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Takedown

What’s With All The GM Bashing?

General Motors Corporation

Image via Wikipedia

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.

In the ultra-hot Compact Multi Activity Vehicle segment, the Ford Escape and the Chrysler PT Cruiser are ranked in the same category as the Toyota RAV4 and Honda CR-V – all are “Among the best.”

Even in the Midsize Multi Activity Vehicle segment, the Chevrolet Trailblazer and Dodge Durango are ranked “Among the best” along with the Toyota Highlander and Hyundai Santa Fe in initial quality.

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.

Car

City MPG

Highway MPG

Cadillac Escalade Hybrid 20 21
Toyota Sequoia 14 19
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.

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  • http://www.accurev.com/blog Lorne

    Unless you own stock in Toyota, it’s illogical to _want_ GM to fail: there are millions of people whose paycheck (not to mention health benefits and pension) depend on GM, and the last thing this economy needs is a large new group of people who can’t make their mortgage payments.

    Perception of quality is a hard thing to change based on a high quality product. Quality generally means “performs as expected.” The old adage that there’ll be 10 people complaining about bad quality for every one that recommends based on good is still true, and the fact that Jeep owns 4 of the 8 WORST quality rankings will generate a lot more buzz than the Ford Escape at the top.

  • http://www.accurev.com/blog Lorne

    Unless you own stock in Toyota, it’s illogical to _want_ GM to fail: there are millions of people whose paycheck (not to mention health benefits and pension) depend on GM, and the last thing this economy needs is a large new group of people who can’t make their mortgage payments.

    Perception of quality is a hard thing to change based on a high quality product. Quality generally means “performs as expected.” The old adage that there’ll be 10 people complaining about bad quality for every one that recommends based on good is still true, and the fact that Jeep owns 4 of the 8 WORST quality rankings will generate a lot more buzz than the Ford Escape at the top.

  • Mark M

    One key number (not given in any of the above stats) is a ranking for CONSTANT quality. Every year t in any given year you’re sure to find a domestic straggler that’s made it into the “best of” class. Every “best of class” is sure to have a Toyota and/or Honda in it though EVERY year. In fact, SEVERAL Toyotas and Hondas make the grade and “set the bar” on a CONSISTANT basis.

  • Mark M

    One key number (not given in any of the above stats) is a ranking for CONSTANT quality. Every year t in any given year you’re sure to find a domestic straggler that’s made it into the “best of” class. Every “best of class” is sure to have a Toyota and/or Honda in it though EVERY year. In fact, SEVERAL Toyotas and Hondas make the grade and “set the bar” on a CONSISTANT basis.

  • http://www.2-speed.com/ Will

    Mark,

    What you say makes sense, although I’m not familiar with any popular constant quality measurements. I think the data states that your claim about “domestic stragglers” making it into the best of class might be changing. Having two of the three top spots filled by cars that have been around a few years is hardly random.

    It’s clear that American auto manufacturers have lagged in the quality battle for a long time. The dependability rankings mentioned in my post show that too. I by no means believe that those companies have caught up across the board, but we’ve seen huge movement in quality levels in the last few years. If we follow a select group of cars produced by these companies, I’d being willing to bet that they’d appear in constant quality rankings moving forward. Sadly, this is not ALL cars produced by these manufacturers.

    Of course, I doubt that Toyota’s FJ Cruiser is anywhere close to the top of anyone’s quality charts either.

    The bottom line is that there remains reasons for hope :-)

  • http://www.2-speed.com Will

    Mark,

    What you say makes sense, although I’m not familiar with any popular constant quality measurements. I think the data states that your claim about “domestic stragglers” making it into the best of class might be changing. Having two of the three top spots filled by cars that have been around a few years is hardly random.

    It’s clear that American auto manufacturers have lagged in the quality battle for a long time. The dependability rankings mentioned in my post show that too. I by no means believe that those companies have caught up across the board, but we’ve seen huge movement in quality levels in the last few years. If we follow a select group of cars produced by these companies, I’d being willing to bet that they’d appear in constant quality rankings moving forward. Sadly, this is not ALL cars produced by these manufacturers.

    Of course, I doubt that Toyota’s FJ Cruiser is anywhere close to the top of anyone’s quality charts either.

    The bottom line is that there remains reasons for hope :-)

  • http://www.2-speed.com/ Will

    Lorne,

    Yeah, reversing the downward spiral of a bad reputation that you’re reinforced for years seems almost impossible. Like I said, it took the Japanese almost 25 years.

    The Ford Escape is the perfect example. It’s an SUV and has outdone the best hybrid sedans and coupes from every other manufacturer for years, yet no one knows about it and it’s a selling laggard.

    Is Jeep dragging it down? It’s certainly contributing.

  • http://www.2-speed.com Will

    Lorne,

    Yeah, reversing the downward spiral of a bad reputation that you’re reinforced for years seems almost impossible. Like I said, it took the Japanese almost 25 years.

    The Ford Escape is the perfect example. It’s an SUV and has outdone the best hybrid sedans and coupes from every other manufacturer for years, yet no one knows about it and it’s a selling laggard.

    Is Jeep dragging it down? It’s certainly contributing.

  • don849195

    Hey, there’s someone out there who feels GM bashing is crazy. I’m an avid car buff and if anyone knows about cars, it’s me. GM has cars that’s not only just as good but are better. Those who wish the demise of the domestics car makers do not know much about cars.

  • don849195

    Hey, there’s someone out there who feels GM bashing is crazy. I’m an avid car buff and if anyone knows about cars, it’s me. GM has cars that’s not only just as good but are better. Those who wish the demise of the domestics car makers do not know much about cars.

  • don849195

    Consumers Report is a big culprit of bad reporting. They’ve been in love with Japanese cars from the day Japanese junks came to our shores. Back then their cars were really junk, but Consumers Report thought they were wonderful cars. Their survey has had a big impact to the auto industry. The major flaw in it is that it would have to be tested against a random sample. As most readers already know, they survey only their subscribers and since they have been singing the same anthem for the last 30 years, their own subscribers will tend to join the choir. This is called a convenience sampling method that does not add cost for CR. Their database could be in jeopardy if a manufacturer told their employees to subscribe to CR.

    In any serious statistical study, this would be impossible since the sampling would be random.

    The huge discrepancies between JD Power and CR tends to prove this point.

    Convenience sampling:

    “Sometimes called grab or opportunity sampling, this is the method of choosing items arbitrarily and in an unstructured manner from the frame. Though almost impossible to treat rigorously, it is the method most commonly employed in many practical situations.In any serious statistical study, this would be impossible since the sampling would be random.

    The huge discrepancies between JD Power and CR tends to prove this point.

  • don849195

    Consumers Report is a big culprit of bad reporting. They’ve been in love with Japanese cars from the day Japanese junks came to our shores. Back then their cars were really junk, but Consumers Report thought they were wonderful cars. Their survey has had a big impact to the auto industry. The major flaw in it is that it would have to be tested against a random sample. As most readers already know, they survey only their subscribers and since they have been singing the same anthem for the last 30 years, their own subscribers will tend to join the choir. This is called a convenience sampling method that does not add cost for CR. Their database could be in jeopardy if a manufacturer told their employees to subscribe to CR.

    In any serious statistical study, this would be impossible since the sampling would be random.

    The huge discrepancies between JD Power and CR tends to prove this point.

    Convenience sampling:

    “Sometimes called grab or opportunity sampling, this is the method of choosing items arbitrarily and in an unstructured manner from the frame. Though almost impossible to treat rigorously, it is the method most commonly employed in many practical situations.In any serious statistical study, this would be impossible since the sampling would be random.

    The huge discrepancies between JD Power and CR tends to prove this point.

  • http://www.2-speed.com/ Will

    Excellent point about sampling and data sets, don849195. I totally agree about CR. This is not only true for cars, of course. In fact, they often don’t even include leading competitive products in a category in the comparisons.

    That’s not to say that Japanese cars are of poor quality, although some are. Just that their comparisons are somewhat invalid.

    As Lorne says, above, perceptions created by reality – let’s face it, Detroit did make some questionable stuff in the 80′s and early 90s – or through incorrect analysis – like CR – are going to be difficult to turn around.

  • http://www.2-speed.com Will

    Excellent point about sampling and data sets, don849195. I totally agree about CR. This is not only true for cars, of course. In fact, they often don’t even include leading competitive products in a category in the comparisons.

    That’s not to say that Japanese cars are of poor quality, although some are. Just that their comparisons are somewhat invalid.

    As Lorne says, above, perceptions created by reality – let’s face it, Detroit did make some questionable stuff in the 80′s and early 90s – or through incorrect analysis – like CR – are going to be difficult to turn around.

  • john bower

    Some other thoughts:

    I believe THE most popular car line in China is Buick.

    Quality is intangible and is a subjective by it’s nature. Sure we try to throw in some things that seem objective, but in the end when it is used in the more global sense it’s pretty subjective.

    I beleive that the Big 3′s quality perception problems trace back to about 1973-74. Given the double whammy of a gas crisis and new pollution control requirements, about 99.9% of engineering effort was focused on meeting the near impossible requirements of meeting the new EPA rules. Which if one recalls, the EPA had the power to block ANY sale of ANY vehicle that did not meet the pollution requirements.

    As a result pretty much Every car sold in america from 1975 to 1978 is a real piece of junk. Suppose you bought an american car during this time period, by the time you were ready to buy a new car, you would already have been pissed of at your own brand of junk and ready to try another brand. Since mileage was still of importance, you would naturally gravitate toward a japanese model. Low and behold it’s a lot nicer than your POS american car. (It does not matter that the American cars had improved too). Too late the damage has been done.

    One thing that is left out in these discussions is part of human nature. There are in some things a tendency to have an unfounded attraction to imported goods. French wine vs California wine, Italian shoes, German Engineering, Foriegn Oil, vs the crap they pump out of Texas Gulf coast. There is no sex appeal to the domestic equivalent.

    John

  • john bower

    Some other thoughts:

    I believe THE most popular car line in China is Buick.

    Quality is intangible and is a subjective by it’s nature. Sure we try to throw in some things that seem objective, but in the end when it is used in the more global sense it’s pretty subjective.

    I beleive that the Big 3′s quality perception problems trace back to about 1973-74. Given the double whammy of a gas crisis and new pollution control requirements, about 99.9% of engineering effort was focused on meeting the near impossible requirements of meeting the new EPA rules. Which if one recalls, the EPA had the power to block ANY sale of ANY vehicle that did not meet the pollution requirements.

    As a result pretty much Every car sold in america from 1975 to 1978 is a real piece of junk. Suppose you bought an american car during this time period, by the time you were ready to buy a new car, you would already have been pissed of at your own brand of junk and ready to try another brand. Since mileage was still of importance, you would naturally gravitate toward a japanese model. Low and behold it’s a lot nicer than your POS american car. (It does not matter that the American cars had improved too). Too late the damage has been done.

    One thing that is left out in these discussions is part of human nature. There are in some things a tendency to have an unfounded attraction to imported goods. French wine vs California wine, Italian shoes, German Engineering, Foriegn Oil, vs the crap they pump out of Texas Gulf coast. There is no sex appeal to the domestic equivalent.

    John

  • http://www.2-speed.com/ Will

    John,

    I think your description of the timing is just about right as well as the point you make about attraction to foreign goods. Too bad we have forgotten the days of huge wings and jet-engine facsimiles as bumpers and grills. When those were big, everyone wanted to own American.

  • http://www.2-speed.com Will

    John,

    I think your description of the timing is just about right as well as the point you make about attraction to foreign goods. Too bad we have forgotten the days of huge wings and jet-engine facsimiles as bumpers and grills. When those were big, everyone wanted to own American.

  • http://www.truedelta.com/ Michael Karesh

    CR’s sampling isn’t their key weakness. Instead, it’s how the question is worded. I’ve written about this here:

    http://www.truedelta.com/pieces/cr_survey.php

    Even then, the key source of differences between the results of Consumer Reports, J.D. Power, and my own at TrueDelta.com–and there aren’t that many large differences–is that all three surveys ask different questions.

    Consumer Reports: “problems you considered serious” over the past year

    J.D. Power: just about any problem, even very minor ones, during either the first 90 days or the third year

    TrueDelta: repair trips during which something was successfully fixed

  • http://www.truedelta.com Michael Karesh

    CR’s sampling isn’t their key weakness. Instead, it’s how the question is worded. I’ve written about this here:

    http://www.truedelta.com/pieces/cr_survey.php

    Even then, the key source of differences between the results of Consumer Reports, J.D. Power, and my own at TrueDelta.com–and there aren’t that many large differences–is that all three surveys ask different questions.

    Consumer Reports: “problems you considered serious” over the past year

    J.D. Power: just about any problem, even very minor ones, during either the first 90 days or the third year

    TrueDelta: repair trips during which something was successfully fixed

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    I found your site while browsing on google and read a few of your other articles too. I’ve just added you to my yahoo rss Reader. Just wanted to say” keep up the good work” and congrats on a job well done! I am looking forward to reading more from you in the future.

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    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.

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