Can General Motors really be revitalized? It’s a question that fills TV producer Stephen Talbot with an eerie sense of déjà vu. In 1993, he posed the very same question in “The Heartbeat of America,” a CIR/FRONTLINE co-production that explored how the mighty GM had fallen on such hard times, and asked how the company intended to right itself.
Video Excerpt edited by Carrie Ching
When General Motors declared bankruptcy this month, it already felt inevitable. This had been a long time coming. Now the question for the Obama administration and American taxpayers is whether an infusion of $30 billion can resuscitate the company that was once an unassailable symbol of U.S. economic dominance. Can General Motors really be revitalized? It’s a question that fills me with an eerie sense of déjà vu. Sixteen years ago, in October 1993, the Center for Investigative Reporting and I posed the very same question in “The Heartbeat of America,” a documentary we produced for the PBS series, Frontline. Back then, the country was also struggling through a recession, and the U.S. auto industry was reeling, battered by intense competition from Japanese imports. GM, the largest of the U.S. carmakers, had just suffered the biggest yearly corporate loss in U.S. history, a staggering $23.5 billion. Despite the near-collapse of GM in the early 90s, it seemed almost sacrilegious to question the company’s future. But we decided to do just that, investigating how the mighty GM had fallen on such hard times, and asking how the company intended to right itself. It turned out that GM executives were in no mood to discuss their company’s woes, or to reassess publicly the decisions they had made that led to GM’s downward spiral. They refused to cooperate from the very beginning—politely at first—but their replies to our continued queries took on a belligerent tone. CIR reporter Eve Pell and I began to feel like crash test dummies smashing into one impenetrable GM barrier after another. By the end, they were denouncing our documentary as “yellow journalism” and threatening to cutoff their financial support for public broadcasting in retaliation. Now that Americans are being asked to bailout a company experiencing its second near-death experience in the last twenty years, I couldn’t resist going back to our film to search for any signs of the bankruptcy to come. Unfortunately—for GM and the Obama administration—they were not hard to find. Are these guys ever going to get it right? To set the stage: We began to work on the GM documentary late in 1992, after covering the presidential election for Frontline. Bill Clinton had won that race in large part because the country was mired in recession and voters blamed the incumbent Bush (senior) administration. “It’s the economy, stupid!” was the Democrat’s now famous battle cry. GM had become the poster boy for a troubled corporate America—a once proud and prosperous company that had controlled 50 percent of the U.S. car market but had lost the knack of making a popular, well-engineered, midsize, affordable car. (It’s only gotten worse: GM’s domestic market share is now down to 20 percent.) In what became known as the “Christmas massacre,” GM chairman Bob Stempel closed out the year 1991 by announcing the layoff of 74,000 workers and the closing of 21 GM plants. By 1992 the corporation was in real danger of flat-lining. Enter Jack Smith, a relatively modest, low-key, plain-spoken GM chairman, who had enjoyed some success running GM’s Opel European division. This new Smith promised a new era in which corporate openness and flexibility would replace GM’s reputation for arrogance and stubborn resistance to change. “Terrific,” we thought, “there’s our story.” CIR’s Eve Pell, correspondent Robert Krulwich and I would follow Jack Smith as he tried to re-invent this floundering corporate giant. No such luck. Despite our appeals and Eve’s impeccable East Coast manners, GM stonewalled. The closest we ever got to Jack Smith was when we tailed him to the New York Auto Show and he graciously autographed the cast on Eve’s broken wrist. We spent ten months pursuing GM, but they refused all interview requests and denied us entry to any GM office or factory. It became part of the story—GM’s phobia about the media, Frontline in particular. Nevertheless, we opened our documentary on a hopeful note with a celebration in Washington on the Capitol Mall. This was spring 1993, and the new Clinton-Gore administration was eager to show that the recession was beginning to recede and that the U.S. auto industry, even GM, was showing signs of life. They called it “Drive American Quality,” put up circus tents on the Mall, and brought in the chairmen of Ford, Chrysler and GM to show off their new cars to members of Congress and the press. “I grew up in the back of a Buick dealership,” Clinton told the crowd in that charming southern drawl, adding that he’d do anything to help the Big Three regain their former glory. We spotted a very short Secretary of Labor Robert Reich conferring with a very tall United Auto Workers president Owen Bieber, and with our camera rolling, the suave Secretary of Commerce Ron Brown climbed in to a shiny red muscle car to take a test drive. Everyone appeared upbeat. Only later that day, when we went for a ride with a mid-level UAW official, did we hear a discouraging word. He told us on camera that as GM stumbled and downsized he feared he and his fellow auto workers were “a dying breed”—the last generation of well-paid unionized factory workers with full medical benefits and pensions. GM did manage to stave off collapse then, thanks largely to the general economic recovery and to the marketing of an invention that now seems like absurdly anachronistic—the SUV. Ironically, that’s the same vehicle that helped bring them down did in the long run. Relying on these gas-guzzling, outsized vehicles—the Hummer being the most outrageous—stalled development of fuel-efficient, stylish, affordable cars, including the forward-looking hybrids. All the Detroit automakers are still searching for the answer to the Honda Accord and Toyota Camry. Another thing to keep in mind as President Obama tries to revive GM and steer it toward developing a “green car”: They’ve already tried: Clinton and Gore tried to do the same thing and failed. Toward the end of our doc, we went to the White House to cover a ceremony in which the Clinton administration announced it would give $1 billion to the Big Three to develop a revolutionary “clean car.” Vice-president Al Gore vowed that this new generation of cars would get 60 to 90 miles per gallon. Jack Smith and his counterparts at Ford and Chrysler solemnly nodded their heads. It would be a 10-year plan, an industry-government partnership, like putting the first man on the moon. Needless to say, it never happened. Screening “Heartbeat of America” now, a lot of it does seem strangely prophetic. A few snapshots … * We included a section on GM’s thwarting of the electric vehicle from the days of dismantling the trolley lines in Los Angeles (the sub-plot, you may recall, of “Who Framed Roger Rabbit?”) to its pulling the plug on its own creation of an electric car, the oddly named “Impact.” Some of our interviews and footage were later included in the theatrical release documentary, “Who Killed the Electric Car?” * There’s a hilarious interview segment withTom and Ray Magliozzi, the Car Talk guys (we were the first to put them on TV) in which they critique a series of GM cars, particularly the Chevy Lumina whose main selling point appeared to be its 14 cupholders. GM went on to re-design the much-maligned mini-van. * There’s a lot in our report that is disturbingly familiar about the battle between the California Air Resources Board and GM, with the automakers resisting clean air standards set by the state. This may be of interest to the Obama administration, as they try, once more, to establish firm goals for production of low-emission vehicles. Despite GM’s efforts to thwart us, we managed to get inside a GM factory in Oklahoma and we were able to get interviews with dissident GM board members such as Ross Perot and Chicago attorney Elmer Johnson, whose scathing assessments of the company then seem like they could have been said yesterday. GM’s top spokesman condemned “The Heartbeat of America” as “yellow journalism” and issued a press release saying: “We will be re-evaluating our corporate involvement and financial underwriting of Public Broadcasting shows, if programs such as ‘Frontline’ reflect a value shift on the part of PBS.” But no one at GM ever pointed to a single error in fact. We sparred with GM after the broadcast and discovered that the only PBS programming GM was underwriting at the time was Ken Burns’ forthcoming series on baseball. When we pointed this out publicly, GM backed off its threat to curtail its PBS funding. The company continued to be Ken Burns’ patron right up until this year when they finally announced that they could no longer afford to underwrite Burns’ work—another sign that the end was near. The New York Times called “The Heartbeat of America” a “scathing account of the breakdown of General Motors,” the Newark Star-Ledger said it was “devastating,” and the Atlanta Constitution described it as “a sober, more credible version of Michael Moore’s documentary, ‘Roger & Me’.” As a Newsday reviewer put it: “Do yourself a favor tonight. See how far wrong things can go with insular, isolated leaders unwilling either to listen to good ideas or to grasp the truths in what they consider bad news.” Sound familiar? What we warned about then has come to pass. GM is bankrupt. But the question we asked back in 1993 is still strangely the same: can GM be revitalized? It will take more than a presidential laying on of hands to truly salvage GM. This is a company and a corporate culture that has to utterly transform itself to survive and prosper. Otherwise, the heartbeat that was jolted back to life by federal intervention doesn’t stand a chance. If GM can’t re-invent itself, it’s code blue.
Stephen Talbot is now president of a San Francisco-based media company, The Talbot Players, where he is developing “Sound Tracks,” a new series for PBS about music and musicians around the world. His last Frontline documentary was a 90-minute critique of the state of the news media, “News War: What’s Happening to the News” (2007) with reporter Lowell Bergman.
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