The Victims of Vauxhall's Luton Closure Have Plenty of Candidates for Blame

The victims of Vauxhall's Luton closure have plenty of candidates for blame, from the high pound and the relative ease of British shutdowns to the hire-and-fire mentality of the American overlords. But the real cause runs deeper and further back through decades of managerial mishaps.

The British managers bear some responsibility for the underlying, persistent weakness of the Vauxhall brand. That's as nothing compared to the monumental mistakes of General Motors, at home and abroad. Entangled in bureaucracy, paralysed by inaction, drowning in excess costs, GM has wasted tens of billions on learning how not to run a mega-corporation.

Very few other car managements are in a position to hurl the first stone. Consider the present scene of devastation. Chrysler, quite recently the most profitable US carmaker by far, is bleeding millions so fast that its purchaser, Daimler-Benz, is buckling at the knees. Daimler not only overpaid ridiculously, but compounded this sin by heavy-handed and typically unsuccessful long-distance interference.

BMW is still licking its wounds from the inept takeover of Rover Group. Lest British managers are licking their chops at these foreign fiascos, not only Rover, but Landrover were found wanting in fundamental management and manufacturing skills by their new owners. So, in spades, was Jaguar. The first American sent to the rescue by Ford declared its plant the worst he had ever seen, with the possible exception of the Gorki factory outside Moscow.

Not that Ford is any paragon of virtue. Its performance in the Firestone tyre recalls was so inept as to make the angels weep. The list of automotive ineptitudes could go on, and on. Is there some pattern here? The car makers have all that managers could desire: huge financial resources, vast accumulated expertise, armies of well-versed executives and specialists, global markets, insatiable public demand. How could they get so much so wrong?

The first answer is that this industry is highly inbred, dominated by company veterans who, like all their colleagues, adore playing with cars. Infusions of outside talent are rare, and so is jobhopping at the highest level. When jobs are hopped, as when a miffed Lee Iacocca quit Ford for Chrysler, the results can be electrifying. But Chrysler was a basket case then (as now). Others with bigger market shares, larger cash flows and greater conceit (which is endemic among car managers) are unlikely to place their heads on somebody else's block.

The conceit is compounded by a second major fault, autocracy. The Western industry was originally created by all-powerful entrepreneurs. Their heirs can't match their genius, but grasp for their power. A bitter boardroom battle at Daimler thus ousted the comnpany's top car man and left total control to Jurgen Schrempp, the mastermind (if that's the word) of the Chrysler fiasco. It's unfair to blame Schrempp for other flops, like the original instability of the A-cars or sluggish sales of the unsmart Smart car. But he's certainly responsible for the halved share price and the sadly reduced reputation.

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