Good American Cars, Unloved and Unbought

June 28th, 2009

2009 Mercury SableHere are some thoughts occasioned by tgriffith’s post on “buying American” and an interesting piece by Keith Naughton (Bloomberg) on some J.D. Power research supporting the idea that car buyers still want products from Japanese brands, not GM or Ford.

The Mercury Sable (You thought it was gone, didn’t you? Nah, it’s just a rebadged ’08 Taurus, née Ford 500) got top marks in quality in the latest Power surveys, and GM cars—the Chevy Impala and Malibu, Pontiac G6, and Cadillac CTS—rank well up there. But U.S. buyers still perceive Toyota and Honda to hold the edge on quality: “Imports held 69 percent of the U.S. car market through May, 4 points more than a year earlier.”

Well, did you think people were going to forget overnight those 25 years of declining quality, product irrelevance, marketing indifference, and management arrogance?

Of course not. The Big Three trained their customers well in diminishing expectations. Now with their reputations and balance sheets shot, the companies have to stop talking and start producing cars that are better than their Japanese, German, and Italian competitors. This will likely take years.

Here are a few things I think need to happen for them to succeed:

  1. American cars are still mostly ugly and overweight. Look at the new Taurus and tell me you think it’s beautiful—at over two tons. Put some emotion and style into these products—it’s the only way to distinguish them. Our cars have no imagination or passion in them. That’s what’s wrong with the Impala.
  2. Credibility and good will on the part of some patriots may help seed the market. But professional/technical people are mostly very turned off with Detroit. “Buy American” makes absolutely no sense today. There is no “American,” as tgriffith showed. The global marketplace has been part of the car industry for years, and people must learn to accept that.
  3. Not only will great products be required, but the Big Three needs some real marketing genius to change attitudes and make it cool to buy American—that is, American-owned firms that produce cars with a unique style and quality—again.
  4. Akio ToyodaToyota got fat; now they’ve put the grandson, Akio Toyoda, in charge to do a makeover. The great principles of lean production that Toyota brought to the world were overlooked in the company’s zeal to follow the U.S. market. Of all the models to follow, GM was the worst they could have chosen.
  5. All the big companies are going to have to produce smaller, greener vehicles, which means much lower earnings. They will have to find their profits in production and merchandising efficiencies. There is no other way.

Sounds grim, doesn’t it? How many years will it take before you buy your next “American” car?

—jgoods

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  1. July 6th, 2009 at 09:41 | #1

    Americans are well advised to buy and operate American made cars.

    1: It is important to USA economy. Formerly, the auto industry represented 5% of USA employment; now, it is only 2%. The 3% loss was all very well paid jobs. The 3% employment loss is very significant as money in the USA economy circulates an average of 5 times as the employed spend money in our economy. Thus, the 3% loss causes an extra 3*5= 15% of unemployment, for a total of 3% + 15% = 18%. This is approximately twice our current unemployment rate.

    2: Shipping cars across the ocean is ecologically and economically expensive. Imagine the ships travelling across the oceans spewing out great amounts of smoke and polluting emissions. These ships typically take steel ore from the Americas to the plants in Asia, then they bring the autos back across the oceans spewing more smoke and emissions. The cost of shipping an auto, on the order of $5000 per moderate size vehicle (e.g., Toyota Tundra truck), is equivalent to enought gasolene to drive the car 40,000 miles. This does not even include the cost of shipping the iron ore in the first place. The world gets the equivalent in pollution from each vehicle shippped. Buying cars from abroad when there are home built cars available is ecologically (and economically) a disaster.

    3: While USA made cars were not as high quality as possible, that was because the USA philosophy kept designs and parts constant, and did not continually re-engineer them. Japanese manufacturers employed engineers for lifetime back in the 60′s and 70′s, so they contiued to re-engineer them. I remember 40 years ago going to a Honda motorcycle dealer to buy new piston rings for a 175cc bike only to find out that I needed to know the exact model, since they had no less than 25 different designs for the same basic model (due to the continual re-design process). Re-design is/can be good, but it is expensive both in the initial production and in the repairs needed. Car parts are now much more expensive relative to the cost of the original vehicle because of the wide variety of parts that need to be stocked. I remember helping a secretary with her Toyota in 1979; the vehicle needed a new ignition module, and the cost was $140 !! This was equivalent to $400 in current cost. One could purchase the entire ignition system for a USA car for about $45. Now, the USA seems to re-engineer more often, and the USA quality is very good. USA mileage is very good also.

    I am not in favor of the United Auto Workers union by any stretch, nor have I ever been associated with the auto production industry. I have however owned 3 Corvettes, the 1963 lasted me for 400,000 miles and 23 years, and never stranded me. The two 1986 corvettes, one purchased new and the second used, I drove for 225,000 each and sold them in very useable condition. My current ride, a 1995 Jeep Cherokee has gone 225,000 miles (bought used with 95,000 miles) now has 203,000 miles and has cost less than $200 in maintenance, and it is still going strong with the only non-working part being the radio antenna. Contrast that with the Honda del Sol that my bride owned when I met her; it required $550 in routine maintenance at 60,000 miles (stupid rubber timing belt) in addition to about $250 in repairs (including the $120 part cost for the timing module which stranded her on the highway).

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