The auto industry paid the price when GM's gumshoes trailed Nader

During its century on the scene, General Motors has been responsible for much that is good in the auto industry. There was Charles Kettering's electric self-starter in the 1912 Cadillac, the automatic transmission in the 1940 Oldsmobile, the hardtop body style that began with the 1949 Buick Riviera.

Any automotive history buff could list dozens more. Maybe hundreds more.

But GM also must shoulder much of the blame for something the industry regrets and dislikes intensely: federal regulation.

A harsh indictment? I don't think so. Let's go back four decades and examine how the feds got their hooks into the auto industry.

Federal examination of auto safety was not new in the 1960s. Rep. Kenneth Roberts, a Democrat from Alabama, was an early safety advocate. Abraham Ribicoff took up the cudgels as governor of Connecticut in the 1950s and later as a U.S. senator.

The early efforts brought a few rules for brakes, headlights, safety glass — generally things the industry was doing without a federal mandate. Ribicoff was conducting safety hearings in 1965 when an obscure 31-year-old lawyer published a book that damned the Chevrolet Corvair as Unsafe at Any Speed.

The author, Ralph Nader, had worked as an adviser to Ribicoff's subcommittee. He was a summa cum laude graduate of Princeton and a graduate of Harvard Law School.

The General's gumshoes

Unsafe at Any Speed spawned many lawsuits, accusing the Corvair of just about every crime since the assassination of Abraham Lincoln. GM wondered whether Nader was associated with the attorneys who filed the suits.

Nothing wrong with that. Just smart business. What wasn't smart was the way GM went about its investigation. GM's general counsel's office hired private investigators, but the private eyes were about as subtle as a herd of elephants. Nader "made" them almost immediately and eluded them.

That didn't stop the gumshoes; they inquired into Nader's private life, his sex life, his political beliefs and other activities that had no bearing on whether he was working with plaintiffs' lawyers.

Nader told the Ribicoff subcommittee about the shadowing, and GM was in deep trouble. Nader was to testify before the subcommittee — and in Washington, one does not harass a congressional witness. It's called contempt of Congress.

The GM general counsel played it close to the vest. He didn't tell GM President Jim Roche about the shadowing. A mistake. Roche would never have allowed it. The general counsel also didn't inform Tony De Lorenzo, GM's public relations VP whose job it was to present GM's activities in the best possible light.

When the investigation became public, De Lorenzo's minions issued a press release that said, in effect, we did no such thing. A few days later, another press release confessed, "As a matter of fact, we did do it."

It appeared that GM could get off the hook by apologizing to Nader and to the Ribicoff subcommittee. The nasty assignment fell to Roche.

Roche appeared before the subcommittee on March 22, 1966. It was brutal for him because of the black mark against his beloved corporation and because of the individual before whom he was humbling himself.

I knew Jim Roche quite well. We spoke of his Senate appearance after he returned from Washington. He told me, "Jack, it was the worst day of my life."

Ralph's legacy: Regulation

OK, why do I say that GM's gaffe was responsible for the current regulation of the auto industry by the feds?

In all safety hearings, the industry had maintained a united front: The driver and the roadway were responsible for auto crashes, certainly not the vehicle. The automakers followed the same line in the 1965 Ribicoff hearings, and there was a good chance that they would prevail again.

Until GM set its sleuths on Nader, that is.

The Senate was angry; the House was angry. And an angry Congress is likely to be a vindictive Congress. The auto industry never had a chance. From that day forward, there was no question: The auto industry was going to be regulated. That was 43 years ago. The industry is still regulated. GM's blunder has had a far-reaching effect.

One chapter of the story remained a mystery. Mentioned is the fact that Nader eluded GM's gumshoes.

Nader was a friend of Helen Kahn, Automotive News Washington bureau chief. A story circulated that Ralph had hidden out in Helen's basement.

In later years, Helen was asked about that many times. She always smiled and changed the subject. She never admitted that she was Nader's protector.

But she never denied it, either.

Helen died in 1993, so only one person can say for sure: Ralph Nader. I asked him about it while preparing this report.

"No," he told me. "I didn't hide out in Helen's basement. We were good friends and had lunch often, but I never hid at her home."

Well, so much for another fun story.

In 1966, Nader sued GM, alleging invasion of privacy. He sought $26 million in compensatory and punitive damages.

In August 1970 he won a $425,000 judgment against the corporation.

In a delicious piece of poetic justice, Nader said he would use the money to continue his investigation of GM.

You can reach John K. Teahen Jr. at autonews@crain.com.