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Unpublished Paper
Meaty, Beaty, Big and Monopolistic: The Story of General Motors
(2007)
  • Denis Binder
Abstract
Detroit, General Motors, and the American automobile industry have been in a progressive decline for decades. Millions of jobs, union and non-union, have been lost, scores of plants shuttered, and the Michigan economy left reeling. I wrote an unpublished manuscript 35 years ago, positing that as a monopoly, or "quasi-monopoly," GM should be broken up for the good of America. Its stultifying power limited innovation and competitiveness among Detroit's Big Three as prices skyrocketed, quality deteriorated, safety languished, and fuel economy suffered. The general rule became: "Don't buy a Detroit car built on Monday, Friday, the first day of hunting season, or the first year of production." GM lost over half its market share, and such once great marques as Oldsmobile and Plymouth (Chrysler) were scrapped. High entry barriers forestalled new domestic competitors. Those of us who are children of the 60's remember the teachings of John Kenneth Galbraith, Charles Reich, et al., that the great American corporations, and shared monopolies, were immune to competition, could administer prices, and ignore consumers. This manuscript partially reflects these beliefs. The Japanese, Germans, and now Koreans did not follow Galbraith's dictates and filled the competitive breach. This 35 year old manuscript examines the history of GM from an antitrust perspective. The manuscript did not foresee the shock of two oil embargoes in the 1970's and the change to a global economy. Nor did it fully anticipate the effects that poorly designed and manufactured, but overpriced vehicles, would have on the marketability of GM cars. These models include various Chevy's, especially the Corvair, Chevette, Citation, Nova, and Vega and Cadillacs, including the Allante, Cimarron, and Seville. Had GM been dissolved 3-4 decades ago, American manufacturers might have regained their competitive edge and successfully responded to the foreign competitors.
Disciplines
Publication Date
2007
Citation Information
Denis Binder. "Meaty, Beaty, Big and Monopolistic: The Story of General Motors" (2007)
Available at: http://works.bepress.com/denis_binder/6/