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."
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