Sunday, February 1, 2009

The nature of the beast

"General Motors, in the years after the war, made very bigger cars. It moved in that direction because it was the nature of the beast. There had been one brief skirmish within the corporate hierarchy when [Charlie 'Engine'] Wilson wanted to do a low-price car at Chevy in the late forties. He had in mind a car that would cost under a thousand dollars. There was even a brand name for the new car -- the Cadet -- and engineering on it was pursued to a relatively advanced stage. Charles Kettering, the company's most brilliant inventor, was one of the few top executives sympathetic to Wilson's idea, but it was Kettering's invention of the high-compression engine using high octane gas that, as much as anything else, helped tip the balance away from small cars.

Small cars meant smaller profits, while basic production costs stayed the same. Producing a fender for a big car, the GM analysts liked to point out, was not much more expensive than producing a fender for a little car. The financial people reported that they would have to sell three hundred thousand Cadets a year for three years just to pay for its tools and dies. Worse, who was to tell how many Cadet sales might have gone instead to larger cars, where GM made a larger profit? By 1947 the Cadet was shelved. In December 1949 a reporter asked Wilson if there would ever be an inexpensive car priced under a thousand dollars again. No, he answered, that was in the past."

From David Halberstam's The Fifties (Villard Books, 1993), pp. 119-120.