Contributor Post Created with Sketch. Recommended by Ricochet Members Created with Sketch. Blooming Idiots or Bureaucratic Blight?

 

There is nothing inevitable about the trajectory of a nation or a business enterprise. While we may perceive patterns, these arise from human nature at the mean. Yet, we see moments when individuals and relatively small groups make a real difference for some time. Consider two instances of business enterprises seeming to go badly wrong, and ask if blooming idiots or bureaucratic blight are to blame.

Cadillac: an instance of automotive industry decline?

The Wall Street Journal recently reported on Cadillac’s stalled U.S. sales.

Cadillac’s U.S. comeback has taken another detour.

General Motors Co. has been trying for decades to revive Cadillac in the U.S. luxury car market, where it was once the standard-bearer but now is No. 5 in sales behind BMW, Mercedes-Benz, Lexus and Audi.

Cadillac’s latest reboot began a year ago with the installation of a new executive team, which has overhauled marketing and relocated its headquarters from Manhattan’s SoHo neighborhood to a Detroit suburb.

[…]

Most of the brand’s sales growth now comes from China, where it has expanded rapidly in recent years. But GM executives also are counting on Cadillac’s renewal in the U.S. to drive future profits and help it diversify beyond its big money-making trucks. GM last year said it wants to double Cadillac’s profits over four years through 2021, but didn’t disclose a number.

Two photographs accompanied a graph showing the trend line for Cadillac and rival global brands. My father suggests that the pictures explain the graph, and it is hard to argue otherwise.

https://www.wallpaperup.com/uploads/wallpapers/2013/06/21/105843/b754bfe4dbe33cd07dd6050a9a923cab.jpghttps://i2.wp.com/2019suvs.com/wp-content/uploads/2018/03/2019-Cadillac-XT6.jpg

Approaching two SUVs from the rear recently, it seemed the only visible difference between the Kia and the Mercedes was the brand badge. Is that tristar badge really worth almost twice the price? With Cadillac priced squarely in the middle of Kia and Mercedes, what is the incentive to spend more than the Kia price, and why not get into the lower level trim Mercedes rather than the top level trim Cadillac?

One explanation of the homogenization of vehicle body forms is the ascendance of bean counters and management fad chasing MBAs over engineers and gear heads. This is the blooming idiot explanation. We can rack up instances of this, and point to bright moments when the gear heads grabbed the corporate wheel back for a moment.

Yet, the bean counters have a point, and so do the lawyers. If the whole industry is moving the same way, then we should look to causes outside the corporations, as well as considering group think. Here we must count the cost of a massive regulatory state, especially “safety,” “environmental” and “fuel economy” regulations. Indeed, “state” is an understatement, as every major automotive brand operating in a global market, exposed to every national or supra-national regulatory regime. If the bloom is off automotive art and romance, it may well be due to bureaucratic blight, leading to regulatory rot.

Sears: How did the proto-Amazon fail?

Sears and Roebuck has died a long and painful death. It need not have been so. Indeed, Sears was Amazon on steroids over a generation ago. There was virtually nothing you could not order from the Sears catalog, including a house. So why is Sears in bankruptcy and fighting in court with a venture capitalist buyer over the allocation of responsibility for mere millions of dollars?

Writing from the home of the Sears Tower, the Chicago Tribune offered an analysis of Sears‘ withering:

The most impressive statement to make about Sears as it seeks bankruptcy court protection is also the most damning: Sears was the Amazon of its time.

Impressive because Sears really was that influential long ago. Damning because the company’s decline wasn’t preordained. Sears could have maintained pre-eminence and, in the digital era, elbowed out Amazon and other retailers. Some companies do preserve and build on success through reinvention. Look at McDonald’s….

[…]

By 1972, 2 of every 3 Americans shopped at Sears in any three-month period, and more than half of households had a Sears credit card, according to “The Big Store,” an engaging 1987 biography of the company by Donald R. Katz. The Sears Tower rose in downtown Chicago as “a lasting monument to the invincibility and boundlessness and extreme profitability of a company that now accounted for fully 1 percent of the Gross National Product,” Katz wrote.

Parallels to Amazon are uncanny: Almost 2 out of 3 U.S. adults purchased something via Amazon in a three-month period in 2017, according to market researcher Packaged Facts. Amazon’s $177 billion in revenue last year is in the neighborhood of 1 percent of GNP.

[…] 

The question of what befell Sears isn’t hard to answer. It was internal attitude as much as external forces. Katz’s book explored the hubris and insularity of a behemoth that couldn’t imagine being usurped, and thus didn’t anticipate the rise of mall competition or discounters or, eventually, the internet. “Sears doesn’t have competition save ourselves,” one company executive quoted in “The Big Store” said in 1975. “Sears is number one, two, three and four.”

Notice that Sears did not die because “change” or because “internet.” Decisions to act and to not act were taken by a series of executives. No government bureaucracy, no regulatory regime, seems implicated in Sears’ long withering. Instead, it seems that the management and shareholders became so complacent for so long that they failed to do the periodic plant care needed for continued health, let alone production of new seasons of fruit. Beyond neglect bred of complacency, we should also recognize that a fabulously successful firm is producing great wealth in the present. Any discussion of change may sound like a threat, like an unnecessary risk to ongoing production of profits and jobs.

When we consider Sears and Cadillac side-by-side, are we to conclude that Cadillac, and the rest of the automotive companies are effectively driven to sameness by irresistible forces, in contrast to the retail sales business? Perhaps not. Consider that these outside influences shaping car design are from governments, and that the vast majority of the relevant governments can credibly claim to arise from the consent of their citizens.

So, the growth of the regulatory state and regional regulatory schemes can be said to be responsive to governments seeking election and reelection by their voting public. However, once a regulation starts to grow, it attracts its own admirers, like a volunteer plant sprouting in a garden. While some argue that it should be trimmed back, it becomes harder over the seasons to seriously discuss ripping out a regulatory system and planting something new.

Yet, there may be a change in the global political climate. Might “populism” allow more local variation to flourish for a season? Might the latest waves of elections create an opening for those who would “make automobiles great again?” Readers doubtless have their own gardening analogies, which they are invited to share in the comments.

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  1. Clifford A. Brown Contributor
    Clifford A. Brown

    A writing prompt from my father, about cars, caused a long dormant post about Sears to finally germinate, yielding this hybrid.


    This conversation is part of our Group Writing Series under the May 2019 Group Writing Theme: Blooming Ideas. Thanks to everyone who signed up, filling out May’s garden plot.

    Also, June’s theme is posted now, sign up to write about “Hot Stuff!”

    • #1
    • May 28, 2019, at 4:51 PM PDT
    • 5 likes
  2. Stina Member

    Clifford A. Brown: Yet, the bean counters have a point, and so do the lawyers. If the whole industry is moving the same way, then we should look to causes outside the corporations, as well as considering group think.

    If they are all the same, then having only a handful of competitors makes sense. There’s no accounting for personal taste that creates loyal, niche markets – like Mustang fanatics vs Jaguar.

    Which is mildly surprising, considering the glut of personalizations in the market, except they are all just skin deep. Personalization is limited to skin options, from cell phone cases to clip-on laptop covers and Logitech’s many and varied mini-mice that are all exactly the same.

    • #2
    • May 28, 2019, at 5:10 PM PDT
    • 2 likes
  3. JoelB Member

    Cadillac and Buick seem to have become popular in China, but I have not heard the same for Chevy. Why is this? Not enough prestige?

    • #3
    • May 28, 2019, at 6:03 PM PDT
    • 2 likes
  4. Cato Rand Inactive

    I can’t for the life of me see how populism is going to help. A more stifling and less innovation friendly ideology would be hard to come by. Well, maybe communism is worse. I guess it can always get worse. But populism isn’t the answer to anything. Certainly not drab auto design.

    • #4
    • May 28, 2019, at 6:04 PM PDT
    • 3 likes
  5. Randy Webster Member

    Stina (View Comment):
    Logitech’s many and varied mini-mice that are all exactly the same.

    I’m not sure what a mini-mouse is, but I noticed that the more ergonomic mice got, the more uncomfortable it was for me to use them.

    • #5
    • May 28, 2019, at 6:23 PM PDT
    • 4 likes
  6. Randy Webster Member

    Clifford A. Brown: There is nothing inevitable about the trajectory of a nation or a business enterprise

    Do you think we’re freer than we were 100 years ago? Do you think that trajectory is likely to change?

    • #6
    • May 28, 2019, at 6:38 PM PDT
    • 1 like
  7. SkipSul Coolidge
    SkipSulJoined in the first year of Ricochet Ricochet Charter Member

    I said this earlier today in the PIT, but it bears repeating when it comes to automobile form factors (I’ve been meaning to turn this into a post too, but time has not been on my side):

    Cars are a worldwide market. They all look alike because they all have to obey the same laws of physics, and are homogenizations of lots regs both here and abroad. We mandate safety cages, the Euros mandate that cars have a certain nose and windshield pitch to roll-off pedestrian strikes below a certain speed. We all have fuel economy regs, pollution regs, regulations on what materials can be used in the paint or the wiring, or the car’s HVAC coolant, or the tires. We have frontal impact regs, side impacts, corner impacts, roll-over regs, minimum service life on service parts (at least 10 years after the last one rolled off the line).

    And then there are the mandatory insurance laws, and don’t kid yourself over the influence that insurance companies have, or their safety testing outfits. Those safety test people have killed marques by 5-starring them one year under one standard, and 2-starring them the following year because the insurance safety standards were tightened, not because the car design changed one bit.

    Who today would buy, say, a rebirthed Chevette, even at $10k? How many people would pony up for another ’61 Caddy?


    They all look alike because they’re all trying to fill the same market niches, and satisfy the same government and insurance regs. It’s amazing that there’s as much brand and marque differentiation as there is, that any auto maker can still have its own design language is a testament to how much creativity they still have.

    To turn to Caddy in particular: they’ve been fighting a tough battle for the last 40+ years, and it is only GM’s ego that has kept them going. This isn’t saying that they’ve made all bad cars – their modernization that produced the CTS some 17 years ago produced a beautiful car – but they’ve been seen as “the car you get when you’re too old for Buick” for a long time, and they’ve suffered from GM’s mixed quality reputation for a long time too. When you’re forking out that much money, your car either needs to be brilliantly eccentric such that your buyers see the repair bills with pride (see also: Jaguar), or unfailing (see also: Mercedes and Lexus). At least with Caddies at one time you were getting features that plebian cars wouldn’t see for another 10 years, but even a humble Chevy Cruz today has amenities that would put a Caddy from 20 years ago to shame.

    Doesn’t help that current Caddies are unattractive (the current CTS is ghastly). Maybe that’s due to regulations and design homogenization, but it could also be that Cadillac, as a brand, has little left to offer.

    • #7
    • May 28, 2019, at 7:06 PM PDT
    • 14 likes
  8. SkipSul Coolidge
    SkipSulJoined in the first year of Ricochet Ricochet Charter Member

    Regarding Sears, I am absolutely convinced that their recent CEO had always planned to run the company into the ground so he could skim off the cash – basically sell it piecemeal, brand by brand, property by property, since he could not sell it as a whole. I do not think he ever had any intention of trying to save it.

    • #8
    • May 28, 2019, at 7:08 PM PDT
    • 11 likes
  9. Stina Member

    Randy Webster (View Comment):

    Stina (View Comment):
    Logitech’s many and varied mini-mice that are all exactly the same.

    I’m not sure what a mini-mouse is, but I noticed that the more ergonomic mice got, the more uncomfortable it was for me to use them.

    These are not aggressively ergonomic and are slightly smaller, blue-tooth mice designed for laptop portability. They are very generic in design, but varied in color and decoration.

    • #9
    • May 28, 2019, at 7:25 PM PDT
    • Like
  10. Stina Member

    SkipSul (View Comment):
    They all look alike because they’re all trying to fill the same market niches, and satisfy the same government and insurance regs.

    So what I hear you saying is that more local markets may produce a greater variety, even while also limiting potential market share.

     

    • #10
    • May 28, 2019, at 7:35 PM PDT
    • 1 like
  11. SkipSul Coolidge
    SkipSulJoined in the first year of Ricochet Ricochet Charter Member

    Stina (View Comment):

    SkipSul (View Comment):
    They all look alike because they’re all trying to fill the same market niches, and satisfy the same government and insurance regs.

    So what I hear you saying is that more local markets may produce a greater variety, even while also limiting potential market share.

     

    Sure. It’s not as if the occasional wild-eyed entrepreneur hasn’t tried to launch a new car company with a new aesthetic or form factor concept – they just rarely succeed as the decks are massively stacked against them. The EPA restricts your motor to what’s already meeting current specs, unless you can afford to do EPA tests and design your own (good luck). Crash tests are expensive, engineering is expensive, and so on. Tesla got its start by buying Lotus Elise chassis and bodies, and electrifying them as that was the only way to get going with something while taking the years of cert work to make their own.

    The regs basically are now such that you have to be a multi-national behemoth to have any hope of passing, and so there is little room for local markets, or more than a few generic form factors.

    • #11
    • May 28, 2019, at 7:58 PM PDT
    • 5 likes
  12. Clifford A. Brown Contributor
    Clifford A. Brown

    Randy Webster (View Comment):

    Clifford A. Brown: There is nothing inevitable about the trajectory of a nation or a business enterprise

    Do you think we’re freer than we were 100 years ago? Do you think that trajectory is likely to change?

    Do you think that history is on a trajectory? Specify “freer.” “Likely” is different than “inevitable.”

    • #12
    • May 28, 2019, at 8:09 PM PDT
    • Like
  13. Clifford A. Brown Contributor
    Clifford A. Brown

    SkipSul (View Comment):

    Regarding Sears, I am absolutely convinced that their recent CEO had always planned to run the company into the ground so he could skim off the cash – basically sell it piecemeal, brand by brand, property by property, since he could not sell it as a whole. I do not think he ever had any intention of trying to save it.

    That is certainly the claim in the suit, or counter-suit by the remnant of Sears, while the recent CEO, complains of the remnant management violating terms of the sale agreed to to escape bankruptcy court.

    Reporting last year certainly had a flavor of what you suggest.

    • #13
    • May 28, 2019, at 8:14 PM PDT
    • 1 like
  14. Clifford A. Brown Contributor
    Clifford A. Brown

    Stina (View Comment):

    Clifford A. Brown: Yet, the bean counters have a point, and so do the lawyers. If the whole industry is moving the same way, then we should look to causes outside the corporations, as well as considering group think.

    If they are all the same, then having only a handful of competitors makes sense. There’s no accounting for personal taste that creates loyal, niche markets – like Mustang fanatics vs Jaguar.

    Which is mildly surprising, considering the glut of personalizations in the market, except they are all just skin deep. Personalization is limited to skin options, from cell phone cases to clip-on laptop covers and Logitech’s many and varied mini-mice that are all exactly the same.

    Yes. And. The skin options have been significantly shrunk in the automotive market. Hence my observation about three SUVs, and how Cadillac might be pinched between a Kia level product and a Mercedes level product.

    • #14
    • May 28, 2019, at 8:27 PM PDT
    • 1 like
  15. James Lileks Contributor

    I’m in the market for a car, and it’s been depressing. The same damned thing with gimcrack interiors and the same predictable colors. When I bought my Element it was because it leaped out: hello I am BOXY AS HELL and also INCREDIBLY GREEN. 

    On the other hand, it’s given me 14 years of service with one day in the shop, so there’s that. 

    What’s really surprising about the American cars is the crap GUI on the screens; it’s like looking at a 640X480 monitor from 1996. Last year I looked at an Escape that had a prominent CD-slot on the top of the dash. Not optional. You had to have a CD-slot staring at you on the top of the dash. Odd, because the brochure and ads all had Young People (TM) enjoying their frisky car, going to picnics and nights on the town. These people would want to connect their phones to the car. A CD player was like an Edison cylinder reader.

    What’s really depressing: the salesmen. They’re all nice calm young men who might as well be selling fridges or vacuum cleaners. The last two guys with whom I’ve dealt had no particular passion for the job. It’s just a car. 

    I want a salesman with a bright grin and a meaty paw to drape an arm around my shoulder and ask what it’s going to take to get me into this vehicle. 

    • #15
    • May 28, 2019, at 10:08 PM PDT
    • 10 likes
  16. Stina Member

    James Lileks (View Comment):
    What’s really surprising about the American cars is the crap GUI on the screens; it’s like looking at a 640X480 monitor from 1996.

    Yes, this. My husband’s 2018 civic has a far better display than my 2013 odyssey, though. It could still use improving.

    James Lileks (View Comment):
    Last year I looked at an Escape that had a prominent CD-slot on the top of the dash. Not optional. You had to have a CD-slot staring at you on the top of the dash.

    I use my CD player a lot. Not all the time, but often enough where I’d miss it if it were gone… and I’m thinking I’m younger than you.

    • #16
    • May 29, 2019, at 4:11 AM PDT
    • 1 like
  17. Jon1979 Lincoln

    SkipSul (View Comment):

    To turn to Caddy in particular: they’ve been fighting a tough battle for the last 40+ years, and it is only GM’s ego that has kept them going. This isn’t saying that they’ve made all bad cars – their modernization that produced the CTS some 17 years ago produced a beautiful car – but they’ve been seen as “the car you get when you’re too old for Buick” for a long time, and they’ve suffered from GM’s mixed quality reputation for a long time too. When you’re forking out that much money, your car either needs to be brilliantly eccentric such that your buyers see the repair bills with pride (see also: Jaguar), or unfailing (see also: Mercedes and Lexus). At least with Caddies at one time you were getting features that plebian cars wouldn’t see for another 10 years, but even a humble Chevy Cruz today has amenities that would put a Caddy from 20 years ago to shame.

    Doesn’t help that current Caddies are unattractive (the current CTS is ghastly). Maybe that’s due to regulations and design homogenization, but it could also be that Cadillac, as a brand, has little left to offer.

     

    Cadillac Cimarron vs. Chevrolet Cavalier — GM’s bone-headed decision to cut costs by making their top-of-the-line models start looking like their entry-level vehicles ignored the reality that lots of Caddy sales weren’t for the added bells & whistles inside the vehicle. They were to show off to the people on the outside that you had a Cadillac.

    Once you eliminate that distinction and combine it with the bad quality rep Detroit had by the late 70s compared to other luxury car makers, you put yourself not only a step behind BMW and Mercedes, but you opened the door for Toyota and Nissan to create their own U.S. luxury vehicle lines.

     

    • #17
    • May 29, 2019, at 4:41 AM PDT
    • 6 likes
  18. Hoyacon Member

    SkipSul (View Comment):

    Regarding Sears, I am absolutely convinced that their recent CEO had always planned to run the company into the ground so he could skim off the cash – basically sell it piecemeal, brand by brand, property by property, since he could not sell it as a whole. I do not think he ever had any intention of trying to save it.

    We’re talking here about hedge fund dude Eddie Lampert, who appears to have outsmarted himself. While I generally agree with your take, Sears was on a rather steep downward trajectory before Lampert came on the scene and merged the company with K-Mart. It seems to me to also be a tale of how some management teams–even those staffed with “industry veterans”–just simply make bad decisions, even if those decisions seem informed at the time. This is why we get the latter in “winners and losers.” The guy at the top of Sears during a crucial period in the 90’s was Arthur Martinez–he of NYU Tandon School of Engineering, Harvard MBA, and 10 years as Saks Fifth CFO. Yet, fail. 

     

    • #18
    • May 29, 2019, at 4:42 AM PDT
    • 3 likes
  19. Aaron Miller Member
    Aaron MillerJoined in the first year of Ricochet Ricochet Charter Member

    James Lileks (View Comment):
    What’s really depressing: the salesmen. They’re all nice calm young men who might as well be selling fridges or vacuum cleaners. The last two guys with whom I’ve dealt had no particular passion for the job. It’s just a car. 

    It gets worse. Some people buy cars online and have them delivered to their doors, as if it was Amazon. A two-week return policy gives one time to have it inspected. 

    • #19
    • May 29, 2019, at 5:51 AM PDT
    • 2 likes
  20. Aaron Miller Member
    Aaron MillerJoined in the first year of Ricochet Ricochet Charter Member

    Clifford A. Brown: Cadillac’s latest reboot began a year ago with the installation of a new executive team, which has overhauled marketing and relocated its headquarters from Manhattan’s SoHo neighborhood to a Detroit suburb.

    This is emblematic of the problem. The Cadillac brand smells of Detroit while trying to look like it’s from Manhattan. 

    In Houston, I associate Cadillacs with poor blacks. Old Cadillacs and Pontiacs with the paint flaking off are normal around project apartments and high-crime areas. I have been in a more recent Cadillac that was nice, but the association remains. 

    • #20
    • May 29, 2019, at 5:58 AM PDT
    • 2 likes
  21. EJHill Podcaster
    EJHillJoined in the first year of Ricochet Ricochet Charter Member

    I actually see Amazon taking some of the same bad decisions that Sears did. The push to get ever bigger, ever broader, more ubiquitous in people’s lives pushes CEOs to make stupid decisions.

    My wife worked for Sears for 13 years. She started in catalogue fulfillment and left as department manager. The latter job really opened her eyes to the company’s dysfunction. All of their non-retail services – optometry, key making, photography, etc. – were all third party businesses that Sears slapped their name on. When those people screwed up they didn’t just screw the customer, they screwed Sears’ reputation, and in the end their entire business.

    And then there’s the question of how you define success. CEOs of publicly traded companies make a lot of dumb decisions based on “the expectations of ‘The Street.’” And with their compensation tied to stock price, well, it can be disastrous.

    • #21
    • May 29, 2019, at 6:10 AM PDT
    • 7 likes
  22. Stina Member

    Aaron Miller (View Comment):

    Clifford A. Brown: Cadillac’s latest reboot began a year ago with the installation of a new executive team, which has overhauled marketing and relocated its headquarters from Manhattan’s SoHo neighborhood to a Detroit suburb.

    This is emblematic of the problem. The Cadillac brand smells of Detroit while trying to look like it’s from Manhattan.

    In Houston, I associate Cadillacs with poor blacks. Old Cadillacs and Pontiacs with the paint flaking off are normal around project apartments and high-crime areas. I have been in a more recent Cadillac that was nice, but the association remains.

    I actually thought this should be a testament to the longevity of the car that a beater caddy could keep going.

    I drove my grandmother’s ’95 oldsmobile for a few years after she stopped driving. It was a 12 year old car and could have kept going except I really wanted a car that didn’t look like it came from the ghetto :p (it really was well maintained and in good shape).

    • #22
    • May 29, 2019, at 6:25 AM PDT
    • 2 likes
  23. Bryan G. Stephens Thatcher
    Bryan G. StephensJoined in the first year of Ricochet Ricochet Charter Member

    James Lileks (View Comment):

    I’m in the market for a car, and it’s been depressing. The same damned thing with gimcrack interiors and the same predictable colors. When I bought my Element it was because it leaped out: hello I am BOXY AS HELL and also INCREDIBLY GREEN.

    On the other hand, it’s given me 14 years of service with one day in the shop, so there’s that.

    What’s really surprising about the American cars is the crap GUI on the screens; it’s like looking at a 640X480 monitor from 1996. Last year I looked at an Escape that had a prominent CD-slot on the top of the dash. Not optional. You had to have a CD-slot staring at you on the top of the dash. Odd, because the brochure and ads all had Young People (TM) enjoying their frisky car, going to picnics and nights on the town. These people would want to connect their phones to the car. A CD player was like an Edison cylinder reader.

    What’s really depressing: the salesmen. They’re all nice calm young men who might as well be selling fridges or vacuum cleaners. The last two guys with whom I’ve dealt had no particular passion for the job. It’s just a car.

    I want a salesman with a bright grin and a meaty paw to drape an arm around my shoulder and ask what it’s going to take to get me into this vehicle.

    I have been happy with my Ford Fusions, and they are going to stop making them! Really? Great sedan, that has a neat look to it (They put a Mustang grill on it – makes a world of difference). 

    I think people would pay for different bodies if they had them. 

    • #23
    • May 29, 2019, at 6:59 AM PDT
    • 1 like
  24. Aaron Miller Member
    Aaron MillerJoined in the first year of Ricochet Ricochet Charter Member

    Bryan G. Stephens (View Comment):
    I think people would pay for different bodies if they had them. 

    All I want is a Duesenberg that runs like a Maxima. 

    • #24
    • May 29, 2019, at 7:10 AM PDT
    • 4 likes
  25. Cato Rand Inactive

    Hoyacon (View Comment):

    SkipSul (View Comment):

    Regarding Sears, I am absolutely convinced that their recent CEO had always planned to run the company into the ground so he could skim off the cash – basically sell it piecemeal, brand by brand, property by property, since he could not sell it as a whole. I do not think he ever had any intention of trying to save it.

    We’re talking here about hedge fund dude Eddie Lampert, who appears to have outsmarted himself. While I generally agree with your take, Sears was on a rather steep downward trajectory before Lampert came on the scene and merged the company with K-Mart. It seems to me to also be a tale of how some management teams–even those staffed with “industry veterans”–just simply make bad decisions, even if those decisions seem informed at the time. This is why we get the latter in “winners and losers.” The guy at the top of Sears during a crucial period in the 90’s was Arthur Martinez–he of NYU Tandon School of Engineering, Harvard MBA, and 10 years as Saks Fifth CFO. Yet, fail.

     

    I worked at Sears as a management trainee in the credit business in the late 80s. Mostly it was local – at a credit center in Minneapolis – but at part of the training program we got a little exposure to upper management. You could almost smell that the end was just a matter of time by how the big guys isolated themselves. The C-Suite in the Tower was secured and guarded by a Praetorian Guard. The head of the credit business, a guy with responsibility for the credit P&L nationally, came to visit once and all the older management people treated him like the pope. He dressed impeccably and took the management team out for a fabulous night of food and drink. It was fun for this 23 year old but I think even then I wondered – could people this comfortable with their own wealth and status really win in a competitive environment? They had the feeling of a fading royal line walking down the proverbial stairs in proverbial silken slippers, not up them in wooden shoes.

    Just one small player’s anecdotal memories, but I think most institutions tend to either fail or at least go through a serious shock when they become too big, too rich, and too successful. There’s a tendency for those at the top to get flabby – in every sense – as they worry more about enjoying, displaying and preserving the wealth and status of their positions than they do about the disruption that will inevitably come.

    • #25
    • May 29, 2019, at 7:24 AM PDT
    • 5 likes
  26. The Reticulator Member

    SkipSul (View Comment):
    They all look alike because they’re all trying to fill the same market niches, and satisfy the same government and insurance regs. It’s amazing that there’s as much brand and marque differentiation as there is, that any auto maker can still have its own design language is a testament to how much creativity they still have.

    Yet another way in which big capitalism is like Bernie Sanders’ socialism in trying to reduce the varieties of products that are available to us.

    • #26
    • May 29, 2019, at 7:50 AM PDT
    • 2 likes
  27. The Reticulator Member

    Cato Rand (View Comment):
    Just one small player’s anecdotal memories, but I think most institutions tend to either fail or at least go through a serious shock when they become too big, too rich, and too successful. There’s a tendency for those at the top to get flabby – in every sense – as they worry more about enjoying, displaying and preserving the wealth and status of their positions than they do about the disruption that will inevitably come.

    Also, it’s very hard for a successful company to compete with itself and drive itself out of business. Eastman Kodak is a more clearcut example, but maybe this is an example, too?

    • #27
    • May 29, 2019, at 7:53 AM PDT
    • 3 likes
  28. David Foster Member
    David FosterJoined in the first year of Ricochet Ricochet Charter Member

    James Lileks (View Comment):
    What’s really depressing: the salesmen. They’re all nice calm young men who might as well be selling fridges or vacuum cleaners. The last two guys with whom I’ve dealt had no particular passion for the job. It’s just a car. 

    Last time I was car-shopping, in 2011, I found that the salesmen had a bimodal distribution. Some of them had really good professional selling skills; I would have considered them for a job selling expensive & complicated products to businesses. The majority of them, though, were incredible idiots, no listening skills, repetitive sales patter that they had obviously memorized.

     

    • #28
    • May 29, 2019, at 7:55 AM PDT
    • 2 likes
  29. The Great Adventure! Inactive
    The Great Adventure!Joined in the first year of Ricochet Ricochet Charter Member

    I’ve said for years that I will never be old enough to own a Cadillac. The typical Caddy owner in my mind is Danny DeVito with a cigar.

    • #29
    • May 29, 2019, at 8:02 AM PDT
    • 4 likes
  30. David Foster Member
    David FosterJoined in the first year of Ricochet Ricochet Charter Member

    Peter Drucker, who studied GM intensively, had an interesting observation about Cadillac…can’t vouch for its correctness or otherwise. Apparently, GM in the early 1930s was about to abandon the Cadillac line on account of poor sales. But Nicholas Dreystadt, the division general manager, identified a specific market niche on which to focus: African-Americans. The idea was that successful blacks were not allowed to buy expensive houses in nice neighborhoods, and needed an alternative way to project their status. Thus…Cadillac! Saved the brand.

    Searching (bing, not google), I just turned up this interesting link: Nicholas Dreystadt, GM, Cadillacs, and African-Americans. Includes a comment from Nick Dreystadt’s grandson.

    • #30
    • May 29, 2019, at 8:04 AM PDT
    • 5 likes

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