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tv   Book TV After Words  CSPAN  October 31, 2011 12:00am-1:00am EDT

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he could have made it better for the free slaves but chose not to. . . >> the memoirs are a tough read. i'm told that's the last question, so thank you very much. [applause] >> this vf of event was part of
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2011 book fast value in washington, d.c.. for more information visit >> well, bill, your new book, "once upon a car" about the three big auto makers is very timely. the companies are growing, creating job, and reasserting their global leadership. great to have the opportunity to visit with you about that book. i think so a lot of viewers might want to start with just a question much how these companies got to the brink of disaster? how did these great american icons really come to this point where in some cases they almost ceased to exist. how did this tremendous crisis come about? >> guest: well, the big three auto makers were dominant for so many years in the 1960s and 1970s, and still, you know,
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commanded 50% or more of the market into the middle of the last decade, but there's a sort of slow acting poisen going on with the companies, and that was legacy costs. these companies were supporting hundreds of thousands of retirees and surviving spouses with the health care, with pensions, and gm's case, general motor's case, was two retirees per average workers and that's what made the companies so great that they did have in great retirement plan and pension plans. unfortunately, those were written when the companies were incredible successful and owned 90% of the american market. times had changed so dramatically that those costs really were not sustainable with the kind of volume and sales they had fallen to. on top of that, it's pretty well known that the detroit companies had made some mistakes.
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they -- since had been exposed, but their product portfolio became much heavily weighted towards large vehicles, trucks, suvs. these are the profitable products for them, and they neglected the passenger cars and fuel efficient models that the japanese competitors were so strong in. over time, i think, they lost their way in trying to improve their products, and it was more a matter of survival in trying to sustain what was working for them, and then in the end, they couldn't -- they couldn't support these enormous organizations and obligations that had built up over the years. >> host: when should it have been apparent to the companies that the legacy costs were not sustainable in your view? >> guest: well, there's always been a lot of date --
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debate who's at fault here. is it because they demanded more salaries and benefits or the companies who gave away the store? you hear that a lot when people criticize general motors saying they gave everything away to uaw. remember the great contracts the unions negotiated were done when the companies were making 5 -- a lot of money. maybe they were not looking down the road far enough. maybe in the 1990s, maybe when gas prices were not so low that everybody wanted to own a seven passenger suv might have been the time to look at hybrids or look towards the fuel efficient cars that a lot of americans wanted and were not getting from gm, ford, and chrysler. >> host: sure. were you surprised the mechanism the companies used to move some of their legacy costs off of their balance sheet?
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>> guest: well, the 2007 labor talks were really a water shut, and the unions should be given credit for understanding that the general motors in particular could not afford the billions and billions of dollars in health care that they were spending on retirees in particular. i think for several years for every one dollar gm spent on health care, they spent one dollar on products. not too many businesses can survive that kind of drain on their cash, so it was -- these companies were on thin ice if you will for quite a number of years, and they tried to make it quarter to quarter, but the 2007 agreement allowed them to off load these costs on to a health care trusts, but even that now in retrospect was like monopoly money. gm committed nearly $30 billion
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in 2007 to retiree health care, and that money just wasn't there, and i think it became clear a year later that the hull of the battleship had sprung a big leak, and gm's financial structure and ford for that matter as well just couldn't meet these obligations any longer. >> host: you mentioned the similarities, obviously, that the companies faced, but they all obviously took very divergent paths, the companies did, as they moved through the crisis and restructuring and now in some ways, they are all profitable and creating jobs, but very different ways to get there. talk about the three paths, and why you think the companies took the paths that they did, the individuals involved, and the percents involved, why did ford take the path it took versus gm's obvious choices, and then chrysler, of course.
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>> guest: starting with general motors. they have been the biggest, most dominant companies, the leader of industry in a way in america, very proud company with a lot of success, and somewhat resistant to change. i'll be charitable here. some people can cast stones at gm and their corporate culture, but what worked for them for many, many years is what they believed in. general motors as a corporation had a hard time admitting mistakes. i think that's a lesson to be learned. not so much their senior executives and private, but the corporation itself was very resistant to any kind of criticism or suggestion that maybe they should do things differently. their ceo, rick wagner, grew up in gm. he had the perfect gm resumé
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being groomed from the top for years. he was a defender of general motors. when gm was attacked, rick and his people defended it. in hindsight, perhaps some of the criticisms and some of the suggestions that gm needed to go in a different direction weren't heated. they fought change rather than embracing it. the ford motor company was a smaller version of gm operationally; same structures, same global strategy, but the difference is controlled by the ford family, the descendents of the legendary henry ford, so they could make some adjustments based on their leadership, which, at the time, was bill ford jr., henry ford's great grandchildren. bill ford after becoming ceo,
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learned pretty quickly that his company was having the same kind of troubles of gm, and what i consider a very admirable decision on his part, decided to look for answers outside of detroit, began looking at other auto executives from foreign makers such as chrysler and reno and nissan to bring fresh ideas to ford. he went way outside the auto industry to the boeing corporation recruiting a senior executive of building commercial airplanes and brought him to detroit to take a different look at ford. what was wrong with this company? how could they do things differently? he had a very -- had an epiphany when he arrived in detroit that ford needed to change and change
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drastically. all these things start at the top. you have to have the wherewithall, and i believe the sort of guts to make hard choices, and ford made choices a lot earlier than jm did, the biggest of which was in late 2006 when they decided to mortgage the entire company and borrow as much money as they could, $23 billion, to have a rainy day fund, if you will, when things got tough, and more importantly, to start transitioning the company away from its reliance on suvs and trucks to smaller, more fuel efficient passenger cars. >> host: sure. you know, one of the things you touch on in the book, and i'm sure you know as a hard nosed reporter, but you spend a lot of time with the emotional connection of bill ford and the company. it's really compelling. you spend a lot of time ton.
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it's moving, actually. >> guest: well, bill ford is a passionate, dedicated, emotional man who was in a very unique position. he was an owner, and he was an executive at the same time. he had a family that had history and all of their financial wherewithall with the corporation, and yet, he was close to hundreds and hundreds and hundreds of the men and women on the line and the design studios, the engineers, he lived and breathed this company since he was a kid, and i felt that mr. ford always had the company's best interest at heart; however, he had a legacy to protect as well. when he became the ceo, ford was still profitable, and suvs were still making a lot of money, but he saw the handwriting on the wall, and i believe that it was an unusual and a difficult
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decision for him to admit that i might not be the best person to be the ceo of this company. where do you hear that in corporate america these days? someone saying, you know, that somebody else might be able to do the job better than me. >> host: it's humble and courageous at the same time. >> guest: it was a wise move. bill ford understood that the industry was changing, and ford was not changing fast enough, and whether it was because he was such a familiar figure in the company and perhaps people -- their emotions got the better of them which was bill ford's here, the ford family's back in charge, ford's going to be okay now. bill ford saw it a little differently. he realized that this company should maintain its stature and to grow, it had to go back to
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basics, and he wasn't perhaps the best guy to do it. he needed somebody who was experienced turning around industrial corporations this size. >> host: uh-huh. thinking about the three companies, the company that maybe had the least predictable path was chrysler with foreign ownership, and then private equity ownership, and now, of course, the partnership with fiat. talk about their path and sort of how that all came together. there's obviously lots of different options. there was always some discussion of a chrysler merger with one of the other american based companies that didn't come to fruition, and obviously, it took a divergent path, and now, of course, is doing extraordinary well. >> guest: yeah, chrysler was always the hyperactive, youngest sibling of the big three. gm was the dominant one, ford was more conservative, but followed a lot in gm's
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footsteps, and chrysler had a boom and bust history for decades, and i covered the merger with benz in 1998, an extraordinary situation. that was the biggest merger in automotive history, maybe the biggest industrial merger of all time looking to be a great marriage of the german luxury cars, german ingenuity, with mass market of american trucks and minivans and suvs, but it turned out not to be the marriage made in heaven. the companies didn't mesh. they didn't have a lot in common. chrysler found itself in a position where the -- its german owners actually looked ahead in the future and sa chrysler as a drag on dimler and a threat. one who became the chairman and
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ceo of chrysler realized very early on when he got that position in early 2006 that the legacy costs and the obligations and the paper thin profit margins that chrysler had could turn into a real problem if the market turned. there's some repress in selling the company, but then chrysler went adrift, sold to capital management, the private equity firm on wall street that had a game plan of stripping it down to essentials and rebuilding the company. i guess we'll never know how that would have worked out because they only owned the company for a year when the financial crisis hit this country in 2008, and auto sales went off the cliff, so chrysler was incredibly vulnerable, and at that point, scrambling for a partner, trying to merge with general motors, their executives
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were traveling around the world looking for foreign auto makers tooling up with, but at that point, detroit was in chaos. the crisis was unfolding day after day, and chrysler really was saved from extinction, if you will, by fiat. i think when detroit went to washington for government assistance, i believe the -- first the bush administration and then the obama administration saw general motors going out of business as a disaster for the economy, but chrysler, they were not sure was worth saving, so this little car company that could -- you can call it that -- the company with $50 billion in revenue compared to the other two, really needed a hand, and a partner to succeed. >> host: sure. question's obviously important
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company, make about as many cars in the united states as toyota does for example, which was until recently the largest car company if in the world. it's important they remain a viable going enterprise, so it was interesting to see how you laid out the path and what occurred in the book, and led to this partnership now with fiat that seems to be extraordinarily successful. any thoughts on the partnership? >> guest: oh, absolutely. i've been covering the three companies on a daily basis, and i don't think a lot of people give chrysler much of a chance when they came out of bankruptcy. i think fiat was a little bit of an unknown. they have not sold cars in this country for a number of years. they don't have the high profile that benz did or toyota for that matter, but, again, sergio, the ceo of fiat and now chrysler was an outsider. one of the themes and lessons i take away from my coverage of
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the industry is an outsider brings something to the party in detroit. for the longest time, outsiders were not welcome here. their ideas were suspect. they didn't understand the business. they didn't have the experience. ford proved that was a fallacy, and that an executive with experience and vision can succeed in the auto industry by applies sort of the basic turn around principles, match your market to your production, improve your products for consumer, what the consumers really want, and stick to a plan. he's come in and seen the good in chrysler, seen what chrysler is capable of doing, which may be people close to it had sort of given up on. he's applying a lot of the fiat engine technology at chrysler.
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there's going to be a new car built here in the united states, 40 mile per gallon passenger car with fiat technology, and it's interesting to see the same people who were kind of ready to throw dirt on chrysler's grave trumpeting the fact this company has resiliency and know-how to make cars and trucks people want. >> host: sure, it's an exciting story. one of the new facts you revealed was related to the gm-ford merger discussions, and obviously gm's real interest in pursuing that -- you might talk about that process and then maybe what that would have meant for the industry if something like that had occurred. >> guest: it's something that's been talked about just inside conversation for years, what would happen if gm and ford, the two biggest american car companies, were the big
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one. not the big three anymore, just a big company, threw all their resources together, all their market share, kind of a good hypothetical, but never been seriously approached because these companies are bitter rivals and have been for years. i think i made the analogy could the yankees and the red sox merge, and i don't think that would work out. there's a lot of overlap, but very distinct identities with a tremendous competitive spirit, and that's why bill ford and malali were so surprised in the summer of 2008 that rick wagner and the general motors executive team approached them about a possible merger, and, in fact, i would say they were shocked, but what they learned very quickly was this was just demonstrating how desperate general motors had become at that point. between the second quarter and
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the third quarter of 2008, gm went from being a "healthy company with cash reserves" to a company running out of money and would be insolvent in 60 to 90 days. that's extraordinary when you think about it, but it's because they spent so much cash to just keep their head above water. when mr. wagner approached bill ford, and they had worked together on a variety of issues over time common to each other, trade issues here in washington, union contracts, so they knew heaven other well, and there was a healthy respect -- >> host: sure. >> guest: the ford con ting gent was -- contingent was stunned gm wanted to merge with them out of the blue and quickly realized this was indicative that gm was desperate. they had nowhere else to turn. they had been shut out from borrowing money on wall street.
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their restructuring options had dwindled down to cutting jobs and cutting costs essentially, and ford was looked to as a potential lifeline. ford wanted nothing to do with gm in that state, and actually felt gm was coming to them because they did have cash. they did have the money they had borrowed from the banks, but shortly thereafter, it was clear that ford had followed gm to washington to see if general motors could get a lifeline there because the prospect of gm going into some sort of uncontrolled bankruptcy liquid dation would have affected ford dramatically. the whole supply base in the country would have been upended, and it also was an indication that the big three was sort of cracking apart, if you will --
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mg was going one way to -- gm was going one way to ask the bush administration in congress and later the obama administration for financial assistance, and ford was going to go on its own path and turn around on its own. >> host: sure. companies made a lot of changes obviously in 2007 that you mentioned. in 2008, we went into a deep economic crisis, and everything from just the -- obviously, with the collapse of the financial industry, the dramatic decrease in people's home prices, which can affect their purchase of what's for most people, their second larger purchase which is a car, and then the collapse of the car sales rates to 10 million units which is just a stunning developments. how much of what happened in 2008 was really beyond the control of the companies? how much of what happened to the american car companies was really beyond their control, and how much do they have to take
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ownership of? >> guest: well, when you go from 17 million cars sold a year to 10 million, this is a 40-plus percent drop, an extraordinary situation. i'm not sure any business can survive long if they lose 40% of their vol lym. should they have seen this coming? i can't anticipate how they would have seen that. it affected all the car companies, not just the american companies. >> host: sure. >> guest: the japanese companies, the european companies. it was bend down the hatching time, and the fact is gm couldn't have picked a worst time to go to washington because the t.a.r.p. loans and the assistance to the wall street and the financial community already had people very upset, concerned, worried, there was a
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reelection for congress going on at that time, there was a presidential election going on. it couldn't have been a hotter seat to sit in than to testify before congress and ask for money to save car companies that when asked about ownership, they had to take ownership for some of the animosity that had been building up for years against detroit, whether it was for the quality of their products or their resistance to change on fuel economy or on the environment, crying foul every time an auto maker made gains in the united states that was the fault of washington and trade policies. it was extraordinary how the the emotions and many of them negative, about the detroit car companies, and i think general motors in particular just poured out at those congressional
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hearings, and frankly, these executives were stunned. they thought when they came to washington that the politicians would understand immediately that this was in the national interest to bail these companies out, that if gm went bankrupt, the ripple effects on jobs would be in the hundreds of thousands, if not larger, and then all the vie tree yal and the anger that had been building up about how detroit had conducted its business for years all came pouring out whether it was people who didn't like unions, didn't like gas guzzlers, didn't like the way detroit built cars, had a lousy pontiac that didn't work for them 20 years ago, it all started coming out, and it was pretty -- it was pretty surprising, but one of the
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executives said something interesting to me in the aftermath of that saying if nothing else, there was a lot of apathy about the auto industry and do we even need an american auto industry or would we be fine driving hondas? this hearing and this crisis forced americans to address this issue. how much do we value having an auto industry? is it important for america to have a home grown company that make cars and trucks? that apathy that may have existed for years earlier just a feeling of we're stuck with detroit and became how can we support these companies and can they be better and valuable to the economy? >> host: sure. i argue that we have to. we have to. if we're going to make anything in the united states, we have to make cars. cars are the logical thing for us to make, and historically,
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we've had a knack for it, and today, americans are turning out some tremendous and great products, but if you think brat it, it's a low skilled things that will not be made in the united states, and then, obviously, there's things like fighter planes, mri's, things we make extraordinary well, but don't have scale. something that has scale that we can make 12 million of every single year, it creates a lot of jobs and a lot of economic activity, really has to be cars. cars would be the central thing that our manufacturing almost -- would focus around, and argue is, really is the underlying foundation of our manufacturing infrastructure. what were we like if one of the companies had actually just collapsed, particularly if general motors or ford collapsed. what would that have meant for the united states economy? >> guest: well, in detroit it would have been a disaster, and it would have rippled out from detroit very quickly whether
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it's dealers, suppliers, and we have tiers of suppliers from the lowest tech stuff to the highest tech stuff. >> host: sure. in my state of missouri, it's the largest manufacturing sector of the economy. >> guest: they had a couple plants down there, ford also had assembly plants. these assembly plants are like small cities under themselves with 4,000 jobs in the plant themselves, but for every job that is in a plant, there's two, three, four other jobs, trucking companies, other retailers, and restaurants that service the plant. the suppliers who bring parts in and out, and they -- they're a network, and they -- somebody closes the plant, these things stop immediately. if gm went belly up and had to
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liquidate, it would have been a matter of weeks before all their suppliers would have to shut down, and not to mention their dealers, and dealers are a big source of employment in the country. it kind of touches every part of american life does, the car does. it's part of our birthright and heritage. we invented the that, you know, henry fort invented the modern assembly line and other companies, other countries learned a great deal about building cars from us. we don't have a monopoly on it anymore. we vice president for a long time, but boy, there'd be a big hole in the american economy, and in the psych of industry if one of these auto companies or all three of them went out of business. one of the things that had been discussed for awhile, and i
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didn't touch on it in the book because it never came to fruition, the idea that if all companies merged into one, we'd have one american motors if you will, a u.s. motors. you know if that -- i don't know if that's as preferable to what we have now which is the competition of the three. competition is healthy. these companies drive each other to do -- force each other to improve, and i think we're seeing that now as they are healthy. ford, for example, has become a real leader in in-car technology. it's sort of a shoe on the other foot. i think everybody assumes the asian auto makers would have been leaders in the blue tooth technology in your car and the in-car connectivity, but it's partnering with microsoft and other powerful and successful american company to bring some
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of the data and voice connected phones and other information into the car. it touches the industries as they grow. as companies grow, the car companies grow and draws in the software companies and the others who want to be part of what's really a lot of people, their second home is their car. >> host: sure, absolutely. i think the companies are doing a great job. the american companies in particular are bringing those types of things that people take with them one way or another. they will take their phone and applications and things that are important to modern life. they're going to take that into their car, and companies have a focus in doing that in a way that enhances safety and ensures that you're not, you know, diminishing the focus on the primary purpose of driving which is driving and getting from point a to point b, but they really are making dramatic improvements i think in the
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driving experience, and then obviously, in safety with, you know, the number of vehicle miles driven continues to rise and decrease today and fatalities and accidents with actually continuing to decline. there's a real focus i think the companies have on safety in trying to ensure those applications important to modern life are important in a car and in a way that doesn't distract the driver. you did, i think, a really good job in the book of pointing out it's a michigan industry, that a lot of great production facilities are in states like kentucky and missouri and oklahoma and really all across the country, and then, of course, suppliers are such an important part for our economy, even in states like california, which you wouldn't think of as a traditional automotive state. talk about the country and what that means for america's
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economy. >> guest: some of the best assembly plants gm and ford have in the country are in texas, not oklahoma anymore, but missouri and kentucky. it's a national industry. the -- these jobs are valued very highly. i was at the oklahoma city assembly plant when it closed, in 2005, and it was the largest single taxpayer in the state of oklahoma, and these jobs were valued down there, and people still in the heartland have a real affection for american-made products and american-made cars and trucks, and the coasts, the companies have lost a lot of market share, but that's -- i think part of that is just due to the tremendous competition for those dollars. this really is an industry that
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touches many lives, and the fact is it's important that they maintain these large assembly plants around the country because it's where their buyers are, where the consumers are as well as the workers. michigan has bore the bankrupt of the downsizing. there's plants closed that will never reopen. that's part of the evolution of the detroit companies. it can't be that centralized. it has to be a broader base, and , of course, these companies are doing a tremendous amount of expansion overseas as well. gm is the largest automaker in china. ford, now that they have their domestic business straightened out is pouring many resources into expansion in asia and
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elsewhere and chrysler is looking to expand around the world, but if you don't have the assembly plants in louisville and in dallas and in kansas city, st. louis, you are losing sort of the real heart and soul of the company. >> host: uh-huh. you know, you mentioned that market share, the companies of today are, of course, gaining market share for the first time in years, and they are different companies. they are different companies than they were just a few years ago and whether it's a much more competitive cost structure and labor cost structure, product design and quality, obviously, is beating much of the competition, and they are winning quality and design awards, so they are fundamentally different than the past. one indicator was their willingness to accept and agree to very aggressive fuel economy standards for 2016 and then for even 2025 which was really
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change the type of product that rolls offer an american assembly line. you might talk about what those new fuel economy standards mean for the companies and obviously then the environment and then individual consumers. >> guest: well, the new fuel economy standards have taken what's been an evolution to almost a revolution. i mean, these are high goals, and i don't see any reluctance though on the part of the detroit auto makers to embrace these gels. i was told we can make this. we can hit 54 miles per gallon by 2025. it's going to take a tremendous shift though in what people expect from their vehicles. again, the evolution's been happening. the v8 engine is almost extipghts --
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extinct now. there's few mass market models. the four cylinder engine is the most popular engine for cars sold in the country which is, when you think about it, a huge change. the technology, though, that the companies are pursued with turbo charging and direct injection and things i'm not capable of explaning have made these cars just as fun to drive and reliable as the larger displacement enjoins of the years past that were getting 12-15 miles per gallon, and now we get that routinely. >> host: four cylinder engines are different. ford and general motors both spend on their own four times what apple speans on research -- spends on research and development in four years. what that engine dliefer -- delivers today is different than just four years ago.
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>> guest: absolutely. the driving experience has not changed. in fact, ford is putting six cylinder engines in pickup trucks seeming like a gamble at the time because trucks equal v8. 40% of their sales are six cylinder. in fact, i just interviewed a gay the other day who -- a guy the other day who paid extra to get a smaller engine because he wanted to save on gas, so people's mind sets are changing, they are accepting these things because the products are filling their needs, and they want more fuel efficiency without sacrificing size and power, and so hybrid technology will be a big part of reaching these new goals, and all of the auto companies are spending tremendous amounts of money in improving their hybrid technology, and then, of course, electric vehicles. a small section of the market
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yet at this point, but they are coming. sometimes this fall, ford will begin building the first american made electric car and electric ford focus in the same assembly plant where they are building regular internal combustion engine focus, hybrid focused, plug-in, and electric. let the consumer choose, and the flexibility of the plants allows them to build more electrics if that's what people want or more hybrids if that's what people want, so these numbers out there, 54 miles per miles per gallon seems futuristic or awe-inspiring, and how can we get there, but the pace of change is extraordinary, and a lot of that is driven by competition because hyundai and toyota want to be the first too,
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but in the end, it's good for the consumer having more choice, better vehicles, and we, in the end use far less oil, which i know is a concern for everybody in this country. >> host: sure. what are the impediments for the new generation vehicles whether it's plug in, electrics, there's obviously a lot of interest in europe, some acceptance of compressed natural gas, so what's the challenges for the industry as you think through the technologies? >> guest: well, with the electric cars, it's all about the battery, and we'll building a battery industry in the country from scratch. a lot is sub subsidized from the government, which is not that different from other countries, korea in particular, highly subsidized because they're very research and development intensive, and it takes time to perfect batteries that are going to last long enough and give the kind of performance that's required in an automobile, a
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little different than an appliance or a computer, so i visited some of these battery plants. they are expanding slowly but surely, but there's not enough volume right now to support large fleets of electric cars which is probably the way it should be because i think consumer acceptance of electric cars is an impediment. my feeling was most people don't know too much about how their traditional car works. they just want to make sure it starts every morning and gets them to where they want to go, and it's going to take some time for people to be comfortable with the electric car and to realize that this is a solid reliable vehicle that if they take care of it and charge it, it's going to serve a lot of their needs. there's a lot of talk of range anxiety means how far can i
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drive this electric car, and the companies are dealing with that by offering alternatives. gm has the volt that primarily runs on electric, but has a small gas engine to recharge the battery if you have to go further than 40 or 50 miles, but this is changing every day now, and i understand general motors has an electric model they'll announce soon. >> host: all electric. >> guest: all electric, and so people will be able to decide what fits their lifestyle best. if you drive 20 miles a day and feel you're happy with electric car that you can plug in at night, that's going to serve your needs, great. if you need a second car, use your electric car as your primary commuting vehicle, but on weekends maybe you need something larger or a gas powered engine, then maybe you'll get your needs served as
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well, but there's a lot of choice, and i think the impediments will be basically technology and how quickly can we have the kind of batteries that can allow people to really make this their primary car. >> host: sure. there's obviously some options presenting fueling structure issues, particularly compressed natural gas, but i think you're right. siewmples are going to en-- consumers are going to enjoy an extraordinary range of choices that would be impossible to envision a few years ago, and i think companies, if people wonder if the companies are different today, you have to look at where they are in fuel economy. where, as you pointed out in the past, they had been, you know, pretty vigorous defenders of the status quo, and now the companies, in fact, are really the ones pushing the envelope with technology innovation. what's it like to write a book about companies of this size,
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this magnitude? i mean, these are massive industrial enterprises, so what's it like to really dig in and go through all of that? find all the data you need, you had a reservoir of interviews and knowledge built up in covering the industry, but what's is it like to write a book like once upon a car? >> guest: well, i felt that this story -- it was the biggest business story in the world for a good sod ill year, and there were a lot of things going on in washington, a lot of discussion about, you know, what these companies meant. should we save them, do they matter, and i wanted to tell the story. i felt that there's a lot of opinions and a lot of emotions surrounding this, and still to this day the american taxpayer owns 26% of general motors. some people are comfortable with that, and others can't stand
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that concept, but it's what had to be done to keep gm alive which was a bailout, if you will. i wanted to kind of strip away the emotions and the opinions and get to the heart of what really happened here, what were the decisions made, and it was not easy. i have been a reporter for the "new york times" for three years now covering this stuff on a daily basis. can't say i ever worked harder in my life than these last few years because it was such a challenging story to cover, and i was lucky enough, fortunate enough that i was begin some time off to do some research and do interviews and try to hear what went on behind the scenes of, for example, in this ford,gm discussions or what was happening with chrysler when people thought, perhaps that this merger was going to be a
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success, but, in fact, the german side of the company was already planning to sell chrysler. i think we learn a lot, i learned a lot about how people operate under pressure. i learned about leadership and team work too. no matter what the organization is, you have to have team work at the top, and the ford motor companies turn around is a great example of how bill ford and malawi sort of put their egos aside and worked as a team to set a vision for a company that really needed a dramatically action to decide. they came to detroit and said as an outsider these companies have been slowly going out of business for 70 years, so to be
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able to get that candor as a reporter and to have people open up about what they really saw and what it was really like when they were faced with the right lights in congressional hearings and put on the spot and forced to defend, sort of the indefensible, which is a company of general motors size which was so proud and pros pows for so many -- prosperous for so many years coming to washington, to know what that was like, to hear about it, to tell it in human terms was a privilege for me. i appreciated the opportunity. i covered this industry for 16 or 17 years, and to get the kind of insight and have people trust
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me and tell me what happened was a privilege for me and something i saw as a learning experience as well. don't think what you see on the surface is what's really happening. there's a lot more involved. >> you seem to have extraordinary access, and a lot of candor from everybody you talk to about the industry, and what they were trying and what was really going through their mind, critical moments, and i think people were willing to admit their human weaknesses and that sort of thing. anybody you would have loved to talk to that you didn't get to talk to? somebody you wanted to know what was going on in their mind, and you didn't get to visit with them in >> guest: well, i was only turned down for one interview, and that was the now former head of the united auto workers, and i interviewed ron many times over the years, and obviously, observed him at many
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events, and interviewed a lot of people around him, but he went out the way he came in which is i won't talk about what goes on behind closed doors of the bargaining table, which i respected. i would have liked to have had a chance to ask about some specific dates and places and events, particularly when the final negotiations were going on with the president's awe motive task force on how gm would go through bankruptcy and what concessions had to be made, but other than that, and i respected his decision. you know, once a union -- >> host: you seemed to talk to a lot of people who were close to him, because you seem to have his perspective almost. things he might have told others. >> guest: yes, i talked to a lot of people close to him and in the room with him, and i interviewed him many times before, so i drew on all of that as well, and i observed him, and i have a lot of respect for ron,
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and that's his principle. you know, and i don't blame him for -- he turned down a lot of other people too, so i didn't feel too much like a special case there, but the fact is most people were willing to talk. some took a little longer to feel comfortable. when you lose your job, i don't care what it is, it's tough to kind of look back and to discuss it, but to their credit, all the executives at general motors and at chrysler, and even at ford to come guard and were -- come forward and were -- they wanted their story told, and i appreciated their trust and candor because it's an important story. i think people need to realize this was a story of survival. we came very close to losing the american auto industry in this country, and i don't have a firm opinion about the politics of -- i do -- i do think that the
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administrations and the congress ultimately realized that letting these companies fail would have been far more harmful -- >> host: arguably cease to be a power at all. dramatic implications for the global economy. >> guest: for years to come. >> host: sure. talk about for a couple minutes your thoughts on the automotive task force president obama established with ron bloom and others. talk a little bit about their work and the work they established. >> guest: they came together so fast and accomplished a tremendous amount in a short time. bloom, who i spent time with, really had to conduct a total crash course on understanding what these companies were, what their situations were, and the whole industry, and how it was interrelated, and make some very
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expedient decisions. time was of the essence here. the obama administration was under a lot of pressure on two projects. one, do we give them more money? if we do, what control do we require over them, general motors in particular? the bush administration gave bridge loans which kept them alive long enough for the obama administration to decide should they stay alive, and i think they did an extraordinary job on the task force of boiling down to the essence what needed to be done. general motors, for example, much like coming into ford moe tar company, steve coming from wall street or ron bloom with his background looked at this how can gm have so many divisions and cars 245 are not selling? so many unprofitable models?
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for the longest time gm was reluck at that particular time to give up -- reluctant to give up anything. we don't want to give up pontiac. they forced them to make hard decisions which was the right ones. gm is a smaller company now and a more profitable more effective company, so i think in the compress the time -- compressed time frame and the pressure the task force was under, they really distilled the needs of the companies and what had to be done if, in fact, taxpayers were going to put up more money, some hard choices had to be made, and they really pushed those through. >> host: sure. one of the interesting things in the book is that president obama and president elect at time president obama, and president bush, talked about keeping the companies alive just in the period of transition, and might touch on some of the -- from almost unilateral decisions that
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president bush made to ensure that was the case and that president obama would be able to then deal with the challenge as he did. >> guest: well, president bush, my understanding is told mr. obama that i won't turn this over to you as a failure. i will keep these growing until you have an opportunity to assess what you want to do with it, which was a courageous move on his part. it was sort of against his core policies and in terms of, you know, assisting a private enterprise, but to his credit, i think he understood that general motors liquidating when a new administration came in would be a tremendous burden and challenge to an economy that was already struggling. president obama, i give him a lot of credit for believing these companies could succeed
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with assistance. there were a lot of people who said no matter how much money you give general motors, it's a lost cause. it won't turn around, and to his credit, he felt with the right kind of direction and obviously with the financial assistance that there was enough talent and commitment and know-how in detroit to succeed, and that's a leap of faith on his part, i think. it's paid off. these companies are now growing again. they are adding jobs. of course, not enough to replace the hundreds of thousands that lost, but, you know, this is an evolutionary business, and right now, gm, ford, and chrysler are kind of hot again, and just got finished covering the lathest round of -- latest round of labor talks, and are adding jobs, and it seems detroit lives to fight another
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day. >> host: just a couple minutes, but how are the companies different? they are all successful today, but how are they different today? >> guest: well, you know, ford motor company by not taking government assistance, this is a decision and an experience that will benefit them for decades to come. they are the american car company. they made it on its own, and they should be congratulated for that, and the fact is i think it will resinate for years that that's something that some people in america feel very strongly about, and they're gravitating to their products. gm is evolving as we speak. new management, changing their product structure, and trying to retain that humility that was long and coming. it didn't come overnight, and i think it's important for them to remember what almost happened. i think they'll be conservative on some things going forward,
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and chrysler -- >> host: they'll regain their position as the world's largest auto maker almost as surely this year. >> guest: yeah, and it's amazing, isn't it? people thought that that was done forever, and toyota would be the biggest company in the industry going forward, and gm is back on top. i don't think size is quite as important to their success as focus, and to continue to improve their products, i think the most telling effect about gm's rebirth is the number one selling passenger car in the country today is the chevrolet cruise, a small car from general moe tars. >> host: sounds great. we've been talking with the author of "once upon a car," and, bill, i've enjoyed your book and talking with you. >> guest: great, i certainly appreciate it.
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>> that was "after words" booktv's show where authors are interviewed by others familiar with their material. "after words" airs every week on booktv 10 p.m. on saturday, 12 and 9 psm on sunday, and 12 a.m. on monday. you can watch it online at and click on after words in the book tv series and topics list on the upper right side of the page. >> next, jack neilly, local author of no no knoxville, tennessee takes us on a literary tour of knoxville. >> famous for no country for old men, all the pretty horses, bo


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