WI: American Auto Wank?

Many things could be said about the American auto industry today and how they got where they are, but, AIUI, it's pretty well accepted that the industry benefitted greatly from WWII, as it set Japan and German auto industries back, and gave US manufacturers something of a monopsony.

But what if one American car company took more advantage of this situation and developed into a multinational in this key period? It actually almost happened; from wikipedia:

"The Ford company was offered the entire VW works after the war for free. Ford's right-hand man Ernest Breech was asked what he thought, and told Henry II, "What we're being offered here, Mr. Ford, isn't worth a damn!" With that, the Ford Motor Company lost out on the chance to build the world's most popular car since their own Model T."

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I also remember reading that two Japanese car companies (Nissan and Honda I think) approached Ford executives looking for some kind of partnership, but the offer was tossed, as their cars were considered "tin boxes".

So first, what would be a good PoD to make sure Ford takes both these opportunities? As an example, if Henry Ford II had died in war, his younger brother, William Clay Ford, would have taken over the company when he came back from the Air Corps (though I admit, I have absolutely no idea if he would have been different from his brother ).

Second, what would be the implications -- for the auto industry, for the American economy, for Detroit, and whatever else you can think of?

(Also, about the title... I'm sorry. I just couldn't resist...)

No thoughts?

OK, here's a start:

90% of cars in the world are made by an American company
the US remains a manufacturing behemoth; no trade deficit
Detroit is in the country's five biggest cities, and a popular family vacation
the Lions have won a number of Superbowls over the past half-century
Michael Moore and Lou Dobbs are just a couple of laid back guys who hang out at the local bar

So -- any thoughts?

John Fredrick Parker said:

OK, here's a start:

90% of cars in the world are made by an American company
the US remains a manufacturing behemoth; no trade deficit
Detroit is in the country's five biggest cities, and a popular family vacation
the Lions have won a number of Superbowls over the past half-century
Michael Moore and Lou Dobbs are just a couple of laid back guys who hang out at the local bar

So -- any thoughts?

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Getting the manufacturing behemoth part is easy, simply adjust US trade rules to keep manufacturing jobs in the United States and make American companies not rest on their laurels. That, more than anything, did in many of the Detroit automakers and many other American heavy industry firms.

90% of the cars in the world is impossible without Europe and Japan staying poor, which pretty much negates the point of such a recovery in the first place. The firms from around the world will find a way back. The better thing to go for here is that Detroit still owns 90% of the US car market. That is possible, as the last year that happened was 1982.

Detroit as one of the five largest cities is iffy. The biggest three will always be New York, Los Angeles and Chicago, and keeping Detroit in the top five when you also have Houston, Philadelphia, San Francisco, St. Louis, Atlanta, Dallas and a bunch of others which could take the crown. Keeping Detroit booming would be important, but more than that you'd have to remove the racial element which proved so destructive to many American cities in the 1960s and 1970s. (Making Detroit a major tourist spot is absolutely impossible - there isn't anything of note there. The only way you'd pull that off is to figure out man-made attractions in number.)

Lions winning Super Bowls? OK, we're into Alien Space Bats territory there.....

Moore and Dobbs can be easily butterflied - Moore becomes a GM line worker and rises up the ranks, and eventually becomes a union big-shot. Dobbs stays a reporter in Detroit, and never joins CNN as a result.

Getting the manufacturing behemoth part is easy, simply adjust US trade rules to keep manufacturing jobs in the United States and make American companies not rest on their laurels. That, more than anything, did in many of the Detroit automakers and many other American heavy industry firms.

90% of the cars in the world is impossible without Europe and Japan staying poor, which pretty much negates the point of such a recovery in the first place. The firms from around the world will find a way back.

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Ah, but what if American companies own and operate those who become their foreign competitors in OTL -- if Ford runs Volkswagen, Nissan-Honda (and say Toyota doesn't do as well*) -- then coordinate their manufacturing policy so that cars sold in America are produced here?

*not so crazy -- they were on the brink in the early 50's, when rescued by a contract with the US military during the Korean War; if Ford took that partnership offer with Nissan and Honda, I'm betting the military would find itself pressured to take them on as contractors, and Toyota may fall completely

That would probably only delay the inevitable. Japan will not want to have its industries owned by the Americans for very long, and while that would certainly help Nissan in the 1950s (Honda wasn't making cars at that time, they were still focused on motorcycles. Their first production car was in 1963) it would probably result in Tokyo wanting things to change by the mid 1960s at the latest.

Germany is the same story. Even if Ford had bought Volkswagen, that still leaves a pile of competitors - Mercedes-Benz, Audi, NSU, et cetera - who could and almost certainly would rise up again. Then you have British Leyland, Peugeot, Renault and Fiat, all of which survived WWII without being totally destroyed, and later on you'll inevitably have Hyundai, Tata and others. Getting 90% of cars made in the USA is simply not possible. Even Detroit imports cars, too. My Pontiac G8 was made in Australia, for example, and GM has a huge plant in a suburb of Toronto that makes Camaros, as well as Impalas and Buicks.

(Honda wasn't making cars at that time, they were still focused on motorcycles. Their first production car was in 1963)

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Gah! I may have mixed up some JACs. I'm pretty sure Nissan was one of the two companies that approached Ford, and one of the JACs of today was saved by Korean War contracts, it seems I may not be as clear as I thought I was. I'll have to get back to the source.

Japan will not want to have its industries owned by the Americans for very long... it would probably result in Tokyo wanting things to change by the mid 1960s at the latest. Germany is the same story.

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Yeah, I may be underestimating the power policies can have in setting up entrepreneurship, and a country determined to have its own auto industry will likely get it.

Then again -- and this may be stretching plausibility -- but if Ford finds itself invested in certain overseas manufacturers, it may pressure Congress to keep pressure the governments of Germany and Japan as "war reparations" or some such thing, seeking to establish monosopy in Europe and Asia. Of course, even if they tried something like that, there's no guarantee they'd succeed.

Even if Ford had bought Volkswagen, that still leaves a pile of competitors - Mercedes-Benz, Audi, NSU, et cetera - who could and almost certainly would rise up again.

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You seem to have a point there...

Then you have British Leyland, Peugeot, Renault and Fiat...

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Them, OTOH, I'm not so worried about -- it still looks to me like if Ford can hold the market on car manufacturing in Germany and Japan, then it can essentially take car of foreign competition for American autos.

Granted though, that's still looking like a big if.

When I read the title, I first thought of a little shell script which takes a year number as input and produces an Ameri-wank timeline with a PoD in that year automatically ...

OK, here's the correction with Japanese Auto:

In the 1950's, it was Nissan and Toyota who came to Ford hat in hand, seeking a partnership (not Honda, as I said -- sorry ). But it was Toyota that was saved from oblivion by Korean War contracts.*

*source for both, American History Revised by Seymour Morris Jr.

You also have to fix the union situiation.

From here:

GM says its total hourly labor costs are now $69 including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.

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And that doesn't count parts which Toyota outsources to overseas non-union firms while Detroit outsources much to heavily unionized Canada.

A high protective tarriff might protect the domestic market but foreign markets would be gone. If you want this TL to work then y'all are going to figure out how to bring costs WAY down.

A high protective tarriff might protect the domestic market but foreign markets would be gone.

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I think I may have been a little unclear about what I mean by "American Auto Wank".

I'm not really interested in how cars sold in Asia and Europe would be made in America; my idea is really two fold:

1) that most American bought cars are produced (more or less) in America
2) that globally, the auto market would be controlled by companies headquartered in America

So, European cars would be produced in Europe, cars driven in East Asia in Japan, but for the bulk of them, their operations would ultimately answer to Detriot; same deal with the American market.

In addition to control, the big incentive for companies like Ford to run this way are shipping costs; and with foreign manufacturers chugging away, they wouldn't be afraid of being unable to export American cars, so a protective tariff is less problematic for them. (And, by extension, less trouble with foreign competition, and extending from that, less trouble with high labor costs.)

That's my thinking anyway.

John Fredrick Parker said:

I'm really interested in how cars sold in Asia and Europe would be made in America; my idea is really two fold:

1) that most American bought cars are produced (more or less) in America
2) that globally, the auto market would be controlled by companies headquartered in America

So, European cars would be produced in Europe, cars driven in East Asia in Japan, but for the bulk of them, their operations would ultimately answer to Detriot; same deal with the American market.

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That changes things somewhat. Ford operates all around the world, and GM had extensive international operations set up all over the place, including owning Holden, Vauxhall and Opel, and other smaller entities later on such as Saab, Lotus, GM subsidiaries in other countries and so forth. Chrysler went down that route in the 1960s and 1970s as well, but that ended when Chrysler sold off its international operations to allow Washington to bail them out in 1981. Already, most American cars are made in America, or at worst Mexico and Canada.

If you want Detroit to own much of the world's auto industry, you'd have to have a major change of thinking in Detroit, as well. Detroit for decades, really until the 1980s, saw compact cars as loss leaders, relied on proven engineering technologies and steadfastly refused to change to suit changing realities. And even when they began changing with efforts on the GM J-cars, the Ford Escort and the Chrysler K-cars, they still missed wide of the mark, and allowed foreign competition, especially the Japanese (Toyota, Honda and Nissan in particular, less so for Mazda, Mitsubishi, Subaru and Suzuki) to get big teeth into the American car market. The way that CAFE laws were changed in the 1990s led to the SUV boom, which Detroit capitalized on, again ignoring the car market. Those factors bloody near sank Chrysler twice, and if the Ford Taurus had flopped Ford would probably have bit the dust as a result.

And even beyond this, many countries want their own automakers and will support them lavishly to get them or to keep them alive - British Leyland, Renault and Alfa Romeo had years where they were state-owned, and Japan's industry in general only got off back off the ground because they erected extensive import barriers, many of which still exist. That tactic was replicated by South Korea in the 1970s and 1980s, and the adjustments of which caused Japan's 'Lost Decade' and South Korea's economic problems after the Asian Financial Crisis in 1997. If other countries want to get things really running, they'll figure out a way to keep Detroit from owning them.

John Fredrick Parker said:

Yeah, I may be underestimating the power policies can have in setting up entrepreneurship, and a country determined to have its own auto industry will likely get it.

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For a country with major economic weight like Germany and Japan, there is no 'likely' about it. Japan in particular to this day remains rather more nationalistic in its policies, which means that allowing industries like automakers which can be major export earners is just not going to happen. Ford could buy Nissan and/or Toyota, but that still leaves Honda, Mitsubishi, Fuji Heavy Industries (Subaru's parent), Mazda, Suzuki, Daihatsu, et al.

John Fredrick Parker said:

Them, OTOH, I'm not so worried about -- it still looks to me like if Ford can hold the market on car manufacturing in Germany and Japan, then it can essentially take car of foreign competition for American autos.

Granted though, that's still looking like a big if.

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Again, if you have concentrated all of the world's engineers in Detroit, you'll invariably have some talent which goes elsewhere. In addition to that, it would simply change better engineering or build quality in many cases to keep Peugeot, British Leyland, Fiat and Renault in the North American market. Remember that Peugeot didn't pull out of the US until 1991, Alfa Romeo in 1994 and Rover in 1996. Now, the Japanese aren't perfect - Daihatsu had an awful few years between 1988 and their 1993 departure - but they have too much influence and strength.

As I said, holding on to 90% of the US car market IS possible - difficult, but not impossible. Best POD to start that is to have the Chevrolet Corvair do really well, and thus allow the flush-with-cash Detroit of the time to invest in higher technology and better small cars, thus not giving the Japanese a hole to exploit when the energy crisis hits. This also would need a change of heart with respect to the UAW, because American cars of the 1960s and 1970s were very badly made, which is also part of the reason the Japanese got a hold.

If you want Detroit to own much of the world's auto industry, you'd have to have a major change of thinking in Detroit, as well.

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Yeah, no kidding. In addition to the examples you mentioned, there's also the glitch that there was a general contempt for foreign cars when Detroit was at the top (e.g. the "tin cans" remark).

And even then -- and I may well be mistaken about this -- there was something of a tendency to have an attitude, when releasing a new car, that said "The consumer will buy what we damn well tell them to", which was (in part) behind the disaster that was the Edsel. (Though like I said, I could be wrong.)

GM had extensive international operations set up all over the place, including owning Holden, Vauxhall and Opel, and other smaller entities later on such as Saab, Lotus, GM subsidiaries in other countries and so forth. Chrysler went down that route in the 1960s and 1970s as well, but that ended when Chrysler sold off its international operations to allow Washington to bail them out in 1981.

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Wow, I actually had not known that GM had done something similar 1925-31 to what I'm talking about Ford doing ITTL in the decade following WWII. I wonder if it's realistic for Chrysler to still go that route ITTL or if those efforts would more likely be butterflied away? Either way, it's more for plausibility, I suppose...

For a country with major economic weight like Germany and Japan, there is no 'likely' about it. Japan in particular to this day remains rather more nationalistic in its policies, which means that allowing industries like automakers which can be major export earners is just not going to happen.

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I threw out the idea before, but what if Ford pressures Congress to work to restrict Germany's (and maybe Japan's) ability to aid their auto industries as a form of "reparation", so as to protect their investments? I'd imagine if Michigan Senators like Vandenburg and Ferguson were pushed into this role, they might be able to pull it off, no?

Remember that Peugeot didn't pull out of the US until 1991, Alfa Romeo in 1994 and Rover in 1996.

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Wait, wasn't Rover defunct in 1967? And Leyland in 1968? I'm sorry, but I just don't see British Autos posing any kind of threat.

On Alfa Romeo and Fiat: OK, I concede I may have understated them --although... they are in Italy. If Germany and Japan can be tamed on a WWII pretext...

Well, at any rate, there's still Peugeot and Renault. Real competition, yes, but still a lot less than OTL. And if Paris alone can really still bring them down, well...

Best POD to start that is to have the Chevrolet Corvair do really well, and thus allow the flush-with-cash Detroit of the time to invest in higher technology and better small cars, thus not giving the Japanese a hole to exploit when the energy crisis hits. This also would need a change of heart with respect to the UAW, because American cars of the 1960s and 1970s were very badly made, which is also part of the reason the Japanese got a hold.

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I'm not ruling either of these out necessarily, but I'd still like the PoD to be earlier -- during or just after WWII -- and for the immediate effects to be Ford taking on VW and Nissan-Toyota. If what you mentioned can be butterflied from there, that's all the better.

You forget it's also an issue of mentality and circumstances. MUch of Europe will be too poor to buy American Streetcruisers (How we call 50s and 60s Yank cars) for at least a couple of decades, and when they can cars like the Beetle and the Austin Mini are well established.

Ah, but if Ford had taken over VW in 1948, as they were offered, they would control the Beetle, and reap the rewards of its success

trekchu said:

You forget it's also an issue of mentality and circumstances. MUch of Europe will be too poor to buy American Streetcruisers (How we call 50s and 60s Yank cars) for at least a couple of decades, and when they can cars like the Beetle and the Austin Mini are well established.

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That's a good point, too. European road tax laws and fuel costs don't work in favor of the land yachts of the 1950s, either. That's part of the reason I brought up the Corvair. It IMO would be a great flagship for European divisions, made instead of being a cheapo economy car more of a sports sedan two decades before BMW popularized the term. (Road and Track compared the turbocharged Corvair Monza to the Porsche 911 in 1966, and found that the comparison was fairly good.) GM produced it with one of the most handsome bodies of the 1960s with its 1965 redesign, and also with some of the best suspension of any GM car of the time. It shoulda been a first of a new generation, but between GM's myopic management and that a-hole Nader, it died away quietly in 1969.

John Fredrick Parker said:

Ah, but if Ford had taken over VW in 1948, as they were offered, they would control the Beetle, and reap the rewards of its success

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Assuming it had any. Like I said before, its success was because of Volkswagen's management more than anything, and the Beetle lasted WAY past its use by date. Ford wouldn't have let that happen in all likelihood, which woulda meant the thing might have made it to 1960, but not much beyond that. Volkswagen held on to it because by 1960s the things were engineered just about to perfection (they never did get the HVAC right), and VW Beetles are tough as nails. My father has an incredible story of his '63 Beetle he had when he lived in South Africa. He rolled it off a road one night near Johannesburg, and with the help of a local farmer, he flipped it back onto its wheels and drove away. Try THAT in a land yacht.

The Beetle came to life after the war because the British Occupation authorities needed cars for their Officers. If ford buys the Company before that happens, the Beetle never happens anyway.

Life goes on.