Murray, J., & Schwartz, M. (2019). Wrecked: How the American Auto Industry Destroyed Its Capacity to Compete.

Abstract

Why did the U.S. auto industry crumble while its Japanese competitors rose and remained strong? Conventional wisdom points to the excessive demands made by U.S. workers and the United Auto Workers union. Class conflict is also at the forefront of Joshua Murray and Michael Schwartz’ new book Wrecked, but not in terms of U.S. workers resisting givebacks in the 1980s. Instead, they place the blame at management’s feet and go back much further to document the incredible innovation in the industry prior to World War II and where it went wrong. The history is fascinating. The argument is provocative, and the problem remains timely. Wrecked is worth the read. Labor itself is found wanting as an explanation of the Big Three’s (Ford, GM, and Chrysler) dramatic slide in the late twentieth century. Labor costs accounted for just a quarter of the price advantage for Japanese vehicles during their rise in the 1980s. Most of it stemmed from the benefits of flexible or lean production. As perfected by Toyota, this includes flexible machinery, just-in-time delivery, and long-term supplier relationships based on trust. It also requires significant buy-in from workers. Together this fosters innovation by allowing for more trial and error experimentation—often with the involvement of production workers—and the introduction of new parts in a cost-effective manner. Notably, Murray and Schwartz show that U.S. producers were not averse to flexible production and indeed utilized it before Toyota, who drew from the U.S. model. GM’s Chevrolet pioneered the use of Book Reviews