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Let me put all my cards on the table. Like my friend Shawn, I want GM and, in fact, all three American car manufacturers to make it through this current mess and to be hugely successful. I can’t understand why anyone wouldn’t want this. Aren’t more choices a good thing? Isn’t competition good? Any thoughts about punishing them for poor execution are just stupid. The only punishment a company should get is what it receives in the marketplace. Plain and simple. Yeah, it’s more complex than that because it’s not a globally consistent playing field (do we think that French and Italian manufacturers aren’t routinely helped out by their governments? Aren’t labor laws significantly different from country to country?). GM, Ford and Chrysler have all received their fair share of well-deserved market punishment. Is that reason enough for us to want them to fail?
In the last month I’ve run across many people caught up in the whole bailout question, not only accepting, but encouraging the demise of the American car companies, especially General Motors. I’ve been surprised to hear things like, “they deserve to fail,” “they haven’t listened to the marketplace or their customers,” “they don’t innovate," “their cars are draining the planet of its natural resources” and “their cars are garbage.” Geez, that’s harsh.
For sure, all three manufacturers have been slow to respond to changing wants and needs. They all have often been guided by the classically American corporate need for instant returns and a fast buck. This has left some truly great cars on the drawing boards. Is there any doubt that American engineering is as good or better than Japanese or German engineering? Corporate decisions on what makes it into consumer’s hands is what the problem is.
But I digress . . . let’s get back to the bashing which is coming from people who only have a passing concept of the relationship between an accelerator pedal and an engine and true autophiles, alike. Before we decide that GM sucks and should be taken out back and shot, let’s look at the facts.
First, on not following the market or listening to customers. Does anyone think that prior to gas prices skyrocketing people weren’t clamoring for SUVs and pickup trucks? Take off the blinders folks. That huge sucking noise you heard over the last decade was people pulling cash out of their wallets fast to buy bigger vehicles. While Americans seem to love to blast their home town manufacturers for delivering big-ass cars that their customers actually wanted to buy, they don’t seem to want to acknowledge that during the same period, Toyota introduced loads-o-SUVs, made their Land Cruiser bigger and less fuel efficient, grew the Sequoia to the size of an oil tanker (necessary to carry all the fuel it needs) and introduced the huge Tundra pickup to compete with big American trucks. If GM was missing the boat, wasn’t Toyota too? GM listened and delivered. As did every other car manufacturer in the world. Big is what the buying public wanted and all manufacturers delivered. Taking GM to task for this sounds like a double-standard to me.
This stands true on the other end of the spectrum, in the small car world, as well. For sure, GM has not been great in the small car market, but did it deliver what it’s customers wanted? The answer is yes. The fact is that the group of car buyers looking for small cars were more often driven to that decision because of the purchase price of the car than they were because of how miserly it sipped fuel. As such, GM offered several inexpensive cars to meet this demand. In general, we equate small cars and fuel efficiency, assuming that people who buy them are looking to drive further on a tank of gas. The data shows, however, that at best, fuel efficiency was a secondary concern and that low cost of entry is what the consumer was really looking for. Again, there is no indication that GM ignored the market or its customers.
Secondly, on innovation. I totally agree that GM looks like a company that didn’t innovate much over the last 20 years. As a customer of a couple of companies that I ran over that period, I can tell you that they always had loads of cool products and technologies being worked on. The fact is, corporate decisions kept most of these from reaching the consumer. So, it’s easy to see why people don’t equate GM and innovation, but that is not the fact. Google “GM and hydrogen fuel cells,” “GM and hybrids” or “GM and engines” and check out the cool stuff that’s gotten past GM’s PR blockade.
Thirdly, on quality. GM and it’s American brethren have a lot of making up to do in this category after producing some seriously crappy cars for a lot of years. But it’s not like they have to get around to producing higher quality cars, they have been doing it for many years now and continue to do it.
According to the JD Power study on initial quality for midsize cars (the competitive segment that the Toyota Camry and Honda Accord are in), the three cars ranked in the top category (the best cars) are the Chevrolet Malibu, Mitsubishi Galant and Ford Fusion. The Toyota Camry is ranked one step lower, in the “Better than most” category and the Honda Accord is ranked two steps lower than the cars in the “Above average” category. Let’s see, that’s two out of the three top slots taken by American car companies, one by GM. Hmmm.
There are, sadly, few American entries in the Compact Car segment, and those don’t fair well. Funny enough, like with compacts and premium vehicles (dominated by the Germans) the American companies also show poor results in Large Cars. Large Multi Activity Vehicles (SUVs) and Large Premium Multi Activity Vehicles (high end SUVs) have several entries with American Cars being “Among the best.”
In terms of JD Power’s dependability rankings, the rankings of how well cars that are a few years old are holding up . . . in midsize cars, the sole leader is the Buick Century, the famed Toyota Camry is in the next category, “Better than most” along with the Mercury Sable, Buick LaCrosse and Ford Taurus.
In most other categories, American cars don’t do quite as well, although many are in the “Better than most” category. This is because building a wide variety of quality vehicles is still rather new to American car companies and dependability ratings are based on the performance of older cars.
Finally, on fuel economy. According to fueleconomy.gov, of the top 10 highest mileage family sedans (4-door, any number of cylinders, any fuel type, automatic transmission) sold in America, four are American (2 are Toyotas, including the Prius; 2 are Nissans; one is a Kia and one is a Hyundai). Of the four American cars, all are made by General Motors.
If you look at SUVs (any size, any number of cylinders, any fuel type, automatic transmission, 2 and 4 wheel drive), American cars, occupy 9 of the top 10 slots, including the first 8. Before you say, of course, that’s obvious, consider that there are loads of foreign cars in this segment and that the the best American car in the segment, the Ford Escape Hybrid with Front wheel drive gets 34 mpg in the city and 31 on the highway. The vaunted Toyota RAV4 is 16th on the list with 22 mpg city and 28 highway. Keep that in mind next time you chuckle about the how poor the mileage is in the huge Cadillac Escalade Hybrid at 20 mpg city and 21 highway. In fact, here’s an interesting comparison.
|Cadillac Escalade Hybrid||20||21|
|Toyota Land Cruiser||13||18|
Whoa! You say. That’s not fair, you’re comparing a hybrid with non-hybrids. True, but the Toyotas don’t come as hybrids. If you take the stance that GM isn’t innovative, you can’t play it both ways. In fact, the hybrid in the Escalade is extraordinarily innovative with the electric motor inside the transmission.
Even better, the Escalade hybrid gets 20 mpg combined (city and highway) and the Toyota Camry (6-cylinder) gets 23 mpg combined. When I hear how crappy the Escalade’s mileage is from people, I have to wonder, compared to what? Sure, a Prius gets better mileage, but you can park two of them in an Escalade. Comparing apples-to-apples, it’s hard to knock what GM is doing with respect to fuel efficiency.
Look, I’m no shill for the American auto industry or GM. I own one American car and it’s made by The General. I also own several German and Japanese cars. I think they’re all great. All I’d like to communicate here is that GM and the other American car manufacturers deserve more recognition than they are being given by the buying public. Of course, that’s not the consumer’s problem, The Big Three have augured themselves into a hole. I just think it would be great if we gave them greater consideration when looking for a new vehicle. They’ve actually already earned it. We just don’t know about it yet.
It took the Japanese about 25 years to go from having the reputation of selling “cheap Japanese shit” to selling “the highest quality cars on the planet.” The Germans similarly took decades to earn the position they have now in the consumer’s mind. GM stockholders don’t have the kind of patience and GM certainly doesn’t have the money to make that work. Having more car companies is a good thing and having American car companies is a good thing. If we simply are willing to give them a try before their reputation rebounds, we might be able to cut their return to success by ten years. In the end, we’re not giving anything to them. They still have to earn it which, in my opinion, they greatly already have. It’s just a secret.