Cars and Culture by Rudi Volti.
Due to its past in the production of industrial goods as well as both the country’s social and economic conditions, America was able to surpass France, Germany, and Great Britain to become the world’s largest producer of automobiles by 1904. Where European countries focused on creating high-end vehicles for the affluent, American companies focused on driving down production costs to expand the market for automobile ownership. American industrial production techniques relied heavily on unskilled laborers compared to Europe’s reliance on a smaller, more skilled, worker base. Ford Motor Company was the leader in this movement through its use of the assembly line, in combination with a high daily wage for its workers (to decrease the turnover rate) to create a basic, affordable, reliable car that would cater to a wide market. Whereas Ford focused on making a mass-market vehicle, General Motors was founded in 1908 with an entirely different business plan. GM combined many different companies such as Oldsmobile, Buick, Cadillac, and Chevrolet, to produce cars for every economic category of the market.
Throughout the early 20th century the automobile underwent many improvements such as, all metal, welded, closed bodies, electric headlights, windshield wipers, rearview mirrors, carbon-black rubber and individual cotton cords in the tires, increased speed, and most importantly the electric self-starter. With fewer tire problems, a more all weather capabilities, and a decreased risk of broken arms, the automobile was starting to look increasingly attractive to the country as a whole.
Although the vehicle itself was improving greatly, the widespread use of the automobile was reliant on other changes in the country throughout the early 20th century as well. It was only with the support of bicyclists and farmers that the public financing for road construction and maintenance became popular. With their support, the implementation of a gasoline tax to fund roads became a reality, contributing to the convenience of automobiles. In addition, catalytic cracking of petroleum started to be used in the United States during the mid 1930’s, increasing the production of gasoline by 43%, lowering its cost. With the decreasing price of gas, along with the addition of gas stations across the country, the fueling of automobiles became less of a hindrance, increasing their convenience as well.
The increase in the use of the automobile in the early 20th century changed the United States. People living in rural area were no longer restricted to a 20 mile radius that could be covered by a horse and buggy. Rural habitants could commute for work, church, school, and social activities. General stores, country churches, and one-room schoolhouses no longer were the only sources of these resources. In urban areas, the use of automobiles decreased the amount of horse excrement in the streets, leading to a decrease in the spread of dangerous pathogens. Automobiles opened up new areas for housing, offering more privacy and space for inhabitants. By 1914 the automobile was far on its way to becoming a staple in the American way of life.
The origins of the modern car is more intricate than the current industry, dominated by a relatively small number of firms producing many cars, would suggest. The first car, by some definitions, was invented in 1770 by a french man, Nicholas Cugnot. The car was “a self propelled vehicle running on a road surface.” It was a steam powered vehicle, and it was originally designed to move military equipment. It took until the early twentieth century for gasoline to become the clear favorite type of fuel moving forward for cars as steam engines and electric powered vehicles were produced widely as well.
The first automobile propelled by an internal combustion engine was a motorcycle with a wooden frame built by Gottlieb Daimler and Wilhelm Maybach.</p?
What we know as the modern car comes from these humble beginnings. Just as the first cars were markedly different from today’s technology, the young car industry was much different from what we observe today. At the outset, the french were the most technolgically advanced nation in terms of cars. The United States later became a leader in the industry largely because of the nation’s high per-capita income, more egalitarian distribution of wealth, and industrial advantages.
Finally, the young car industry wasn’t run by large companies with engineering teams. Hundreds of small companies produced cars of all kinds. Cars were an expensive luxury at the time, but they were simple enough than many companies could try their hands at creating one. The overwhelming majority of these firms no longer exist, but some of the prominent names in the industry were around at the beginning of the car industry’s development.
Volti’s Chapter 3 discusses the evolution and relevance of the automobile from years 1914-1923. By this time, the automobile had become more than just a luxury vehicle. From the onset of World War I, the automobile served a number of functions. A variety of cars were used in the war, but the Model T was still most prominent. Automobiles would have heavily influenced traditional combat dynamics, as transportation of soldiers and supplies in war zones became easier. The absence of men from the US during the war also changed the role of woman and their relationship to automobiles. Women not only drove more but aided in production, repair, and maintenance of automobiles. This would certainly spur economic growth on countries’ respective home fronts, as women began to comprise a much larger portion of the labor market than they previously had. Automobile manufacturers from many different countries also aided in the production of war necessities. For example, the majority of US aircraft engines used in the war were manufactured by automobile manufacturers.
War time demand for mass transportation caused automobile manufacturers to produce many more trucks. Trucks were used for mass transportation over long distance and alleviated some of the reliance on railroads. Trucks proved to be an economical mode of transportation during the war, and contributed to the Allies’ victory. The economic implications of the Allies’ victory, which can be in part attributed to the production of trucks and other automobiles, cannot be understated. Had the Axis powers triumphed, they likely would have occupied Allied states and completely changed whole markets and economies.
Federal, state and local governments worked to improve the poor roads in the US. Economic implications may have included job creation for road work, as well as more efficient transportation for farmers to deliver goods to market. In Europe, the Italian autostrada laid the foundation for what would become the autobahns in Germany and the interstate freeways in America. Public transportation also evolved in the form of intercity busses, increasing both short and long distance travel in the US. While this change did not threaten the growing private automobile industry, it did take passengers from the railroad market, which had certainly been a prominent vessel of long distance transportation for many decades.
As automobile manufacturers continued to improve on their models, the Model T began to lose appeal to the average consumer. A car superior to the Model T in almost every respect could be purchased for a small amount more. Ford then decided to end production of the Model T and completely overhaul Ford manufacturing facilities to prepare for the advent of the Model A. The Model A was introduced 6 months after the Model T was no longer in production, and although the car sold well, Ford no longer dominated the automobile industry. Although it cannot be said Ford had a monopoly over the industry, the market structure of the automobile industry changed, becoming a more competitive market.
As Ford declined, General Motors rose to prominence under the presidency of found William Durant. After being ousted and subsequently buying his way back in, General Motors had three automobile divisions: Cadillac, Buick and Chevrolet. This diverse business model differed substantially from Ford, who only produced one automobile model under the Ford Company name. Under the control of Alfred Sloan, GM achieved continued success through its diversity of auto types. People of different preferences and economic standing could typically find a car that appealed to them somewhere in the diverse options of GM cars. At the end of each year, a new model was introduced. This marketing technique made people more inclined to trade in old cars for new cars, increasing GM revenue. Also unlike Ford, GM allowed customers to buy cars on credit, which was a more effective marketing policy during the economic downturn of the 1920’s. Such a policy may have positively affected the economy since more cars went into circulation under this model, allowing efficient transportation to continue.
With the emergence of Chrysler as a major competitor with GM and Ford, the automobile industry effectively became an oligopoly. The production of newer cars required massive amounts of capital, so the dominance of these firms propagated due to access to large amounts of capital. As the market became national and international during the 1920’s, marketing and having a broad network of franchised dealers became more of a necessity. Ford and GM also began producing cars in foreign countries across the globe in order to circumvent export taxes and tariffs in other countries. Ford dominated the European market for a time, however certain taxes were implemented to discourage the sale of Ford vehicles and encourage European vehicles. Despite these taxes, Ford still produced the large majority of vehicles, proving that demand for Ford’s product at the time had low elasticity.
Innovations were made during the twenties, such as increasing production of cars with enclosed bodies, creation of balloons tires (allowing cars to drive lower), front wheel breaks, and overall reshaping of the car features. Hotels would not accommodate motorists due to their disheveled appearance on arrival, so camping grounds and subsequently motels began to open, creating a new market related to the automobile industry in the private sector.
Socially, the widespread use of automobiles seemed to increase the amount of casual sex since youths could escape parental supervision more readily. Also, it may be argued both that cars helped overturn the traditional gender role of women as the weaker sex, but also that it in some ways reinforced women as the homemaker and caretaker of the children.
- How did Ford and GM both experience such success despite having very different business models? What might the state of the US economy had to do with the success of the respective companies?
- Discuss the market structure of the auto industry at the beginning of the period as well as the end of the period, and why the transition between structures may have taken place
- Genderization, changes in women’s traditional role and changes in the Labor Market
- Model T and Ford’s decline. Ford’s model was so durable, car ownership was diffuse. One may say the market was saturated with Model T’s as new cars were being sold and used cars continued to circulate. Cars are differentiated goods.
- GM on the other hand used product segmentation and differentiated products, which appealed much more to customers (differing paint jobs, body styles, brand names [Buick, Cadillac, etc]).
This chapter discusses the evolution of the auto industry during the time between 1929 and 1945. Obviously in America, 1929 was the year the great depression began spelling economic hardship and adversity for years. However, Volti claims that irrespective of the depression; the auto industry continued to progress and improve. During the early years of the depression purchases of new cars dropped off, but returned to pre depression levels in 1936. On the contrary, it would seem the drop off in new car purchases may have been supplemented by more exhaustive use of already purchased cars because of the jump in fuel consumption. The depression also worked to squeeze out the small players in the auto industry as only the large stable companies could weather the dropping sales and tough business climate. The “big three”(Ford, GM, and Chrysler) , as they came to be known, survived and dominated the American auto industry after the depression controlling 85% of the market. The Great Depression did not have as severe economic consequences abroad as several European nations saw continued annual growth in car sales during the time. However, oligopolistic markets became the normal market variant among most automobile industries during the time (whether that be domestic oligopolies or the American “Big Three” dominating foreign markets).
Technology in cars over this period was not particularly innovative as most of the improvements stemmed from implementing preexisting technology into cars. Notably streamlining, single auto body, lights, hydraulic brakes, and windshield were all either implemented or improved during this time period. Further, Ford released the first mass produced low cost car with a V8 in his Model A. Also, until this point almost every car was a manual transmission requiring very strategic shifting that lead most people to simple get in a gear and stay there. However, new transmissions were invented during this period, which made shifting gears much easier or altogether eliminated shifting with GM’s introduction of the automatic transmission in 1939. The diesel engine, which had previously been designated to stationary machine, boats, and the likes was reintroduced to cars as its thermodynamic efficiency was superior to the otto engines used in automobiles during that time. Interstates and freeways started to make an appearance towards the beginning of world war II, though America did not make much progress (Germany and several European countries were farther ahead with infrastructural development). The workers of the auto industry first began to organize into unions and strike during this time. However, towards the end of the time spanned during this chapter WWII began, which
lead the government to rely on the auto industry and its manufacturing capacity to supply wartime materials and aid.
- To what extent did the great depression hinder/progress the automobile industry?
- How did the global culture and economies change during the time period, and what affect did this have on the automobile industry?
- Did the automobile industry stagnate during the 1930’s or was the implementation of preexisting technologies into cars a necessary step in the evolution of the industry?
- Did the oligopolistic nature of the auto industry that took over during this time period hurt automobile consumers or help them?
The two decades after World War II saw incredible success for the american auto industry. Profits soared and technical innovation clipped along at a rapid pace. This success was
unlikely unanticipated, considering that the U.S. was coming out of a costly war and millions of men and women would be flooding a barren job market. The opposite, however, occurred. Demand soared for cars, in large part because new production had ceased during the war leaving the used car market barren. This drove the demand curve for new cars out, pushing up the price and increasing the quantity.
This increase in demand, it seems, was the leading factor in spurring the success of the auto industry in America and the innovation which that success sparked. While the “Big Three” continued to consolidate their market share during this period, they started producing more diverse lineups. According to Rudi Volti, in 1951 Chevrolet only produced one basic car body, with minor trim differences separating the models. However, by 1958 Chevy was producing eight differentiated models. This product differentiation can be credited to the public’s thirst for different, new styles.
Beyond creating new and exciting models, the “Big Three” also began creating more and more advanced cars technologically. The V-8 took over as America’s favorite engine and they continued to become larger and more efficient. Technological advances, however, only reflected what the public demanded. With little government regulation, safety was far from a priority in the eyes of the major car companies. Seat belts could be purchased as an optional extra, but this option was rarely exercised. The same was true of recessed steering wheel hubs, breakaway rearview mirrors and crash-proof locks. The demand simply was present for these features, despite their benefits being, potentially, incredibly high. Eventually, after the risks of not having these features became apparent, the government was forced to step in and regulate their use.
Increased demand for cars also translated to cars’ complement goods. For instance, the national highway system was supported by a great number of interests ranging from average consumers to the military to commercial interests. This public good was then funded, through tax dollars, with strong support from all these interests. Similarly, franchised motels and fast food chains became popular due to the proliferation of road trips. Consumers wanted places to stay and eat that they recognized and could trust. Accordingly, nationwide chains sprouted up along popular high way roots to meet this demand. The rise in demand for these complements provides an example of the external effects that the proliferation of personal cars had on American culture and the American economy.
By 1965 the auto industry had reached its highest levels of success in its history. The market was very profitable, the cars were the most impressive they had ever been, and the amount of people driving cars had increased exponentially.
In the mid-1960s questions began to arise about the detrimental affects of cars. This included lower quality air, the high death tolls, and the possibility of not having gas.
A book by Ralph Nader titled, Unsafe at Any Speed: The Designed-In Dangers of the American Automobile, sparked many concerns in the general public about the safety of cars. The automobile industries however paid little attention to the critics because they knew from previous attempts by Henry Ford that “safety doesn’t sell.” The industry also feared government oversight. They assumed that adding additional safety features to their cars would lead to this.
The federal government would soon get involved with the auto industry despite efforts to keep them out. In 1964, the Generals Services Administration (GSA) was introduced to establish safety standards for cars. By 1966, the government created the Department of Transportation and soon after came the National Highway and Traffic Administration. Criteria for brakes, lights, and tires were soon announced and a seat belt became a required feature on every car after 1968.
Other improvements on cars became mandatory with the institution of the Clean Air Act in 1970. A study done in 1950 proved that automobiles were a large contributor to the photochemical smog that was appearing in Los Angeles in the 1940s. Companies were forced to clean up the emissions of their cars. This would prove to be a very difficult task. It was quite a hassle for the companies to adjust their engines, as it was tons of effort that often resulted in different issues. Such as other chemicals being released that may have been worse. The expensive results were also not pleasing to consumers. The cars weren’t as smooth, they needed more gas, and they would many times stall, surge, or diesel.
Another issue would soon come to the surface as a result of an international crisis. Gasoline was no longer an easily accessible commodity. After America’s support of Israel in the Yom Kippur War, Organization of Petroleum Exporting Countries (OPEC) didn’t supply the U.S. with oil. Consequently, gas was difficult to acquire and the government got involved with the design of vehicles. Miles per gallon had to reach a certain standard and speed limits were reduced. The thought of recreated the steam powered car was not out of the question.
The gas would eventually be imported again from the Middle East, but the affects from the shortage of gasoline were long lasting. More Americans became interested in smaller cars with better gas mileage. This combined with the treatment of workers lead to Japan taking control of the auto industry. One strategy that helped Japanese car companies like Honda become a prominent force in the industry was the influence from the Japanese government. Instead of having multiple car companies the Japanese government strongly suggested mergers of smaller companies. Ultimately Japan’s superior strategies would gain them the lead in the global auto industry.
- Questions for discussion:
- What were the reasons for new safety regulations?
- What if steam-powered engines resurfaced in the 1970s as a result of a low abundance of gasoline?
In the years after 1990 up to the present, the United States’ automotive industry did not see much in the way of intensive or radical technological advancements. Much of the change in the industry was the result of the fine-tuning of pre-existing technologies, such as safety and control systems. While this time period did give rise to the popularity of the SUV, this seems to be the only big change of the modern car industry.
One of the major advances of the automobile post-1990 was the improvement of the efficiency and emissions of engines. Smog was becoming a serious problem in major cities, particularly and most noticeably in Los Angeles. Soon the connection was made between automobile emissions and the collection of carbon monoxide in the atmosphere. As a result of this, the US Government passed the Clean Air Act, which resulted in every new automobile to be outfitted with catalytic converters to the exhaust, in order to clean up emissions. This piece of technology has done great things for the environment and cleaned up air pollution around the country.
Another impressive development within automobiles was the introduction of the variable valve timing and lift. This technology allows the engine to easily adapt to changing speeds and leads to increased efficiency, which is in turn good for the environment and the vehicle’s performance.
Along with advancements in engine technology, the auto industry experienced a change in the safety features of automobiles. While seatbelts had long been required in cars, another important aspect of the safety restraint system, the airbag, came into prominence. While some view the airbag as controversial and potentially lethal, with modern advancements and proper usage, the airbag was found to be a lifesaver, and was eventually a required part of every new car. Handling also received an upgrade post-1990. Car manufacturers eventually began to use stability control systems, which, coupled with better tires, are more capable of keeping traction with the road, particularly on steep turns. Antilock braking systems were also developed in this modern period, allowing the brakes to adapt to the situation and avoid lockups. This allows cars to stop quickly, and removes the necessity to pump the brakes in an emergency situation.
Along with the SUV, the pickup truck became a major player in the auto industry post-1990, even for casual consumers. Pickup trucks eventually became one the the largest selling vehicles in the nation, and continue their dominance in present times. However, it is now widely known that trucks and SUVs traveling at high speeds on the road lead to more deaths via rollovers, as well as more deaths as a result of a truck hitting a smaller car. By this reason, pickup trucks are one of the deadliest vehicles on the road.
A recent development that claims its origins at the very beginning of the auto industry is the heavy use of acquisitions and mergers throughout the industry. However, in recent times, these mergers have taken a more global scale. For example, Daimler-Benz acquired Chrysler, and Ford acquired a controlling interest in Mazda, to go along with their ownership of Jaguar, Volvo, Aston Martin, and Land Rover. General Motors came to acquire sizable shares in Isuzu and Subaru, Fiat, Daewoo, and Saab. Large motor corporations began to extend their reach into new markets.
Another recent development has been the emerging market of the third world. China and India have become huge markets for automobile industry, as incomes continue to rise in these countries, making widespread car ownership possible. By expanding car ownership in India and China, the world can double the number of cars it has.
The last part of the chapter talked about the hypothetical future of the car. Though major advancements have been made in the way of electric and hybrid cars, pollution is becoming a major concern with building levels of carbon dioxide in the atmosphere contributing to fears of global warming. With markets such as India and China opening up, what can be done to combat rising pollution levels? Some claim that the answer is found in public transportation, although the very few successes in public transportation have largely been subsidized by the government.
In summary, advancements in the auto industry in the post-1990 world have been centered around safety standards and computerized systems. Although government mandates have been behind most of these changes, what other reasons would car companies choose to move their product in this direction? What are the economic benefits to improving these systems in their product? Are such advancements worth the costs that they produce? What are some of the ways in which the industry would start to look past the internal combustion and look into alternative energy as a feasible power plant for the automobile? What is the future of the auto industry?