# What's Wrong With the American Auto Industry?



## burnedandfrozen (Mar 11, 2004)

So GM is going to close several plants and lay off 30,000 people. Why? Haven't they realized by now that American cars are of inferior quality? Whenever I've purchased a used car (which is all I've ever purchased) I check Consumer Reports and American cars all have the worst reliability ratings. I'd love to buy American but I don't want to have my car recalled several times and then have massive repair bills down the road. So upper management charts the course and when that course fails to deliver the profits they lay off thousands of workers to save on labor and try to bring the stock up? Whatever happened to making quality goods? Too risky? Too expensive? Did anyone else read the quote somebody said about Fords employee discount for the public? "Forget employee discounts. Just build a car people want to buy". Seems simple to me. So while all these blue collar workers are going to loose their jobs how many in upper management will loose theirs? After all, they are the ones who steered GM into the rocks. If history repeats itself these folks will probably get a hefty bonus. Furthermore how many of these thousands of workers will get a "golden parachute" like CEOs do when even they cannot escape the chopping block? It just seems like once one enters a certain strata of society, they are no longer held accountable for anything. Is this true?
Regards,
Mark


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## Kav (Jun 19, 2005)

I don't even want to comment. I listen to Car talk with the two brothers out of Boston on NPR and a more serious ( but hardly more enlightening) car show on KPFK here in L.A. Eventually we will all be lined up at fast food joints- applying for jobs with the lucky ones in security guard uniforms watching us


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## Karl89 (Feb 20, 2005)

Burnedandfrozen,

Four things in my opinion. 

1) The Big Three are saddled with huge liabilities from their defined benefit pension plans. Many private pension plans are woefully underfunded and GM, Ford and DC are no exeptions.

2) Healthcare costs have gotten out of control and union contracts, signed when times were flush, provided for almost free healthcare for current workers, retired workers and their dependents. I read somewhere that healthcare costs account for about 2000 USD of the price of each GM vehicle. Cuts into the margins pretty quick.

3) PR problems. Recent quality (JD Power, etc.) surveys show that American cars are as reliable as the best of the Japanese but public perception is quite the opposite. Ford and GM rank ahead of even Mercedes for quality but maybe less than 5% of the buying public knows this.

4) The Big Three focused too much on SUV's - ok when gas was cheap but biting them in the ass now. Unless you have ten kids, live in the Yukon Territory or regularly tow in excess of 5000 lbs I don't understand the allure of SUV's. I am not casting any moral aspersions on SUV drivers mind you (as Dennis Miller once remarked to the What Would Jesus Drive bumperstickers "I always thought my God would have a driver.") I just don't understand the attraction to cars that don't handle well, aren't efficient and aren't particularly safe. Give me a good sportswagon over an SUV anyday. The sharp decline in SUV sales demonstrates that the American public is beginning to feel the same.

But lets not panic - we arent seeing the end of the US auto industry, just a shift of who the dominant players will be. Toyota, Honda, Nissan, Mitsubishi, Hyundai, BMW, Mercedes and soon perhaps VW too, all build new cars in the US, employing American workers. Capitalism's "creative destruction" is at work here and while it may be painful for alot of workers (and I dont mean to seem callous or dismissive to someone who has lost a job) in the short term, long term it will produce a more stable industry in the US.

On a side note I don't think GM will declare bankruptcy. They still have tremndous assets, still have a lot of cash and are making cuts while they still have a chance to make a postive impact. GM will emerge smaller and leaner and hopefully more dynamic - a company that builds more cars like the Solstice and none like the Aztek. And for investors with some risk tolerance, GM corporate paper offers a stellar return. Just stick with 5 year notes and dont run for cover everytime you hear a negative GM story.

Karl


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## ChubbyTiger (Mar 10, 2005)

I think the biggest problem is that the big three (two and a half?) can't build a car that _I_ want to buy. I know lots of people who love their Ford minivan or whatever, but I haven't honestly seen an American car that I'd realistically like to purchase in a long time. OK, yeah, the Viper, but I said realistically.

In the middle of the road segment, maybe 20k-35k, sedanish to more sporty, they have nothing decent. When we bought our TSX, we looked at Acura, Toyota, Honda, Lexus, Infinity, Volkswagon, Audi, BMW, and Jaguar (yes, I know it's owned by Ford). Some were a little too much, some we just didn't like, but they all have good cars in the mid-size 4-door slightly-sporty segment. Where was the Chevy? The Ford? I sure-as-hell wasn't going to buy a Taurus. Chrysler actually has a decent offering near the segment (the 300, but it's huge).

I looked at at least one car from almost every major car company and didn't see anything even remotely attractive from GM or Ford or DC. What is the average guy w/family going to buy? An Accord/Camery/TSX/Passatt/etc. Maybe he makes a little more and he gets a 3-Series or G35 or A4. Or maybe he's single and gets the Lancer Evo or WRX STi.

GM and Ford need to get off their collective asses and start building something that is a normal size, attractive, fun to drive, and reliable. DC just needs to build something reliable and normal sized, at least their cars are attractive.

Perhaps they could start by eliminating some brands. Chevy lives, kill off Pontiac, Saturn, GMC, Buick, and Hummer. Keep Caddy as the premium brand. Then maybe make a good solid car that doesn't look funny, or ride like a boat, or have 'quirks'. Doesn't need a V-8, just a good quiet 200ish hp engine and good brakes. Don't offer 873 different trim levels that bring the price from 19000 to 47000. Keep it simple - nav system, sport suspention, leather. Make the ride firm but not harsh. 0-60 around 8 sec, 70-0 in 180 ft, skid pad ~0.80g. And for the love of all that's Holy, hire an ergonomics expert away from Honda and give him free reign to do whatever he wants.

CT

It's very dissapointing.


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## crazyquik (Jun 8, 2005)

I consider myself a "car guy", though I don't have Manton-esque knowledge I have been a moderator at a very popular GM brand-specific website.

GM is/has been run by a bunch of morons. For the last...35 years. Every couple years you would see a new car or article in the car magazines "Will this save GM?" but it never has. Cadillac Cimmaron? Front wheel drive everything? The new Malibu, Impala, and Monte Carlo? [xx(]

*Piss Poor Management*
When things were good, they negotiated a lot of cushy contracts with the unions. That's coming home to roost now. They underestimated the impact of the Japanese auto in the mid to late 60s (granted these didn't really become common for ~10 more years) and most would argue that they are still not competitive.

They pay thier executives too much. Now, I have *no problem* with extremely high CEO pay, as long as the CEO is kicking ass and taking names. But GM, year after year after year is losing market share, thier stock price is at about a 20-25 year low, and they continue to pay bonuses and salaries that are too high. You could hire me and I could run your company into the ground for a lot less! Why don't they pay these exectutives commensurate to thier performance? If our market share goes up 5% you get a ton of money, and if it falls you owe us money! Or just fire them instead?

GM makes most of its decisions with the "hive mind". Sort of like, you scratch my back, I'll scratch yours, neither of us will get in trouble for not scrathing enough backs. When everyone comes to a consensus, you can't fire the whole group or board. Its been this way since at least the early 60s though.

*Product*
Also, as we know in politics and business, often the facts dont matter as much as the perception. GM's cars are percieved as inferior goods. Whether they seem/are unreliable, or simply feel cheaply made. Thier average vehicle sells for ~3500ish less than Toyota. So even if the two cars are on par, Toyota has a lot more pricing power. GM resale (resell?) value is horrendous when compared to Toyota or Honda, which is a good indication of the public perception of desirability.

Further, most of thier cars are best described as "fugly". It doesn't cost anymore to bend a piece of metal or mold a piece of plastic in a way that is pleasing to the eye than it does to bend it in an ugly way. Yet GM tends to choose ugly, or at least, bland styling. Such is the result of building cars based on those little consumer survey groups (what do they call those?). Inoffensive to none, but uninspiring as well.

This is the company that thought "hey, most cereal and detergent is made by the same company, and they get thier brand difference from marketing and labels on the grocery store aisle, lets hire one of those guys to manage our different car labels!" Dumbass. People _do_ put more thought into buying a car than they do a washing machine or thier cereal, and its a lot easier to sell a car that people are excitied about b/c or aggressive or inspiring features (Chrysler 300M, BMW Mini, PT Cruiser, etc) than a bland appliancemobile.

*Gas Price related stuff*
And lets see, there is this high gas problem thing. Has anyone at GM heard about that yet? Thier bread and butter lately has been high margain SUVs. Many of the owners of these don't realize that much the technology and components of thier $40k land yacht is not that much different than a $15-18k basic halfton pickup. So as long as they sold, GM could limp along on all that extra inflow of cash. And when they stopped selling due to rising gas prices they were left holding the bag.

The average Toyota Prius sits on the lot *20 hours* before being sold.

Of course, if you go to the Smithsonian right now, there is a GM EV1. A fully electric car, sold to consumers like 12 years ago. Disregarding the practicality of the EV1, if they would have kept some semblence of an electric car program for the last 12 years, where would they be now? Would they be kicking Toyota's ass across the ocean? Would they have developed thier own hybrid gasoline-plug in electric car in the late 90s? Instead, in this one instance where they were ahead of the curve, they are now so far behind the ball that they are in an informal alliance with BMW and maybe Isuzu to develop some stop-gap hybrid. Of course, by the time this thing comes on line Toyota and Honda will be on thier 2nd Gen hybrid.

They have great capabilities, but somehow mismanage or let the accountants ruin every good idea that the engineers come up with. And they are too big to change. It's a situation where you need to burn the barn to kill the rats. File for bankruptcy, fire all the top level managers, and start over.

The bottom line is, as Carlos Ghosn (the man who 'saved' Nissan) no car company has problems too big that good products can't solve. GM just has no good products.

Sure the 1986-87 Buick Grand National was neat. The C5 and C6 Corvettes and Z06s are amazing cars on thier own, especially when compared dollar for performance. Thier trucks have been succesful, especially in the face of stiff competition over the last 10 years. The restoration of Cadillac has been a success. However GM as an entity is not run the way Corvette as a brand is run, or now Cadillac. But your bread and butter is the mid level sedans. The Ford Taurus, Toyota Camry, Honda Accord line. Here GM has nothing (other than straight to the rental fleet crap).


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## crazyquik (Jun 8, 2005)

With deft management (which I think I could provide  ) GM could still keep most of its brands. It just needs to do more than badge-engineer them.

Look at Volkswagen's (the mega-corporation) lineup in Europe.

They take one platform and stretch it across several distinct marques, building cars for Seat, Skoda, VW, and Audi (of course they own Bentley, Lambo, and Bugatti too but there are not many Skoda part in those). You have cheap, intro-sporty, introlux, and luxery cars.

The problem is GM is not skilled, or smart, or whatever, enough to do this with Saturn, Pontiac, Chevrolet, and Buick.

------------------------

I just thought of another example of GM's stupidity.

They have been building this badboy, and branding it Opel in Europe, for several years. Think of it as a poor man's Lotus Elise.

Yet when they want to give Pontiac a new roadster to pep up its image, they try to build a Miata-fighter, playing it to the press for it seems like 5 years, and they come out with the Solstace from a clean sheet of paper. Color me "not impressed."

The Opel Speedster has a 13:1 power to weight ratio vs 16:1 of the Pontiac. It looks better. Handles better. Price is slightly more but it was already built, not a clean sheet new product. Further expanding the car to the US market would take the Opel/Vauxhall and make it an Opel/Vauxhall/Pontiac.










Why not use that badge engineering GM knows and loves so much and bring us the Opel? Its already being built, fitting it for the US market would cost a fraction of what the clean-sheet design Pontiac cost. Further, the average American car consumer isn't going to know its a rebadged Opel. However most could discern that the Pontiac Grand Am, Chevrolet Malibu, Oldmobubble Cutlass Calais, Buick Skylark, etc were all based on the same crappy L platform.

Seeing as how the BMW Z3 came out in ~1996 or 1997, which was followed by many other small drop tops, GM is only missing the roadster craze by about 8-10 years.


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## burnedandfrozen (Mar 11, 2004)

Excellent insight guys, thanks. I too am guilty about thinking American cars are inferior quality. As I mentioned when I look at Consumer Reports I just see lots of recall history and poor reliability for American cars. I'm not speaking of cars like the Camary which are made here, but cars from the Big Three. I'm looking for another car now and I'm looking for another Toyota around 2000-ish or newer if I have scrape together the bucks for it.
I also agree with the frustration about these CEO's getting raises and bigger bonuses while the ship sinks and the blue collar guys get laid off. Why reward poor performance? 
As far as the SUV thing, yeah, I don't care for them either and I do notice that some drivers are pretty reckless and rude when driving them but that can be said for all drivers at times. In LA with so many peope driving Mercedes my friend has a theory that driving one magically exempts the driver from basic traffic laws and courtesy since so many of them also seem to be reckless overly aggressive drivers. I should also add that I always thought it was a bad idea to introduce any kind of gas guzzler cars while we are so dependent on forign oil. My biggest problem with SUVs isn't the occasional rude driver but when I want to fill up and I'm stuck behind two SUVs while they fill up. I mean it takes FOREVER to fill those suckers up! 
Regards,
Mark


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## Kav (Jun 19, 2005)

First let me temper this comment by saying I once loved, and retain a flickering flame for the romance of the road and fine cars. Most of those idyllic car ads are filmed near me in Hidden Valley, a small enclave of horse ranches and homes to the rich and famous.I finally sold my one of a kind Mini Cooper S when a near multiple collision- more of a squeeze between two SUVs mutually merging on top of me unseen on that very drive produced flashbacks of a ketch rammed by a supertanker off Seattle. Between future fuel issues, pollution both by production, operation and disposal and sheer numbers associated with our cancer rate population growth the system must someday,somewhere come to a rather nasty stop. I was 4 years old, my father driving to give a lecture in San Francisco. We were at the TOP of Nob Hill when the engine literally fell out of our brand new chrysler stationwagon. I've always remembered that early event in my life, and the ease with which we hopped onto public transportation (after the local dealer received a withering phonecall[xx(])There are places and infrastructures make automobiles appropriate technology. But worldwide we need to literally look down the road before we race into the coming wreck.It won't matter much if we do it in a Studebaker, Toyota, Rolls Royce or chinese Trabant.


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## pendennis (Oct 6, 2005)

I work for one of the "Big Three". I've been in, and around the automotive business for almost fifty years. There is no other industry in the world which is more complicated to run, more regulated by government, and less understood by those not involved in the business.

I do not speak for the collective boards of Ford, GM, or DCM. They can do that for themselves, when and if they wish. However, most of what I read written or spoken by those on the outside, whether in government, or those who consider themselves "car people", don't have a clue as to running the automobile business.

The automobile is the most expensive purchase which most people ever make, with the exception of their primary home. In fact, most people spend more on their own transportation in a lifetime than they will ever spend on their home. Further, most people don't have even a remote clue as to what it takes just to assemble a car, SUV, or truck. Let's see:

Insure that more than 6,000 parts get to a particular point, within 20 square feet, on time, within specification, and priced competitively, from thousands of diverse suppliers, from all over the earth.

Insure that the man/woman on the operation has the proper, ergonomic tools and conditions to allow for proper installation.

Get out the Ouija boards and divine the prices of steel, oil, plastics, other metals, rubber, and determine what the price of your product will be two years forward.

Insure that you have no control over energy costs, and that the energy industry doesn't have any standard, other than gasoline and diesel fuel, for which you can operate your end products.

Cope with Moore's law. Everyone knows that the latest electronic game technology can be used in the drivetrain's design and engineering.

Be sure you take into consideration mandatory engineering and design changes that occur within a particular model year; and don't forget to try and divine what government regulators will do, and what laws will change your design, manufacturing and marketing strategies; and insure that you order the exact quantity of required parts, insuring no leftovers or obsolete parts.

Insure you build your vehicles to mandated Federal specifications, then defend your company when sued by some family whose idiot relative tried to get his SUV to handle like a Ferrari, and splattered him/herself all over the highway. Defend yourself against lawsuits for building a quality police car, and then having a police officer killed in a rear-end collision by a drunk doing over seventy miles per hour, when no mechanical device yet made will stand up to this type of abuse. Like others, we can repeal Newton's laws of physics, thermodynamics, and Einstein's Theory of Relativity on a whim.

Insure that a supplier in another country produces your part to the exact specifications and properly heat treats the metals to your specifications. Do it while eliminating inspection personnel.

Insure that you have a harmonious labor force. Pay them good wages, and provide good benefits. Never mind that you can't dismiss someone for cause, without a protracted legal process.

I agree, that upper management compensation is too high; but it's not nearly as high as many smaller companies. Our managers aren't getting any bonuses. White collar non-managers probably won't get raises next year or the following year.

Try and be successful when your own government will not call other countries to task for keeping your products out through protective tariffs, while those countries manipulate currency rates to maintain advantages for their own automakers.

Insure you incorporate 6-Sigma; Statistical Process Control; the latest Microsoft products; management, design and engineering techniques; and other process and legal requirements into your business environment, and make sure you don't make any mistakes.

Deal with incredibly dishonest politicians, idiots like Ralph Nader, Joan Claybrook, The Center For Automotive Research, and others who don't know a Corvette from a corset. The Corvair was safe at any speed, and the Pinto only caught fire when raw gasoline got into the atmosphere when an idiot drove it with no gas cap installed, and was rear-ended, causing gasoline to spew out of the filler pipe. I personally owned a Corvair and a Pinto, and they were as safe as any other car made.

The same people who don't buy American-made cars, are the same ones who put American textile workers out of business, and for the same reasons. They always buy price, and never look to the longer economic picture. This is the very action which will insure that the American standard of living will be pulled down, long before the Chinese, Korean, African, etc., standards of living will be pulled up to ours.

Oh, and insure you get products designed, engineered, and produced, to the market place from three years earlier, just when hurricanes hit Louisiana and Texas, and gas and oil prices spike. See how many SUV's you sell.

There is no conceivable infrastructure in place or planned to provide service for alternative power sources. There are no battery-replacement centers or hydrogen service stations, which can provide refills at the price which gasoline does today. There is literally not enough acreage in the United States on which to grow enough grain to provide alcohol/methanol alternatives to gasoline and diesel fuels.

The automotive industry accounts for over eleven percent of the GDP in the U.S. No other single industry accounts for that much. So, when GM sneezes, everyone gets the cold. Remember where the last dollar of profits goes. If it doesn't go to a company incorporated in the United States, then you are part of the problem. That eliminates Toyota, Kia, Honda, and DCM, among others. None of those companies invest their profits back into the United States.

For companies operating under such constraints and uncertainty, automotive management does a good job. It can be improved; but then so can the quality of Microsoft software.

Dennis


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## pendennis (Oct 6, 2005)

> quote:_Originally posted by crazyquik_
> 
> With deft management (which I think I could provide  ) GM could still keep most of its brands. It just needs to do more than badge-engineer them.
> 
> ...


Please don't be so naive as to imagine that adapting a European car to the American market is a matter of rebadging or tweaking. The cost to bring a foreign car platform to the U.S. is measured in billions of dollars, and years to do. Vehicle standards vary so much by country, that it is almost cheaper to start with clean paper than to adapt. Also remember that cars designed for European highways, are not the ideal designs for American highways. There are day and night differences in the two markets. The same holds true for purely Japanese designs. European and Japanese designs are more compatible. There is a distinct American design and market.

Dennis


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## ChubbyTiger (Mar 10, 2005)

pendennis - I disagree with you. I do not need to understand the industry to know what I like and what I don't. I lived near Detroit for 6 years and I know many extremely competant engineers who work for the Big Three. I fully believe that they could build a good car. Unfortunately, I just don't see them doing it. Let me run down the list of American cars which I would consider buying (at any price):

Corvette (expensive and impractical)*
Viper (expensive and impractical)
Mustang (impractical)
Ford GT (expensive and impractical)
Lincoln LS
Caddy xTS (CTS, STS, etc.)
Chrysler 300/Dodge Magnum
Dodge Charger (impractical)

(*expensive and/or impractical by my current standards)

OK, that's it. I won't run down the list of cars which I wouldn't buy even if it meant driving my old '84 Accord again. Hell, there are American cars I wouldn't drive if you _gave_ them to me (see Vibe, Aztec).

Consumer Reports list of top 
'Owner Satisfaction' cars lists 8 Japanese cars. 0 American. 
Fun to Drive: 4-1 against. 
Luxury: 4-0 them. 
Fuel Efficinecy: 5-0 them.
Family Friendly: 4-0, not us.

I'm not a big Consumer Reports fan, I'm more of a Car and Driver guy.
So then, the 2005 10-Best list? 
6-4, with 2 of the American winners being the Mustang and Corvette, niche cars. Two of the 6 non-American cars are also, the SLK and RX-8. 
Eliminating them, it's 4-2, and both of the '2' were designed by DaimlerChrysler, hardly a purely American company.

So, there are no Ford or Chevy mass-market products on the 10-Best list and only the Focus on the Consumer Reports lists.

I would like to "buy American" and I'll happily pay a premium for it. But I'm not going to spend $25k on something that looks like crap, drives like crap, or lasts like crap - regardless of the price. As soon as Ford builds a car as well as Honda, I'll be buying Japanese cars.

In the meantime, I will continue to buy American textiles and shoes, because they are _good_, not because they're cheap. If I wanted a cheap car, I'd go buy a Ford or GM at half-off with -2% financing or whatever they're offering this week. I will chose to get the prettier, quicker, better made automobile.

CT

PS I'm sorry if this seemed a little strident. I'm not trying to insult anyone in particular, just trying to explain why I don't like many of the current crop of American metal and what I think is wrong with the industry.


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## pendennis (Oct 6, 2005)

> quote:_Originally posted by ChubbyTiger_
> ...
> PS I'm sorry if this seemed a little strident. I'm not trying to insult anyone in particular, just trying to explain why I don't like many of the current crop of American metal and what I think is wrong with the industry.


No insult meant, none taken. This is just an issue which is near and dear to me and hundreds of thousands of other Americans who are affected by GM's announcement yesterday. The other shoe will drop in January, when Ford makes its announcement. I've lived in the Detroit area for over 23 years. The gray skies today only add to the mood.

I agree with you about designs and product. My initial response was meant to give some of the folks on the forum just a microscopic taste of what working in the industry is like. I've shaken my head in disbelief when some of our products are introduced. In 1985, when the '86 Taurus was introduced, it had a 4-cylinder engine, that couldn't get out of its own way, and when the Freestar was introduced, a driver's side sliding door was nixed, and Chrysler had one the next year on their minivan.

One of my strongest internal criticisms is the fact that we have very little program continuity, and even less ongoing responsibility by program/product managers and their teams. Not one individual on the original Taurus team was around when the '96 Taurus was designed and engineered. That makes it very difficult to practice lessons learned.

I'm sure we are not alone in the corporate world however, when I say that we seldom get more continuity than one program/product in a row.

Dennis


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## Kav (Jun 19, 2005)

An environmentalist maxim is to "Think globally and act locally." Part of this is supporting your local community infrastucture buying local products, thereby keeping the dollars in town and reducing the impacts of transport. By extension, and some inherent nationalism in spite of my liberalism our community is the USA. Much as I still dream the urban myth of buying a Rolls Royce or Jaguar stored in a garage 40 years for $200 my social consciousness dictates Detroit Iron at least given first chair. GM used to build Camaros right here in the San Fernando Valley. When it closed many of those folks moved to Texas. The building was eyed by a well known local actor as a retail center, much like the old Firestone Tire factory with it's marvelous Babylonian facade. It didn't happen. I once worked retail and the vendor was promoting Honda lawnmowers. He made a point of telling us ( and by extension the customers) the motors were actually made her in the US of A. I retorted asking how many Briggs and Stratton engines were being built in Tokyo. I don't mind a global economy,from space there are no political boundaries and it's roughly spheroid. I just wish the dollars rolling overseas were equaled by euros, yen etc rolling back.


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## Literide (Nov 11, 2004)

Wow, lots of good points, especially from Karl and pendennis.

While I agree there are corporate governance issues regarding executive compensation and accountability, I also dont shed too many tears for the rank and file who frankly have spent a generation or 2 helping negotiate the next generation out of work. These issues are not unique to the auto indudtry, but they certainly are magnified there.

I think I would bail motor city for a job in a North Carolina Beemer plant in a second anyway.

What some class warriors (many already wealthy themselves) miss is the old risk/reward calculation. Individual managers enjoy much less job security than the people reporting to them. They take responsibility, risks, and make decisions that can come back to haunt. The rank and file are paid less to perform repetive tasks, but enjoy a degree of security the managers do not. Somewhere along the way, the rank and file got too powerful for their own good. 

I think there has been a lack of accountability at both the top and the bottom, and feel most sorry for those caught in the middle.

And dont even get me started on the union "leadership", government regulators, and the Naders of the world.


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## crazyquik (Jun 8, 2005)

> quote:_Originally posted by Literide_
> 
> I think I would bail motor city for a job in a North Carolina Beemer plant in a second anyway.


BMW set up shop in South Carolina, though its very close to the NC border.

More opinions:
The Big 3, once they have made a successful product, have stuck with it and continued to refine the wrinkles out to perfect it. The Japanese have been very succesful here.

Instead they take a successful product and badge-engineer it untill there is too much cross over and not enough definition between brands. They have too many marques, and have not shown the deft ability of VW AG in managing them to maximize one platform while minimizing overlap.

If they could remedy this they would be a lot closer to solvency.

But I'm probably just bitter that GM wouldn't give me a job interview [:I]


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## smr (Apr 24, 2005)

We spent some time studying the auto industry when I went back to school for my MBA, and a close friend of mine is pretty highly placed in GM. Based on our studies and what I hear from my friend, I don't think that it is the complexities of the industry that are the problem that is sinking GM and Ford.

When it comes to revenue, they just don't make enough cars that people want, as has been mentioned above. It is just amazing to me that with all the GM brands, they cannot make an appealing looking full size car. Nissan had this problem, and they solved to a large degree with the now larger, remodeled Altima, which at least last year was very popular. I think that GM's cars in this category, the Malibu and the Impala, look pretty awful, although recent redesigns made them slightly less ugly. I read a review of the Impala last year, and it praised its performance while calling it ugly. Cadillac has performed much better over the last several years, but the other GM brands are bland. Some will undoubtedly have to be eliminated as GM cuts back. Buick and Pontiac have been mentioned as candidates for elimination in some business publications. Perhaps as a smaller company, GM could become less beaureaucratic and more agile, which could lead to them to making cars that people want. It also could help them improve the dealer network, which is too large.

As to their costs, their unfavorable labor contracts and high health care insurance and pension costs are huge factors. Pension liabilities may become less of a factor as interest rates increase due to the way these costs are determined by actuaries. GM made some strides recently with union concessions on health insurance costs, but it probably will continue trying to lower its health insurance costs in part by trying to push more jobs up to Canada, where health insurance is socialized.

Bill Ford's appearance before Congress the other day indicates that the auto industry will seek the Federal government's help in turning around the industry. They want higher R&D credits, supposedly for the design of more advanced vehicles (but of course these increased credits would apply to _any _ research and development expenses), and they also want incentives to help them re-tool their plants. I'd love to see the US auto industry turn around, but I'm not real excited about the government having to bail them out. Even with help from the government, could these same people who ran the industry so poorly actually turn their companies around?


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## shuman (Dec 12, 2004)

> quote:_Originally posted by pendennis_
> 
> 
> 
> ...


The point is, why did Ford release the '86 Taurus this way? It makes me scream when someone talks about "buying American". My VW was built in Ohio, while that DC or Chevy was likely built in Japan or with parts from Mexico. Do you want it to go where the CEO's are, or where the plant and part workers are?


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## ChubbyTiger (Mar 10, 2005)

> quote:_Originally posted by shuman_
> 
> 
> 
> ...


Very funny thing related to this. In the most recent C/D, they tested four family sedans (Honda Accord, Toyota Camary, Ford Fusion, and Hyundai Sonata). Three of the four were made in the USA and one in Mexico. Care to guess which was the 'foreign built' car?

CT


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## jbmcb (Sep 7, 2005)

> quote:_Originally posted by ChubbyTiger_
> Three of the four were made in the USA and one in Mexico. Care to guess which was the 'foreign built' car?


Domestic car companies have a few disadvantages to foreign companies. Foreign companies can sell parts (powertrains, electronics, chasis) to their US subsidiaries, which are independantly incorporated, for whatever they want, to be assembled in the US. By varying the cost of these parts, they can control how much the domestic subsidiaries show in profit, thereby controlling how much tax they pay. Less profit, less taxes, and the parent company makes all the money. They also avoid costly import tariffs by exporting parts to the US instead of finished products.

The only way domestic car companies can compete is doing the same trick in neighboring countries with favorable trade conditions (NAFTA.)

Good/Fast/Cheap - Pick Two


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## swiego (Oct 17, 2003)

I'd like to see the U.S. auto industry start to innovate a little. It's not lost on me that every major efficiency advance, drivetrain advance, safety advance, etc. seems to come from a foreign automaker. A while ago I bought a Honda S2000. It has, among other innovations, a 120 horsepower per liter powerplant, electrical power steering, carbon fiber synchros in the tranny, and a rather interesting monocoque chassis. This is NOT an expensive car. Nor is it such a low volume car that the manufacturer can get away with rolling out half-baked technologies. And yet, all this technology is there. And, after ~ 40k miles, I can vouch for the fact that it all works extremely well. And this is just one example of one model from one automaker in an industry just brimming with innovation.

But what do I get from Ford? Retro/muscle styling and '90s technology at a low price. GM? Retro/muscle styling and '90s technology at a low price. Chrysler? Retro/muscle styling and '90s technology at a low price.

They say that mainstream America derides science, math and engineering in favor of athletics, prom and vocational jobs. I don't know how true that is versus the rest of the world, but as someone who has been in the Detroit metro area for more years than I would like to have been (at this point) I am pretty convinced that nobody (mgmt, uaw, engineering) wants to do the real hard work that it takes to put out a competitive product: good 'ol fashioned white-collar engineering and innovation that produces platform technologies that can be leveraged over subsequent decades. That's why foreign companies are ahead with hybrids, diesels, AND fuel-cell powertrains. That's why Mercedes is mass-manufacturing seven-speed automatic transmissions, why Mitsubishi is pulling 300hp out of two liters, why Porsche is including ceramic composite brakes if you have the cash.

Meanwhile, Chrysler offers a mediocre supercharger, Ford offers a Mach 9000 sound system and GM is still trying to pawn the H2. Truly cutting edge engineering.


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## tom22 (Feb 19, 2004)

This topic is a personal one with me because I have always gone out of my way to buy American products and American cars in particular. When they are competitive, when they are a decent deal. American car manufacturers suffer because they have agreed to the gold standard for their workers beginning when: maybe the 60s, certainly the 70s. Walter Reuther was a revered public figure when i was growing up. he brought manufacturing workers well into the middle class, even the upper middle class. I grew up when American cars ruled. But it wasn't because they were the only game in town. They represented the best game in, not just the town, but the world. The cars were sharp, edgy and hit the taste of the market. I don't believe the american companies can't do this again. Cadillac in maybe five years turned the market around. They have decent quality, original edgy styling, and mechanics that can compete with anyone. It will surprise a lot of people on this thread to know that Buick, traditionally the step below Cadillac for GM, in JD Power recent surveys is a better quality car than Toyota, The 3.6 liter 6 engine competes with anything the Japanese can produce (the Shortstar. The Northstar is probably a better V8 than anyone makes). The Mustang is a hit. As is that 2 seater that Buick came out with (4 month wait to order). Buick needs some edgier styling. The Ford Five Hundred is a fabulous car. Read the review on the CarTalk guys website. What it needs is some style. American quality is competitive. What the companies need to do is make cars that look like what the country wants. The companies do have issues. legacy costs add 2200 dollars to the price of a car. Those numbers just get better after 2010. Health care adds another 1500 or so. It would be nice if the country gave everyone a health benefit and brought the country into the 20th century (compared to our peers). But what the auto industry needs is hot cars that people want to buy. We can still do this. GM probably needs better management. Bill Ford needs to take a few risks. I believe in these companies. Ford in particular isn't going bankrupt. The family still has their fortune tied to the company. But they need great manangers with style. Maybe there is someone here on the website that should send in a resume. I believe style is a commodity that is here in plentiful supply.


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## ice (Sep 2, 2005)

The Big Three started losing market share after the oil crisis of the 1970s when federal emissions and fuel economy standards made their entire auto lineup obsolete. Foreign cars were mostly junk then - British and Italian cars in particular were driven out by horrible crash test results - but they were cheap and good on gas, and as the Big Three struggled for 20 years to get a handle on making smaller cars with smaller engines, foreign quality, especially Japanese, started to improve. In the mid 1980s when the Big Three switched from making reliable rear wheel drive to unreliable front wheel drive, Japanese quality overtook North American for the first time and has stayed ahead up until recently.

One thing to remember is that a car "platform" usually has a 12 year cycle. Design to testing to tooling is about three years, followed by about nine years of production with a major refresh in the middle. This can vary widely of course: the last Ford Mustang platform lasted 25 years, while the Plymouth Prowler when from CAD screen to end of production in about 7. My point is that problems with product are very slow to fix because you have to plan ten years ahead.

Now that North American quality has caught up with Japanese (check the stats - it has) it doesn't matter because consumers have 20 years of bad memories. No one forgets the car that let them down. The Big Three are stuck with over capacity - too many mediocre products that suck the profits out of their great products. They need to make fewer cars, better. But to do this is to give up market share. 

For all those how despair, here are some examples of outstanding North American vehicles and brands:

Ford F-150: best truck in the world
Ford Focus: quality problems fixed, best small car on the market
Buick: better quality than Toyota and Honda
Corvette: best sports car value
Ford GT: best sports car
Cadillac: outstanding luxury lineup
Chrysler 300: hottest sedan and a glorious return to rear wheel drive
Jeep: the original SUV


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## tom22 (Feb 19, 2004)

I agree completely. American quality is undiscovered by the marketplace and allows for some great bargains today. The ford 500 received great reviews. In its catagory it is very inexpensive. As is the Buick Lacrosse. these cars are a substantial bargain compared to their competitors. The NYTimes had a nice review of the Chevy Impala this Sunday and a long article about why GM still believes the pushrod engine may be superior to to double overhead cam which GM mastered long ago with the Northstar and the 3.5 shortstar engines. Cheaper to make with fewer parts and the V8 can easily be modified to make it a 4 on the highway. People who think the Japanese cars (with boring styling and and this point no better quality) are better continue to miss a bet.


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## smr (Apr 24, 2005)

I know that JD Powers has been giving the Big 3 better ratings, and that auto magazines are giving these cars better reviews, but are there any stats showing that maintenance cost for Ford, GM or Chrysler cars are decreasing (unless it is too early for anyone to know)? That's one of the areas where Toyota and Honda have dominated Ford, GM and Chrysler.


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## pleasehelp (Sep 8, 2005)

> quote:_Originally posted by ice_
> 
> The Big Three started losing market share after the oil crisis of the 1970s when federal emissions and fuel economy standards made their entire auto lineup obsolete. Foreign cars were mostly junk then - British and Italian cars in particular were driven out by horrible crash test results - but they were cheap and good on gas, and as the Big Three struggled for 20 years to get a handle on making smaller cars with smaller engines, foreign quality, especially Japanese, started to improve. In the mid 1980s when the Big Three switched from making reliable rear wheel drive to unreliable front wheel drive, Japanese quality overtook North American for the first time and has stayed ahead up until recently.
> 
> ...


Judging cars is highly subjective, but I disagree with many of ratings of the cars on the bottom.

The Honda Civic is still the best small car on the market. I haven't seen much evidence that Buick has higher quality than Toyota or Honda. You are clearly correct about the Corvette. I can name many sports cars that are superior to the Ford GT (the F-1, the Enzo, the Carrera GT, S-7, etc.). I don't know that Cadillac has an outstanding luxury line... I believe they really lost their identity about 30 years ago and have struggled to regain it ever since. The Chrysler 300 is going to have to put some more years in the books before it can be a competitor to the German sedans. I think the Rover is probably considered the original SUV.


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## crazyquik (Jun 8, 2005)

> quote:_Originally posted by pleasehelp_
> 
> 
> 
> ...


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## jbmcb (Sep 7, 2005)

> quote:
> _Originally posted by ice_
> I haven't seen much evidence that Buick has higher quality than Toyota or Honda.


Toyota and GM shared most of last year's JD Powers quality awards. The plant that makes most of the Buicks had the highest overall quality of any plant, anywhere. The Century won for premium midsize car. Honda's quality has been slipping of late (personally I think their cars were always overrated.)



> quote:
> I don't know that Cadillac has an outstanding luxury line... I believe they really lost their identity about 30 years ago and have struggled to regain it ever since.


It can take time, but for now, they outsell Lincoln and Mercedes, but not BMW or Lexus. The SRX is very well reviewed in the midsize luxury SUV (won best-of by several rags.)



> quote:
> The Chrysler 300 is going to have to put some more years in the books before it can be a competitor to the German sedans.


It, sort of, *is* a German sedan, isn't it? Besides, it has already won a bunch of Car Of The Year awards, I think it's already considered a compeitor to anything in it's class.



> quote:
> I think the Rover is probably considered the original SUV.


First Land Rover: 1948
First Civilian model Jeep: 1945
'Willy's Wagon' Jeep station wagon: 1946

Good/Fast/Cheap - Pick Two


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## pleasehelp (Sep 8, 2005)

> quote:_Originally posted by jbmcb_
> 
> 
> 
> ...


I will need to see a few years of buicks staying on the road without problems before I believe they will be able to compete with Toyota and Honda's 20 year track record to reliable cars in their Camry and Accord respectively. Just because a product seems to be good quality coming out of the factory, does not mean it will endure over time (as I am sure you know).

I assume you mean that Caddy outsells Mercedes domestically (I don't think that could possibly be true world-wide). I worry that too much of Cadillac's profit is based on gas guzzling SUVs. Just because they are scoring some quick sales now does not mean that they have regained their soul. I don't know many people (particularly young - middle age) who would even consider a Cadillac when looking for a new luxury car.

I agree that the 300 has potential. It took a bold styling step and has really found an audience. However, I think it is going to need to take another step forward before buyers will turn in the keys to their German Sports sedans for a 300.

* Thanks for the dates on the jeep!

I would love to see a revival of the American car companies. I agree that there are some model lines that give us hope (the Corvette is embarrassing the competition), but I don't think we should underestimate the hole that many of the companies have dug or the dominance that foreign companies have displayed. I think Chevy made a horrible mistake with the marketing and features of the Cobalt (at least they could name it something that didn't start with a "C" to try to distance it from the Cavalier).


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## ice (Sep 2, 2005)

```
I will need to see a few years of buicks staying on the road without problems before I believe they will be able to compete with Toyota and Honda's 20 year track record to reliable cars in their Camry and Accord respectively. Just because a product seems to be good quality coming out of the factory, does not mean it will endure over time (as I am sure you know).
```
That is the exact problem: they have been losing buyers for twenty years with poor cars, and now those buyers rightfully have loyalty to the Japanese brands they trust.


```
I don't know many people (particularly young - middle age) who would even consider a Cadillac when looking for a new luxury car.
```
Isn't it amazing how GM almost killed the Cadillac brand? Some young people think Cadillac was named after the saying "It is the Cadillac of ... " and not the other way around. Eight years ago the only place you would find people who loved Cadillacs was old age homes and in handicap parking spots.
But boy are they back. The Escalade is the hottest car for the trendsetting urban crowd and the CTS-V is a 400hp sports sedan that beats the Germans at their own game. Check them out - you would be surprised.
But the question is, is the revival too late? Will younger buyers trade in their Lexus and BMWs for Cadillacs?


```
I agree that the 300 has potential. It took a bold styling step and has really found an audience. However, I think it is going to need to take another step forward before buyers will turn in the keys to their German Sports sedans for a 300.
```
No-one else makes a car like the 300 in that price range. But the really great thing is the return to 8 cylinders and rear wheel drive, something only the US has ever down well. Just look at the car it replaced - the Intrepid! This is a distinctly American car (sure sure, made by a German-owned company, go ahead and say it) that proves there still is a purpose in the US industry, something it does uniquely better than anyone else. And it is not a niche vehicle, but squarely in the mainstream.


```
I think Chevy made a horrible mistake with the marketing and features of the Cobalt (at least they could name it something that didn't start with a "C" to try to distance it from the Cavalier).
```
Wasn't that Cavalier horrible? What an embarassment, and they sold it almost unchanged for so long. The Cobalt looks good on paper. But the Ford Focus is amazing: most interior room, great console, best engine in its class, amazing transmission, great handling. It is clearly better than its competition in the way the Honda Civic used to be so clearly better than the others. Of course, there is a new civic out now that it has to compete against...
Too bad the initial US launch for the Focus was so incredibly bad, with all those quality problems that came up when they refit it for the US market. Tons of bad press and disgruntled owners from the early days - they won't forget easily.

What GM, Ford, and Chrysler need to work on the most is "perceived" quality. Building quality cars isn't enough, because the Japanese already do that. Building sporty cars isn't enough, because the Europeans already do that. And low prices isn't enough, because the Koreans can always go lower. Their cars need to communicate their purpose, their intent, their soul to the driver immediately. Like how the soft touch of a Lexus console whispers luxury, how the weighty clunk of a think Volvo door closing asserts safety, how the assertive stance of a Volkswagen suspension handling a corner says capability. The North American makers need to realize what makes their cars great and communicate that better to the drivers. A car can't just be great: it has to scream greatness even in areas that don't matter. The Big Three do this with trucks but not cars yet.

To make all their cars better all at once may not be possible. I think there will be more market share loss and plant closings before they return. But they will return, because the manufacturing and engineering skills, infrastructure, and knowledge here are immense and unmatched throughout the world.


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## smr (Apr 24, 2005)

GM debt rating cut yet again:

S&P cuts GM's debt rating deeper into junk

NEW YORK (Reuters) â€" Standard & Poor's Monday cut its ratings on General Motors (GM) deeper into junk territory and warned that the world's largest automaker may have to restructure its debt if recent trends persist.

The downgrade puts GM's ratings deep into the speculative class, a sign of growing risk that GM may have trouble paying back all of its debt.

Ratings on GM's finance arm, General Motors Acceptance Corp., were not changed but remain on review with "developing" implications, meaning the direction of the rating is uncertain.

The developing status reflects the possibility that GM may sell a controlling stake in GMAC to a highly rated financial institution, S&P said.

GM has lost nearly $4 billion this year as it battles high health care and commodity costs, eroding U.S. market share and slumping sales of its once-profitable sport-utility vehicles.

Consolidated debt outstanding was $285 billion on Sept. 30, S&P said.

"The changes that will have to occur to turn this company around to cause it to be a profitable auto manufacturer are huge," said Dan Zaldivar, fixed income analyst at RBC Capital Markets in Chicago. "This is a very big ship and it turns very, very slowly."

S&P cut GM's corporate credit rating by two notches to "B," five steps below investment grade, from "BB-minus." The outlook is negative, meaning the rating is likely to be lowered again over the next two years. S&P's rating on GM is the lowest of the three major rating agencies.

"This year has witnessed a stunning collapse of GM's financial performance compared with 2004 and initial expectations for 2005," S&P said.

Net losses at North American operations could reach $5 billion for the year, even before substantial impairment and restructuring charges, the rating agency said.

An industrywide falloff in demand for sport-utility vehicles makes it doubtful that GM's new models can help restore its North American operations to profitability, S&P added.

S&P's downgrade came on the same day that bids are due to buy a controlling stake of GMAC as GM tries to restore the unit's investment-grade ratings. Borrowing costs at GM and its financial unit have soared since they were first cut to junk in May.

GM's bonds with an 8.375% coupon due in 2033 fell to 72.2 cents on the dollar from 73.25 cents on Friday, according to MarketAxess.

https://www.usatoday.com/money/autos/2005-12-12-gm-debt-status_x.htm?csp=26


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## crazyquik (Jun 8, 2005)

I think I'll simplify it. But I don't have an MBA so maybe I don't really understand the car industry. Someone can quote me on this though.

"Thier products suck."

It's really as simple as that. It baffles me how a company that can get some things *SOOOOOO* right (1955 Chevrolet, C5 and C6 Corvettes and a few in between) can get everything else it touches soooo wrong.

Ed Cole and 75 engineers took the '55 Chevy from an idea to a showroom car in 28 months using only 2 major systems from '54 (transmission and brakes) and happened to design the small block Chevrolet engine too; the most successful engine of all time. GM has built well over 65 million of them and still builds them 50 years later. Cole never finished engineering school and that was when you still had to pull the handle down on the adding machine and every engineer carried a slide ruler. The accountants, mismanagers, and corporate culture have managed to waste or snuff out the great pools of talent available to GM.

---------------------

Beware of showroom sales-fever reasoning: i.e., "for $20 . . ." Once you're home, how little you paid is forgotten; how good you look in it is all that matters.


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## Badrabbit (Nov 18, 2004)

One word: UNIONS. 



--------------------------------------------------------------------------------
Women thrive on novelty and are easy meat for the commerce of fashion. Men prefer old pipes and torn jackets. 
Anthony Burgess


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## pendennis (Oct 6, 2005)

> quote:_Originally posted by crazyquik_
> 
> I think I'll simplify it. But I don't have an MBA so maybe I don't really understand the car industry. Someone can quote me on this though.
> 
> ...


I wouldn't be so naive as to believe that GM does not get anything right. They are still, by far, the largest manufacturer in the world. No one hits a home run every time.

The world was very different in 1954. There were only three car makers who could supply vehicles in a global market (GM, Ford, and Chrysler), The rest, with the exception of Mercedes and a few other high-end marques, built absolute crap cars. The Big Three all had major model changes for the 1955 model-year. Odd-numbered years were always big-change years.

Europe's economy was still in the tank from WWII, as was Japan.

Don't confuse accountants with financial analysts. The two are very different disciplines.

You can have all the simple 1955's you care to own -

- Vacuum operated heating systems that were extremely unreliable.
- Points and plugs, change every 3,000 miles.
- Bias-ply tires that may have lasted 10,000 miles.
- No factory-installed air conditioning.
- Water pumps that lasted about 20,000 miles.
- Generators to re-charge batteries.
- Leaky batteries that needed to be replaced every two years.
- Mufflers which could be gutted/rusted within 10,000 miles.
- Dry-rotting spring seats made of live rubber.
- The "Power-slide" (Powerglide) two speed automatic transmission.
- et cetera, et cetera, et cetera.

I owned and drove '55 Chevy, '50 Mercury, '53 Mercedes. I'll take my "unimaginative" 2005 Explorer every day.

Materials and engineering have changed a lot in the last 50 years. There are also a lot of car manufacturers that did not exist in 1955.

The auto industry accounts for 11% of the U.S. economy, and puts over $15 billion into industrial research and development. Not one other industry even comes close. Better hope GM, Ford, and DC stay in business.

Dennis


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## ChubbyTiger (Mar 10, 2005)

I wish the non-engineers* would drive a Bimmer and feel what good handling is. Then drive a Honda and witness the ergonomics. Listen to the door close on a Merc and hear the solid thud. Get a 10 year old, 200k mile Toyota and see how little has changed from when it was new. See what a perfect shifter is like, great brakes. We've got the engines to use (read big mother V-8 hemi or equivalent). Now, make like Japan circa 1970 and _copy all those things_. More accurately, let the engineers do it and get the hell out of their way.

Maybe more execs like Bob Lutz would help. But only if they're given free reign to let the car guys make good cars. Someday, I hope that I actually want to buy a Caddy instead of the new Acura.

CT

* The engineers aren't the problem, I think. They are engineers, just like any other. They love cars and love to solve problems. It's the business/marketing/analysis types who are the problem.


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## 16128 (Feb 8, 2005)

> quote:_Originally posted by tom22_
> 
> The Ford Five Hundred is a fabulous car.
> Read the review on the CarTalk guys website.
> What it needs is some style.


I almost bought one of those because you can put eight
golf bags in the trunk. This sounded useful because dead
bodies are about the same size.

Most car buyers want reliability and fuel economy, and
the Japanese have that market cornered (or at least
that is the perception.) Yes, style would be nice, but
the bottom line is that I want a very reliable car which
gets good mileage. If it's stylish and not boring-looking,
that's a plus.


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## smr (Apr 24, 2005)

> quote:_Originally posted by Badrabbit_
> 
> One word: UNIONS.
> 
> ...


Unions have had a role, but it's the white collar workers who were designing awful cars.


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## pendennis (Oct 6, 2005)

> quote:_Originally posted by smr_
> Unions have had a role, but it's the white collar workers who were designing awful cars.


Historically, white collar designers have come up with designs which have been very nice. There are three elements which cause the demise of what would otherwise be winners:
1) Constraints in manufacturing technology. Some designs are just
not capable of being produced as drawn or modeled in clay.
2) Design committees which can overrule designers.
3) Restrictions based on Federal Motor Vehicle Safety Standards.

In the 1970's, designers produced more aerodynamic shapes. Upper-management literally squared-off the design, because that was what would sell. Also, remember that items such as headlamps, turn signals, and back-up lights, have to be approved by FMVSS. The aerodynamic shapes of lights, etc. were not approved until the mid-to-late 1980's.

Dennis


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## smr (Apr 24, 2005)

> quote:_Originally posted by pendennis_
> 
> 
> 
> ...


I know that the second factor has been a big problem, and that too many people in too many departments were involved in the design process. That's something that GM has been changing, and it's in part why the hired Robert Lutz to help with design.

As to first factor, if you cannot design a car that can be executed, then I don't think that you can call the design "nice." You've got to design a car that you can manufacture and sell. Also, with respect to the first and third factors, if GM and Ford cannot design nice cars that can be manufactured and then satisfy safety standards, it is easy to see why they are doing so poorly. The same can be said for upper management squaring off designs. I cannot understand why they would think that squaring off cars would make them more popular. This makes them all sound incompetent when you see what their foreign competition is doing.


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## pendennis (Oct 6, 2005)

> quote:_Originally posted by smr_
> 
> 
> 
> ...


There have been thousands of designs produced which do not translate to production models for the market. Some are exercises in design, others are "concept" cars which are produced in single numbers, and provide a "look-see" at what can be coming in the future. Should you ever have the opportunity to attend the North American International Auto Show in Detroit during January, you'll see what I mean.

Remember, the "squared" look was dominant in the mid-70's to early-80's. Marketing people are using surveys to help determine what will sell. This also drives the designers and engineers in the final design stages. It also must be considered that designs must be somewhat evolutionary, else the public might shun the design as being to radical.

In the early 1980's when the Thunderbird was finally given a real aerodynamic design, and the Taurus was in the drawing and modeling clay stages, there was real fear that the designs would not sell. As a matter of fact, when the Taurus was launched, GM's Roger Smith called the vehicle a "jelly bean". It was the first vehicle launched with an aerodynamic shape. It really defied the skeptics, and was a huge success. The Thunderbird's success in the showroom was directly translated into success at the race track. It was far more aerodynamic than competing GM products, and its success resulted in changes to the rules, handicapping the Thunderbirds.

I don't recall anyone standing in lines to buy the early Toyota Camrys. It was several years before they became competitive with the "Big Three".

Also, remember that the European and Asian governments continue to protect their domestic auto industries. The quality level of American-made cars is on a par with anyone in the world.

Also remember that the profits from Toyota, Honda, Kia, etc., do not remain in the U.S. for their sales. All Fords and GM's do.

Dennis


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## smr (Apr 24, 2005)

I agree with you Dennis on your point about protectionism (and not just in the auto industry), but as to most your recent points, it still comes down to making (and selling) a car that people want to buy, with the perception of quality also as a factor. GM and Ford still have quite a bit of work to do, in terms of design, quality, and the perception of quality. Also, as I mentioned above, despite the JD Powers and other surveys, I'm am not quite sure that the proof is there that GM and Ford cars have the low cost maintenance that Toyota, Honda, and some Nissan cars have. Time will tell, and I just hope that Ford and GM can hold on in the meantime.

I will be in Detroit with my friend from GM and his family for the auto show next month. Cannot wait! To date, I've only been at the auto show in NYC.

Talked to my friend about the fault of the UAW versus white collar workers, and he felt that the fault is shared 50/50. He was telling me that the interior of a GM car is very much affected by labor costs. They do whatever they can to keep the cost down on a car's interior, which of course does not help them with ratings.


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## jbmcb (Sep 7, 2005)

> quote:_Originally posted by smr_
> I will be in Detroit with my friend from GM and his family for the auto show next month. Cannot wait! To date, I've only been at the auto show in NYC.
> 
> Talked to my friend about the fault of the UAW versus white collar workers, and he felt that the fault is shared 50/50.


Fun Auto Show story:

A co-worker of mine was working for a parts company that was installing some widgets in certain cars at the Detroit Auto Show. Cobo Hall, the convention center that's home of the show, is very heavily unionized, especially since the city owns most of the building and the labor agreements fall under the city's contracts with it's unions.

Sooo, my co-worker walks in with a briefcase holding a couple of these widgets. It's one of those slim aluminum cases, as the widgets are only a few inches square each, and he only had a couple of them. He was stopped at the entrance, and was told that it was a union job to move things around the show floor. He had to wait two hours for someone to swing by with a *forklift*, with a board across the forks, which they set the briefcase on, and drove to the appropriate booth.

I saw the same shennanigans going on when setting up for CES a couple years ago. I kept the Union guys away by saying my hardcase held a $30k prototype, and it would be coming out of their paycheck if they damaged it. It seems they feared filling out insurance forms more than anything.

Good/Fast/Cheap - Pick Two


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## smr (Apr 24, 2005)

> quote:_Originally posted by jbmcb_
> 
> 
> 
> ...


Pretty awful and short sighted of the union. I'm all for unions, but I just don't see how these sorts of things help them in the long run.


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## gregp (Aug 11, 2005)

> quote:_Originally posted by Karl89_
> 
> Burnedandfrozen,
> 
> ...


Take a look at the recent car issue of consumer reports: American cars just do not approach Japanese cars for reliability. Some of the most popular models (eg, Ford Explorer) have some of the worst scores. Mercedes quality is at an all time low, but people still buy unreliable European cars for the drive and panache that American cars seldom offer. Also Chrysler is often viewed as being a part of the Mercedes problem, Ford owned Jaguar and Land Rover continue to be horrible of the reliability front, which only reinforces the view that American companies cannot build a dependable car.

American companies could compete on the low end with the Japanese if they improved quality. You cannot compare a Toyota or Honda to a GM product for build quality and reliability. No way, no how. As you go up the price bracket, folks are willing to pay the premium for repair costs on European vehicles because they are perceived to be better driving cars than the Japanese or Americans build (in general, this is true of companies like Audi and BMW; Land Rover up until recently could lay claim to uniquely capable SUVs). The only interesting American car I've looked at in the last few years was the Crossfire, built in Germany on shared parts/platform with the Mercedes SLK. And its hard not to notice that European quality seems to be on the rise compared to American cars (eg, Volvo - Ford owned, so lets give some credit where it is due - sedans and wagons are both safer and more dependable).


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## crazyquik (Jun 8, 2005)

Don't forget GM-owned Saab! Consumer Retorts rated the 9-3 as highly unreliable due to electricals. 

Granted I don't rate Consumer Reports or JD Power very highly, but they are good for comparing what people report as initial quality, etc. FWIW the Infinity Q56 or whatever (the big blob of an SUV, its like the Kenneth Cole of SUV shapes) had the worst initial quality as ranked by CR. Something like 300% worse than the next poorest quality car, with nearly half having to go back to the dealership for a problem.

---------------------


Beware of showroom sales-fever reasoning: i.e., "for $20 . . ." Once you're home, how little you paid is forgotten; how good you look in it is all that matters.


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