GM rides high, Ford flounders, but tables turn fast in auto world

By James V. Higgins / The Detroit News

James V. Higgins

   Those who wish to kick Ford Motor Co. while it's down, or pat General Motors Corp. on the back for its current revival, had better hurry up.
   Ford has been battered in quality surveys, is losing market share, has spent billions on a tire recall and just fired its CEO. GM is on a strong product blitz, appears to have stabilized its market share and is basking in the glow of having hired a new product development hero.
   Sooner or later their positions will be reversed, if history is any judge. There apparently isn't room for two at the top of the domestic auto industry's image and performance scale.
   For instance, rewind to April 1964 when Ford introduced the Mustang and President Lee A. Iacocca made the covers of Time and Newsweek simultaneously.
   What was GM doing while Ford basked in reputed genius? Late in 1965 Ralph Nader published Unsafe at Any Speed, the famous assault on the Chevrolet Corvair.
   GM hired a New York law firm to investigate the bold young critic. Nader reported harassing phone calls, suspicious encounters with attractive blondes and brunetes and the sensation of being followed.
   Then a U.S. Senate subcommittee called for an investigation of whether the company illegally harassed and intimidated its critic. Early in 1966, GM President James M. Roche was the one making sensational national news -- a public apology to Nader and Congress.
   But GM did a better job of figuring out the oil-starved 1970s. With demand for small cars soaring, it brought in the tiny Chevette from Brazil as a stopgap and began to switch its products to front drive.
   By the end of the decade, GM was building a credible stable of fuel-efficient small cars while Ford played an uncertain game of catch-up.
   Entering the 1980s, Ford was all but broke. GM had lots of money. It announced Saturn, an ambitious plan to market a line of small cars to compete more effectively against the Japanese. GM built a series of new plants and equipped them luxuriantly. In Europe, it entered new product segments, discounted cars heavily and soon had Ford on the run. And it appeared to leap into the future with the acquisitions of Electronic Data Systems Corp. and Hughes Aircraft.
   Ford would have done much the same if it had GM's resources. Of necessity, it was forced to go back to basics, patch the roof to keep the rain from coming in, renew its operations selectively, get as lean as possible, focus on quality, make peace with its unions and fight the perception that it was woefully out of shape.
   Then the landscape again changed dramatically. Going into the 1990s, it was clear that Ford had done the right thing. GM had spent too much money with too little return, and had failed to prepare adequately for a new age of global competition.
   While GM lost market share and reputation, Ford ruled the decade, earning more (or losing less) than its larger rival in seven of the 10 years between 1991 and 2000.
   GM is definitely recovering now from its 1990s swoon, while Ford seems to have lost its way. There's no telling how long this will last, but both companies probably would be delighted if they knew for certain that 20 years from now they -- and not someone else -- would still be contending for the No. 1 and 2 spots in the global market.

You can reach James V. Higgins at (313) 222-2749 or