Thursday, February 10th, 2011

Imported from Detroit

Unless you are one of my overseas readers, you’ve doubtless seen the $9 million “Imported from Detroit” Chrysler ad featuring Detroit grit and Eminem that ran during the Superbowl. It was a huge crowd favorite and I really thought it was done well. I’ve never had anything that generated as many “did you see this?” type emails as this one did. Here’s the ad (if the video doesn’t display, click here).

I suppose it was inevitable that this would generate blowback, but even I was surprised to see such strange bedfellows as Mother Jones and Mark Steyn united in their distaste of the commercial. It’s notable that most of the criticism seems not to be from Detroit or the Rust Belt itself, which liked the ad and doesn’t feel patronized by it. The critics seem to be mostly those who are incensed that the auto industry and Detroit have the temerity to dare to fight back rather than meekly accepting due recompense for their unholy bailout-Democrat-autodependent-consumerist-capitalist sins.

But to me that’s not the interesting part. What this really shows once again is the power of brand Detroit. Is there another city in America an ad like that could have been created about? Even in a radically different style, it’s hard to imagine someone using the power of a city’s brand to sell a product in that way other than perhaps a tourist town or in a totally facile way (“We brew our beer in Milwaukee”). If someone tried, it certainly wouldn’t be nearly as effective. There are lots of cities that have “been to hell and back,” but I can only think of two where you could pull off something like this: Detroit and New Orleans. Not even Chicago has the brand power to resonate like this, showing at least one way in which Detroit actually exceeds the Windy City.

Detroit may be facing a very tough road ahead, but if nothing else, it remains a place that has the power to command the world’s attention in a manner few other American cities could ever aspire to achieve.

Topics: Civic Branding
Cities: Detroit

47 Responses to “Imported from Detroit”

  1. Dave Reid says:

    I find this commercial simply great. The pride shown for Detroit being its own unique and still great place built on hard work and history… excellent.

  2. Kurt L says:

    I also find this commercial pretty effective. Gosh, if Indy could only define themselves as well.

  3. I too think that brand Detroit is powerful and could help reshape the city. But with that said, there is a long road ahead for the Motor City and I don’t feel that a commercial, or even the automobile industry can lead Detroit out of the mess they are currently in. Fortunately brand Detroit is helping change that. I wish them the best and am glad to see the Midwest finally sticking up for itself.

  4. Quimbob says:

    To me, the Detroit brand is the Motor City brand & it was built on Mustangs, Corvettes, GTOs, Lincoln Continentals, Cadillacs, etc.
    While Detroit looked good in the ad, the car was generic & nondescript and could have come from anywhere.
    Maybe, if they had been hawkin’ a Viper, the ad might have worked.

  5. @Quimbob, Here’s what the Autoextremist had to say on that: “Chrysler choosing the pathetic 200 for the spot was a monumental miss. The 200 remains a rolling monument to automotive tedium and no matter how much make-up and lipstick you put on a pig, it’s still a pig. The spot should have featured the 300 or shouldn’t have mentioned a specific car at all. It would have been just fine as a Chrysler corporate postcard to Detroit and leave it at that. “

  6. KP says:

    Interesting commercial with an obviously potent hook about an American car company owned by Italians (Fiat), and previously owned by Germans (Mercedes). Obviously wherever a car is made (designed, manufactured, assembled)impacts the local economy in the form of job creation but Toyota manufactures more cars in the US than Chysler!

  7. Anon says:

    I appreciate the positive look at an industrial city and a the honorable work of making things. I liked that they showed images fromt the cold, gray time of year that is part of our life here.

    However, the text of the commercial was almost incoherent. The hottest fire makes the strongest steel? What is the fire? Our poverty? Foreign competition? De-industrialization?

    The commercial starts by asking what we know about luxury (then features a non-luxury car) but answers with the working-man ethos. There is a right answer, but that’s not it. The industrial Midwest knows more about luxury than the rest of the country or world because we were fabulously wealthy at the peek of the production of luxury (1890-1930). It is still here to some extent in our public buildings, our homes, our arts institutions, our parks, our clubs, and even our furnishings. The stuff built and made in the South and West since 1950 is sometimes big, sometimes showy, but not luxurious. The same is true for Asia. When I lived and traveled in Korea, Japan and China, I felt sorry for them because their cities were shiny, modern and new, but almost devoid of craftsmenship.

    Anyway, I appreciate luxury and I appreciate hard work but they’re two different messages.

  8. Patricia says:

    I just got back from a business trip to Detroit. That ad has sparked people’s enthusiasm for reviving their town. Everywhere I went people were buzzing about it. My take is that it made Detroiters feel proud of their city’s past AND future. I grew up there. Have lived in Chicago for two decades. I found your assessment of the difference in the two civic brands thought provoking.
    Patricia Martin

  9. Aaron Naparstek says:

    As pure TV product the ad is phenomenal. As branding for the U.S. auto industry, however, the ad is deeply, fatally flawed. After all of what has happened these last few years, it is stunning that Detroit is choosing to brand itself in the American consciousness with a “luxury” muscle sedan that gets 21 mpg on a good day.

    I mean, really!? You want to sell us “luxury” when a record number of Americans are broke and out of work? You want to sell us 21 mpg when the Toyota Prius nearly put you out of business and they say gas prices could hit $5 by year’s end? What’s the new plan here? What has Detroit actually learned? The suggests that Detroit has, in fact, learned almost nothing from its recent struggles.

  10. Brett Hoover says:

    I felt the same way, that no one city had such a powerful hold on the nation’s mindset. Throw in the Motown music history and that city is in a national awareness class of its own. When the ad came on, I was transfixed and moved. Ads don’t frequently do that for me.

    I have followed a lot of what you have reported about economic development the difference that college attainment can make for a city and region. With Mayor Bing looking for innovative answers, why not take an old warehouse, tech it up and build, in essence, nice dorm rooms and welcome young college grads with tech ideas and no money. Let them see if they can develop something by giving them an opportunity they don’t otherwise have because of office and housing costs. Just my crazy thought.

  11. EK says:

    @Brett, we do have quite a few new business incubators in the state. In Detroit, we have one sponsored in part by Wayne State University called Tech Town:

  12. I had quite a different reaction from the advertisement, because I saw it as building a specific geographic imaginary to sell cars. See my reaction here:

  13. DBR96A says:

    Time for some enlightenment…

    The “Auto Extremist” is a guy named Peter DeLorenzo who has an axe to grind with Chrysler since they fired him many years ago. He has repeatedly proven incapable of being objective in his criticism of the automaker.

    Secondly, Fiat has a 25% stake in Chrysler, which means that they do not have a controlling interest — yet. However, even if they do gain a controlling interest, CEO Sergio Marchionne has gone on record saying that a merged Chrysler/Fiat has a good chance of being based in Auburn Hills, MI.

    From the article…

    “Chrysler Group and Fiat Auto could become one company that could be based in the United States, Chrysler and Fiat CEO Sergio Marchionne told an industry conference here today.”

    In other words, Fiat is more likely to be “American” than Chrysler is to be “Italian.” The main reason for this is because the Italian autoworker unions have been a ginormous P.I.T.A.

    And since the mainstream media won’t mention it — after all, they have scripts to follow and agendas to push — Chrysler will have its entire product lineup overhauled by the end of 2012. They’ve already redesigned three vehicles in the last 12 months, and all three of them have been given rave reviews by the automotive press, Peter DeLorenzo notwithstanding. They’ve also given five more vehicles mid-cycle refreshes that are substantial enough for the automotive press to give them a second test drive.

    Within the next year or two, it will become totally obvious just how badly Daimler f***ed Chrysler. It was never a “merger of equals.” It was nothing but a hostile takeover by Daimler so they themselves wouldn’t be taken over. And Chrysler still hasn’t gotten their $12B in cash reserves back. In 1998, they had $12B in cash reserves saved for a rainy day, but that money disappeared in Stuttgart. Chrysler really could have used that money — money they earned themselves — a couple of years ago. If they had it, they wouldn’t have needed a $9B federal bailout. Again, you have to rely on me to illustrate this because the stupid mainstream media won’t. In fact, the media said that Daimler tried to “save” Chrysler, which is TOTAL BULLS**T! Daimler only tried to save themselves, and Chrysler didn’t even need to be saved! They had $12B in their own cash! I’ll repeat: they had $12B in their own cash! Chrysler was the most profitable automaker IN THE WORLD per vehicle sold during most of the 1990’s! That all changed when Daimler took over.

    Meanwhile, Chrysler now is doing much more with much less. Sit in a 2010 Dodge Avenger, and then sit in a 2011 Dodge Avenger. Notice how much nicer the interior is in the 2011 Avenger, even though Chrysler has less money than they had before. That’s because Sergio Marchionne isn’t demanding that Chrysler cut the cost of interior materials by 40% the way Daimler did in 2005. Ask Dodge President Ralph Gilles what it was like working for Daimler versus what it’s been like working with Fiat.

    And here’s a good read from Bob Sheaves, former Jeep and Dodge Truck engineer:

    “Chrysler and Mercedes Engineering: From Best Practices in the 1990s to Behind the Curve in the 2000s”

    The article covers everything from the early 1990’s through the late 2000’s, and shows just how destructive Daimler’s corporate culture was behind the scenes.

    So now you know the rest of the story. Now watch as Chrysler gets its dignity back in the next two years.

  14. DBR96A says:

    By the way, the fuel economy of the Chrysler 200 — the car featured in the Super Bowl ad — is 20/31 when equipped with a 173-horsepower 4-cylinder engine, and 19/29 when equipped with a 283-horsepower Pentastar V-6. (For the record, the V-6 engine is a brand-new design, and many automotive publications have commented on its high level of refinement.)

    Expect those fuel economy numbers to improve when Chrysler rolls out nine-speed automatic transmissions for front-wheel drive cars, and eight-speed automatic transmissions for rear-wheel drive cars. The new transmissions should be available in 2012.

  15. pete-rock says:

    As one who grew up in Detroit but moved away nearly 30 years ago, I found the ad to be just fantastic. I think it truly and accurately reveals the pride, grittiness, spirit and tenacity that exists in the city. To me, the message was similar to a P. Diddy song from a few years ago — “we ain’t goin’ nowhere…” There is definitely power in Brand Detroit.

    However, the negative reactions to the commercial are revealing, too. There are people who wish Detroit would go somewhere, or have put Detroit elsewhere in their minds already. Sometimes I wonder if the power of Brand Detroit is too strong and overwhelming. There’s Detroit as metonym for the failing American auto industry, or urban poverty, or local government incompetence, and I sense that people who viewed the commercial negatively did so because they didn’t want to feel a connection to that.

    That’s why I think the “Imported from Detroit” tagline will become increasingly important and might become the most memorable aspect of this ad campaign. The city’s problems have left it with a sense of “otherness” in the mindset of America, and I think the city’s leadership has failed in making outsiders believe that they have a stake in the city’s future because it’s recent past could very well be their own. But “Imported from Detroit” means the city may be embracing its otherness, in the same way that New Orleans has long done.

  16. MetroCard says:

    It was a compelling ad from a marketing perspective, but I think Detroit (referring to the collective American automotive industry here) missed the mark–badly. You simply cannot push brand consciousness if you’re still selling a mediocre product.

    Sure, generating interest within the context of prime-time television is one thing, but what has Detroit actually done different to warrant renewed consciousness? How is the Detroit of today radically different from the 1970s Detroit, 1980s Detroit, 1990s Detroit, and 2000s Detroit?

    Furthermore, what does Chrysler want people to take away from this…are they aiming a moral message, or do they want to sell cars? If it’s the latter, then perhaps they need to make the necessary adjustments in order to become successful once again…otherwise, don’t expect anyone to buy American “just because.”

    With the kind of branding power Detroit has, people are going to expect some serious results when someone makes statements like “imported from Detroit.”

  17. The thing that disturbs me (not about the ad, but about the controversy surrounding it, the auto bailout, and the broader economic program of the Obama Administration), is the sheer number of people who have been rooting for Detroit… to fail.

    MANY people want to see the city as a ruin, it seems; for various sins both left and right. Some on the left, including many urbanists, enviros, and transit advocates, obviously dislike the auto industry, and particularly dislike the US automakers’ long-standing preference for big hunks of steel, rather than more economical models. And many on the right want to see the UAW–arguably the flagship industrial union in the US–crushed. (There are many rather racist anti-Detroit narratives as well that aren’t hard to find, although they generally aren’t uttered openly in respectable publications).

    (In a similar fashion, googling “Katrina was good for New Orleans” produces a surprising number of hits reflecting mainstream opinion, including the present Secretary of Education; a good lot of which boils down to “many poor people were forced to move elsewhere”.)

    Regardless of what you think of the US auto industry or its unions, actively cheering on the demise of a major US city strikes me as utterly repugnant.

  18. Nathaniel says:

    To reiterate a point made earlier – this is a great TV spot! Any advertisement that can drum up this much chatter and dialogue did surely something right.

    I thought it spoke wonders for Detroit as a brand. The Urbanophile is right in saying that no City touches Detroit in that category(possible exception: New Orleans).

    The selection of the 200 is baffling. When I think of Detroit craftsmanship and pride, the 200 is about the last car I’d associate with that. Nonetheless, I am a big fan of the ad.

  19. Beta Magellan says:

    I have to second Engineer Scotty, with an addendum: I’m also bothered by the way Detroit (and New Orleans too, I guess) became a sort of blank slate for all sorts of quasi-utopian schemes, as if it were some sort of blank slate. While a large portion of Detroit’s certainly become a pretty blank slate in terms of urban form, that doesn’t necessarily mean you can just imagine it turning into transit-oriented charter-schooled agro-city—there’s a lot of economic and social context that gets left out. The Chrysler add was strong because it said “We are Detroit,” not “this is Detroit.”

    I can’t imagine Milwaukee pulling this off either, but then again that kind of defines Milwaukee to me. How many other cities eschewed the city beautiful movement in order to improve their sewerage systems?

  20. Roland S says:

    >However, the text of the commercial was almost incoherent. The hottest fire makes the >strongest steel? What is the fire? Our poverty? Foreign competition? De-industrialization?

    Your point about the Midwest having the physical remnants of the Gilded Age is a strong one. You’re also right that the copy was incoherent. But the imagery of Detroit showed no bombed-out lots, no vast industrial ruins, and no street hustlers. It showed massive, ACTIVE industrial complexes, vast landscapes of infrastructure, and the beautifully-renovated downtown landmarks of Detroit. Look at how closely the Penobscot Building is cropped. It looks like Rockefeller Center. Or the Fox Theatre, which is surrounded by parking lots.

    My point is not to argue that the ad misrepresented Detroit through omission, but that the imagery made the argument (Gilded Age bones = solid future potential) strongly and coherently when the copy did not.

  21. Roland S says:

    re: New Orleans…

    The NFL marketers have already made this point about NOLA ad nauseam, and Treme fleshed out the image (although not in advertisement form).

    These things take time, but the future is starting to look pretty rosy here. Hopefully Detroit, which suffered from similar structural problems, can also manage to reinvent itself without losing its valuable identity as a place where things get MADE.

  22. David C. says:

    I find it interesting that this ad was more of a promotion of Detroit than it was of their car. I liked the ad, in so far as it’s entertaining and not tedious/annoying, but I don’t understand it’s utility – it seems to be selling Detroit more than it is the car.

  23. cbusser says:

    i think this talks a lot about chicago’s failure to become the hub of the midwest…this commercial should have been about chicago. yet they are trying to distance themselves from the midwest, something you have talked about. and in their place detroit is taking up the banner as a comeback, midwestern city. detroit will be huge in a few years if this works.

  24. Wad says:

    Aaron, Brand Detroit is powerful on the Urbanophile. Anytime you do a post on Detroit, you get burning-hot traffic. I remember the photo tour of non-decayed Detroit, as well as the grocery store thread recently, and now this.

    Nothing gets people talking like the Motor City.

  25. the urban politician says:


    Chicago did not fail to become the hub of the midwest. I’m not sure how you drew that conclusion after viewing this commercial.

    Regarding the commercial, I absolutely loved it! It really struck a cord with me. While the wording could have differed, the imagery was spot on. I agree that it was more of an advertisement of Detroit than of Chrysler, but nevertheless it was well executed. Criticize Chrysler all you want, but it’s due time the private realm did something to pull Detroit’s image out of the ashes.

    Really, this is no different than New York companies using Manhattan’s iconic imagery in their advertising on a regular basis. The difference here is that while Detroit has a brand etched into the American conciousness, it needed a bit of a reboot. This was the reboot, but the real question is where do we go from here?

  26. Anon says:

    Roland, that thought did cross my mind when E. walked into the theater. Oh, here is the luxury. But mixed with the fist and the guys jogging in the snow, it wasn’t clear.

  27. the urban politician says:

    On another note,

    The funny thing about the Fox theater is that, if I’m correct, in the early 90’s it used to be the location of a nightclub named “Club X”, which I used to go to from time to time.

    While this is obviously a much more mature discussion than one of nightlife, when comparing Detroit to Chicago the image has always been (from a standpoint of nightlife) that Detroit’s was always edgier, while Chicago’s was one of fine dining and sports bars. Sure the lines have blurred, but the imagery is still there.

  28. Chris Barnett says:

    DBR96A, Chrysler didn’t need Daimler to mess themselves up. I owned two Chrysler products in the 90s (pre-Daimler) and will never buy another. (I have also owned VW, Ford and GM vehicles.)

    There are good product-based reasons why Chrysler is number 5 in the US market and headed for irrelevance; this commercial is a good example of a non-competitive Chrysler product. Who would buy a Chrysler 200 (redecorated Chrysler Sebring) before a Ford Focus, Chevy Malibu, Toyota Camry, or Honda Accord? And none of those is a luxury car.

    Does Chrysler’s ad agency really think the 200 can compete with the Cadillac CTS or anything from Lincoln, Lexus, Acura, Mercedes, BMW, or Audi?

    The ad is good theater, but they missed the mark. They should have been selling RAM pickups or Dodges with that ad.

  29. Edward says:

    It has been mentioned in some of the auto related blogs that the 200 was selected over the 300 as it is made in suburban Detroit, while the 300 is made across the river in Canada…

  30. Patrick M says:

    First, I like this ad. It says the people are determined and have pluck. These are good messages in tough times, and most of the ads in the Super Bowl are dumb jokes that appeal to humor that degrades others. So this is a superior television commercial in most every respect.

    New Orleans and Detroit are the only cities that could make this type of ad because they are the only places that have suffered as extensively as the rhetoric in this ad intimates. Of course, the ad may not be aimed at people outside the US. It may not be aimed at people outside of the Midwest, or even outside of the 313 area code. And whichever is true, it’s fine.

    But this doesn’t mean the Detroit Brand is more powerful than others. It means that their economy was over-agglomerated in one industry for years and lacked resilience in the face of change.

    Boston, New York, Chicago, Philly are all cities with working-class street cred that would have an easy time making an ad about how they were can-do places in which everyday people would recover from a blow dealt by economics or nature.

    But corporations would not be able to sell a product like this because those cities are more diverse economically and not easily identifiable with one consumer product to the exclusion of all other types of products, with the minor exception of being the epicenter of the music that preceded Eminem’s artform, hip-hop. Even “Motown” though, acknowledges the car industry in its moniker.

    Brand Detroit is recognizable over the world for doing mostly one thing in the city, basically to the exclusion of all others. The same thing that makes Brand Detroit so recognizable is the condition that made the prosperity of the auto industry a massive unhedged bet for the city.

    Other cities can covet that level of recognition as long as they recognize the risk it implies.

  31. DBR96A says:

    Chris Barnett, I’m sorry that your experience was not a pleasant one. I’m about to cross 250,000 miles on my Dakota, though, so apparently one man’s trash is another man’s treasure.

    Be that as it may, if Chrysler is “headed for irrelevance,” then why were their 2010 sales up 16% over their 2009 sales? Why were they back over 1,000,000 vehicles sold? (Fleet sales and cash incentives both dropped year over year, by the way.) Why have the 2011 Jeep Grand Cherokee and 2011 Dodge Charger been given universally positive reviews by the automotive press? They’ve accomplished all these things against the odds, and their small cars haven’t even been redesigned yet. (Give it one more year.) If this is what it means to be “irrelevant,” then all automakers should strive for irrelevance.

    Plain and simple, Chrysler is now doing much more with much less, and reports of their death have been greatly exaggerated.

  32. Thanks for the great comments.

    Clearly, Chicago is the capital of the Midwest. But I could agree with that commenter if what he intended to convey is that Chicago is no longer a Midwestern/Rust Belt symbol of the type is used to be 100 years ago. Now, it’s a different type of global city with more in common with New York than Detroit. It’s still the Midwest capital though.

    I think Chicago imagery, like that of New York, could be effective in an ad. I just don’t think that the symbol of the city itself could not make a connection to national viewers in the way the Detroit ad did. I’m not sure New York could do it either now that so many years have passed since 9/11.

  33. Much of the conversation here focuses on the quality of the cars, particularly the Chrysler 200 contained in the ad. Many here claim that the 200 is a rather mediocre model (I don’t follow the auto trade much, so do not have an informed opinion). However, I will comment on the notion that seems to be present here–that if the 200, or other soon-forthcoming product offerings, aren’t one-swing home runs, that Detroit’s resurrection is all for naught.

    I don’t think so.

    It took Japan the better part of a generation–and then a rather disruptive event (the oil shocks of the 1970s) to move their automotive industry into worldwide prominence. I’m old enough to remember that when Hyundai and Kia first entered the US market, their cars were generally written off as second-rate; now, Korean automakers enjoy a much better reputation, especially in the lower-cost market segments. It took a long time for Detroit to go from king of the automotive world, to the depths of despair recently faced by Chrysler and GM. And it will probably take a long time, if ever, for the US auto industry to become globally prominent. And it might not happen, either.

    One necessary condition–restoring the finances of the industry–has occurred.

    A few other things need to occur, namely:

    * Elimination, or at least significant reduction, of some of the dysfunctional business culture that has long plagued the Motor City.

    * Technological innovation. US automakers are behind many foreign competitors in several key pieces of automotive technology.

    * Greater focus on quality, over the long haul. There is an opportunity here, as Toyota (a brand long predicated on quality) has been wounded significantly by issues such as the sticking accelerator problem and the oil sludge problem. But to do this will require a bit of work, including the aforementioned reform of management culture, as well as greater labor acceptance of quality-enabling manufacturing practices. Quality reputations have a slow attack and a fast decay (it’s easier to develop a bad reputation than a good one), but they can be improved over time–just ask the Japanese. To the up-thread commenter who commented that he would never by a Chrysler again, I ask the question: what would change your mind? If Chrysler (or another “blacklisted” US automaker) were to consistently receive high marks in the auto trade press, and no longer get tons of dark circles in Consumer Reports, would you reconsider?

    A few other things, though, are outside the scope of Detroit’s control.

    * Industrial policy in Washington. Too many people in this country think that our industrial policy ought to be “we don’t have one”. None of our global competitors operate in this fashion, and nor has the US for much of its existence as a superpower.

    * Macroeconomics in general. A longstanding concern is that the US will continue to have trouble competing (in manufacturing) with lower-wage countries, thus what’s the point of trying to restart the US auto industry?

    * Energy issues. As a transit advocate, this is my biggest concern: Is Detroit making plans to build stuff necessary for a peak-oil future? There’s the Chevy Volt–what else? Detroit has pretty much ceded the domestic transit vehicle industry to other parts of the country. It doesn’t seem to successfully market its wares to Millenials, who are less interested in big hunks o’ steel. Much of the product line seems designed for the 1990s marketplace still, not the future.

    Bottom line: While Detroit doesn’t need to hit it out of the park on the first pitch, if the recovery of Detroit is to happen in any sensible fashion, then progress needs to be demonstrated on these fronts. If the 200 is a better model than the Sebring, that’s a step in the right direction for Chrysler, even if its nowhere near where they need to be.

  34. Alon Levy says:

    I haven’t commented so far because I didn’t see the ad, and I have nothing to say about brands and marketing that I haven’t said 15 times already on this blog. But now that industrial policy got mentioned as a way of helping Detroit, I’m going to barge in.

    The basic problem with industrial policy: governments are really bad at picking winners and losers. Japan was; some of its biggest exports, including cars, were completely ignored by MITI until they became big on their own. The US won’t be any better. Its politicians think GM is a national industry, but respond to Google and Facebook with sneers of “Not everyone can be a programmer.” (As if everyone could be an industrial worker in 1911.)

  35. Chris Barnett says:

    Engineer Scotty, no. Never again will I even consider a Chrysler. There are too many better-quality cars built in Michigan, Ohio, Indiana, and Kentucky by Ford, GM, Honda, Toyota, and Subaru.

  36. Wad says:

    EngineerScotty wrote:

    Is Detroit making plans to build stuff necessary for a peak-oil future? There’s the Chevy Volt–what else?

    There’s the Nissan Leaf, the Toyota plug-in Prius, the Tesla, the Coda …

    There is a market out there for coal-powered cars.

  37. Wad says:

    Engineer Scotty also wrote:

    Detroit has pretty much ceded the domestic transit vehicle industry to other parts of the country.

    And that was a generation ago.

    The saddest part? GM had a reputation of high quality for its buses.

    The U.S. as a whole lost the domestic transit vehicle industry to foreign competitors. The one major U.S.-based bus maker remaining is Gillig. Thor’s ElDorado-National division is the leading maker of midibuses and cutaway vans.

    Of the top 3 U.S.-market bus manufacturers, two are Canadian and the third is Hungarian.

    Whatever U.S. presence these companies have it is only to be in compliance with Buy America laws.

  38. I don’t know enough about Chrysler’s new lineup to comment on that, but I do think that had this been a GM ad featuring the Cadillac CTS, a legitimate luxury contender, it would have been even more effect because that car already has mindshare in the marketplace.

  39. Roland S says:

    ^^ Agreed… then the copy might have actually made sense. The 200 isn’t a luxury car – it doesn’t have the performance, the amenities, or the pricetag.

    The 300 might have made more sense, and the Canada thing is stupid – how many people actually care where a specific model is made? Most people do know that Chrysler works out of Detroit, though, and that all the design, testing, and innovation (if any) occurs there.

    Cadillac has done a much better job reinventing itself for the luxury market – I don’t have data, but it seems to be the biggest success story of GM by far. GM’s other brands have at best a mixed reputation.

  40. Honda-Worker says:

    I’m a second generation Honda of America assembly line worker. I’ve been a car guy since probably after i could crawl. What most people don’t realize when your brought up in a family who (usually the dad) works on the assembly line it doesn’t matter if its Chrysler, Honda,GM,Ford,Mercedes, Toyota cars run deep in your blood.
    So even though I work for the competition to Chrysler and I live off of I-75( and i’ve been down the stretch of I-75 1000000 times) there’s a special place in my heart for Detriot.
    Second reason why Detriot has a special place in my heart. when i was in college . The college I went was in a fairly small town not much to do not to many areas to met ladies and hang out. so on Friday or Saturday nights we’d go up to Detriot and hang out.
    So even though i now compete against Detriot I got nothing but love for Detriot.

  41. Honda-Worker says:

    oh a quick fact: did everyone know more cars produced in Ontario, Canada(all production plants) than Michigan (at all production plants)
    I know my numbers a little old but in 2005:
    Ontario produced 2,624,212 cars and trucks
    Michigan produced 2,476,123.
    I’ll admit its pretty close but I had a friend i worked with he showed me the statistic. I didn’t believe him until he showed it to me. cause I thought Michigan pumped out a ton of cars. but i was wrong.

  42. A few more interesting questions.

    > (concerning domestic transit vehicle manufacturers): Whatever U.S. presence these companies have it is only to be in compliance with “Buy America” laws.

    A big part of the problem is that sixty years of pro-highway policies have eroded the domestic market for these things (especially railcars); thus the lack of quality US manufacturers. Simply “buy America” policies aren’t effective–at best, they result in domestic companies producing low-quality transit vehicles as a side project to capture the “buy america” market; at worst the result in debacles like Colorado Railcar.

    Which brings me to Alon’s comment regarding the proper role of industrial policy.

    > The basic problem with industrial policy: governments are really bad at picking winners and losers. Japan was; some of its biggest exports, including cars, were completely ignored by MITI until they became big on their own. The US won’t be any better. Its politicians think GM is a national industry, but respond to Google and Facebook with sneers of “Not everyone can be a programmer.” (As if everyone could be an industrial worker in 1911.)

    Obviously, any sort of industrial policy initiative can be subject to capture by producers, who simply line their pockets rather than taking the necessary steps to improve their product offerings. OTOH, there are some industries with extremely high barriers to entry (and the automotive industry is one of them; though there are others I think more worthy of attention), where new market participants (even ones with otherwise worthy offerings) are simply likely to be DOA. Perhaps the correct choice is to not participate in those markets; perhaps the correct choice is to find some way of bootstrapping them. In the case of Japan’s auto industry, it took a handful of huge industrial conglomerates decades of losses and second-rate products to get to the point where their offerings were competitive (let alone superior) to the entrenched American and European automakers–I suspect resurrection of the domestic US auto industry as a quality supplier will take as long. ASSUMING, of course, that it is permitted to occur.

    (It’s also worth noting that the domestic US software industry is one that doesn’t really need much assistance, at least not at the present time–there’s a good reason for Washington to lend assistance to Detroit while not heaving buckets of cash at Silicon Valley. Over two decades ago, the high-tech industry got their “bailout”–SEMATECH–the results of which have been largely regarded as successful).

    Perhaps this is OK. Many in finance will tell you that it is; but many in finance seem utterly unconcerned with the broader state of the economy (beyond Wall Street) as it is–unemployment only being a problem when it affects sales. If unemployment skyrockets and wages plummet here, c’est la vie–capital can leave easily, the rest of us can’t. Perhaps if the US wants to have a thriving manufacturing industry, the price will be to give the oligarchs and plutocrats their pound of flesh–the present situation is merely our comeuppance for the gall to ask for decent wages and working conditions. Perhaps we’re all deluding ourselves in believing that we can avoid a race to the bottom.

    Or perhaps not. Many of our current economic competitors deploy openly mercantilist policies, including “picking winners and losers”, albeit with mixed results. Yet our political culture is such that even investments in basic infrastructure are often questioned as intrusions on the marketplace.

    Alon, your response–while worth noting, certainly–seems to be buying in to the libertarian framing of “government frequently screws up when it tries to do something, so government shouldn’t be permitted to do anything”. Ensuring that government does the RIGHT thing is a hard problem, given the endless supply of rent-seekers trying to capture it at every turn, but the proposed cure (“do nothing”) is frequently worse than the disease. “First do no harm” is excellent advice, but does not extrapolate to “let the patient die”.

  43. Alon Levy says:

    Scotty: the point is that even competent governments, such as Japan’s, are not good at industrial policy. The Japanese auto industry grew under MITI’s nose, using garden-variety import replacement – repairing bicycles, then making motorcycles, and only then making cars.

    One of the serious arguments for neo-liberalism (and yes, I’m aware that I just used “import replacement” positively; the Jacobsian process is not the same as import substitution industrialization) is that government control means political control. Not every country can be like Singapore, where deep government control coexists with the lack of regulatory capture and other political dangers. That’s how privatization can make things more effective, too, as is very obvious if you compare the performance of JNR to that of its successors.

    What a neo-liberal would tell you to do to spur industry is a much less fine-tuned and hijacking-prone process. He’d tell you, as a developing country, to keep your currency competitive, which could help spur import replacement without explicit tariffs. He’d tell you to invest in health, education, and infrastructure, and reduce red tape and barriers to entry though not basic rules protecting workers and the environment. (Those specific issues are where the government has to learn to be competent, because business would loot it otherwise. Industrial policy isn’t.) And he’d tell you to keep tariffs low across the board, and not get into overly complicated bilateral trade agreements vetted by more lobbyists than you thought even existed.

  44. Wad says:

    Engineer Scotty wrote:
    A big part of the problem is that sixty years of pro-highway policies have eroded the domestic market for these things (especially railcars); thus the lack of quality US manufacturers. Simply “buy America” policies aren’t effective–at best …

    The bus market was very productive, especially from the 1940s-1960s, when they were replacing streetcars.

    Plus, pro-highway policies had nothing to do with the contraction in the bus markets. Rail is another matter.

    I don’t know if this has been studied, but I think the government’s 12-year life-cycle for transit buses may have actually backfired and stunted the market.

    Look at GM’s exit of the bus business in the mid-1980s. It exited at the top of its game, with still a stellar reputation among fleet managers. It thought that its consumer car and truck market would be a better focus of time and money.

    GM essentially had a monopsony and a guaranteed revenue stream, as well as a government standard that ensured repeat business. It still walked away.

    The difference may have been the 12-year standard. Until the RTS era, GM’s customers were private fleet companies. They’d typically cycle in a few buses at a time, then run them for 15 years or more; 20-25 years were common.

    GM could also carry the financing and depend on a reasonable payment stream.

    With government-assisted purchasing, the market changed to massive fleet purchasing and the purchases changing to a cash (grant) transaction. This might have made the bus market less lucrative.

    The U.S. has also seen two major failures among domestic bus builders: Flxible (Ohio) in 1995 and Neoplan USA (Colorado) in 2005. You could also add Millennium, which became the heir to the RTS lineage and squandered it.

  45. Wad: The difference may have been the 12-year standard. Until the RTS era, GM’s customers were private fleet companies. They’d typically cycle in a few buses at a time, then run them for 15 years or more; 20-25 years were common.

    GM could also carry the financing and depend on a reasonable payment stream.

    With government-assisted purchasing, the market changed to massive fleet purchasing and the purchases changing to a cash (grant) transaction. This might have made the bus market less lucrative.

    The U.S. has also seen two major failures among domestic bus builders: Flxible (Ohio) in 1995 and Neoplan USA (Colorado) in 2005. You could also add Millennium, which became the heir to the RTS lineage and squandered it.


    Interesting. One thing that’s always annoyed me, I guess, about the automotive industry (both Detroit and foreign-based manufacturers), not to mention a few other industries I can think of, is the seeming importance to capture the financing business as well. The few times I’ve bought cars, I always obtained financing through the credit union, and it always seemed to annoy the dealership. It’s a good side business to be in (and can serve to stimulate sales when independent credit is tight), but any time a manufacturing business isn’t viable on a cash basis, it ought to be a red flag–any time two separate products/services are tied together, there’s an opportunity for someone else to undercut the subsidizing line of business. Just ask the newspaper industry.

  46. kws says:

    Many people in the US already view Detroit as more like a third world cesspool than a part of the US, so I guess it’s about time that corporations in the area recognize it too.

  47. Greg says:

    I’ve seen the American pride angle before (USA#1 from the 70’s, Buy American circa 1980’s), but this time I think there might actually be improved quality to back it up. For Detroit’s sake lets hope so.

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