This week U.S. Sen. Richard Shelby (R) of Alabama told Meet The Press and CNN that the U.S. auto industry is a dinosaur whose demise would only be postponed by a bailout. In response, automotive journalist Peter M. DeLorenzo told Huffington Post today that Shelby is 100 percent wrong.
"Detroit has an image problem that is just killing them with Congress and the general public. The perception is that Detroit isn't building fuel-efficient, high-quality cars and trucks with great design. But it isn't true. An entire industry is being written-off by a combination of bad previous experiences and a reluctance to delve deeper into the issue. Dick Shelby is a classic example. His comments are flat-out false," said DeLorenzo.
To further this conversation, Huffington Post invited DeLorenzo, founder of the Auto Extremist internet magazine and author of The United States of Toyota, to share his views.
HuffPost: Senator Shelby said Detroit has good workers, but not good management, and that GM's Rick Wagoner, among other executives, should go. Do you agree?
Peter M. DeLorenzo: CEO Alan Mulally has done a superb job at Ford Motor Co. He quickly assessed the reality of Ford's position in the U.S. market, and made some immediate decisions that are proving to be positively brilliant today. Ford's financial position is healthier than any other U.S. automaker, and its future product plan is scintillating.
As for General Motors, CEO Rick Wagoner isn't the culprit. Did GM stink up the joint between 1979 and 1999? Yes. Are we talking about the same GM today? No, not even close. Under Wagoner, GM has extended its global reach, a strategy that is keeping the company alive today. Much to the surprise of critics who say GM is stuck in 1985, the company has designed dazzling new products like the Chevrolet Malibu, which is the best mainstream American car of the last 35 years, and equal to the vaunted Toyota Camry and Honda Accord. The Buick Enclave is the finest luxury crossover available. And the Chevrolet Corvette ZR1 is one of the finest sports cars in the world, at any price.
Then why is there a lack of respect for U.S. vehicles? Is it due to poor fuel efficiency?
Do the critics mention that GM offers more than 30 vehicles that get over 30 mpg? No. Do they mention that more fuel-efficient vehicles are on the way with each passing quarter? No.
Currently GM is developing an extended-range electric vehicle -- the Chevrolet Volt -- that will be a game changer for the entire industry. Bad management isn't the problem. The problem is America's crushing financial crisis that has decimated the credit industry, the lifeblood of the car business.
In addition to the financial crisis, isn't there a perception problem?
A suffocatingly negative perception gap exists, one that paints a picture of Detroit that was obsolete years ago. I can just see Washington "helping" Detroit by putting a bunch of a managers in place who are ill-qualified for the job. There's no time for on-the-job training in this business. U.S. automakers simply need a bridge loan -- not a bailout -- until their new products reach the marketplace.
Shelby accused Detroit of not being able to innovate. Are foreign engineers really coming up with all the new ideas?
People who say the U.S. doesn't innovate are woefully out of touch with Detroit's standing in this business. For example, the most significant anti-pollution device in the history of the automobile is the catalytic converter. Every car and truck has one. Can you guess which Japanese or German company invented it? None of them. It was General Motors.
Some of the most dramatic innovations in safety, drivability, and durability have come from Detroit. Why people want to shut down this crucial part of America's manufacturing base is a mystery to me. In Dick Shelby's case, maybe it's because he helped Toyota, Honda, Hyundai, and Mercedes-Benz open plants in his state. His comments are regional and self-serving.
A Buick LaCrosse costs $30,000 in the U.S, but nearly $50,000 in Tokyo. That's not a level playing field.
That's true. The Japanese government protects its home grown industries with an unofficial government policy of currency manipulation. Japanese cars built abroad arrive in the U.S. with a $1500 cost advantage before they even hit the showrooms. Add the pension and health care costs that Detroit has to deal with, and we start out with a disadvantage of $3,000 to $10,000 per car, depending on the cost of the vehicle.
Is it fair? I don't think so. Want to rectify the situation overnight? Require foreign automakers to comply with the same standards, tariffs and duties applied to U.S. vehicles imported in their countries. Back in 1983, the U.S. International Trade Commission imposed a 45 percent tariff on imported motorcycles to protect Harley-Davidson. It saved that iconic American company. Today, a fundamental part of the fabric of this great nation is about to go down the drain, and we -- as a nation and a government -- are acting like it's no big deal. But how can an industry that either directly or indirectly affects 1 out of every 10 jobs be no big deal?
Why not put a sliding scale of import tariffs in effect immediately for two years, and watch as the Detroit automakers unleash a series of innovative, efficient, safe, reliable cars? These machines are already in the works, by the way.
Is bankruptcy a viable option for GM?
Theoretically, GM could eliminate a lot of problems by filing Chapter 11. Dealer agreements, labor agreements, and pensions could all be dealt with in a brutally efficient manner.
But there's more to it than that. The car business isn't like the airline business when it comes to Chapter 11. We've all flown airlines that are in bankruptcy. However, when a consumer spends $10,000 to $50,000 on a new car or truck, they want to be sure the auto company in question is going to be around for service and parts. If GM files for bankruptcy, it's naive to think people are going to crowd into the showrooms.
The UAW is calling for "no concessions." Isn't that the wrong signal to send to Washington?
The UAW already agreed to new contracts that eliminated years of accumulated gains. UAW president Ron Gettelfinger thinks the concessions should stop right there, but I doubt he'll get much sympathy for his position. It may all come down to one simple question: Do you want jobs with additional reductions in benefits and wages, or no jobs at all?
If the U.S. goes deeper into a recession due to the loss of nearly three million auto-related jobs, it will affect everyone. Why is this issue splitting along party lines?
The GOP is trying to flex their muscles one last time before the new administration takes over. They're putting their own interests ahead of the greater good of the country, even though that attitude cost John McCain the election. How else do you explain Dick Shelby, who slams an essential American industry, smug with the knowledge that his state of Alabama has basically opened its doors to the import manufacturers, tax free?
President Bush doesn't appear to appreciate the complexities of the automobile industry. Does Barack Obama have a better grasp?
I think President-elect Obama understands that the domestic automobile industry's health and well being is inexorably tied to the health and well being of the nation as a whole. I wish his advisers knew more about what Detroit has already done in terms of developing high-efficiency and advanced-technology vehicles. They'd be amazed at what Detroit has coming down the pike.
Follow Diane Tucker on Twitter: www.twitter.com/dianetucker
I am getting so sick of politicians and their positions on the bailout and now on the car companies. It is safe to say the majority don't know jack about anything but what will get them votes in the next election or money for their district. The politicians at these hearings are just trying to look tough so the next time a vote comes around, they're remembered as the ones who "looked out for the little guy", even though the fact they jumped on this trillion dollar bailout bill for big firms, while slapping blue collar America in the face is a complete farce.
When I saw the politicians berate the CEOs for flying privately to Washington I wanted to slap them all silly. I would like to see an official figure on the number of helicopters flown from Reagan to Capitol Hill when a cab would take probably five minutes longer to get there.
It's time for Detroit to get a little respect, thanks Delorenzo and Ms. Tucker for delivering a little. Hopefully some more reporters get off their ass and realize Detroit's getting an unfair shake.
Distorting the GOP message in being against helping the U.S. Automakers is not helping find a resolution. The Congessional Dems have suggested a $25B Bailout without any oversight is necessary to save the industry. This is not the case...and even Prez Elect Obama has said as much in his 60 Minutes interview. All Stakeholders (Big 3, Govt, Suppliers, Dealerships, UAW) must come together for the good of the country. The GOP is not anti-loan, but they recognize the industry must go through some re-structuring otherwise we are only throwing money at the problem but not solving it. If we "handle" the current problem with the U.S. auto industry as the Dems have suggested without concessions being made by these stakeholders, we will be back in the same place as soon as the cash runs out (which according to Waggoner today could be in less than a year).
Jobs are going to be lossed and the structure of the industry must change; its a sad inevitablity. This is a huge problem; One that must be corrected. Making it a political partisian issue is not going to correct it.
Letting oil go through the roof and not trying to ameliorate the price by not buying oil temporarily for the Strategic Oil reserve would benefit the Republican Party by destroying the United Auto Workers at the same time. In their mind GM, Ford and Chrysler supply the UAW with money to attack the Republican Party, so if they died it would not be a big deal.
The problem for many Republicans was that they like the big cars; they just did not like the people who built them.
In the long run the Oil Companies could continue the revolving door for the Republicans and enrich the party through lobbying while at the same time destroying one of the biggest lobbyist for the Democrats, and beside Honda and Toyota now make BIG SUVS. They will just have to build more of them in the future when the price of oil goes down. The only problem is that Oil affects everything in America and their path of destruction for the UAW resulted in collateral damage to the rest of the economy.
When I look for cars to buy I look for cars that will run without major repairs for 300k+ miles. I no longer look at US cars because they will not last. I know I have tried. I can do minor repairs but I will not replace motors or transmissions and in US cars these are what fail.
Now once Detroit starts making simple, rugged, dependable 4 door transportation without heated seats or toaster oven, that can be had for $200 a month I may be back. But for now I have to buy Japanese.
And if you tell me that people just don’t understand the excellent quality improvements in US autos then the Big 3 need to work on better advertising because I see ads all over the place and simply dismiss them as that, advertising.
They railed against the Supercar project even though it gave them designs for a 60-80mpg hybrid 10 years ago, right when Toyota released the first hybrid
Along with the DOE, Ford funded FutureTruck, a competetion between colleges to design a more efficient SUV. They were given hundreds of designs for hybrid SUVs, using technologies that ranged from fuel cells, Li-ion batteries, and any kind of hybrid. I worked on one of these myself at Georgia Tech, where we converted a Ford Explorer to use an inductor motor in a parallel hybrid scheme that increased fuel efficiency and lowered emissions to the ULEV standard. It also INCREASED power, beating the stock car's 1/8th mile time by more than a second. We were told, by a Ford rep, that if the electric motor's gearbox wasn't so noisy he could sell the thing tomorrow for about $2k above the stock price. Where is that SUV? Why isn't it on the market?
Maybe it's time for the international oil cartels to pony up some guarantees?
Jeez, I've read three different articles this morning with CEOs of crippled corporations bawling about how they're misunderstood. How we should be commiserating with them, comforting them, and giving them more of our hard earned dollar.
Detroit and the oil mega-interests have been in bed together since day one- incestuous as it is, as the auto industry is related directly to oil!
"We're running out of oil!" the oil companies cried! Well, while they were gorging themselves at the table of fear, Detroit sure wasn't doing anything about it.
Now, the car companies are trying the same tactic- be afraid, we're going under any minute! Thow us the green backed life preserver!- no one is buying it, and they're refusing to have their bluff called.
Surely this is the voice of oil again. Indeed, if we order the automotive industry to address the oil "shortage", we are in fact, shortening the obscene profits being made by the oil interests.
Time to call the bluff! The auto industry isn't going to collapse. Oil will take the profits they can get, versus none at all. No further deliberations are necessary, no further arguments, no further mewling from these corporate mouths. Either fix your self declared "emergency", or shut up, or go out of business.
Time's they is hard all over. I don't know about anyone else, but it's time for the gloves to come off!
Is it fair? I don't think so.
The Big 3 do what is good for their businesses - suck the last dollar out before they are forced to make a change, despite the greater good. With the air quality as bad as it is right now, we must get the gas burners off the road. These companies are way behind and delusional...They are still making the Hummer.
When a company is unsustainable, ships jobs out of the country, enjoys tax breaks at the expense of America, why should they be kept afloat? To maintain the American way of Greed and Convenience?
Change is necessary and sometimes uncomfortable.
Our system, our way of life, is not sustainable. The autos we drive quietly contribute to the destruction of our lives. This country may go though major shifts that will be painful. If we get rid of the dead weight along the way, maybe we will come out better on the other side. Maybe we will have the healthy shift that we need.
I would rather push my GS up hill in Houston Tx in July than drive a Malibu.
Malibu - a 60's lead sled based off the Chevelle...1997 - brought back in a crummy looking, half baked, slapped together fifth/sixth generation version...now 2008 and the new 2008 Consumer Reports reliability survey ratings of the Malibu are "average" for the LTZ V6 and "above average" for the LS 4-cylinder.
...and this is "dazzling"? If you want to beat out Accord or Camry, GM has to do better than that. First off, get rid of the nameplate as the nameplate alone connotes abysmal "mediocrity" as seen through the years via the following link:
http://en.wikipedia.org/wiki/Chevy_Malibu