GM squandered our good will, setting off years of licks for corporate America
By Ronald Ahrens
Throughout the 1950s and into the 1960s, General Motors was the most admired corporation in America. The company had received credit for single-handedly saving the national economy in 1955, when chairman and chief executive Red Curtice decided, despite the forecast of a recession, to go ahead with plant expansion worth $1 billion. Curtice was subsequently named Time’s man of the year; GM executive Ed Cole, the father of the Corvair, would appear on the cover of that magazine in 1959, and Curtice’s replacement Fred Donner also got a cover in 1962.
But all that good will was thrown away. On November 30, 1965, Ralph Nader, the son of Lebanese-immigrant parents, published Unsafe at Any Speed: The Designed-In Dangers of the American Automobile. While Nader’s book is a sweeping exposé in the tradition of The Jungle, it might have made no mark whatsoever; some 20,000 copies were sold in the first three months. Not bad, but not quite a blockbuster. GM’s legal department assured otherwise, though. Led by chief counsel Aloysius Power and egged on by Eileen Murphy, GM’s first female attorney who was the department’s librarian, the company started spying on Nader. He received harassing calls at his unlisted number in northwest Washington, D.C., and was tailed as he traveled to TV appearances in February of 1966. One investigator interviewed Nader’s acquaintances to learn his political beliefs, whether he was anti-Semitic, and whether he was gay.
Standing at a drugstore newsstand on February 20, Nader was “leafing through an auto magazine when a woman apologized for being forward but asked if he would like to participate in a ‘foreign affairs discussion’ at her apartment,” according to the New York Times.
Three days later, Nader was choosing a package of cookies in a supermarket when “a young woman asked him for help in moving some heavy articles at her residence.” After he said no, the woman didn’t ask any of the other men in the store.
By March 10, the spying story had broken. Bunkie Knudsen, GM’s new executive vice president for overseas operations, was with Donner in Honolulu at the beginning of an around-the-world tour of company facilities. In the early 1960s Knudsen devoted some effort to critiquing Donner’s policies and his personal style, which was imperious, and his emphasis on long meetings that mired everybody in minutiae. Donner was also too involved in determining the particulars of individual car models. Nevertheless, Knudsen was clearly on the boss’s side, now, perhaps not in the least because he hoped his next promotion would be to GM president. He recorded the reaction to the Nader bust in his diary:
“Fred found out we—through our Legal Dept.—had been investigating Nader. We had to admit it after first denying it. Fred is very upset as he should be. I can’t understand why they would do such a thing.”
At a cocktail party the next evening, Knudsen found Donner feeling “blue” and questioning his own leadership ability. But he also said the legal department “got their just due since they have been continually lecturing on the need to be Simon Pure.”
Shock from Across the Dateline
On Saturday, March 19, the men were in Adelaide, South Australia, where the fall festival was in progress. Donner took a call from Roche and learned the “accusations relative to [the] investigation were true and Jim’s statement is one of eating crow. This whole thing will hurt us badly both with the public and with our competition.”
The next week, company president Jim Roche and the legal department were in Washington, separately appearing before Congress. Roche sweated out his auto-da-fé before Senator Abe Ribicoff’s traffic safety subcommittee, admitting guilt and accepting blame. But Power, making a basket with his fingers, Murphy, looking desperately bored, and Louis Bridenstine, assistant general counsel, frowning and reflecting great solemnity, also appeared before the subcommittee. Power said it was he who’d authorized the investigation of Nader—but not to harass him. And Power said Murphy handled the details.
In a WASP-y outfit like GM, it didn’t go unnoticed that the three guilty parties—Roche, Power, and Murphy—all happened to be Roman Catholics.
That Saturday, now in Sydney, Knudsen wrote, “It appears Fred has some questions in his mind vis-à-vis Jim. He can’t say. He keeps on feeling sorry for Jim. The Nader investigation has hurt Jim and Fred can’t be blamed in any way. Jim who is the most detailed man got caught with Power on the investigation—his buddy and a fellow churchman. This hurts Fred deeply and brings out the religious affiliation. Fred has never said this but it is very obvious.
Two weeks later, after stops in Singapore and Bangkok, they made their way to Beirut. After meeting with dealers and distributors, Donner and Knudsen went on an excursion to see the ruins of the Baalbek Valley. It was a “nerve-wracking” trip, Knudsen reported. “They pass on curves and going uphill and they drive very fast. They are reckless and have many accidents. I would suggest that Ralph Nader come to his hometown and see how they drive.”
In the Aftermath, Scorn for Corporations
Knudsen was right in predicting the incident would hurt GM.
“General Motors had been marked as arrogant and mendacious,” wrote Ed Cray in Chrome Colossus: General Motors and Its Times. The National Traffic and Motor Vehicle Safety Act was passed later that year, and Congress wasn’t inclined to cut Detroit any slack on complying with new regulations.
Roche succeeded Donner as chairman and big cheese in 1967, and the next interval saw GM involved in a huge recall of Chevrolets with faulty engine mounts that could cause sticking throttles. The company showed additional insensitivity when Roche’s successor as president—not Knudsen, after all, but Ed Cole—was quoted in the New York Times saying, “There is no real danger and no reason a person shouldn’t drive the car in a normal manner. A person driving a car should be a skilled driver, and if he can’t manage a car under 25 miles per hour, he shouldn’t be driving.”
Cole—along with influential automotive editors like David E. Davis, Jr.—never quit defending the Corvair, either.
- How the Corvair’s rise and fall changed America forever (blogs.reuters.com)