  Cambrian Member Username: Cambrian Post Number: 424 Registered: 08-2006 |
December 1, 2006 American Perception Problems of the American Auto Industry by Roger Simmermaker 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 http://www.howtobuyamerican.co m/ 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 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 untarnished 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!” 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. | ||
Hagglerock Member Username: Hagglerock Post Number: 357 Registered: 03-2005 |
Great find Cambrian. As we say in my line of work, "perception is reality". Good news for GM, Ford and DCX that perceptions won't last forever and sometimes can be changed rather quickly. The big 2.5 have some really great products these days(Saturn Aura, Buick Enclave, Dodge Caliber, Ford Fusion,ect) they just can't get complacent like they did decades ago. | ||
Citylover Member Username: Citylover Post Number: 1968 Registered: 07-2004 |
I linked an article in another thread the jist of which is how the "media" is being blamed for the woes of the u.s. car co's. The writers name is Jerry Flint. And as he astutely points out it is easier and less offensive to blame the media.But if anyone is to be blamed(why blame anyone) it should be the consumer. The best barometer of customer satisfaction is sales.So just insert the word car buying public instead of media so we know who we are really talking about. | ||
Spitty Member Username: Spitty Post Number: 509 Registered: 07-2004 |
This is a weak argument considering that Ford of Europe has a totally different lineup of vehicles from what is sold here. http://www.ford.co.uk/ You won't see too many Expeditions, Navigators, Econolines or f-150's. Instead of all of those, you'd rent a Transit Van, which gets better gas mileage than all of it's US counterparts. Instead of an Explorer, you'd have some funky looking Focus based van. And have you ever heard of the Ka or teh Fiesta? Over here, we'd be embarrassed to drive either on the golf course, but that's all you see over there. This article might have been better if he would have left that lame rebuttal out. Otherwise, he points out some pretty interesting facts that Big 3 haters might prefer to continue to ignore.  | ||
Michikraut Member Username: Michikraut Post Number: 203 Registered: 05-2004 |
Spitty is correct- the produkt line of Ford and GM (going under the "Opel" name here in Germany) is from another world as compared to what is available in the States. There are few Toyato, Honda, and VW SUV every now and then on the road but in the cities they have a real problem with finding space in narrow streets and a parking space must be an impossible dream. As someone else also correctly stated: Detroit made the cars the "buying public" wanted. They had smaller few efficient cars in their line-up. No one wanted them a few years back. Hell, sitting with my aunt in her little Chrysler Seebreeze (don´t really know the name) was sometimes intimidating on the highway or Intersections as we were surrounded by walls of metal. As for quality perceptions: well- GM and Ford may have cleaned up their act in the past few years and I truly hope they keep up the good work- but it will take some time to build the reputation back up. That is the funny thing with reputations: Takes years to build up and polish and only a few moments to ruin. | ||
Gravitymachine Member Username: Gravitymachine Post Number: 1424 Registered: 05-2005 |
that is no longer true to a full extent, and the differences between the two will differ less and less. the Saturn Sky roadster is the Opel Speedster in germany, and next year the Opel Astra will be sold here under the Saturn name with little difference other than badging and I intend to give it a SERIOUS look when it goes on sale  http://forums.thecarlounge.com/zerothread?id=2979539 (Message edited by gravitymachine on December 18, 2006) | ||
Cambrian Member Username: Cambrian Post Number: 426 Registered: 08-2006 |
The article pointed out numerous perception problems the US car buyers' have with the Domestics including my favorite contention; The divestment in US plants, with concurrent investment in Asia. The US Automaker's have done nothing to fix this perception either. That's the issue I have with the people running our car companies, they belive they are only accountable to the share holders and Wall Street, and everyone else can go jump in a lake. Guess what morons, it's the every one else who are the car buying public! Recruiting people who will never buy your products is a bright move too. Walking by all those fancy new lofts in Royal Oak yesterday I saw a few too many Beemmers and Lexus's with GM Employee parking badges in their windows. | ||
Futurecity Member Username: Futurecity Post Number: 400 Registered: 05-2005 |
Perception is a problem. The domestics are paying the price now for producing decades of low-quality crap. After driving domestic shit-pile after shit-pile through the eighties and early nineties, I have to admit it is difficult to believe/accept that GM or Ford can match Toyota. The domestics worked long and hard at driving customers away. They are going to have to work much harder to bring them back. | ||
Boshna Member Username: Boshna Post Number: 141 Registered: 01-2005 |
Two things: First, the article employs poor rhetoric. It reads like a high school English essay. I find the lack of organization in general to take away from the argument, making it seem more like a general rant. I also would have liked to see some citations for the various claims Simmermaker makes. Second, I bought my Chevy Cobalt new in 2005 because 18 of the 20 guys in the men's choir I direct work for GM. I did it originally to make a statement and was expecting to compromise quality I was used to as a Honda customer. Thus far I have been pleasantly surprised by the build quality of the car. I will probably look at GM first next time I buy (which is, hehe, at least 8 or 9 years away). | ||
Spacemonkey Member Username: Spacemonkey Post Number: 128 Registered: 03-2006 |
Fact: Chrysler Town & Country is the highest quality and safest minivan available according to JD Powers. Fact: Most people think all Chrysler vehicles are garbage thus they buy foreign instead. | ||
Cinderpath Member Username: Cinderpath Post Number: 28 Registered: 05-2006 |
Yes- it is kind of interesting- I currently have a '96 Jeep Cherokee that just turned 200K with very few problems. (new water pump, radiator, shocks, tires, brakes, pretty standard stuff for 200k). I can't kill the thing, and I have beat the snot out of it off-road. I mean, REALLY gone off road too! I don't want to get rid of it now. My mom had a '93 Saturn that had 312K Miles on it, on a 4 cylinder. I believe it is still running! Impressive by any standard. My friend needed a new starter for her Nissan Sentra with less than 60k miles on it. The mechanic quoted her over $600 ouch :-( ! I have had a number of friends who have had problems with Nissans. I made the big mistake of buying a '96 VW Jetta made in Mexico, it was the biggest lemon I ever owned. The transmission went out at 58,000 miles, and they would not backing the powertrain warranty and wanted $4500 to replace the transmission. I wound up donating it to Mother Waddles, and bought a Chrysler Sebring, which now has 90K problem free miles. I have only replaced 1 headlight on it. I just test drove a new Chrysler Pacifica today, and I have to say the fit, finish were really, really nice. I'll probably get one. I really doubt a foreign car will give me much better longevity, and parts and service for domestics around here tend to be cheaper. Besides, my work is connected to the domestic auto industry, and I will support my friends and business colleagues, and family who work for domestic automakers. Aside from this, however I cannot complain about my domestics much. (Message edited by Cinderpath on December 18, 2006) | ||
Futurecity Member Username: Futurecity Post Number: 401 Registered: 05-2005 |
I think that there are a lot of people who buy imports, but have been waiting (rooting, even) for the domestics to get better. Maybe now is the time... | ||
Jerome81 Member Username: Jerome81 Post Number: 1221 Registered: 11-2003 |
Future, that is me and several others I know. Actually, my biggest gripe about american cars isn't the quality/reliability, its that they put very few manual transmissions in their cars. You can't get a Malibu with a manual and the V6. Or the Fusion with a V6. I can get a Mazda6 or Honda Accord with manual+V6. Heck, you can get Infinitis, BMWs, and Acuras with sticks as well. S40 Volvo. I believe Cadillac only offers a stick on the CTS (and I NEVER see them on dealer lots), while Lincoln offers none. The Charger/300 are all autos too, as is the Sebring. You only seem to get manuals on the el-cheapo domestic models for the most part. Or only on the bare-bones stripper mid models. Really, I just wish they had more manual transmissions on more model lines, and if they did add them, I hope they have a real nice feel to the shifter and clutch. But of course I'm in the minority. Most people buy autos. Unfortunately the selection of manual equipped cars is much higher on non-domestic models. | ||
Bearinabox Member Username: Bearinabox Post Number: 96 Registered: 04-2006 |
Agreed 100% Jerome. Hopefully this will change with all the rebadged Opels coming over here, but I'm not holding my breath. | ||
Nainrouge Member Username: Nainrouge Post Number: 121 Registered: 05-2006 |
I think he is very selective in his choice of figures to look at. According to him, US cars do well on the 2006 Vehicle Dependability Survey, but check the source. Quote: "Lexus, Toyota and Honda models dominate the segment rankings. Lexus models lead in four segments: GS 300/GS 430 (midsize premium car), LS 430 (large premium car), SC 430 (premium sporty car) and GX 470 (midsize premium MAV). Four Toyota models also lead in their respective segments: Echo (sub-compact car), RAV4 (compact MAV), Highlander (midsize MAV) and Tundra (large pickup). Honda models rank highest in three segments: Civic (compact car), S2000 (compact premium sporty car) and Odyssey (van). Models by Acura, Buick, Cadillac, Chevrolet, Ford, Mazda, Mercury and GMC each rank highest in one segment." http://www.jdpower.com/global/ press-releases/pressrelease.as p?StudyID=1160 Hardly a sweep of the awards. Besides this is a study of 3 year old cars. JD Powers Initial Quality Survey (new cars) states that "Lexus and Toyota models continue to dominate initial quality rankings, capturing 11 out of 19 segment awards in 2006." http://www.jdpower.com/global/ press-releases/pressrelease.as p?StudyID=1132 I have some great domestic cars and some really lousy ones. I have never had a lousy Toyota. There are probably some domestic cars that are better than my Toyota, but what are the chances that I would buy the right one? | ||
Jelk Member Username: Jelk Post Number: 4118 Registered: 10-2003 |
Initial quality standards are for suckers. What I want to know is the track record of a firm's vehicles over the long haul. How does a 2002 Taurus stack up against a 2002 Camry five years later? I realize the 2007 Camry is probably different in many respects than the 2002 vehicle and that the Taurus has been replaced by the Fusion, but what was good and/or bad then probably tells a story about what I can expect from a given company's vehicles. | ||
Nainrouge Member Username: Nainrouge Post Number: 122 Registered: 05-2006 |
If you read, you will see that the domestics didn't do so well on the three year test either. I am not aware of a 5 year test. Personally, I would like to see a 15 year test, which would tell me which hooptie to buy next. | ||
Jelk Member Username: Jelk Post Number: 4119 Registered: 10-2003 |
Three year, five year close enough for me. My beef with initial quality tests is that most cars are quality just out of the showroom. However is I'm financing a new car over a three to five year period I want to know that it will remain quality as long as I am making payments. | ||
_sj_ Member Username: _sj_ Post Number: 1638 Registered: 12-2003 |
The domestic appear to have higher "user" ratings in some cars. Such as the Fusion over the Camry, but the "report" score has the Camry rated higher. Most domestics have manual transmissions available, because you pay the nice 800 to $1500 conversion fee but the demand is so low they order a few manual and all automatic for the dealer lot.
I too had a '96 Cherokee, however mine had a huge brake problem before 20k miles. The thing would shoot brake dust and crumpled the rotors so bad the steering wheel would shutter. Needless to say after the 3rd attempt they finally fixed it right instead of risking a lease lemon. | ||
Cambrian Member Username: Cambrian Post Number: 431 Registered: 08-2006 |
Honestly, I can name quality issues of Foreign and Domestic vehicles. A girlfriend's 03 Sentra had those weird starter problems mentioned above, recalls all that. My buddy's Saturn Ion gave him annoying little problems too. Yes, I think the playing field for quality is a pretty level one now. The big three need to get their noses out of the Wall Street journal and pay attention to what the consumer wants. If they want to pursue Asian expansion, that's fine, but eliminating jobs here to accomplish that will just mean more red ink on those balance sheets. | ||
East_detroit Member Username: East_detroit Post Number: 873 Registered: 11-2003 |
The Taurus was replaced by the Ford 500, not the Fusion. The Fusion and Milan (and MKZ) replace cars in the Contour size. They also beat the Camry and Accord. | ||
Ramcharger Member Username: Ramcharger Post Number: 176 Registered: 05-2006 |
I haven’t owned an automatic in 35 years. In all that time only one of my vehicles was foreign (a Triumph Spitfire), and that was because, at the time, there were no domestic two seaters except the Corvette. I even had a Dodge minivan with a stick shift. All you have to do is special order. (Message edited by Ramcharger on December 19, 2006) |
