know that it was a diesel until you had to fuel it. I made the mistake of filling the tank to drive 250 miles from half to full and gave back a car with three-fourths of it in. I was getting 65 miles to the gallon, basically. I understand Ford won't bring that car here. I'd like to know what you think of the prospects for them doing so or a car like that to succeed here?
[01:14:22.14] DAVID E. DAVIS: I think that it's like so many really important innovations. Everybody's a little staggered by the incredible progress that the Europeans have made with diesel. And Bosch has been just doing a fantastic job. We get one Bosch test vehicle after another in the fleet to drive, and I'm constantly amazed. Now I've driven Japanese cars with Bosch diesel technology. I've driven all the German cars with it, and I just think it's remarkable. I just came away talking to myself after the trip to Florida and back in a diesel Volkswagen Jetta.
[01:15:07.25] If you get an opportunity, if you could go to your local Volkswagen dealer down the road here and get a drive in a Jetta diesel, it's just mind-blowing. Now that wonderful R8 race car that Audi ran is available with a diesel engine. That's another one that's just an absolute peach for another reason. Because it's separate your retinas when you stand on the throttle. It's just astonishing how fast that thing goes.
[01:15:42.52] So if we did what needs to be done to have European diesel technology in the United States, if we put the same kind of money into expanded rail transportation, both urban, interurban and cross country -- I should say all three, not both, -- if we did all three of those things, rail, diesel and better hybrids, I would think that would be a long way towards solving what right now is a complicated problem. Sir?
[01:16:34.26] SPEAKER 6: Here we are in Ann Arbor, Michigan, a midsized community without a daily paper. Can you tell me what you see as the future of automotive journalism, your magazines, websites and so on?
[01:16:50.76] DAVID E. DAVIS: All print publications are in serious trouble, newspapers and magazines alike. It has become almost impossibly difficult to deliver the kind of package that we did as recently as 10, 12 years ago because the costs are just off the wall. I look at Road & Track magazine, which to me was always -- as an editor and publisher of competing magazines, I always thought that Road & Track was the target and was the one that was doing the best job. And you look at Road & Track now, and it looks like a Pep Boys catalog. It's a terrible-looking magazine. The paper is junk. And it's just people have had to cut costs and cut costs and cut costs, cut staff, cut staff, cut staff.
[01:17:43.80] Csaba Csere is no longer the editor at Car and Driver because he went to New York for a budget meeting, and they ticked off their list of things that they felt needed to be cut, and they came to one that Csaba said, look, that's a really important part of the magazine. I really don't feel we can cut that. And they said we have a problem. And he said, well, what should we do about that? He said, well, I believe you should go back and clean out your office and leave the company. And that was how Csaba Csere left after what? 21 years with Car and Driver magazine?
[01:18:18.87] Magazines have just become ruthless because they're scared to death. They don't know whether they're going to be in business this time next year. Newspapers, exactly the same thing.
[01:18:28.27] I have been on the Board of the University of Michigan Journalism Fellowship Program, which is a program for journalists at midcareer. And the people who are at midcareer in journalism are really troubled and really concerned because they see all of the things that have traditionally been barriers to keep bad journalism out and keep good journalism in are going away. And now you're not allowed to say no when somebody wants to do something really terrible to your department in the magazine or the newspaper.
[01:19:08.53] It has not become that bad on television, although it is bad on television. One of the reasons that we see all these incredibly bad reality shows is that they're very cheap to produce, and they do get an audience, although I would not want to have lunch with any of the people who watch them regularly.
[01:19:31.23] But the publishing business is a nightmare. And you think about the automobile companies, the unthinkable happening, and automobile companies going out of business.
[01:19:44.53] Gourmet just went out of business. Gourmet was an absolutely rock-solid magazine with a good audience that was absolutely reliable year to year, always with a certain percentage growth, terrific publication, terrific audience, everything you want in a magazine, and they killed it because it wasn't going to make enough money. It just makes your heart sick if you really love magazines as I do. Sir?
[01:20:13.12] SPEAKER 7: I'm pretty car ignorant. I'll try and keep my question as nondumb as possible. I remember being pretty embittered when a pack of senators from the right-to-work states all united to try and stop the rescue of our American-owned car companies in right-to-organize states. Their deliberate goal was to exterminate those car companies so as to default all the business to their right-to-work transplants. Could that be a marketing wedge issue that American-owned companies could use?
[01:20:49.73] DAVID E. DAVIS: Well, nobody listened to them in the hearings in Washington before the GM and Chrysler bankruptcies. That was kind of a nonstarter as an issue. I don't think at the present time you'd have much luck trying to go against organized labor on an issue like that. I don't think Mr. Obama is very interested in going up against the people that he gave General Motors to.
[01:21:23.13] SPEAKER 7: I meant could those car companies or American car companies say you might consider buying a union-made car from a right-to-organize state instead of buying a car from states whose senators tried to exterminate the American industry?
[01:21:39.05] DAVID E. DAVIS: I'm sorry, that was a bad answer. I have watched the growth of the imported car in the United States, and I think we'd have a hard time if we went out and canvased everybody in California and tried to find those people who bought their import cars so that they wouldn't have to buy a union-made automobile. I don't think anybody ever thinks of that except when a senator from one of those states makes himself heard in a hearing or something, and then you think about it, and you say, well, you know, maybe.
[01:22:22.82] But they don't think we need the capacity to make war where they think we can get all the war materiel we need from Canada and Switzerland and Yugoslavia. They don't think about that kind of stuff. They have a remarkably tin ear where -- I'm talking about the entire political establishment. I'm not taking sides.
[01:22:53.19] They do have a remarkably tin ear for those sorts of issues until it becomes a bread-and-butter issue in their backyard, and then they become very pious on the subject. But generally speaking, they're not even thinking about it when they're thinking about where they're going to put a new plant or whether they're going to let somebody do something so and so. Unless the UAW really kneels on their chest and makes a loud noise, they don't pay much attention.
[01:23:27.71] SPEAKER 7: Now, are what's left of the American car companies -- you've described some ongoingly wonderful foreign, especially European, companies. Are the American car companies incapable of making things at that level, or are they fully capable and absolutely refuse?
[01:23:44.86] DAVID E. DAVIS: They have demonstrated -- recently with a minority of really good products, Ford Motor Company is probaby leading the way with an interesting portfolio of products that are very, very nice cars. And it's interesting that Mulally comes from the aircraft industry and is not a car guy and therefore shouldn't be able to do that, but Mulally has kind of pulled the rug out from under everybody with a series of very nice products. And I personally give him a lot of credit because they weren't doing it before he worked there.
[01:24:22.85] The Chevrolet Malibu is fully competitive with most of the European stuff. The Malibu hybrid is an extremely nice addition or evocation of the hybrid idea. There are good cars scattered all through the thing that are fully competitive with the Europeans. Right now, the world has changed. When I got into the business in the years right after the war, people would laugh you out of the building when you tried to sell them a Volkswagen. It's just the dumbest idea they ever heard in their life. They're not going to drive a stupid German car, for God sake. And year by year, they have had continued their penetration. There is nothing evil about it. It's the force of the market.
[01:25:15.81] And generally speaking, if you look back to the late 1970s, early 1980s, when Detroit just fell on its face and built some of the worst cars they have ever built. I had a Pontiac Grand Prix. I drove into a carwash in Romeo, Michigan, and when the water hit the car, a three-inch sheet of water came into the car over the top of the windshield. And people had experiences like that right through Cadillac with the 5.7-liter diesel. There's a whole generation of people who would never go back and buy another Cadillac because of the 5.7-liter diesel and all the other dumb cars.
[01:26:02.47] The Cimarron that they built. The Cadillac Cimarron -- the President of General Motors, as the chairman of the Product Policy Group, grabbed the head of Cadillac, Ed Kennard, when he was presenting his plan for building and selling the Cimarron as a Cadillac. Pete Estes, the president of the company and the chairman of the meeting, took him out in the hall and said, Ed, General Motors doesn't have enough money and you don't have enough talent to turn that son of a bitch into a Cadillac. And he said there's a bunch of people in that meeting who don't know anything about automobiles and they're going to think you're doing a hell of a job, and they'll give it to you, and it'll be the end of your career. And he was right on every point.
[01:26:53.14] So they're really guilty. I mean, they have burdened us with some desperately bad product. They're getting over it now. They're doing a hell of a job, but it's a little late.
[01:27:08.35] You sat down sort of meekly. I was waiting for the angry repost.
[01:27:16.18] SPEAKER 7: I had another question, but I'll get back in line to save time.
[01:27:19.01] DAVID E. DAVIS: Sir?
[01:27:20.71] SPEAKER 8: Just quickly. Next time I see you in The Roadhouse, I'll buy you a drink.
[01:27:25.04] DAVID E. DAVIS: Oh, excellent!
[01:27:25.98] SPEAKER 8: And if you were at the auto show last night, did you get a chance to see the Volkswagen hybrid, which looks sensational in pictures?
[01:27:33.40] DAVID E. DAVIS: I was not there. I decided that I'd had all the bad champagne I ever wanted to drink and I didn't go. Sir?
[01:27:44.83] SPEAKER 9: You spoke of the diesel engines, and I had either the benefit or burden of owning one of the 5.7-liter --
[01:27:51.01] DAVID E. DAVIS: Well, good for you!
[01:27:52.11] SPEAKER 9: --engines.
[01:27:52.93] DAVID E. DAVIS: A pioneer!
[01:27:53.46] SPEAKER 9: --from Chevrolet, and I think the best accessory to have with it was a [UNINTELLIGIBLE] towing contract. In essence, I'm absolutely fascinated with how General Motors ever came to go into that area, apparently with no expertise, if you have a thought or comment on it.
[01:28:15.47] DAVID E. DAVIS: The system of recruiting, training and positioning guys that they brought into the company was really weak, and there were some really second-rate people in decisionmaking positions all around at that time. There was a wonderful guy who was the original ahead of Saturn. One of the brightest guys I ever knew. He lived here in Ann Arbor. His wife died of Alzheimer's when she was only about 45 years old, and he left the business. But, God, he was a lovely man and he was incredibly bright.
[01:28:54.08] We were having dinner here in Ann Arbor one right, and I said I have always thought that one of these days, kids, who went to university and for four years kept a Volkswagen Beetle running, are going to have an entirely different point of view about automobiles when they come to work at General Motors or Ford. They're going to feel about automobiles in a way that people felt two generations ago about automobiles. They're going to bring an entirely different ethic to their role relative to product in the company. What do you think about that? He said, oh, I think that's absolutely true. He said I also know that we will beat it out of them.
[01:29:47.70] SPEAKER 10: Mr. Davis, you have -- you know, your prognosis for the U.S. auto industry is not very bright.
[01:29:54.43] DAVID E. DAVIS: Not bright, no.
[01:29:55.68] SPEAKER 10: Not bright. Now is that a matter of cost? I mean, can we just not compete on cost or is it technology? Is it bright brains that we're lacking, or is it just the vision of the leadership in the auto industry? Is the government holding back? I mean, is there --
[01:30:13.18] DAVID E. DAVIS: Well, I'll tell you one story. A really good advertising guy I know, a guy who was the head creative guy on the Ford Motor Company business for quite awhile is consulting in his retirement, and he was brought in to work on a Jeep project. And he did four Jeep storyboards on four consecutive days and took them to the guy that was paying him and said I have these and let me present these, and here's how you go through them, and this is what it's like.
[01:30:53.50] And the guy said this is good, this is good. This has been very helpful. I'll take them to Washington first thing next week. And he said you're going to take them to Washington? And he said yes, as part of this project, I'm obliged to take them and show them to the task force.
[01:31:09.56] And you think, whoa, that's a good way to get great advertising. I mean, you know, whoo! That's really a painful thing to contemplate. That's worse than the second-level advertising manager who quit smoking.
[01:31:27.70] SPEAKER 10: So even Ford, which is showing some life?
[01:31:31.42] DAVID E. DAVIS: Well, Ford's the exception, and I hope that I've made it clear that Ford is exceptional in this discussion. Ford is right now apparently doing everything right to get themselves out of this mess. They mortgaged a lot of stuff at exactly the right time to make themselves fluid when this disaster hit. They did not have to go into bankruptcy to do it, and as a result, they did not have to take the UAW as a partner on their Board, and they're doing good, good products.
[01:32:09.23] SPEAKER 10: OK, and last, one of these gentlemen asked why isn't that Ford Fiesta with the 65 mile-per-gallon diesel engine coming into the USA?
[01:32:19.22] DAVID E. DAVIS: Diesel engines coming into the United States come very slowly because -- mainly because of the California Air Resources Board. The California Resources Board just hates diesels. They do not believe and they have yet to be convinced that diesels are an answer. All they see is brown smoke and a bad smell, when anybody says diesel.
[01:32:42.84] AUDIENCE: [INAUDIBLE]
[01:32:44.34] DAVID E. DAVIS: Well, Volkswagen, Mercedes Benz, BMW, the list is as long as your arm now of people who are delivering really good diesels, all thank you to Bosch. But it's tough because, as California goes, ten other states go, and then the project doesn't happen.
[01:33:06.92] SPEAKER 11: It's also economical. $3,500 to $4,500 for a [UNINTELLIGIBLE] diesel. Because the European [UNINTELLIGIBLE] doesn't even come close.
[01:33:16.97] DAVID E. DAVIS: But there's also a similar premium on hybrids, and they will never pay for themselves in fuel savings, but you are getting a better automotive experience and you are -- I just got rid of a Cadillac Escalade and replaced it with a Subaru Forester. I bought it from a dealer friend in Maine, and I burned exactly half as much gas coming back in the Suburu as I did going over in the Cadillac. Sir, please.
[01:33:49.92] SPEAKER 11: Is Infinity, Euro, Bosch diesels [UNINTELLIGIBLE], certain kinds of bio or vegetable diesel [UNINTELLIGIBLE]?
[01:34:01.18] DAVID E. DAVIS: I can't answer that question. We've had cars that ran on biodiesel. As a matter of fact, one of them stalled in the parking lot and I was out there helping this poor guy who was trying to get it running again on a lot I know about biodiesel, not being famously mechanically oriented.
[01:34:23.03] But I would say, knowing what I know about Bosch and having driven now, I suppose, 18 or 20 different Bosch diesel-powered vehicles, that they are on top of it. I'd bet you a hundred dollars that, number one, they have run every kind of biodiesel imaginable through a whole fleet of vehicles, and they know a lot about it. And the question becomes, can they use it in their general vehicle population, or does it have to be limited to a certain type of diesel power plant and a certain type of vehicle? I don't know, but I would suspect that there are complications in marrying the European diesel technology with the somewhat simpler and maybe a little cruder diesel technology that accepts bio so readily.
[01:35:20.96] SPEAKER 11: So if you wanted -- if someone hoped eventually for European-level diesel engine technology to run on biodiesel, it won't be until the Europeans design their engines around what biodiesel can do?
[01:35:37.70] DAVID E. DAVIS: You know what I would do if I were you? When you get home tonight, Google Bosch, and go through the background on their diesel, and Google will give you a hell of a lot better answer than I will. Sir?
[01:36:00.65] SPEAKER 12: Maybe you can help me understand one aspect of the bankruptcies of General Motors and Chrysler that, quite frankly, I don't understand.
[01:36:10.91] DAVID E. DAVIS: Probably not, but go ahead.
[01:36:12.77] SPEAKER 12: I'll give you the opportunity. During the hearings leading up to the bankruptcies, both those companies claimed that they needed to shed dealers, lots of dealers, in order to save money for the manufacturer, and that's the part that I don't understand. I can understand how closing a dealer helps other dealers in the same neighborhood because the business gets spread around to those dealers. But how does it help the manufacturer?
[01:36:44.49] DAVID E. DAVIS: I think it helped them that week. I think the mere promise that they were going to do it was extremely helpful in making peace with the government, and then they had to follow through. But my experience with these things is that sometime in the next 18 months, they're going to turn around and rebuild their dealer organization, and they'll have some bogus reasons that it's OK to do that now after they got rid of all those guys before.
[01:37:13.21] I think that was a pretty slimy business. Every dealer body so far that's been killed off has taken just a terrible screwing, and this is no exception. There are some states like Texas where the dealers have enormous power with the legislature, maybe because so many of the legislators are dealers. I don't know. But generally speaking, the dealers have had pretty good clout. Their relationship with their state government has generally been enough to protect them from either stupidity or outright bad behavior on the part of the company they're doing business with.
[01:38:03.10] Now it seems to have changed that the government was clearly on the side of the guys firing the dealers. The government has not been -- as a matter of fact, the government was -- it seemed to me that the people speaking for the government were a little bit sort of disimissive of the whole dealer question. I think, you know, again, all those Harvard guys, think about a car dealership, for God's sake. Those guys with the black-and-white shoes. They're all named Vinny. Sir?
[01:38:42.09] SPEAKER 13: If world conflicts necessitated us rebuilding or attempting to rebuild arsenal democracy, would it require men like they had in the early automotive companies? And if that's the case, if it would, are there enough of them around to do the job?
[01:38:57.33] DAVID E. DAVIS: You make a hell of an interesting point. Go to the public library and get the -- we are, yes! There was a very good trilogy written on the Ford Motor Company, and it's the only trilogy I know that was written. I can't remember the authors right now. There are two guys. And in there, they talk about the B24 bomber. And they talk about the guy who was responsible for the design of assembly lines through the Ford Motor Company joining Edsel Ford and Edsel's sons and going to California to talk to the people at Consolidated about supplying parts for the B24.
[01:39:46.96] And Henry Ford contacted him when he got to California and said we're not going to supply parts. The only thing we're willing to do is build complete airplanes. So after his initial meeting with him, they said, well, no, we don't want you to build complete airplanes. We want you to build parts.
[01:40:04.46] And he went back to his hotel room. He worked all night. He designed the assembly line for Willow Run. He worked out all kinds of stuff on costs that he was doing right off the top of his head, and he came back to them the following day, and he said it's taking you guys weeks to build a single airplane. You guys build the airframe. You take it out of the plant where you're building it and you set it out on the runway in the sun, and you have to make the screw holes oval because the metal expands and contracts as it goes inside and outside in the California heat, and nothing works properly. You're custom-building airplanes. You're not building airplanes a hundred or a thousand at a time. You're building them one at a time.
[01:40:52.76] And the busiest place in the Consolidated shop was the Special Tool Shop where guys lined up to get a special tool they needed to make something work that wouldn't work otherwise. And he sold that program based on his skills as a production guy. And the Ford Motor Company could crank out one an hour. They never had to, but if, let's say, President Obama was going to wing in and make an appearance at Willow Run, they could run the line for half a day and crank out one airplane an hour for his benefit, but the demand wasn't that great. But they were able to build thousands of airplanes in a period of time where Consolidated had already confessed they would only be able to build a few hundred.
[01:41:49.76] You look around. I mean, my friend Tom Adams, a guy that I love as much as any man in the world, flying against the Musashi in his Avenger, and thinking that the really great thing about the Avenger that he was risking his life in at that moment was that it was built by General Motors. I love that, and I don't want it to go away.
[01:42:16.84] SPEAKER 13: Would you know if there are people like that, enough of them around?
[01:42:21.24] DAVID E. DAVIS: Yeah, I think there are enough. In a war situation, you immediately pull those guys off whatever they're doing and put them on. So right now, there are some extremely good guys in one department or another who aren't available for a project somewhere else because they're too valuable where they are. When the balloon goes up, and all the battleships have been sunk at Pearl Harbor, you could make a phone call and pull the guy off that job and put him on something else in about 45 minutes. So yes, they're out there in that vast population of people.
[01:42:58.15] And I'll tell you somewhere else where they are. I've always wanted to do this, and that is to convene a dinner of all the guys who, one way or another, good or bad, have taken an early-out from a car company, and have all these guys, and rent a room and say, OK, here's what we're going to do. Everybody is going to give me a really complete resume. I want to know what each one of you is capable of doing and what your hopes and dreams are, and we are going to form a 5,00-man consulting company, and we will be able to pick and choose the most talented people in the United States for these technical tasks that have to be done and can't be done by a manufacturer in his own routine situation, and we're going to farm these teams out all over the country. We'll do it ad infinitum. First of all, I would just like to be in the room with all that horsepower and all those guys, and then second, I would love to be finding the undoable projects that those guys could do.
[01:44:06.53] SPEAKER 14: If you were used to driving a Toyoto Camry -- you mentioned the Hyundais are better.
[01:44:11.77] DAVID E. DAVIS: Yeah.
[01:44:12.02] SPEAKER 14: What would it be like to switch from a Camry to the equivalent Hyundai?
[01:44:18.55] DAVID E. DAVIS: Not that different. The Camry's success is a long-term marketing success. Hyundai is another matter altogether. Hyundai just made a mess of its entry into North America in Canada. We talked about the 5.7-liter diesel. That thing went on like a toothache for three years, and Hyundai turned it all around, found out exactly what was wrong, found out exactly what the customers were finding that they hated about the Hyundais they were buying, and they fixed it.
[01:45:00.78] Look at the record of our industry in the last 30 years on quick turnarounds on things that were driving people nuts, and it's a dismal record. And Hyundai, you wouldn't have bet $5.00 on the possiblility that Hyundai was going to become the fastest-growing import in the United States. This is not possible. A Korean car, for God's sake?
[01:45:28.71] One thing you have to worry about with the Koreans is that they do say as a nation that the Japanese are the lazy people. So, I mean, any national ethos based on the idea that the Japanese are the lazy people is somebody you've got to watch out for you. Sir?
[01:45:51.58] SPEAKER 15: Yeah, I've been an automobile enthusiast all my life and I've watched the industry deteriorate. I've seen all the poor management in product decisions that we've made here in the United States and watched the rise of the imports and the great cars that they make. And now I see the next thing is these electrical cars coming, and we have to change because of the pollution, because of all the political problems of buying the oil from these goddamn nations that we buy it from, and we have to change to electrical. And now, the Americans have some development, but the Chinese, the Koreans are coming on so strong, the Indians. Companies like BYD and Tata are going to start selling their cars here soon. I'd say four or five more years, they're going to come here.
[01:46:39.23] DAVID E. DAVIS: I don't think we have to wait four years for Tata. And Tata in an interesting company. Unbeknownst to most people in the United States, Tata was the company that built all the Mercedes Benzes that were sold in the Asian markets. They shipped out ready-to-build pallets.
[01:47:00.06] SPEAKER 15: So what do you think is going to happen when these cars come here to our Detroit industry? DAVID E. DAVIS: Well, our Detroit industry is one-third Italian now, and I don't know what's going to happen to General Motors. Nobody does. If they pull it off, it'll be one of the great coups of all time and a bunch of wiseguys will make a lot of money. But they may not pull it off.
[01:47:31.91] When the government removed Rick Wagoner very easily, very quickly, largely because he said again and again that General Motors can't manage a bankruptcy. We have to stick to what we're doing. And in the meantime Fritz was jumping up and down behind him, waving his hand saying I can do it, I can do it. I'll do it. I'll bankrupt the company.
[01:48:04.29] All right. I think we're going to call it off here. I think I've libeled most of the people I'll be seeing at the show.
[01:48:15.32] KATIE RINGENBACH: Thank you so much for speaking. We appreciate it.
[01:48:18.37] DAVID E. DAVIS: Thank you very much.
[01:48:18.99] [APPLAUSE]
[01:48:31.56] [MUSIC PLAYING]

Media

January 16, 2010 at the Downtown Library: Multi-Purpose Room

Length: 1:49:21

Copyright: Creative Commons (Attribution, Non-Commercial, Share-alike)

Rights Held by: Ann Arbor District Library

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Michigan
Automobiles
Ann Arbor/Ypsilanti Reads