Good article (sorry about the "cut-n-paste")

[azasadny]

Good article... What do you guys think?

American Perception Problems of the American Auto Industry

Ford and General Motors have taken turns besting the Toyota Camry in quality surveys for the past two years, but if you talk to many Americans - especially the ones who would never consider supporting home-based auto companies – you'd never know it.

Last year, the Chevrolet Impala beat the Toyota Camry in initial quality according to J.D. Power & Associates, and Consumer Reports just announced that both the Ford Fusion and Mercury Milan scored higher than both the Toyota Camry and the Honda Accord this year.

After the announcement, Ford's Director of Global Quality Debbe Yeager commented "It's a perception gap," referring to the struggle American companies have had overcoming the perceived and seemingly untarnishable reputation of their foreign rivals.

Even as GM and Ford have accumulated award after award on vehicle quality, you'd almost never know about such quality gains made by American companies - or quality declines of foreign companies - by listening to the media. Did you hear about it when the National Highway Traffic Safety Administration announced that Toyota recalled more vehicles than it sold in the U.S. last year? Probably not. Did you hear about Toyota making an "elaborate apology" for their "worrisome series of recalls" that has "tarnished its reputation for quality"? Probably not. Did you hear about the Toyota senior manager quote that stated "We used to do quiet recalls called 'service campaigns' to deal with defects but we're not going to hide anything anymore"? Such a statement suggests Toyota 's past recall numbers were probably much higher than we were led to believe, and they profited handsomely by having a perception of higher quality than they deserved. In Japan , prosecutors are looking into possible negligence on the part of Toyota for shirking recalls for the last eight years. How ironic. You probably didn't hear about that one either because the American media doesn't like to bash foreign auto companies - only American ones.

Then there's the mythical perception that foreign automakers produce the most fuel efficient cars and that Detroit only makes gas-guzzlers when the truth is that all automakers - including Toyota, Honda and Hyundai-Kia alike - have allowed fuel economy to slide in the past 20 years since they all now sell bigger trucks and more SUVs. One of Toyota 's senior executives was even quoted in the Wall St. Journal September 28 saying that both the Toyota Sequoia and Tundra "are big gas-guzzling vehicles" and expressed "concern about the longer-term prospects." These longer-term prospects about their admitted gas-guzzlers are questioned because they know that Ford's F-150 and Chevy's Silverado have led the pack in sales year after year.

Yes, gasoline has been getting more expensive - at least until recently - but the fact that Americans continue to buy it in greater quantities qualifies us as hypocrites for suggesting GM and Ford stop building so many big trucks and SUVs. After all, GM and Ford are only responding to demand as any company would and should if they want to remain profitable in a cut-throat competitive market. According to a Business Week survey, we Americans bought 10% more gasoline in the first six months of 2006 compared to the first six months of 2000 even though gas prices rose 75% in that period. Maybe here I could also mention that the Chevy Tahoe beat the gas-guzzling Toyota Sequoia in quality surveys and gets better gas mileage to boot.

But what has happened since gas prices have been on the decline in recent months? The Wall Street Journal reported a "slight" increase in truck sales by American companies, as Ford Expedition sales were up 41% and Lincoln Navigator sales were up 44%. The American media even tries to restrain its applause for home-based auto companies by referring to gains of over 40% as "slight"!< BR>
Perhaps the biggest perception problem is that American automobile companies GM and Ford (Chrysler is now German-owned) squander all their money on plants overseas and foreign automakers build their factories in the U.S. Foreign car lovers will surely point to Kia's plans to build its first-ever U.S. plant in Georgia, but they probably won't mention that they received $400 million in tax giveaways to do it, which translates into $160,000 per job. Among the many benefits for the foreign-owned company, your tax dollars are going to be used for road improvements surrounding the complex, complete with flower beds and other beautification features. Hey, as long as we're going to allow states to bid for private jobs with our
public tax dollars, we might as well make it look good, right?

And the foreign car lovers will probably also not tell you (or maybe they just don't know or don't want you to know) that GM and Ford pour more money into existing American facilities than foreign automakers spend on new plants, usually with little or no tax breaks. GM has already spent over $500 million upgrading two transmission plants this year, and has spent nearly a billion dollars over the last decade, for example, for facility upgrades in Texas . And what do GM and Ford get for making their existing plants more efficient? It isn't tax breaks. Instead, they get accusations of not being "competitive" enough! Maybe here I should also mention that the average domestic parts content for Kia is 3%, while the average domestic parts content of Ford and GM is 78% and 74% respectively. This means that buying a U.S.-assembled (or even foreign-assembled, for that matter) GM or Ford supports more American jobs than a U.S.-assembled car or truck with a foreign nameplate.

Fortunately for our benefit, the U.S. remains the overall global leader in research and development, and a big reason for that is that American automakers - according to the Level Field Institute - invest $16 billion in R&D (Research & Development) annually, which outpaces any other industry one could name. Admittedly, the Level Field Institute counts German-owned DaimlerChrysler as an American automaker, so Ford and GM's combined R&D contribution to America is closer to around $12 billion. But who's counting, right? Certainly not the American auto-bashing media.

Japanese companies do employ 3,600 American workers in R&D, but that still leaves the foreign competition behind in the dust staring at American rear bumpers. 3,600 sounds like a big number until you realize that 65,000 Americans work in R&D facilities in the state of Michigan alone. In fact, two of the top four R&D spending companies in America as reported by the
Wall Street Journal are - you guessed it - Ford and General Motors. The other two are also American companies: Pfizer and Microsoft.

Ford has recently made headlines as the American automaker with the most challenges to its future, but these challenges certainly are not because they "aren't making cars people want to buy." Toyota did outsell Ford in July, but since then, Ford has reclaimed the No. 2 spot and has held it ever since. GM has the highest market share, increasing over 2 percentage points from a year ago. So apparently they can't be accused of not making cars people want to buy either. Ford sales are also up in Europe , and Ford doubled their sales in China , where GM has the highest market share of any automaker.

General Motors also reported a 3.9% rise in August vehicle sales despite high gas prices and a supposedly slowing economy. And even though Toyota reported record sales that month, they couldn't match the non-record setting sales volume of Ford. GM's sales rose 17% in October from the same month in 2005 and Ford sales rose 8% in the same period. Ford also sits on $23 billion in cash, so they have plenty of money to focus on and fix any problems.

And for all the talk about the lack of fuel efficiency of American automakers, it seems three-fourths of all automakers failed to meet Europe 's improved fuel-efficiency standards intended to cut carbon-dioxide emissions. Japanese and German automakers topped the list of the study's worst performers, but according to an environmental group's study, GM's Opel division and Ford both "come out well."

In closing, I'll leave some encouraging numbers for those of us who actually like to root for and support the home team. The J.D. Power 2006 Vehicle Dependability Survey reports that Mercury, Buick and Cadillac (in that order) grabbed the number 2, 3 and 4 spots to beat Toyota, Honda, Nissan, BMW and everyone else (except Lexus) in having the least number of
problems per 100 vehicles.

Perhaps someday the American media will give GM and Ford the credit they deserve. And once they do perception among the majority of the American public will rightfully change. GM and Ford aren't only doing what they should to make gains in the American market to deserve American consumer loyalty; they're also doing what they should to make gains in the markets of China , Europe and across most of the rest of the globe.


Roger Simmermaker is the author of "How Americans Can Buy American: The Power of Consumer Patriotism." He also writes "Buy American Mention of the Week" articles for his website www.howtobuyamerican.com and is a member of
the Machinists Union and National Writers Union . Roger has been a frequent guest on the Fox News Channel, CNN and MSNBC and has been quoted in the USA Today, Wall Street Journal and US News & World Report among many other
publications.

Roger Simmermaker, Author
How Americans Can Buy American
www.howtobuyamerican.com

[Jim Richards]

Geez, that's a lot to read.

GM car's really look ugly to me. Fords aren't impressive to look at either, sans the Mustang. Chrysler's are better looking.

I find the latest Japanese and (many of the) German cars are getting butt ugly, too. I guess I'll stay with what I have untill the current crop of designers die off or are left to pursue new career opportunities.

[notfarnow]

Originally posted by azasadny

Last year, the Chevrolet Impala beat the Toyota Camry in initial quality according to J.D. Power & Associates, and Consumer Reports just announced that both the Ford Fusion and Mercury Milan scored higher than both the Toyota Camry and the Honda Accord this year.

I think "initial quality" scores are useless; I want to know that I won't end up with a useless heap after 5-6 years. I will start buying domestic vehicles when I see that they compare to imported cars after 5-10 years of use and abuse.

[kach22i]

Originally posted by azasadny
Good article... What do you guys think?

American Perception Problems of the American Auto Industry
.................Perhaps someday the American media will give GM and Ford the credit they deserve. And once they do perception among the majority of the American public will rightfully change.

Yes true, the media is a major player in supporting false sterotypes. They constantly try to create news when they should be reporting it.

Just this morning on the local TV 2 they covered some side impact crash results.

SMALL CARS STILL LESS SAFE.......... Is how the announcer starts out. Details are that three compact cars got the lowest rating possible, two other compact cars got the highest rating possible.

There you go, small cars still unsafe!


I guess it's all about size and not engineering afterall.

[Deschodt]

I think the problem is not perceived, it's real. Each time I've stepped into a GM/Ford car, wheter rented or a friend's, I've been disgusted by the cheap plastics uneven gaps, the interior looks like it's been assembled by a 7 year old from a no-glue kit.

The irony is that both of the above manufacturers built excellent cars.... in Europe and are not bringing them here.

Oh, and JD powers is a total joke ! Ever filled one ?

[IROC]

I didn't read the whole article (that's waaay too many words), but one has to remember that it's easier to violate someone's trust than to win it back. Just ask any jilted lover.

GM and Ford are going to have to make *demonstrably* better cars than the competition and offer them at bargain prices to earn the customers back that they screwed for decades. I think that's just the way it is.

Mike

[MotoSook]

The Art of Spin ...


Buyers and their dollars speak more loudly than some Detroit exec trying to make themselves look good and the imports look bad. If Honda quality was so bad, why didn't people start flocking to GM product?

I didn't read the whole thing either, but to use truck or SUV sales stats in any arguement about quality is BS. How many SUV purchases are really based on the quality of the product these days?

[VaSteve]

Like the rest, I didn't read the whole thing. Quality certainly has improved, but it takes a long time to fix a tarnished reputation. Do Audis still have the sudden acceleration problem? I've heard 911 Turbos tend to spin out in corners.

But, what Jim R said...the cars are nicer quality, but uber boring.

FWIW, I was able to take off most of the paneling to run XM in my wife's Pacifica without any tools.

[scottmandue]

Originally posted by kach22i
Yes true, the media is a major player in supporting false sterotypes. They constantly try to create news when they should be reporting it.

Just this morning on the local TV 2 they covered some side impact crash results.

SMALL CARS STILL LESS SAFE.......... Is how the announcer starts out. Details are that three compact cars got the lowest rating possible, two other compact cars got the highest rating possible.

There you go, small cars still unsafe!


I guess it's all about size and not engineering afterall.

I heard that on the radio this morning and the "small cars" that got bad ratings were the new breed of ultra small cars.

[tabascobobcat]

3 points to consider:

There is a huge difference between initial quality and long term ( More than 3 years, JDP only goes to 3) quality / durability. I am not sure off the top of my head but I think that the Big 2 (Toyota and Honda) still kick the pants off of the Shrinking 3.

Resale value. The Shrinking 3 depreciation rate is exponential while the others are a little more linear.

Also, the expectations of the buyer play a role. I may be stereotyping, but I assume a Chrysler customers standards are a little different then those of a Toyota customer (in general, not always)

[VaSteve]

Originally posted by tabascobobcat


Also, the expectations of the buyer play a role. I may be stereotyping, but I assume a Chrysler customers standards are a little different then those of a Toyota customer (in general, not always)

Depends on the model.

[notfarnow]

Big 3 cars are 3-4 yr lease vehicles. I don't think anyone really expects much more than that out of them.

I don't know of anyone (in their right mind) who buys a Ford, Chevy or Chrysler car thinking they can keep it for 10+ yrs as a reliable primary vehicle. On the other hand, people do so with Hondas & Toyotas all the time. Some do with VWs too, but many end up disenchanted.

Trucks are a different story though. I still see people buying Big 3 trucks with the intention of keeping them for ages.

[Jeff Higgins]

Ownership experinces with American cars have been horrible for everyone I know that has ever bought one. Conversely, I don't know anyone who has had a hard time with a Japanese car. Nor most German cars, recent VW's excepted. The Big Two can tout their quality all they want. When I actually start to see it, I might consider one. My latest new car, by the way, is an '06 Outback Wagon. My wife absolutely loves it, and has logged 20,000 trouble-free miles in the last 10 months. We never even looked at American cars.

[m21sniper]

I've had a couple toyota's blow up on me.

Some US engines are fantastic designs. The 3800 GM V-6 being one. Some suck, the GM Quad 4 being one of those.

I've had lots of American cars, and i find that any extra maintenance is generally offset by the much cheaper parts, much lower initial entry price(i only buy used cars), and the typically much more mechanic friendly underhood area of US vehicles.

Overall, both have their plusses and minuses, but as an ex-wrench, i really do feel US cars(most of them) have gotten a bad rap that they do not deserve, and that is really a hold over from the late seventies and early eighties.

As far as no one using a 10yo American car as a daily driver, i know dozens of such people. My mom has a 95 Taurus that is as reliable as an August day is long. Before i bought my 928 my daily driver was an 83 Buick T-Type Turbo that would've put a straight line smack down on probably 90% of the posters P-cars on this site.

[Moneyguy1]

I will not, under any circumstances, purchase another German car. I am getting far too old for the constant "get out and get under" they demand in order to remain roadworthy. I know, there are those among you who have had a "Deutschesvagon" for 17 years and only had to change the oil". For every one of you there are dozens of others that, given the opportunity, would gladly pay to have the crusher turn their nightmare into a lawn ornament. I have owned three Volkswagons over the years, the lastest one, a Pisant, with less than 80k on it has gone through a fuel pump, water pump, distributor, A/C compressor, and a multiple of other expen$ive things, most of which require special tools to work on so the local European shop makes out quite well. My wife insisted on this particular vehicle, I wanted nothing to do with it. Right now it sits in the driveway and will start with a spritz of ether. This starting problem has resulted in most of the trips to the shop and still occurs on a regular basis. The other two VWs I owned also developed serious problems after only 2 years or so and became money pits. On the other hand, over the past 20 years I have had three Fords, a 1983 LTD II and 1986 LTD II wagons, both saw in excess of 150k without a complaint, were sold and ran for years more without anything other than routine maintenance. Currently, we have a 2000 Taurus as a grocery getter. What a pleasant feeling to get into a car, turn the key and have the damn thing start. While not head turners, perhaps it is advancing years, but getting there is the primary reason for having a car in the first place.

As for Porsches (of which I have owned four...glutton for punishment), I am convinced they are no more reliable than a Yugo and the only reasons they last as long as they do is the $$$$$$$ we sink into them and the fact theyare not usually driven in inclement weather. It may seem an exaggeration mentioning the Yugo, but I posit that any automobile would last indefinitely if it were given the attention that most "exotics" are given...

Just my humble opinion...Why not consider something domestic and save a job or two?

[notfarnow]

Originally posted by Moneyguy1
I will not, under any circumstances, purchase another German car. I am getting far too old for the constant "get out and get under" they demand in order to remain roadworthy. I know, there are those among you who have had a "Deutschesvagon" for 17 years and only had to change the oil". For every one of you there are dozens of others that, given the opportunity, would gladly pay to have the crusher turn their nightmare into a lawn ornament.

+1

I will never own another VW. My $400, 19 year old Samurai, which I pretty much bought as a joke and on a dare, is far more reliable. I would love to get a call from my wife saying the Jetta caught fire and burned to the dirt, and the insurance is giving us 50% of what we paid for it.

If I ever buy another VW, I commit to paying any one of you to fly up here, hit me with my own hat, then fly back home.

[kach22i]

Originally posted by notfarnow
+1

I will never own another VW. My $400, 19 year old Samurai, which I pretty much bought as a joke and on a dare, is far more reliable. I would love to get a call from my wife saying the Jetta caught fire and burned to the dirt, and the insurance is giving us 50% of what we paid for it.

If I ever buy another VW, I commit to paying any one of you to fly up here, hit me with my own hat, then fly back home.

My 1985 diesel Golf was replaced by a 1990 Geo Tracker that I still have. I can't see owning another VW, I'll admit part of the problem is "high expectations" and the VW folklore.

[notfarnow]

Originally posted by kach22i
My 1985 diesel Golf was replaced by a 1990 Geo Tracker that I still have. I can't see owning another VW, I'll admit part of the problem is "high expectations" and the VW folklore.

Funny, my old 87 NA diesel jetta was fantastic. 370k miles and was dead reliable. I'd take it on 1200 mile trips without hesitation. My 96, on the other hand, has been non-stop trouble. I'm taking it to Montreal on Friday, but will have my fingers crossed the whole time.

[kach22i]

Originally posted by notfarnow
Funny, my old 87 NA diesel jetta was fantastic.

Mine was built in Pennsylvania, just before they closed the plant - guess quality was not the greatest right then.

My brother's Jetta 1986 (gas) from Germany was better mechanically but had interior finish problems.