THE SACK OF DETROIT

The fate of a company too big to fail.

By the 1960s, General Motors was a respected automaker, producing more than half the cars in the U.S.; in 2009, it begged for a bailout along with Ford and Chrysler. In an adroit, thoroughly researched history, biographer and telecommunications executive Whyte focuses on GM as exemplary of pressures that led to an economic decline in the 1970s and continue to shape the economy. As the author demonstrates, GM was undermined by an influx of foreign competition; a sudden surge in oil prices in 1973, which led Americans to abandon big cars; and, emphatically, a crusading reform movement that swept up lawyers, congressmen, and consumers and demonized big business. Prominent among the reformers was Ralph Nader, “a secular, twentieth-century Puritan” deeply influenced by critics of capitalism such as C. Wright Mills, Vance Packard, and John Kenneth Galbraith. Bolstering congressional investigations into auto safety, Nader underscored manufacturers’ culpability for negligent car design and for marketing “speed and aggression.” With 40,000 people killed annually in traffic accidents, Nader rejected the notion that education of drivers, enforcement of laws, and engineering of roadways were adequate responses. When his exposé Unsafe at Any Speed was published in 1965, the San Francisco Chronicle called it “a searing document that may become the Silent Spring of the automotive industry.” Far-reaching changes followed. By 1975, all states had consumer protection agencies; tort law penalized manufacturers for hazards even if they were not caused by negligence; and businesses like GM were portrayed as “villains, enemies of the public good.” Whyte argues persuasively against assuming “the altruism of crusaders and reformers,” some of whom are intent on “assigning blame and sacking rich targets.” The constant warfare between the bringers of private goods and the champions of public goods, Whyte warns, “is self-defeating for liberalism” as well as for a thriving economy.

An authoritative contribution to business and automotive history.