Punching bag: After years as the champ, GM was pummeled by critics

For General Motors, the good old days may have officially ended on Monday, June 4, 1979.

That was the day the May sales numbers came out. Imports had logged their best month ever, and GM's market share dropped nearly 3 percentage points from May 1978, to 44.6 percent. It was the beginning of a long slide.

World oil markets were in a tizzy after the overthrow of the Shah of Iran in February and the disruption of Iran's oil industry. With gasoline prices soaring, tens of thousands of consumers were switching to small Japanese cars from big American ones.

But something else happened that year that would provide a glimpse of the future. The publication of John DeLorean's book, On a Clear Day You Can See General Motors, set the stage for a period of GM bashing that would continue for the next, well, three decades.

In the 1980s, even when business was good, GM was portrayed regularly as the essence of American corporate arrogance, intransigence, short-sightedness — you name it. As Japanese automakers flourished and attracted admirers, GM became an oversized target. Rather than a symbol of U.S. industrial might, it began to symbolize what might have been.

Some GM bashing was deserved, and some was just piling on. One can only speculate about the cumulative effect on a new generation of consumers who saw the U.S. company as a big palooka. Did it help turn them into lifelong import buyers?

Brickbats

The critics came running throughout the 1980s, ranging from Ross Perot to Michael Moore. The first real GM scold was Ralph Nader, who in 1965 trashed the Chevrolet Corvair in his book Unsafe at Any Speed. But the spring of 1979 was a major turning point in the transformation of GM from mark of excellence to national punching bag. As GM lost ground in the market, the book by DeLorean, a former high-flying Pontiac and Chevrolet executive, rocked the company.

DeLorean had cooperated on the highly critical account of his GM days with former BusinessWeek staffer J. Patrick Wright — and then got cold feet.

He pulled out of the publishing deal, fearing that a frontal attack on his ex-employer would harm his fledgling car company, the gull-wing sports car maker DeLorean Motor Co. Wright decided to bring out the book on his own, against DeLorean's wishes.

The determined journalist printed and began distributing On a Clear Day You Can See General Motors in 1979, selling copies out of his garage. Wright got heaps of publicity. The anti-GM message was loud and clear.

The overleaf noted that the book "will blow the lid off of some of Detroit's most closely held secrets," including horrendous product decisions, "sinister business practices" and "serious management blunders."

"I felt the story was so compelling that it had to get out," Wright said. "No one had ever looked inside the company. GM had successfully put off those PR attacks. It was the Harvard Business School example of a well-run corporation."

Indeed, On a Clear Day was a gripping account of a hidebound company and was the first of many tomes critical of GM that would roll off the presses. A year later, Ed Cray published Chrome Colossus: General Motors and Its Times. In 1983, auto writer Brock Yates came out with The Decline and Fall of the American Automobile Industry.

A former GM speechwriter named Albert Lee penned Call Me Roger in 1989, portraying CEO Roger Smith as an insensitive boss whose spendthrift ways threatened the company's pre-eminence. In 1990, distinguished analyst Maryann Keller weighed in with Rude Awakening: The Rise, Fall, and Struggle for Recovery of General Motors.

That same year, the best-selling The Machine That Changed The World by James P. Womack, Daniel T. Jones and Daniel Roos praised the business practices of Toyota by measuring them against the less-successful methods that GM used to develop products and manufacture them.

Others escaped

GM usually took the hits for the other members of the Big 3. Media-savvy Lee Iacocca helped sweet-talk Chrysler through its various crises, and Ford was always viewed as a natural treasure ruled by an American royal family. But GM had been run by succeeding generations of gray men. It was the biggest and easiest target. When it came to the court of public opinion, the company couldn't win.

Even when raking in profits, GM was portrayed as a floundering giant. An oft-told tale from the early 1980s was that GM tried to spend its way to plant efficiency by automating factories with costly new assembly line robots that, in one famous instance, painted each other rather than the cars.

Ross Perot carried the biggest stick in the 1980s. His Electronic Data Systems Corp. had been acquired in 1984 by GM for $2.5 billion. Perot joined GM's board and began agitating for changes.

He was a formidable figure, a former Eagle Scout and Annapolis graduate who became an IBM supersalesman, then founded EDS. He had led a daring rescue of U.S. businessmen jailed in Iran that became the subject of the thrilling Ken Follett best-seller On Wings of Eagles. As a GM board member, Perot quickly grew impatient with Smith and his executive team.

In a letter to Smith in the fall of 1985, he wrote: "If you continue your present autocratic style, I will be your adversary on critical issues. I will argue with you privately. If necessary I will argue with you publicly."

Which he did — over and over again. Perot also labeled the other members of GM's board "pet rocks," a famous assault on corporate governance that to this day resonates in American boardrooms.

Perot finally was bought out in 1986 — and silenced. But the thrashing wasn't over. In 1989, Michael Moore's documentary Roger & Me set out to confront Smith over GM plant closings and job losses in Moore's hometown of Flint, Mich., humiliating the CEO in the process. The award-winning film launched Moore's career as a political satirist and dumped years of negative publicity on Smith and GM.

Through it all, GM failed to respond with the same deftness as, say, Big Oil, when the giant oil companies were on the firing line during the 1970s. Indeed, lots of the criticism came from inside GM — and constituted healthy self-analysis. This was a company in throes of a revolution.

Firing back

After GM's 1992 management coup, the new leaders began to fire back at critics. In 1993, Harry Pearce, then vice chairman of GM and an accomplished trial lawyer, put together an argument against NBC and its "Dateline NBC" program, which had shown GM pickups exploding on impact. With courtroom dramatics, Pearce showed that the NBC report was a fraud concocted to make GM look bad and boost the network's ratings.

But there were plenty of shots still to come.

In 2005, Dan Neil, the Pulitzer Prize-winning auto writer at the Los Angeles Times, said GM should fire product development boss Bob Lutz and CEO Rick Wagoner. In a review of the Pontiac G6 Neil wrote: "When ball clubs have losing records, players and coaches and managers get their walking papers. At GM, it's time to sweep the dugout." GM, in retaliation for that shot and others by the newspaper, yanked all its advertising from the paper.

That same year, New York Times columnist Thomas Friedman wrote: "If I am rooting for General Motors to go bankrupt and be bought out by Toyota, does that make me a bad person?"

The 2006 documentary Who Killed the Electric Car? accused the company of being in cahoots with the oil companies to deliberately destroy electric vehicles.

These days, Lutz handles a lot of GM's public sparring and seems to relish the fight. In 2006, he took to writing an online commentary.

"Being able to utilize the blog, all of a sudden even the downtrodden have a voice," Lutz told an interviewer in 2008.

"It is kind of silly to describe oneself as the underdog and the downtrodden," he conceded, but added that GM was "the victim of a media bias for many, many years — (although) you can argue that we deserved that bias."

"With a blog I can vent my frustrations," Lutz said, but "there is no point kidding ourselves that everybody out there loves us."

You can reach Richard Johnson at rjohnson@crain.com.