Autos: Back on the Fast Track

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While its management dithered, the market share of the U.S. car industry slid from a pre-eminent 80% in the late '70s to a low of 63% last year. Along the way, plant closings and other layoffs took a horrific toll. GM let go 40% of its hourly work force in the '80s, and Ford trimmed 14.4%. Following its merger with AMC, Chrysler's work force dropped 22.6%. While all that was happening, the industry continued to find ingenious ways to blame almost anyone else -- government regulators, environmental fanatics, unfair trading practices and even fickle customers -- for its own failings. Defects? Detroit didn't want to hear about them. David Power, head of J.D. Power Associates, whose surveys of quality and customer satisfaction are the most respected in the industry, attempted to outline his ways of measuring new-car defects at a Detroit automakers' conference in 1980. While his family watched, he was booed, jeered and heckled as a meddling outsider. "The hostility of the crowd was just unbelievable," Power says today. "In another century they would have burned us as heretics."

To be sure, the turnaround did not start yesterday. Its roots lie in the extraordinary hard times of the 1980s, which forced U.S. automakers to change. Through remorseless cost cutting, improvements in manufacturing technology and astute plant management, Ford had turned itself into a lean, global competitor by the late '80s with innovations like the aerodynamically styled Taurus family of sedans. GM started Saturn as an experiment to see if America could build a competitive small car. The fully unionized plant in Spring Hill, Tennessee, which began producing cars in 1990, has succeeded in turning out exciting, loaded-with-options vehicles and less-than-shocking sticker prices. So far this year, sales are up 21%. None of the industry's fledgling efforts could match the way Chrysler did it. Under Iacocca, Chrysler jettisoned virtually every shred of its old management system. In its place the company assembled the best (even if youngest) designers, engineers, builders and product planners, put them together in platform teams and, heresy of heresies, trusted them to make most of their own decisions and create the cars. "It's just the way we started building cars at the turn of the century," says Chrysler's chief engineer, Francois Castaing. "Maybe 600 or 750 technical people in small teams in a hangar, building five or six models at a time. You wouldn't believe how happy that makes people."

The firstborn of the new system -- Chrysler Concordes, Dodge Intrepids and Eagle Visions -- made their debuts in October 1992. These so-called LH cars, Chrysler's first all-new vehicles in more than a decade, drove the corporation away from its dated, budget-price lines and into the elite automotive company of some of the best nameplates in the world -- Ford's Taurus, Toyota's Camry and Honda's Accord. The radical cab-forward design and high-quality ratings of the LH cars made them instant hits; 138,723 units were sold through the end of their first model year.