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September 24, 2007
Does the demise of the British car industry set an example for Detroit?
The names of the great British marques live on, giving class and credibility to the vehicles that carry them, but the companies have long been shells for foreign carmakers.
In particular, the two biggest companies, Austin and Morris, went out of business as independent companies decades ago.
Rolls-Royce is owned by BMW as is Mini. Bentley is owned by Volkswagen. Jaguar and Landrover are owned by Ford is currently trying to sell. Ford sold Aston Martin for about $1 million to an investment consortium in March.
Indeed, the most viable British carmakers are Ford, which is owned by Ford, and Vauxhall, which is owned by GM with only remaining wholly owned British marques tiny specialty outfits like Morgan and Noble.
Meanwhile, France has Peugeot-Citroen and Renault, Italy has Fiat and Germany, of course, has three premier global marques - BMW, Mercedes-Benz and Volkswagen.
What happened to the British car industry?
It might be easy to blame its demise on the damage caused by WWII. But France, Germany and Italy were all heavily damaged by the war.
No, a more likely culprit can be found in the dreadful labor relations that followed WWII, with rotten management often at loggerheads with intransigent unions.
And herein the lesson for Detroit. The current strike against GM by the United Auto Workers union is merely the latest incident in a long history of ebbing market share to Asian and European manufacturers.
For decades Detroit has been a byword for second-rate design and execution, forced to play catchup with innovations in both design and technology pouring out of Asia.
As for glamor, long gone are Detroit's glory days of the 1950s and 1960s. German and German-owned British marques and high-end Italian marques are the cars people currently drool over.
And now the union contracts that have had Detroit against the financial ropes for years in terms of health and retiree benefit costs are front page news with the first nationwide strike against GM since 1970.
I hope Detroit is not following the dismal post-war history of Britain's auto industry, but the signs are not encouraging.
- Peter C.T. Elsworth
Posted by Peter C. T. Elsworth 
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