6 Myths About GM, Ford, and Chrysler

US News and World Report:

As the automakers careen toward bankruptcy, here are some of the myths complicating the debate over the future of the Detroit Three:

They don't build small cars. The Detroit Three build plenty of small cars--they're just not very good. In the U.S.News rankings of affordable small cars, for instance, seven out of 34 models are domestics. But the highest ranked--the Chevrolet Cobalt--lands at No. 20, while the top three are all Hondas. So, CEO Rick Wagoner is telling the truth when he says that in 2009 GM will offer 20 models (including a few mid-sized cars, a couple small sports cars, and a few others) that will get 30 mpg on the highway. The question is whether anybody will want to buy them--and if not, is it the government's job to subsidize uncompetitive products.

They don't build any desirable cars. A few recent Detroit models have been hits, like the Ford Fusion, Chevrolet Malibu, Cadillac CTS, and Saturn Outlook. And even Consumer Reports, which has mercilessly trashed Detroit's shoddier vehicles, recently issued a statement saying, "We've seen some progress among the domestic automakers lately, with improved reliability and performance in certain models."

Read the whole story: US News and World Report

Comments

[MajorKong]

I think Detroit actually has decent designers and engineers. Then the corporate bean counters get their hands on the design and start cutting corners. Next thing you know, you have a car with a lot of cheap bits that is a mess of squeaks and rattles after 3 years.

[KillTheMessenger]

Detroit's engineers are trained to design large engines, large frames and large interiors. As Mercedes found out the hard way, one can't use the same design methodology to design small engines, small frames and small interiors. I would be very worried about using the same engineers for a different job. They will mean well, but they will make tons of serious mistakes on the first go around. And Detroit can not afford multiple iterations to get this right.

[MajorKong]

Let's not forget that Toyota and Nissan were starting to play the "My truck's bigger than your truck" game too. They were just (luckily) a little late to the table. The Avalon isn't exactly svelte either.

[Scudrunner]

In the industry, we call it the "halo effect" when the public's perception doesn't quite line up with reality. The "foreign" auto makers use this to great advantage as so do domestics (when they can). A case in point: In the mid eighties we were building the mini-van here in St. Louis and everyone raved about it. Some of us in quality control were sent to local dealers to get feedback on the vehicles. When we interviewed the repair shops, the mechanics would all agree that the quality was great and that people just loved them. Of course we asked them specifically about problems we had reports of and all of a sudden they would say, "oh yeah, we've seen that too". When pressed further, more concerns would come forth. The point being that the vehicle's popularity over shadowed its short comings in the minds of the consumer. There's a psychology involved here and we need to get a grip concerning all the BS being debated right now on whether to let the Big 3 go belly up. I say we should protect ANY of our manufacturing base. No other industrialized nation in the world would let this happen.

[wdw102]

no bailout...­.......jus­t chapter 11

[Scudrunner]

Chapter 11 throws the workers to the wolves which is why all the republicans and neocons are supporting that. Otherwise, it makes more sense to invest by LOANING the money.

[majorteddy]

Part of the problem is the obvious bias in the media toward foreign vehicles. They are much more easily swayed by the foreign label. Obviously , they are not the same size people as the American public. I am not a huge person, but I have a fairly wide build and when I sit in one of these Japanese cars like my sisters Honda Accord or the other sisters Toyota Camry, I feel pinched. Yet when I sit in my Monte Carlo , I feel I have much more room, and the quality of ride is so much better, The Monte Carlo gets the same gas mileage, or better, and is about $6000 cheaper when the deal is done. Foreign car sales very seldom give anything off list. The pickups are a case in point where the Nissans and Toyotas are miserable compared to the domestics, economy, quality, price, I don't know what standards these people are using to judge. It has just become fashionable to beat up on American carmakers. It will change.

[Sundialsvc4]

It doesn't help matters that many good cars which people think are foreign, like the Saturn line, are actually made by domestic industry. They're extremely good cars.

And many foreign cars are actually made here.

When people are hurting economically, they don't buy a lot of new cars. And new cars last a lot longer than they used to. For instance, I usually buy cars with 39,950 miles on 'em: you guessed it, turned-in lease vehicles.

Hmm... How is Detroit accounting for the original sale of that -leased- vehicle, and did they make any accounting adjustments when I buy the thing? You could make that transaction look really glorious or really horrid depending on how you choose to account for it.

I'm suspicious. Detroit would have ceased to exist, categorically, a dozen years ago if things were really as bad for them as they claim. "Would you really be saying these awful things to me if you didn't expect me to give you $10 billion?"

[KillTheMessenger]

Let me know which domestic car achieves 48mpg fuel efficiency. That's my main concern as a buyer. 48mpg today. I will want 55-60mpg on my next car, more if it's a plug-in hybrid.

Unless you can give me that, you can't have my business.

[RobinSeattle]

Well, I am 5'`11" and over 200 pounds and my Honda is comfortable. So just how big do you think Americans are?

I was 180-190 when I owned a Toyota (which I had for about 15 years) and that was comfortable for me.

Now if you are maybe over 6'4", then maybe you would have a problem. But most folks aren't that tall.

[BetterDays]

My mouth dropped open this morning while watching a commercial on a morning news show. GM actually had a commerical running for a newly revamped Hummer pick-up. WTF! These yahoos are going to ask for a bailout, and the best they bring to the market is a new HUMMER!! This is unbelievable. Send these idiots packing.

[Scudrunner]

They've got to sell the ones on the lot - and, if you'll notice, most TV ads now are targeted at high end product markets. People with "money" the only ones buying right now. With gas prices down, rich folks will buy the hell out of those hummers.

[likeicare]

For decades, at least since the 1960's, anyway, Detroit has faithfully trotted out its "cars of the future," which inevitibly included an all-electric vehicle or two, with the caveat that these wouldn't be available for mass-production for at least 10 years or so.

And, here we are, still waiting after nearly 50 years, for electric vehicles to appear in dealership showrooms. Helllloooooo!!!!! Why is this being ignored by the MSM during the current controvery over the Big Three's future???? It goes to the heart of the matter -- the greedy, unethical business practices of not only Detroit's automakers, but of Big Biz in general.

With the brief exception of the introduction of the EV-1 and Ford's all-electric light truck (can't remember what it was called) back in the 1990's, Detroit has maintained that electric vehicles are not practical for consumers and, therefore, not "worthy" of Detroit's time and attention, sniff, sniff.

All-electric vehicles require fewer moving parts, which translates to fewer breakdowns, which means less maintenence and the need for replacement parts, which means less money spent on repairs, etc., or the need to buy newer models b/c of planned obsolescence (Detroit's dirty little marketing secret).

BTW, one of the Big Three bought the lithium battery patents for the 90s electric vehicles, then buried them. And now Big Oil is quietly buying up all the lithium battery companies it can get it grubby paws on.

And no one is reporting on it.

[BARRISTER]

Maybe we can ask Honda, Nissan and toyota to take over the management of GM, Ford and Chrysler for 10 years.

[RobinSeattle]

The endorsement of GM's small cars in that article was pretty lukewarm and only confirmed what I have been saying for 30 years---buy a Toyota or Honda for that segment.

Saturns had been getting pretty good marks over the years from the press and the writer wants to close that division? Doesn't that say something about a failure of marketing?

On his snark about people grumbling over auto industry execs taking private jets to DC, well, there are these things called meetings and you can actually hold them before you get on the plane! No, really! And if you are a competent manager, you leave behind an equally able assistant to run the shop during your absence. I guess that is too much to ask from them, though. Which only further calls into question the wisdom of a bailout for them.

[Riani]

Lousy cars. Bought my one and only American car (Ford) three years ago. Just switched back to Toyota. Had my previous Toyota for 10 years, and it never gave me a single problem!

[Nikola Tesla]

No more dumb technology.

Time to leave the 20th Century behind us!

The technology is HERE NOW! Proof of concept has been delivered.

Invest in the power grid to power an all electric fleet. Green jobs for a green America!

http://www.teslamotors.com/

http://www.hybridtechnologies.com/

[jrh0]

Here's a more concise fact-filled Six Myths: http://www.freep.com/article/20081117/COL14/811170379

[enochsmoky]

I do not understand all of the hostility from most liberals towards the U.S. auto industry. For 70 years the automakers have given above market wages, pension benefits and health insurance to a workforce that would struggle to make a living wage outside of the legal protections of a union environment within an industry that was an oligopoly until recent years. Is not the union mantra "more pay for less work" or in the auto industry's Jobs Banks program, "more pay for no work?" Let's stick it to "the man" for 70 years and see what happens. I love it when I go to my high school parking lot and see all of the non union made cars owned by card carrying members of the NEA, the union brothers of the UAW. That is what I call solidarity!

[Merewen]

The US Auto Industry has produced crap! Pure and simple. They had to give above market wages after they worked their employees to death. My Grandparents are retired auto workers. MY GRANDMOTHER CAN NOT STAND UP STRAIGHT and HER PENSION IS CRAP! I have Dodge Neon and the only reason I have is it because of employee pricing. If I wasn't get that big of a discount you wouldn't catch me buying this piece of shite car. My transmission died within the first year. I had to have major sensors replaced within 2 years. All this with normal and scheduled regular maintenance. CRAP and over priced cars.

[jennbeez]

Did your Neon's head gasket blow at 40K miles, too? Because mine did and when I called Dodge, the lady with the Indian accent (not that there's anything wrong with Indians) said that Dodge wouldn't do anything for me unless I had complete oil change records with the dealer. The dealer was 45 miles away, so I had been having my local independent mechanic do my oil changes every 3000 miles like it said in the agreement to keep my warranty from voiding. The car was less than a year old. I had to have the head gasket replaced at my expense- $900.

Screw 'em. I have a Honda Civic now.

[Anastasia]

As a native Detroit girl who moved to California, I can name a few reasons for people's ire.

1. Rather than innovate and design better cars, Detroit has been using lobbyists to solve their problems, the CAFE standards being just one example. The US auto pioneers such as Henry Ford, didn't expect help in the way of tariffs and regulations to make a profit, but rather designed cars that were the envy of the world.

For the last fifty years, Detroit has fought every safety regulation Congress tried to pass. From seat belts, to bumpers that withstood 5 mph crashes, to air bags, The US auto industry dragged their feet while other manufacturers went all out to make their cars the safest.

Detroit's Complacency, cynicism, lousy design, poor construction, and worst of all, refusal to take energy conservation seriously are just a few of reasons people are angry. If that's not enough, I can provide more.

While the Big3 does need to be bailed out, don't expect anyone to be happy about it.

[Novista]

Seat belts ... first to denounce them was the National Safety Council: a European idea, and "we don't need to turn America into a nation of racing drivers." Magnificent stupidity.

As was poor business decisions -- just looking at the photo of the 1955 Chev reminded me of: new dies needed in 1953, having worn out the previous ones. 1955, new design, new dies. 1956, similar look but 1-1/2 inch wider, retooling of dies. 1957, styling change, the first fins.

1958, new model. 1959, grotesque fins. Et freaking cetera, all style and no substance. And no brains.

[billbb]

The American auto companies grew fat and happy in a relatively protected marketplace, but have had FIFTY YEARS to get ready for this change. That they failed miserably says an awful lot about why they are where they are. In 1957 they misread the market, and left the first market niche open for widespread competition, with Volkswagen taking a significant share of the small car market. The big five (yup, Studebaker and American Motors were still out there), rushed to get small cars out, and they were crap. The automakers promised they had learned their lesson. The little cars were pretty awful but they sold, and the auto companies gradually made them bigger and fatter until they were just cheap end version of the big cars.

Then the oil shock of 1973 hit, and the big four (sorry about that Studebaker) quickly brought out subcompacts - that were awful. The big three gradually made them bigger as they lost market share by making a decade and a half of terrible cars, all the while letting their competitors own the bottom end of the market. Except for AMC, which went out of business, though the top execs did vote themselves a 26% pay increase when the company went bankrupt. Same cycle happened in 1992, the same today.

Are these guys slow learners, or what?

[AngryAmish]

Keep your paws off my grandma's Hornet.

[billbb]

I grew up in Kenosha and I had one of those. I also owned a Rambler Rogue and my wife's grandfather had a Pacer, complete with the mushroom farm on the back floor pan they all had from the crappy window seals. And a couple of friends had Gremlins, which were identical to Hornet ahead of the the B pillar, but far stupider looking. Their six-cylinder engine was known locally as the iron cockroach. You could abuse it in anyway you wished, overheat it until it darned near glowed red and not change the oil until people had to stay back 300 yards behind you in order to see through the smoke, but they would always start and run. Until they tried to emission control that 1940s design, anyway.

AMC actually had some OK products, at one time. But they were trying to be GM on a Studebaker budget, and fell apart when they couldn't make a decent car. That the same thing has now happened to the company they tried to emulate shows that GM was no smarter, they just had a deeper bank account.

More's the pity, because there was a time when American cars were the best and best value in the world. That this was over 50 years ago says way too much about the leadership of American companies. And not just the car companies, either. Xerox, IBM and Kodak all booted near 100% market shares by acting in the dumbest possible manner.

[hw]

Excuse me,

Ford makes some pretty cool small cars under their Vauxhall brand in the UK

GM has some great looking cars in Europe under their Opel line.

Both companies describe themselves as "Global."

GM is opening a new state of the art plant in China.

If they can manufacture these cars "Globally" then why can't ' they offer them for sale here in the United States?

Why are United States tax payers being asked to bail out these 'global' companies?

Look it up, it's all there on their websites.

[manndan]

Vauxhall is GM's English brand. In the fifties American Pontiac dealers sold Vauxhalls. The last time that I watched the British Touring Car Championship racing series on Speed TV the current Vauxhall that I saw was essentially the same car as a Chevy Cobalt.

[DC]

I've wondered that for years. The Opel automobiles (which is GM) are excellent compared to US built cars. Why did Gm build decent cars overseas and absolute trash for the US market?

I guess they were protecting certain management fiefdoms in Detroit instead of doing what is right for the industry and the consumer.

If they get a bail out from the tax payer, we should demand that the deliver high quality products that are desired and needed.

I fear that the US automobile industry is not capable of that. The culture of Detroit is in a bubble. Fire them all and bring in management from the still few successful segments of US manufacturing and from successful overseas automobile manufacturing.

[HaroldFromSPas]

My biggest frustration since traveling abroad is that all of them make small cars but they are only available in foreign markets. I saw some really nice, and I imagine fuel efficient small cars in the UK, Rome and China. One in particular that i remember was a Ford van. It was boxy, small, and seated 6. Where is that car? I know they make them.

[LittlePurpleUSA]

Why can't they file chapter 11? People argue that if they filed bankruptcy it would be the end for them. That people would lose confidence in the product. But there's another Big 3 that filed bankruptcy and ... they're still flying the friendly skies!

http://littlepurpleusa.blogspot.com

[metfan5567]

After seeing what the airline unions accepted to keep their jobs--30-40% wage reductions, federal takeover of their pension, which reduced their value by 50+%, and then to see the execs give themselves $200M in bonuses the day after emerging from bankruptcy, without giving the rank and file anything back,: I think that there are many in the unions who would rather liquidate the Big 3.

[LittlePurpleUSA]

Uhm ... Delta Air Lines does not have a union.

[Scudrunner]

Yeah, but I thought the airlines were still in trouble. This is not a simple matter and the airlines are not manufacturers. A big difference. When the airlines go down, the ripple effect is no where near what we'll see with the auto industry. But why do you think no other Industrialized nation in the world would let that happen? All the foreign manufacturers have their governments' support including subsidies and universal health care. Here we blame it all on the unions. Geez, even though we were smart enough to vote Change, some of us are still drinking the right wing kool aid - this all about a last ditch effort to, on the part of republican fascists, to kill organized labor. PLEASE, don't buy into it!