By on September 14, 2007

mindthegap.jpgWe've said it here time and time again: there is no perception gap between what The Big 2.8 build and how the public perceives it. Or, a little more generously, it's a level playing field. If GM, Ford and Chrysler are reaping what they sowed, so are Toyota, Honda, Nissan, Hyundai, Mercedes, Audi, Porsche and every other automaker on planet earth, And yet today's Wall Street Journal confers renewed legitimacy upon this pathetic excuse for losers. "'Building a better car and assuming people will buy it doesn't work,' GM Chairman and Chief Executive Officer Rick Wagoner told reporters at this week's Frankfurt Auto Show. GM, he said, 'can do a better job' marketing its vehicles." So GM has better vehicles and their $2.9b ad spend ain't getting it done. Same old, same old. But the article's intro is by far the worst piece of diss-information. It reveals that CNW research takes a Toyota Camry, removes any identifying logos and tells consumers it's a new model from one of the U.S.-based auto makers. "If they think it's an American car, the perception of the vehicle falls dramatically," said Art Spinella, vice president of the Bandon, Ore.-based firm. "Detroit really gets a bum rap in the U.S." Or not.

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121 Comments on “The “Perception Gap” Must Die...”


  • avatar
    glenn126

    Past experience gives people a perception of what the future might hold with decision making.

    It’s not brain surgery.

    I’ve given Detroit’s 4, then 3, then 2.8 thirty years of chance, after chance, after chance.

    Finally I “took a risk” and bought a Hyundai – it was “better than average” – then my wife leased a replacement Sonata 5 years later due to longevity concerns – a two year lease – since it was cheap. The new car’s light-years ahead of the old – and the new was apparently engineered in Ann Arbor MICHIGAN, styled in CALIFORNIA and built in ALABAMA – yet this is supposedly a foreign car?! Yet the Ford Fusion gets “a pass” as a “domestic” when it’s based on a Mazda, and built in Mexico?! To use the vernacular “WTF?!”

    My Prius, by the way, is not only my first Toyota, but I’m selling mine as my ’08 is goign to be here in about 3 weeks.

    Nevermore will I go back to the 2.8. They’ve lost me – and millions of others – forever more.

    It’s not like I didn’t give them WAY too many chances over 30 years, though.

  • avatar
    maxo

    It seems their little “study” there is hanging out near legitimacy without quite making it. Maybe someone with more scientific or mathematical knowledge can tell us if this kind of study can be used to prove anything at all?

  • avatar
    Pch101

    If the guys in Detroit spent less time whining, and more time building great products, then there would be no issue.

    If the underlying implication is that brands are tainted (which they are), then the possible solutions are obvious: overhaul them drastically or kill them off.

    Aside from contractual obligations to the dealer network, is there any reason to support the expense of a brand as dead, dead, dead as Buick? That dog don’t hunt and it’s rabid, too, so just do an Old Yeller on it and put it out of its misery.

  • avatar
    mlbrown

    GM hasn’t been “building a better car,” Rick. It’s been building the same car for 25 years. We can tell.

    -Matt

  • avatar
    tulsa_97sr5

    Williams editorial yesterday brought up a great point about how people will not always do the max amount of research they could every time they buy a product. If Crest has been keeping your teeth white for years it makes no sense to spend hours researching other toothpastes every few weeks before going to the grocery.

    That behavior worked in the domestics favor as their quality dropped behind, people still assumed they were better off with another chevy than some furrin’ crap. Now it’s time to pay the piper. Of course them touting their return to quality every few years for the past 15 or so, when they clearly hadn’t doesn’t help.

    Sell me an inferior product, then lie every year about this new one being much better. They’ll have to forgive me for taking a wait and see attitude this time.

  • avatar
    Redbarchetta

    Why do they confuse “perception gap” with the reality that they drove their customers away.

    Glenn is right you can’t get customers back if they have sworn off the brand for life, and millions have done that already. And what about the 100 times they claimed better producs in the past. Why should past customers burned by GM’s past “improvements” listen to more lies from them?

    I might find a tiny bit of respect if they would stop whining for once and just get down to the business of really making good cars instead of just talking about it. At this point they just need to go away, make room for better businesses, no more lies and crap products.

  • avatar
    sitting@home

    Aside from contractual obligations to the dealer network, is there any reason to support the expense of a brand as dead, dead, dead as Buick? That dog don’t hunt and it’s rabid, too, so just do an Old Yeller on it and put it out of its misery.

    That’s what I don’t understand; they spend $2.9b trying to flog a dead horse when it only costs $1b (Oldsmobile) to take it round back and shoot it.

    My perception of American cars comes mainly from extended “test drives” in rental cars. Almost without fail every car I rent goes on my list of cars to never consider buying. Maybe that’s another reason the Big 3 should wean themselves off reliance on selling to the rental fleets.

  • avatar
    Luther

    Marketing 101:

    Lets put lipstick on that pig and market it as Marilyn Monroe.

    I think people are wising up which makes Rick squirm/whine.

  • avatar
    Cicero

    Also, Wagoner did his homework but the dog ate it.

  • avatar
    GS650G

    I owned a Saturn in ’91 and was content with the car, considering I paid 4 grnd less than a Civic for it. I rented a Saturn in 2003 and was shocked how far it had slipped. Nothing more than a Pontiac or Buick with a different badge on it.

  • avatar
    Gardiner Westbound

    I have lived on a street of about 30 houses for 20-years. The vast majority of neighbors originally purchased Detroit-3 products. Now nearly all drive Asian makes. In my view it is unlikely to change any time soon.

  • avatar

    The 2.8 are still unbelievably arrogant and entrenched. The best thing that could happen is that they take all their dead brands out back and shoot them, along with the product managers and so-called executives too. There are plenty of great niches for American cars to regain their foothold, but they have to understand that Hyundai has a better reputation than them, that people would be more willing to take a chance on an unknown Brilliance from China than buy another piece of crap from them.

    Of course that would take guts and vision. Something they don’t have at all. And when they just start to have something, they aren’t willing to spend the time and money to get it right.

    I would consider buying a Saturn/Opel, if they don’t Americanize it, but I am sure they will. I would consider getting a CTS if it was more attractive, priced low enough and I was guaranteed they would never add huge rebates and depress the crap out of resale values. I would have considered a Ford Focus if Europe didn’t always seem to get the model I want.

  • avatar
    RobertSD

    The truth is that there is a gap and tons of misinformation these days. For example, the Fusion is built on the CD3, which is a Ford platform that Mazda used for the 6. It also turns out that this Fusion has better initial quality numbers than a Camry.

    The point WSJ was trying to make is not how the gap was created (wow, if that dead horse hasn’t been beaten enough), but what it means for a recovery of the Big 2.8. It’s probably the greatest risk that the domestic companies face in the short to medium run, especially as a long line of 2008 and 2009 new models debut from them, and some of those models (I’m looking at the 2008 Malibu, 2009 Fusion and 2009 Flex) will definitely be great products. However, if you make the best product in the market and can’t get people to drive it, you’re hosed.

    Finally, did they have to use the Camry? I hope they told the consumers what the car was after they trashed it so that the domestics didn’t have to be associated with another crappy product that they didn’t even create this time.

  • avatar
    umterp85

    I just wish GM and Ford would just die right now so that ALL of the cars on our roadways were populated by Pleansantville types driving their Camrys and Accords…the world would be a much better (albeit uninteresting)place.

  • avatar
    hltguy

    There is a reason that the Domestics only have 29% of the California market, and a good chunk of that 29% is made up up of steeply discounted vehicles. I just purchased a new 2007 Dodge Ram 1500, priced at $26,500.00. The dealer sold it to me for $16,000.00, 40% off the sticker price! Would I have considered the truck if it had been,say $2,000 off sticker price? emphatically no. If I felt I had to spend $24,000.00 for a new truck and was willing to spend that much, I would have purchased a Toyota. There is no way the domestics can compete unless they steeply discount their vehicles (and still are losing market share) or they have a vehicle people are wiling to buy at or near MSRP, and usually that only lasts for a year or so like the Mustang. Perception problem, absolutely! Is it going away? Absolutely not! The domestics have pretty much lost a new generation of buyers on the west coast.

  • avatar
    GS650G

    Like many former 2.8 customers I have dealt with headgaskets and transmissions that were poorly designed. Who wants to take a chance that the totally new engine a domestic company sells will not screw you in the end?

  • avatar
    prndlol

    When do we all start referring to the old “big 3″ as 2.5?

    I’m betting around April 2008.

  • avatar
    KatiePuckrik

    I’ve said time and time again, that Detroit could kill their so called “perception gap” in a heartbeat in a instance, if they wanted to.

    Halve the budget given to their nonsensical advertising, re-direct those funds to providing a 5 year, bumper to bumper, fuly transferrable warranty, with no welching on it.

    If Detroit’s bleating of “Our cars are just as good as the transplants!” are true, then the warranty will cost them nothing, surely?

    People got burned by their shoddy products (me, included) and they thought a few flag waving adverts would kick it all into touch. Trouble is, Detroit still think it’s the 1950’s. They still think that buying a “foreign” car constitutes being a communist and a traitor! No, it constitutes being a sensible buyer. GM want your custom, buy don’t want to put any work into it. That’s how much they think of you. “Yes, we burned you many times before, but please give us another try!”

    Trouble is, Detroit are burning cash quicker than Chrysler can rearrange their upper management a forest fire. Nowadays, the only thing Detroit can afford is talk and we all know how much “talk” is……!

  • avatar
    whitenose

    I would consider buying a Saturn/Opel, if they don’t Americanize it

    Best thing GM could do for Saturn marketing: rename it Opel.

  • avatar
    brownie

    I’m the CEO of a domestic auto company, and I’ve got a great plan for turning my business around. First, I’m going to preserve the status quo throughout my company. Then, I’m going to repeatedly give interviews in which I imply that the people who choose my competitors’ cars over mine are too stupid to realize that my cars are just as good. If they hear that message enough, they will realize that I am right and that they are not smart enough to make a rational purchasing decision. Finally, our non-customers will see that they need to buy what *I* tell them to buy, because only *I* am smart enough to see which cars are superior.

    I think this is going to work. Who’s with me?

  • avatar
    carguy

    So now Detroit is proclaiming that US car buyers are stupid for not buying their cars? That they are being led like a herd of sheep to buy overpriced ‘foreign’ brands? Give me a break – are they now insulting the customers that you want to attract?

    I’m sorry while there are only very few head to head contests that the domestics win against foreign brands they shouldn’t pi** in my pocket and tell me that its raining.

    Let’s face it – choosing an Accord or Altima Coupe over a Monte Carlo or a Kia Sedona over a Chevy Uplander is not nearly as stupid as the 2.8 may want think it is.

  • avatar
    Redbarchetta

    Choosing a domestic product is the stupid decision, history shows that.

    What is taking these liars and theifs so long to just go out of business and die. I have been waiting 15 years for this and I am becoming impatient.

  • avatar
    umterp85

    GS650G :”Like many former 2.8 customers I have dealt with headgaskets and transmissions that were poorly designed. Who wants to take a chance that the totally new engine a domestic company sells will not screw you in the end?”

    My guess is that the 3 million plus Toyota owners who experienced engine sludge problems feel much the same way.

  • avatar
    dkulmacz

    I don’t understand. You take a product (in this case, a Toyota Camry) and disguise the true identity. Then assign it an arbitrary ‘fake’ identity and have potential customers rate it. Correlate the ratings with the various ‘fake’ identities.

    The vehicle remains the same. Only the name has changed.

    When identified as a US product, the data shows that it’s perceived to be junk. When identified as a Japanese product, data shows that it’s perceived to be much better

    Perception gap confirmed. By data.

    Customers aren’t ‘stupid’. They are ‘biased’. Take the term with no negative connotations . . . they simply display a skewed measurement that’s unrelated to the underlying thing being measured.

    How can you argue that this is an invalid observation?

  • avatar
    umterp85

    CarGuy: “Let’s face it – choosing an Accord or Altima Coupe over a Monte Carlo or a Kia Sedona over a Chevy Uplander is not nearly as stupid as the 2.8 may want think it is”

    I would choose a Ford Fusion over a Toyota Camry. I would also choose a Ford Edge over a Toyota Highlander. Does that make me or people that make the decision to buy competitive domestic product stupid ?

  • avatar
    Pch101

    Customers aren’t ’stupid’. They are ‘biased’.

    That’s not a function of “bias”, but of accepting a brand value for what it is.

    You have two neighbors. Neighbor A is a good responsible type who participates in the neighborhood babysitting ring and is known for being an all-around good citizen. Neighbor B just got out of the joint after doing time for molesting children, and has been caught leering suspiciously at the Gap Kids catalog. Now, which neighbor do you trust when it comes to watching your kids?

    Brand equity is earned or squandered. The Big 2.8 are reaping the results of 30 years of burning the consumer. Since their reputations proceed them, is it really surprising when car buyers ignore their pleas for business? They haven’t done anything to earn that business, and $20-30k is a lot to gamble on someone who has a track record of burning others like yourself who entrusted them with their hard earned cash. If you want to gamble, Vegas sounds like a safer bet.

  • avatar
    KatiePuckrik

    Why is it when people mention “Toyota” and “Recall” in the same sentence, you always hear the same two things:

    1. Engine Sludge
    and
    2. Wheel bearings.

    Well, lest we forget GM’s record:

    The Captiva SUV which has engine problem which caused loss of power.

    Chevrolet Aveo: 2.5 million cars recalled and the reason was never given!

    GMT – 360 SUV’s recalled for an electrical problem with the blinkers.

    4th Generation Chevrolet Malibus which had fuel pump failures, air conditioning component problems, and transmission failures. GM, to date, has offered no recall.

    Not to mention GM’s bullying of Ralph Nader to silence him about the Chevrolet Corvair!

    With the exception of the Ralph Nader incident, all those recalls happened in the last 3 years.

    Pardon my cynicism, but I’ll stick with Toyota and GM can go fornicate themselves……

  • avatar
    carlisimo

    Yeah, what Pch101 said.

    The perception gap is real. It’s deserved. And the longer it’s lasted, the longer it’s going to last in the future, long after all cars are equally good (not saying they are).

    But Hyundai has been more successful than the Big 3 at fighting it, and they should take note.

  • avatar
    mikey

    So Redbarcheta you been waiting 15 yrs for GM to die?
    So it would be safe to assume your not responsible for all
    the GM stock buying? 13% in 2 days!
    Anyway go out and have a good look at whats new, and objectivly compare. You might be suprised,
    While your at it give up on your wish for the big 3 to die.
    It ain’t gonna happen.Companys the size of GM don’t die.

  • avatar
    Johnson

    mikey
    Companys the size of GM don’t die.

    You must have been living under a rock when Enron died. The bigger they are, the harder they fall.

  • avatar
    Martin Albright

    It also needs to be considered what effect the dealer experience has. To the customer, the dealer IS GM (or Ford or Chrysler.) So when the dealer does shoddy/nonexistent warranty work, when the dealer quibbles every legitimate warranty claim, when the dealer’s salespeople ooze slime from every pore, to the customer, it’s the manufacturer that’s doing this to them, and their perception of the manufacturer’s product will sink accordingly.

  • avatar
    Martin Albright

    And BTW, it is through “aggressive” marketing like $10k discounts and “we finance anybody” credit arrangements that Detroit has cheapened its reputation. Detroit can’t position itself as the purveyor of cars whose chief appeal is their low cost, and then complain that people think their cars are “cheap.”

    Like I said in my first TTAC article last year, the true ad slogan for every Domestic car company might as well be “…when you can’t afford anything better.”

  • avatar
    hltguy

    Mikey: Eastern Airlines; TWA; Pan AM; Steel companies; Railroads; Enron; Montgomery Ward; Major newspapers etc. etc. Where are you living?, recent history is splattered with the carcasses of dead very large corporations. Evolve or die.

  • avatar
    umterp85

    KatiePuckrik :” Why is it when people mention “Toyota” and “Recall” in the same sentence, you always hear the same two things:
    1. Engine Sludge
    and
    2. Wheel bearings”

    With all due respect—in addtion to Toyota engine sludge and wheel bearings….lets add dangerous automatic transmission hesitation when downshifting—something Toyota refuses to address and say’s “is normal”. Lets add to the list shall we. Several major new product intro’s for Toyota in the last 3 years have been affected by at least one recall and /or multiple TSB’s including the Avalon, Camry, and new Tundra. And this just in, Toyota executives –it does stink.

  • avatar
    Redbarchetta

    mikey Nope no GM stock. How could I possibly afford to invest in that stupid company while my last investment got me the POS bleeding me dry outside. Their stock is grossly inflated right now anyway.

    Exactly why should I be rooting for an evil company like GM who cares absolutely nothing about it’s customers and only about the cash they bring to the door. It’s become almost impossible to stomach the way these giant corp. take advantage of the public, steal from us and then expect us to come back begging for more. I’m sorry but they deserve everything coming to them plus 100 fold. I would love to see a large majority of the upper management go to prison and their assets liquidated.

    I feel bad about all the employees (including you) that are going to suffer, but then I rememeber the millions of people that had to suffer real financial hardships all because of corp. greed and I start to feel worse for them.

    I think I will take you up on that offer and go have a look at whats on the lot, it’s right on my way home. And I honestly will keep an open mind but that doesn’t mean I will ever reommend their products. Past crimes don’t just disappear with new offerings.

    We shall see shortly if they can die or not, but maybe you should look at hltguy post above for a reality check. All empires eventually fall.

  • avatar
    brownie

    Let’s also not forget that the “perception gap”, whether or not it exists, is not the problem. The problem is not that people won’t buy American cars – people buy boatloads of American cars. The problem is that the big 2.x have too much production capacity relative to the demand for their products. That’s it. If they were right-sized for the demand, there would be no issue – they’d be earning a nice profit on the same sales volume and we wouldn’t have all of these “death watch” series.

    As for the “perception gap” itself, assuming it does exist, overproduction is the culprit here as well. It doesn’t matter whether American cars are of measurably lower build quality than foreign cars (whatever “American” and “foreign” mean in the modern world). Every modestly savvy consumer knows that resale values for American cars are far below those of Toyota and Honda, which means buying American is putting them in a cost hole right off the bat, and to accept that higher cost of ownership they need either a huge discount upfront or far superior quality – equal won’t cut it. And resale values come back to excess production, which is all the fault of Big 2.x themselves.

  • avatar
    brownie

    Sorry, I meant to add something in there about people perceiving low resale value as indicative of low quality, which might partly explain the phenomenon CNW observes (call a Camry a Ford and people like it less). But you get the idea.

  • avatar
    JTParts

    What they have to do is build cars that people want. Look at the Escalade, people that CANNOT afford that bought it because it was a had to have for them. The new Mustang is another example even in the rising gas price environment it’s a mover. People want to buy a SKY or a Solstice but they play supply games with the cars that they could really move. Anyone driving a G5, cobalt, PT is a soulless individual. Hyundai should be the blueprint on how to go from bluesmoking POS econo boxes to a fairly respectable brand. I could almost see myself in a Tiburon if not for the Excel…

  • avatar
    Johnster

    Katie is absolutely correct in that the big 2.8 could pick up some sales and help to close the gap if they would increase their warranty coverage, although I think they need to up the coverage to something like 10 years or 150,000 miles.

    On the other hand, even if the big 2.8 have better products than the Japanese and Koreans, having been burned in the past, at this point I’m not sure that I care. Having a marginally better product than the Japanese and Koreans just isn’t good enough.

  • avatar
    KixStart

    What Toyota engine sludge problem affected 3 million people? I must know 8 people with ’99-’01 Sienna minivans with the reputed V-6 “Sludgemaster” engine. Nobody I know has had any trouble with their Sienna (in any way, not just the engine). Now, Ford transmissions… there’s a whole ‘nother story…

    Detroit can whine about a perception gap all they like but the perception gap is their problem to solve and whining about it won’t close it. I’m happy with my Toyotas and it’s Detroit’s problem to figure out how to win me back.

  • avatar
    hltguy

    Speaking of warranties, the Dodge truck I mentioned earlier in this thread has a “lifetime” powertrain warranty from Chrysler. I fully understand that could very well mean the lifetime of Chrysler and not the length of time I own the vehicle. I read the warranty and it gives Chrysler the right to use reconditioned parts as replacements. My recognition of all of that and the sliding value of the vehicle and the fact I take really good care of my vehicles meant the 40% off sticker was a viable gamble. Worst case scenario is that I drive the vehicle and in a few years it falls apart and Chrysler is in the RIP stage, I will donate the truck to a charity, take the tax write off and move on. BTW, the Dodge dealer where I purchased the vehicle was overloaded on vehicles and desperate to make deals, I was told by three people at the dealership how incredibly slow things are, and it is a large dealership, the transaction took place last week.
    One last note, the day I purchased my truck, the Dodge dealership in Downey, California had an advertisment in the Los Angeles Times selling new Quad Cab Dodge Laramie trucks, 2007, A/C Auto etc, for $13,990.00, those truck had a MSRP of $27,000.00. They dealer listed five were available at that price, an inquiry to the dealer indicated they had plenty at that price. I did not want to go quad cab so I passed on it. But I have never seen a new vehicle being sold for essentially 50% off the Maroni sticker.

  • avatar
    mikey

    No I havn’t been living under a rock or a cave,and I know big companys do fail. If GM was gonna go it would have been 2 yrs ago.but not now.
    Its too big too diverse In this round thier gonna land a couple of punches on the UAW,and thats a first.then watch GM take off.
    I am painfully aware of some of the lousy crap that GM has pawned off on the customer 35 years of both working at and driving GM cars has confirmed that.
    I guess we have lost you redbarchetta, and in a way I can’t blame you.
    If it was in my power I would write you a rebate check right now.[something GM should consider]
    I,m all for firing the top management at GM [prison seems a little harsh]
    The perception gap is real and it ain’t gonna go away for a while but it will go away.
    GM. will survive

  • avatar
    Bill Wade

    mikey:

    GM, will survive

    That most assuredly isn’t something I would bet on. They’ve sold virtually everything they can to keep their operation going. Maybe Cerberus will be interested in the remainder of GMAC.

    Selling cars certainly isn’t going to do it unless they can go from a loss on each unit to a profit, something that doesn’t look too likely.

  • avatar
    umterp85

    KixStart: Google “Toyota Engine Sludge”. Warning—it may take you quite awhile to read the 218,000 entries.

  • avatar
    Dave M.

    My guess is that the 3 million plus Toyota owners who experienced engine sludge problems feel much the same way.

    But Toyota, after initially mimicing the domestics with stonewalling, eventually got VERY proactive with engine replacements. I have yet to see GM-F-C do anything that resembles that.

    I rented a Fusion a few weeks ago – while strictly the base model, I was quite impressed overall. But give me a reason to choose one over a base Camry. It’s made in Mexico, the Camry in KY. Maybe if it was $4k less AND there was a 5/50,000 or better yet 10/100,000 warranty, it might be worth the leap.

    The bottom line is this – compare your average 1997 Camry to a same year/mileage Ford Contour or Chevy Malibu – not only is the Camry worth twice as much (the fruit of Toyota’s hard work and reliability), but it most likely drives twice as well.

    Price and warranty are the only thing I see saving the ‘domestics’.

  • avatar
    jthorner

    The most interesting thing to me in the article was the graphic showing the profile of new car buyers.

    First consider people who traded in a Domestic nameplate vehicle. 69.2% bought another Domestic, 28.7% bought Asian and 1.9% bought European.

    Now consider those who traded in an Asian brand vehicle: 78% bought Asian again, 18.6% bought Domestic and 3.8% bought European.

    Finally those who traded in a European branded vehicle: 41.2% bought another European vehicle, 40.2% bought Asian and 18.6% bought Domestic.

    I’m not sure if you have to be a WSJ subscriber to view the chart or not, but here is a link:

    http://online.wsj.com/public/resources/images/MK-AL841_CONSID_20070913213240.gif

    From this data the first thing that jumps out is that the European brands are in a world of trouble in the US market. The majority of their customers trade out of European vehicle into something else the next time, normally to an Asian vehicle. I suspect that VW’s recent sales collapse in the US is the source of many of these never again customers.

    On the domestic side we see that more domestic trade-in buyers defect to Asian brands than the other way around.

    Finally we see that the most loyal group are the Asian vehicle traders. Over 3 in 4 buy another Asian vehicle.

    I don’t see anything the 2.8 are doing which has a prayer of turning this long building trend around.

    Too little, too late.

  • avatar
    KixStart

    umterp85: If it’s a common problem, why is it that none of the 8 Sienna owners I know (and I have one, too) have experienced any problems with the engine? Or the rest of the car, for the matter of that? None.

    Why is it that everyone I know with a Taurus or Windstar has come to grief? Everyone. Usually the transmission but one friend threw a rod (not gonna happen on my DOHC VVTi 3.0L Sludgemaster).

    As for Google hits, “ford transmission problem” yields 2,060,000 hits.

  • avatar
    windswords

    # KixStart:
    “What Toyota engine sludge problem affected 3 million people? I must know 8 people with ‘99-’01 Sienna minivans with the reputed V-6 “Sludgemaster” engine. Nobody I know has had any trouble with their Sienna (in any way, not just the engine). Now, Ford transmissions… there’s a whole ‘nother story…”

    Welcome to perception vs reality. I see the same thing with Chrysler and their transmissions. I personally owned a 94 Caravan, a 90 LeBaron convertible, and 97 Stratus (1st gen – the only good Stratus) with the dreaded Ultramatic tranny. No problems. But because of the media coverage you would swear that EVERY single one failed. The real failure rate AT THE HEiGHT OF THE PROBLEM WAS – 17-18%. Now that is definately unacceptable and Chryco like Toyota owned up to the problem (I will say they did it more quickly than Toyo). Then it was Honda’s turn to go thru tranny hell – but their prevous rep meant there was a lot less coverage and damage to their image.

    Now for The Truth About Toyota engine sludge. Was there a problem? Absolutely. Did it affect everyone of the cars that engine or engines were put into? No. MOST of them were ok, but too many were having problems. One difference though. 15 years from now no one will think that a new Toyota will sludge (unless they do it again) but I still run into people who think my Dodge’s transmission will self destruct anytime now… (it has 47000 miles on the clock and nary a problem – with anything). That my friends is a perception gap.

    “As for Google hits, “ford transmission problem” yields 2,060,000 hits.”

    To be fair to Ford – and I have never really liked Ford – what you googled will display EVERYTHING about all Ford trannies for the last 50+ years. “ford transmission problem” might mean rough shifting or hesitation, TSB’s, etc. – NOT the total grenading of the tranny. “Toyota engine sludge” is about a very specific incident in Toyota’s history and therefore is more focused and therefore has less hits – but it does not mean that it was less of a problem.

  • avatar
    XCSC

    When Wagoner(sp?) makes the quote “can do a better job marketing its vehicles.” it explains EVERYTHING that is wrong with GM and Detroit. They don’t want to build a truly refined quality automobile but they want to market you an automobile. And when they came up with their bs 100k mile warranty last year it was obvious again that all they wanted to do was sell you a warranty and not a refined quality auto. I’m sure many won’t see it that way but I do. As for the perception gap, I disagree. GM has truly made leaps and bounds improvements in their fit and finish and some of the quality materials and switchgear they use. Of the Big 2.5 I believe it isn’t close. BUT, the real question for someone such as myself is “do they build a truly refined quality (not just reliable) automobile?”. And based on the few times I’ve been behind the wheel of a new GM automobile I have to say that they aren’t even close to the Asians and Euros on that front. Refinement isn’t used as an important word too often but I believe it is the “difference”/”gap”/”chasm” that exists that IS real. GM simplly misses the details.

  • avatar
    210delray

    About Toyota sludge and Ford transmissions: I know a little about both.

    I bought a brand new Sable in 1990. Very decent car — up to about 65K miles. Then all hell broke loose, including having to replace the transmission at 93K miles. Before that experience, I was convinced that if you took good care of your car, it would reward you with reliable service. I did manage to keep the car for 10 years and 135K miles, but in hindsight, it would have been better to dump it at 65K miles.

    My next new car was a 1997 Toyota Camry 4-cylinder. I learned about the sludge problem in 2000 from reading Edmunds. But my car never developed sludge, and I kept it for 7 years and 111K miles. It was the most reliable car I had owned up to that point.

    Yes, there were 3+ million Toyota engines potentially affected by the sludge problem. But the vast majority had no real issues, like mine and the ones kixstart mentioned.

    Oh, one other thing, when it was time to shed a car from my “fleet” in 2000, the Sable went and not the 1980 Volvo 240 with over 200K miles on it at the time. Tells you something!

  • avatar
    Pch101

    Now for The Truth About Toyota engine sludge. Was there a problem? Absolutely. Did it affect everyone of the cars that engine or engines were put into? No. MOST of them were ok, but too many were having problems. One difference though. 15 years from now no one will think that a new Toyota will sludge (unless they do it again) but I still run into people who think my Dodge’s transmission will self destruct anytime now… (it has 47000 miles on the clock and nary a problem – with anything). That my friends is a perception gap.

    That’s a bit like comparing a kid who shoplifted a candy bar with a repeat armed robber with a long track record of hold ups. While no one should defend Toyota for its engine sludge problems and how it mishandled the matter, its overall track record of reliability is vastly superior to that of the domestics.

    There is simply no comparison — Toyota, on the whole has delivered a more reliable and durable product to its customers than have the American makers. The exceptions are just that — exceptions — and the rule gives it the prize. It has earned its business through hard work and a managed effort to continually improve the quality of its products. The company ain’t Jesus, but if anyone in the business is close to walking on water when it comes to reliability, it and Honda are the top dogs.

    I think that we should acknowledge that Deming’s lean production methods and JIT systems produce a better result than do the top-heavy-rule-by-bureaucracy-labor-
    sucks-and-the-customer-is-always-wrong mentality of Big 2.8 management. The two Asian leaders simply do business better, and provide the business model that the weaker ones should emulate. Let’s give credit where it’s due, and learn from the winners, instead of being sucked into oblivion with the losers.

  • avatar
    Ryan

    @Dave M – when you suggest a Toyota Camry would drive better than a Ford Contour, what exactly did you mean? Without having driven either of them, from what I understand, the Contour was actually rather nice to drive, while the Camry would be dull (not as bad as the floatmobile Toyota sells now, just not enough to get the blood racing). Granted, the ’97 Malibus I’ve seen haven’t aged well at all (they abide by the mantra of a “GM running poorly longer than many cars will run”).

  • avatar
    Dynamic88

    ” I think that we should acknowledge that Deming’s lean production methods and JIT systems produce a better result than do the top-heavy-rule-by-bureaucracy-labor-
    sucks-and-the-customer-is-always-wrong mentality of Big 2.8 management. The two Asian leaders simply do business better, and provide the business model that the weaker ones should emulate. Let’s give credit where it’s due, and learn from the winners, instead of being sucked into oblivion with the losers.”

    I know GM and Ford both signed up Demming to teach them what he’d taught the Japanese. I’ve always wondered why they didn’t seem to benefit much from the experience. Did they not take notes? Did they not pay attention in class? Did they just do the Demming method for a year or two then chuck the whole thing ? For a while they seemed to be benefiting, making huge advances in quality, then they just seem to have stopped.

    One thing I remember clearly is an executive asked Demming how long it would take to catch up with the Japanese. Demming replied “What makes you think they’re standing still, waiting to be caught?”

    I guess Detroit never got the lessons, and maybe never will. Rabid Rick’s comment indicates that GM has done all it intends to do to improve it’s product. It’s now going to pretend that the problem is marketing.

  • avatar
    umterp85

    All—I apologize for beating a dead horse—but here goes—google Prius software problems—hits 1,350,000.

    I personally know 3 Prius owners whose cars have died due to this issue–and not on their neighborhood street. One on the Chicago Skyway and the other on the Penn turnpike….places nobody in this community would want to be stranded. To date—-Toyota has not admitted they have an issue just replacing the software with something similar that has not solved the problem—sound familiar ?

    You see—perception is what it is—but the “Truth” and “Reality” are what they are. One can RIGHTLY crucify GM and Ford for their mistakes. To hold up Toyota as this bastian of all that is right in the automotive world is simply not the “Truth”.

  • avatar
    KatiePuckrik

    Mr umterp85,

    I can’t speak for anyone else, but the point is not “Toyota is all that is good in the Auto world” but ” Detroit STILL haven’t learnt their lesson”.

    Toyota makes mistakes, like the rest of them, but Toyota learn from them and try not to replicate them (and trust me, I know this! My company works very closely with Toyota UK).Now maybe Detroit are building some cars which are equal to the transplants, but that isn’t good enough. Detroit have been doing the same old same old for 30 years and yet they can’t get the message that they need to raise the bar not just meet it. Say what you like about the transplants, but they turned reliability into a deciding factor in buying cars.

    They EARNED that reputation, let them enjoy it. Detroit earned their reputation for building shoddy goods; let them enjoy it, too.

  • avatar
    raast

    I must say it’s refreshing to read comments reflecting what’s really out there vs. “blind loyalty without recognizing reality”. (Or alternately, rebuttals from dealers and corporate management types).

    Thre’s a lot of hype about “improvements” for the big 3 (or fraction thereof), but the one area in particular that’s lacking is simply stepping up to the plate when there’s an inherent issue with the vehicles. There was mention of Toyota engine sludge, but Toyota recognized a)the bad publicity and b)the owner dissatisfaction and ACTED on it. Likewise with Honda and the Odyssey tranny. I’m still waiting for GM as an example, to recognize the 3.1/3.4 intake manifold gasket issues. To their credit they sometimes will assist, but hey, how about saying “yeah, we messed up, we’ve redesigned it, we’ll make it right”. Sure would go a long way for customer satisfaction. Yes it’ll cost them. Maybe the guys driving the boat could take a pay/reward cut &/or knock a few bucks off the bad-ads-budget instead.
    There was also a comment about giving them 30 years to figure it out, I agree with that 100%. The assembly quality may have improved (Oshawa noteably) but the parts going into the car – well wth happened there?

  • avatar
    KixStart

    umterp85: “I apologize for beating a dead horse—but here goes—google Prius software problems—hits 1,350,000.”

    Sure. Now, go Google “ford sofware problems.” You get 2,920,000 hits. Considering that the software in the Prius has a much more difficult job to do and is probably more critical to vehicle operation and that flaws are more likely to cause severe problems, I am amazed that Ford was still able to beat Toyota on this critical metric.

    [giggle…]

    Thanks for pointing that out!

  • avatar
    Bill Wade

    Worth reading.

    If Hyundai can do it, why can’t we?

    http://www.businessweek.com/magazine/content/01_51/b3762010.htm

    http://www.businessweek.com/magazine/content/04_20/b3883054.htm

    A single minded focus on quality. People are taking note. Why don’t the Detroit manufacturers take some of the money they spend on advertising and use it to set up a quality control department that actually has some teeth?

    Oops, I forgot, short term profit.

  • avatar
    umterp85

    Kixstart—Trying to compare a full line (i.e Ford) that has been in business for many years to one car (Prius) that has been out for 7 years is an unfair comparison and I think you know it.

    Besides—you missed my larger point—-which is that I recognize Ford and GM have legacy quality problems that are nobody’s fault buy theirs. Toyota apologists (domestic bashers) are in denial about their problems—your rationalization about the “complexity” of the Prius software is a perfect example.

    Bill Wade: Based on Ford’s recent quality scores—I think they are starting to “get it”…Lets hope it continues.

  • avatar
    Pch101

    I know GM and Ford both signed up Demming to teach them what he’d taught the Japanese. I’ve always wondered why they didn’t seem to benefit much from the experience.

    I don’t think that they liked the sort of changes that would be required to implement Total Quality Management. When we hear the Big 2.8 speak of TQM, they generally frame it as part of a labor-management pissing contest, distilling it into one phrase: flexible work rules (which, funnily enough, the UAW has actually agreed to on more than one occasion.)

    Flexible work rules aren’t even a fraction of what is required to implement a TQM program. What’s actually needed is a complete deconstruction of the bureaucracy within the plant, thus eliminating most of the barriers between labor and management, and prioritizing quality over production volumes.

    The managers of the domestics, particularly Ford and GM, never wanted that sort of reform. They were so much against it at GM that Roger Smith’s strategy was to bring it to the organization through guerilla means via Saturn, but that effort was not supported and eventually fizzled out. Sure, they were all in favor of flexible work rules, as that could imposed upon the workers, but they were unwilling to accept much else that would actually compromise their power or their own pay scales.

    Ford and GM are so bureaucratic and massive that both would be hard to fix with the number of lifers who actually like things the old way. What is really needed is a philosophical and spiritual cleansing, but as we saw with the Ghosn/Kerkorian debacle, Wagoner ain’t goin’ anywhere, while for Mulally, it may be a matter of too little, too late. I think that Cerberus may be onto something — push into third-world markets where their brand has something more than a snowball’s chance of building credibility.

  • avatar
    Johnson

    umterp85, as KatiePuckrik has mentioned, Toyota EARNED their reputation so let them be. They own up to most of their mistakes, and they learn from their mistakes unlike American automakers. Nobody is perfect, but Toyota is better than most automakers out there.

  • avatar
    Rastus

    Katie,

    I wish I could share a pint or two with you…you sound like a wonderful chick :) I’m loving your quotes…”Detroit earned their reputation for building shoddy goods; let them enjoy it, too.”

    Precious!!!

    Here’s another quote, from the book entitled “High and Mighty”, which pertains to the All-Mighty SUV. This quote comes from the mouth of Harry Pierce, vice chairman of General Motors at a press conference in August 2000:

    “If pigs are big and popular, I guess we’ll make pigs”.

    ABSOLUTELY…MAKE THOSE STINKING SWINE ON WHEELS, there Mr. Chairman!!! Keep spitting them out!!! ….and keep playing the American consumer for a fool!!!

    ENJOY!!

  • avatar
    umterp85

    Johnson—the name of this site is “The Truth About Cars”. If it is renamed “The Truth About American Cars” I will lay off Toyota. Until such time, I will not let them live off of their reputation as you suggest.

    I will bring the facts about Toyota quality issues to the table just as you and most others on this site will do with the domestic brands. Toyota may have a well deserved reputation—but that does not give them permission to have a free ride. If I am not being factual in my comments–I welcome correction.

  • avatar
    KixStart

    Umterp85: “Trying to compare a full line (i.e Ford) that has been in business for many years to one car (Prius) that has been out for 7 years… yada yada yada…”

    The fact is, you’ll prove NOTHING with Google hits. I googled “windstar software problems,” too, and got some obscene number of hits. Does the Windstar even HAVE a computer? Not only does the Prius rely on its computer in a way that few other cars will, the Prius is a high-profile target. Some people hate it just for existing and, if you read along, you’ll find people that hate the Prius drivers for being some sort of eco-snot, you’ll find daily whining about some slow eco-freak driving a Prius getting in the way of someone’s commute… the list goes on and on and on. Any whiff of Prius software problems is going to be Google-amplified by anti-Prius net-morons.

    The fact of the matter is, in spite of its near-revolutionary nature, the Prius is still rated HIGHLY RELIABLE. Will GM achieve that when (if) they bring real hybrids to market? It is to laugh.

    I know lots of people with Toyota “sludgemasters” and they’re all perfectly satisfied with their cars. I know a few people with Priuses and they’re perfectly satisfied with their cars. My own experience; Toyotas have NO Problems in over 10+ ownership years and 110K+ ownership miles of Toyotas that I mostly bought used.

    We ALL used to drive Big 3 cars; in 1972 there was nothing else to drive. Since then, many of us have moved to something else and we’re not moving back. Why is that? Cause we like to throw money down the drain? I don’t think so.

    Feel free to post your “facts” about Toyota quality. I get a laugh out of it but it hardly matters. The big picture is that tearing down the Asian makes won’t help Detroit. Detroit has to build better cars, consistently, for a long time, to win back customers. Oh, and tell their dealers to stop saying, “we can’t reproduce the problem.”

  • avatar
    Johnson

    umterp85,

    The TRUTH is, Toyota STILL makes very reliable cars. And in case you didn’t get the point of this topic, the TRUTH is there STILL does exist a perception gap which is linked to reality.

    Toyota is not “getting a free ride”. It seems you didn’t fully understand my previous post. Toyota DOES make mistakes, but they LEARN from their mistakes so like I said, they are better than MOST automakers.

    Toyota’s reputation is also deserved because they haven’t just sat back and done nothing. Toyota continues and maintains their strong reliability. Toyota suffered some big recalls over the past few years, and they’ve taken steps to improve quality so that it doesn’t keep happening.

    In summation, the TRUTH is that Toyota continues to be a company with some pretty amazing management, Toyota continues to innovate assembly lines and factories, and they continue to be a maker of high quality vehicles.

    A lot of people disagree with this, or wish and hope to see Toyota failing but there are no indications Toyota is even remotely close to failure, and that’s the truth.

  • avatar
    umterp85

    Kixstart: I will not call you a moron and not infer you are stupid because of what you drive. I believe this site expects and demands courtesy. BTW—all cars have software and computers these days—even the rotten crappy domestics

    I do not wish to see Toyota fail (unlike some on this very thread that stated a wish for GM and Ford to just die). To the contrary, I merely want them held accountable for their MANY RECENT quality mistakes the same way GM and Ford have been….fair and balanced. What is so bad about this and why are some so angry about it.

  • avatar
    Pch101

    To the contrary, I merely want them held accountable for their MANY RECENT quality mistakes the same way GM and Ford have been….fair and balanced. What is so bad about this and why are some so angry about it.

    I’m sorry, but to be fair and balanced requires holding each automaker up to the same standard and assessing each of them for their respective flaws.

    Let’s just be blunt — the domestics have produced a lot more bad product, with more serious design flaws and lower longevity. That’s just the reality. Toyota’s engine sludge problem, while nothing to defend, is fairly innocuous in comparison to the lengthy string of bad product offered from Detroit.

    If the offenses committed by Detroit are a 10 (10 being worst) on the scale, then Toyota is at about a 1. Really, there’s just no comparison. This is why there is a market for such cars in the first place, and why the tendency is for consumers to abandon the domestics for the transplants, not the other way around.

    They are not equal offenders, not by a long shot. It is disingenuous to discuss their respective errors as if they are equally flawed, when it is quite clear that they aren’t.

  • avatar
    Rastus

    You all don’t quite understand.

    The perception gap is HIGHLIGHTED by that vice chairman I mentioned.

    It’s NOT *ALL* about Quality.

    It’s the ENTIRE package…quality, fuel efficiency, customer care (or lack thereof), etc.

    When some big smart ass mouths off about the “pigs” his beloved company is building….and then comes out w/ a “GREEN” Aura….are you REALLY going to buy…hook, line, and sinker, the “GREEN” Bullshit???

    HELL NO!!!

    If you want a nice reliable, cost-effective, fuel efficient automobile which upholds its value….where do you turn????

    GM?!?!?!?!?!

    PLEASE!!!!!!!!

    OH, YES….the PERCEPTION “GAP” is quite real!!!

    And it’s of GM’s *VERY OWN* MAKING.

    Let them ENJOY their HARD EARNED REPUTATION!

    (GOTTA LOVE IT!!! LOVING IT ALL THE WAY!!!:)

  • avatar
    AlphaWolf

    The “perception” is out there, like it or not the Big 2.8 need to tackle it head on rather then the normal grandstanding that goes on with initial JD Powers data. We have heard it all before, and too many people have been burned by the car itself or the dealer experience.

    Has Toyota had some quality issues lately…sure they have, the difference I see as a consumer is that they will correct mistakes, not let a model sit out there for years with the same problems. But the slide recently is worrisome and they need to get a handle on that.

    That being said I am rooting for Ford right now. I truly want to see them make a comeback and see more choices in the marketplace. I do not think GM will do as well, they do not get it, and who knows about Chrysler.

  • avatar

    Intellectually, I really wish the American car makers would do well. In my gut I’ve given up on them. I had a ’93 Saturn, bought new. The first engine was crap. The second one was not particularly good. After about 130k the thing started breaking down all the time. My Honda is much better, and the engine doesn’t complain when I push it. Still, it would be wonderful if the big 2.8 would start making cars I might want to buy (besides the Corvette).

  • avatar
    50merc

    Does Lutz think GM should change perceptions their cars are unreliable by beating Toyota and Honda at their own game? No, it just needs to do a better job of marketing.

    It’s deja vu for GM! When it realized dealerships’ service departments had a bad reputation, it didn’t change practices and prices, it invented the mythical Mr. Goodwrench.

    Have those Mr. Goodwrench ads made you confident that dealers perform repairs expertly and at a fair price? You say they haven’t? Thought so.

  • avatar
    P1h3r1e3d13

    It’s all well and good to complain about GM and the “mainstream media” making unsubstantiated claims, but I don’t see any evidence in your article to contradict the idea of a perception gap, Mr. Farago.

    Would you care to tell us why you don’t think there is a gap, rather than just that others are dolts for professing its existence?

    Also what’s wrong with the Camry “study?” It’s probably not ready for journal publication, I agree. However, it’s not an inherently flawed concept and it tends to corroborate their side, not yours.

    I’m eager to hear the truth.

  • avatar
    kjc117

    Well, yes GM and the domestics get a “bum rap” but they deserve it for the many decades of bad cars and even worst customer satisfaction.

    It will take more than advertising and cheap talk from executives to convince the market to swtich back to them.

    GM’s products are not better than Toyota’s or Honda’s. Toyota and Honda listen’s to their customers and produce products that will purchase.

    GM only cares about making a profits.

  • avatar
    mikey

    Just for the record kjc117 I believe Honda and Toyota like GM care about making profits.
    Umterp 85 is only pointing out the fact,that untill now the asians have been given a free ride.
    Has anyone noticed that since Toyota has been number one,they been kicked around more?
    Now GM is slowly crawling back and thier past mistakes are haunting them.As they well should.
    As Toyota grows,and more folks buy them thier mistakes will bite them on the ass
    Everybody wants to try a beat up the big guy

  • avatar
    Bill Wade

    # 50merc:
    September 16th, 2007 at 12:50 am

    Does Lutz think GM should change perceptions their cars are unreliable by beating Toyota and Honda at their own game? No, it just needs to do a better job of marketing.

    It’s deja vu for GM! When it realized dealerships’ service departments had a bad reputation, it didn’t change practices and prices, it invented the mythical Mr. Goodwrench.

    Have those Mr. Goodwrench ads made you confident that dealers perform repairs expertly and at a fair price? You say they haven’t? Thought so.

    We have a winner!

    The Pontiac Vibe and Toyota Matrix are built in the same plant. Virtually the same car with I assume the same reliability. I would buy the Toyota over the Vibe just because of the serious abuses I’ve had at the hands of GM dealers.

  • avatar
    tech98

    GM Chairman and Chief Executive Officer Rick Wagoner told reporters at this week’s Frankfurt Auto Show. GM, he said, ‘can do a better job’ marketing its vehicles.”

    So Rick the Corporate Apparatchik just admitted that GM’s $2.9bn a year marketing budget isn’t performing.

    Here’s some free advice, Ricky: cut your marketing budget down to a still-hefty $400m and put the difference into actually engineering decent, reliable vehicles that don’t look and feel like 1970s Ladas.

    Honestly, that 9th screaming pickup truck commercial during every NFL broadcast isn’t bringing in any additional customers. Put the money into your product instead. Despite what you think, we can tell when you cut corners to pinch pennies.

  • avatar
    Gardiner Westbound

    The Detroit-3 have reached the point of diminishing returns having burned too many customers too many times. Quality products and good customer care speak louder than marketing bumph.

  • avatar
    213Cobra

    I live in coastal California, in an automotive market awash in imports and deeply infected with brand prejudice. Moreover, I work in a sector where the default assumption is that successful people buy German cars. I witness the perception gap every week and not just recently. Since 1992, it happens that I’ve owned and driven a series of American cars, all above the average new vehicle purchase price at time of their purchase. In that time, not a week has gone by without someone climbing into my car and saying something like the following:

    “What kind of car is this? Oh…I had no idea Detroit makes anything this (pick one) nice/fast/cool.”

    A cousin of my British wife, who was routinely disdainful of American cars, said after sequential drives in my then fleet of Ford SVT Cobra, Corvette and Ford SVT Contour: “We haven’t been told the full story in Europe on American cars. They’re a lot better than we’ve been led to believe.”

    Some years back, folks from a German office of a company I was working in were visiting California for the first time. It was a perfect day so I picked up two of them in my SVT Cobra convertible, with the top stowed. When we got out on the open road, they were beside themselves with giddiness. When they learned how much the car cost, their disorientation turned to astonishment. “Please! Tell Ford we need cars like this in Germany!”

    Another German colleague owned a 1997 Ford Thunderbird V8 in Germany, after a long string of Mercedes and BMWs. In his view, the TBird was the best car he ever owned, and indisputably the most reliable.

    Lincoln Mk VIII, Ford Harley F150, Mercury Marauder, Corvette, SVT Lightning F150, SVT cars….same, same, same. A Jeep Wrangler is the only one among my rides where no perception gap existed. Everybody knows exactly what it is and they tend to love them.

    OK, those were the views of some foreigners. The domestic audience was no different.

    So today, every week someone American who currently drives something German or possibly Japanese puts their butt in my Cadillac XLR-V for the first time, and that perception gap yawns wide. “This is amazing, I’ve never seen one of these. I’ve heard the interior isn’t very good but this looks great to me. Wow, this car’s tight. Holy S**t, this is quick! I gotta say, this is a sensational car! I had no idea GM could build something like this…”

    And I hear more of the same when I borrow my wife’s CTS-V.

    I have no doubt many people have had bad experiences driving Detroit iron. But like anything else, it’s a matter of buying what’s competitive. My ownership experience with Ford and a now 3 GM vehicles has been spotless. Most of these vehicles were driven to nearly 100,000 miles or beyond. I’ve never been stranded in an American car, never had an on-road failure beyond a flat tire, never needed a tow. My dealers were forthright about TSBs, which were few. Any recalls were picayune and nevertheless I was pestered to get them taken car of, by both dealer and manufacturer. All of these cars were powerful, more efficient than equivalent competitors, handled well, and had nearly unmeasurable emissions, far under allowable standards for their year in California.

    There are a slew of American cars extant or coming that will please current import owners if those owners will objectively compare them. For me, I travel and rent too. Pretty much all rentals suck, since they are equipped with mediocre tires, are driven by the wrong wheels, have lackluster driver engagement, and interiors are getting cheesier all the time. On a product level, I am mystified that the Camry succeeds but I understand the social and brand factors that prop it up. The Accord’s appeal is understandable but it has gotten steadily bigger, fatter and less incisive. I am hard pressed to find evidence of quality in anything Nissan. Put me in a Fusion or the new Taurus with the 3.5L and both feel like way more car, as does a Mazda 6 or a 5.3L Impala SS.

    The market research experiment cited plainly validates a perception gap with real data. What’s the argument? The question is, how to overcome it. Sure, it’s easy to say, “build better product.” But the reality is, every company must sell what it has, while improving the pipeline. GM’s and Ford’s products have gotten steadily better and many would fully meet the needs of current import owners, if given a chance. I can’t say about Chrysler, which seems totally bungled at the moment. Other than the Wrangler, nothing they make engages me. The fact is, marketing can produce terrific leverage, and as a career marketer, I do see Ford’s and GM’s marketing as the most broken part of their business. They could be doing better with the product they have, but that $3B GM spends completely obscures the iron under an avalanche of price/item come-on. Other than male/female targeting, they are completely neglecting how to emotionally connect specific brands and products to their natural constituents, while having abandoned the corporate marketing context that could be useful in rebuilding trust, sooner.

    Overall, both companies have demonstrated real, sustaining progress designing and building vehicles, but their marketing skills are still devolving. It’s a holistic meltdown as far as I can see, and is the fat man standing on the hose with respect to quickening the pace of a turn-around.

    Phil

  • avatar
    umterp85

    Phil. Very well witten and objective. Thankyou for taking the time to pen some very well thought out and articulated prose. I could not agree more with what you said.

  • avatar
    beken

    Here’s my “truth” about a perception gap. I have a Buick that won the JD Powers quality award. The front wheel fell off while the car was in motion. The car was under warranty and had never been serviced by anybody other than a GM dealership. When the car was towed in for repairs, GM denied warranty accusing me, the customer, of tampering with the wheel. That is the last GM car I and my children will EVER buy.

    On the other hand, Honda discovers that there is a possibility that their wheels may fall off on their latest Civics. They recall every single one of them to have it resolved before any other customer has the problem.
    The quality may not be in the product, but rather the culture of the company that engineers and builds the product.

    GM may be building a better car, but they need to build a better company first. By the ways, I noted to my colleaque at work that his North American built new Honda Civic Si has a panel gap in the interior that didn’t fit quite right and probably would not have been acceptable for Honda 5 years ago. But I’m sure Honda would address that in their continuous improvement processes rather than let their models deteriorate.

  • avatar
    213Cobra

    Katie,

    “…Not to mention GM’s bullying of Ralph Nader to silence him about the Chevrolet Corvair!”

    Actually, GM went ahead and fixed the Corvair. That car shared a design characteristic with VW, Porsche, Triumph and others at the time, which could present a challenging situation for an unaware driver. Basically all these designs were beta tested by the buying public. It’s not like GM was the only company trying compact IRS through a swing-axle implementation in compact cars at the time. But Nader singled out the GM and the Chevrolet Corvair because it was the fat target for a young firebrand looking to build his cred. By the time the book was published, the car was already improved, and then the next revision was a wholesale upgrade.

    The 1965-’69 models of the Corvair were very fine small cars for their time, and more predictable handlers in many ways than the simpler solid-axle unibody compacts that the market diverted to in the wake of Nader’s whack job. But Nader’s smear damaged perception of the Corvair beyond recovery. Had it not done so, it’s likely that a successful Corvair would have opened the door to Ford and Chrysler competitors that would have left the US industry less flat-footed in the product mix needed after 1973. The Corvair was on a technical improvement path before Nader wrote his book. Had the car been allowed to sustain its initial success, American manufacturers would likely have stayed on a small car development vector throughout the ’60s that might have averted the hasty Pinto and Vega disasters of the pivotal 1970s.

    If Nader had been a stand-up guy, we might have seen a follow-up book (or at least an magazine article or TV interview) hailing corporate responsiveness to consumer action, with the subsequent Corvair spotlighted as evidence that companies can do the right thing. Instead, silence from the rascal. Is it any wonder Detroit never trusted Nader after that?

    Phil

  • avatar
    AGR

    213Cobra,

    In hindsight could it be that Nader tainted and killed the small car in North America, and opened the door for the Japanese to garner the small car market.

    After Nader “hammered” the Corvair, VW and Porsche continued for many years with swing axles.

    Its socially correct not to buy or drive domestic vehicles.

  • avatar
    Pch101

    In hindsight could it be that Nader tainted and killed the small car in North America, and opened the door for the Japanese to garner the small car market.

    Between the Vega, Pinto and Pacer, I don’t see that Detroit needed any outside help in killing their own reputations.

  • avatar
    213Cobra

    Pch101,

    I think you missed the point raised about the Corvair and subsequent small car development by US makers. The Vega, Pinto and Pacer were all developed well after Corvair sales were choked off by Nader’s selective and overwrought tirade. The lesson Detroit took from that was, don’t take risk in engineering entry level cars. While the Corvair improved and languished in terms of sales, we got a decade of stick axle Falcons, Valiants and Chevy IIs, which also underpinned by platform or concept, pony cars.

    Had the more sophisticated engineering approach of the Corvair persisted unbroken, with commensurate embrace by the buying public, the Pinto and Vega might not have been “yet another attempt by Detroit to build a small car,” but instead advancements on an engineering and design vector already well established.

    The Pinto was a hasty creation. The Vega was a cleaner start done in by GM’s manufacturing and quality control not having caught up to the heightened requirements for execution built into the design. As for the Pacer….it came from a weakening American Motors and yet I don’t recall any notable quality glitches with that car; just ridiculed for its bulbous design and notoriously thick doors. But outward visibility was stellar!

    Phil

  • avatar
    Pch101

    The lesson Detroit took from that was, don’t take risk in engineering entry level cars.

    I dunno — those exploding fuel tanks in the Pintos seem like a fair bit of engineering risk, if you ask me.

    Ford’s legal department decided that the expected cost of litigation from all the anticipated dead and maimed Americans that would be created by this design innovation would be cheaper than fixing the car. It’s hard to know what they hated most, human life or the value of the Ford brand.

    As for the Vega, it arrived with quite a bit of new engineering, including a new aluminum OHC four-banger. But it didn’t work all that well, yet the compassionate geniuses of Detroit decided to scorn the American consumer and sell it to them anyway:

    When the first prototype Vega arrived at Chevrolet from the central staff, DeLorean had division engineers test it at GM’s Milford, Mich., proving grounds. The results were devastating. “After eight miles, the front of the Vega broke off. The front end of the car separated from the rest of the vehicle,” said DeLorean. “It must have set a record for the shortest time taken for a new car to fall apart.” It was an inauspicious start for GM’s new baby.

    Is it any wonder that Americans don’t like to give their hard-earned money to people who absolutely disrespect them in this fashion? Fool me once, but not twice…

    http://www.canadiandriver.com/articles/bv/vega.htm

  • avatar
    213Cobra

    Yup, no doubt the Vega should have been held back until its manufacturing was vetted and ready. And the legal assessment of risk with respect to the Pinto came after the fact and was wrong. Point remains that the needless malignment of the Corvair was significant among the factors that led to those unfortunate events, in the haste to yet again unnecessarily rethink the small car from a Detroit perspective, as though nothing was tried before.

    Phil

  • avatar
    Pch101

    Point remains that the needless malignment of the Corvair was significant among the factors that led to those unfortunate events

    That point is unsubstantiated. Here’s a bit more on the wonderful Vega.

    Once in the hands of owners, the Vega did little to dispel its star-crossed birth. There was an early recall of 132,000 cars to correct a carburetor fire hazard. Aluminum cylinder blocks were subject to distortion due to overheating, cylinders were prone to premature wear causing high oil consumption, and the lightweight block caused noise and vibration. In addition to all this, the body proved vulnerable to rust.

    The performance of the Vega was only modest in comparison with much of its competition. Road & Track magazine reported a zero to 96 km/h (60 mph) acceleration of 16.5 seconds, 2.6 seconds slower than the Datsun 510, and 3.1 slower than the Toyota Corona, although it did edge out the Volkswagen Super Beetle and the 1.6 litre Ford Pinto.

    Not sure how you can blame Ralph Nader for any of that. Datsun made a much more compelling product, even though Ralph Nader wasn’t on their payroll, either.

    What I do know is that companies generally build their reputations by building better products, not by killing off their customers in fiery infernos or leaving them stuck with melted engine blocks. After 35+ years, you would think that the domestics would realize that excuses and alibis don’t generate sales or profits.

  • avatar
    KixStart

    AGR: “Its socially correct not to buy or drive domestic vehicles.”

    Except that, until recently, EVERYONE did so. This changed because of a book Nader wrote in nineteen-sixty-something? No. Clearly, people waited until something better came along to abandon Detroit.

    But the “social” aspect of the rejection of Detroit is thought-provoking. Not only did Detroit build the fine examples of automotive engineering recently discussed (the Pinto, the Pacer and the Vega), Detroit fought, tooth and nail, any safety enhancement or pollution reduction. Maybe it was a bad strategy to fight for dirty, unsafe cars.

    By the way, my initial impression of the Vega was that it was in many ways a cool little car but, compared to the competition, it was short one gear. It was my first experience with GM’s “not quite good enough” product development. Fast-forward close to 40 years and GM’s still often a gear short in the transmission department.

  • avatar
    213Cobra

    I was driving age and living in the rust belt when the Vega was introduced. I saw first-hand what a disaster it was for both its maker and its customers. In the wintry road salt rust belt, parking a Vega outside was like placing an Alka-Seltzer on the sidewalk in the rain.

    Having been there, I don’t agree that Datsun had a much more compelling product. It was pretty much a pox-on-them-all period when the market was infested with sub-standard, under-engineered, poorly assembled products from nearly every source. Honda was a nearly-lone exception. In those days, small car breakdowns, wrecks and other failures of every stripe were disproportionately common on the roadsides of America. People got killed in Datsuns that accordioned in an impact, or fell asleep at the wheel in Toyotas that rusted through so carbon monoxide found its way into the cabin. Are people really not buying cars due to lapses in engineering, manufacturing, or business judgment 35 years ago? Maybe for some, but largely no. For most people, this is a way to rationalize a current social imperative.

    Phil

  • avatar
    Pch101

    Are people really not buying cars due to lapses in engineering, manufacturing, or business judgment 35 years ago? Maybe for some, but largely no.

    That would contradict your assertion that Ralph Nader killed the small car in the US.

    In any case, the 510 and 240Z helped to establish Datsun as a credible player. In contrast, the Pinto and Vega were the beginning of the end for Detroit’s esteem in the eyes of consumers.

    Detroit can only blame itself for its woes. A random poster’s good luck with his Corvette does nothing to soothe the poor sucker who owned a Chevette, or a Vega, or a Pinto, or a Gremlin or the Cavalier or the…(I don’t have enough hours in my days to complete this list.)

  • avatar
    KixStart

    I read 213Cobra’s lengthy note with amusement. It’s nice that these new Detroiters aren’t as bad as people seem to think. But, how do they look after a few years?

    In ’05, I bought a 6-year-old Toyota. The next day I took a friend for a ride. He thought it was *new*. He traded his ’00 Buick the next year (one of those great “initial quality” machines) because he was tired of dealing with window failures and it was starting to develop some sort of coolant leak. He’s driving a Honda, now.

    Is he driving a foreign car because it’s “socially correct” or is he driving a foreign car because he’s hoping to be driving a car, in 2012, that’s still trouble-free and looks new?

    For those of us who gave up on Detroit, there’s an undercurrent of unreality in the Detroit Fan Club. They say we went to foreign cars because it was socially incorrect to buy Detroit, or we want America to fail or we’ve got the blinders on as far as the “real” quality of Toyotas and Hondas vs Detroit

    It’s none of that. It’s the MONEY. We might be wrong but we’re pretty sure we’re getting a better value from Toytoa or Honda than from Detroit and most of us have the experience that backs this up.

    More troublesomely for Detroit, automobile brand preference is inherited to some degree. My kids are either driving Toyotas or planning to buy them.

    It’s long been known that it’s cheaper to keep a customer than win one. Didn’t anybody in Detroit learn this in business school?

  • avatar
    213Cobra

    Ah, but I did not say that Ralph Nader “killed the small car in the US.” What I posited was that Nader’s maligning the Corvair and failure to recognize GM for fixing it in the aftermath, broke a vector of advanced small car development by GM, which left intact might have resulted in much better small domestic cars when the market changed a decade later. It wasn’t the only factor. That most people here didn’t want a small car also contributed mightily. For the most part, volume imports aren’t small cars anymore either.

    No question, executive management at domestic car companies instigated their own problems. However, newer generations have seriously improved on that past. It’s time to put those now-irrelevant failures behind us. Sub-par products remain. Don’t buy them. But what’s competitive and well-executed deserves deserves fair consideration. There’s self-interest on both sides for domestic recovery.

    Phil

  • avatar
    Pch101

    What I posited was that Nader’s maligning the Corvair and failure to recognize GM for fixing it in the aftermath, broke a vector of advanced small car development by GM, which left intact might have resulted in much better small domestic cars when the market changed a decade later.

    Is that why the Vegas rusted and blew through aluminum engines? And to think that I thought it was poor design and manufacturing…

    I still don’t see the connection between the Corvair and the Cobalt, aside from the fact that it is the same inept bureaucracy that’s designing them. Still, it’s strange that GM would be uniquely affected, while their foreign rivals don’t have problems building small cars.

    The data simply doesn’t support the thesis that big GM is a poor hapless victim of one guy with a bad haircut and a cheap suit. GM could have withheld release of the Vega or simply redesigned it, but it instead sold them to unsuspecting Americans. Did Ralph force them to build it, or was that a fatal decision that the greedy buggers made for themselves?

  • avatar
    KixStart

    We are not “rationalizing a social imperative.”

    We are out to save MONEY.

    There’s an undercurrent of unreality in the Detroit Fan Club. It’s “socially unacceptable” to buy an American car, or we want America to fail or we have the blinders on with respect to Asian quality or some such craziness.

    It’s none of that. It’s MONEY. We spent way too much on something else and we think we get a better value with Toyota or whatever. So we will stick with it until we have compelling reasons to buy something else.

    I had GMs that failed young and I had bad dealer experiences along the way. I moved into Volvos, largely for safety but also for the reliabilit reputation and was pretty happy with their reliability and value – but I kept my eyes open and I took note of how often they required repair, etc. I went back to Ford because Volvo didn’t offer something big enough for our needs. It was a disaster (oil leaks, repeated total transmission failures, mystery problems that never got solved, blower motor failures, crappy dealer experiences). I bought a VW. It was a disaster (brake failure and then engine issues but at least the dealers were good). I looked at Chrysler but I also tried a new Toyota and liked it better (much better performance and a much nicer interior), so I bought it (with the famed “Sludgemaster” engine). It was more reliable than the Volvos I’d previously been happy with – no problems. I bought some used Toyotas. Same story – no problems.

    Tell me why I should do something other than buy another Toyota. Tell me how there’s room in this experience for “socially acceptable” to mean anything to me at all. I’m just saving MONEY.

    When I have reason to believe that GM will save me more money than Toyota, I’ll switch.

    GM can “market” the message that GMs are just as good all they want. I’m in no rush to believe it.

    This is why business schools teach that it’s more profitable to keep a customer than win one.

  • avatar
    213Cobra

    Is that why the Vegas rusted and blew through aluminum engines? And to think that I thought it was poor design and manufacturing…

    Yes, it was poor design and manufacturing, which might have been averted or ameliorated if prior advanced small car development hadn’t been interrupted.

    I still don’t see the connection between the Corvair and the Cobalt

    Well, I made the connection between the Corvair and the Vega and let’s throw the Chevette in there too. It’s a longer road to Cobalt, with many other factors converging. It’s still a vastly better small car relative to its market than the Vega was to its product peers.

    GM could have withheld release of the Vega or simply redesigned it, but it instead sold them to unsuspecting Americans.

    Yes, and shame on them.

    Did Ralph force them to build it, or was that a fatal decision that the greedy buggers made for themselves?

    No, Nader didn’t force GM to build the Vega. They went there all by themselves. But Nader caused a setback to progressive forces inside GM, which reverberated for many subsequent years. The unwarranted public thrashing of the Corvair reinforced the old guard’s belief that innovation doesn’t pay.

    We are out to save MONEY.

    No doubt. But your definition of saving money is too narrow. There is a huge social cost to losing our automotive manufacturers, which you’ll pay for in many ways far exceeding whatever you’re factoring in as savings for your vehicle. Is it worth swallowing some resentment over a past transgression by a manufacturer to objectively evaluate their most competitive models? I believe it is. No one’s forcing you to buy unless you’re convinced. But it is in your own self-interest to reward progress by the domestics where doing so has no meaningful negative.

    This is why business schools teach that it’s more profitable to keep a customer than win one.

    True, and you don’t need a B-school to tell you. But nevertheless, this is where the domestics are. They have to win back customers and win new ones they never had. They are making large improvements to compete, and much remains to be done. But time is short and they need a fair shake now. Is it really so much trouble to give GM, Ford and Chrysler a chance to convince you?

    Phil

  • avatar
    Rastus

    The sick part of all this debate is that Rick Wagoner, I believe, holds a Harvard MBA. So, regarding the “it’s easier to keep a customer than to acquire a new one” argument must have been instilled in him within the first week of his first year.

    But somehow, ….somehow along the way…the attitude that “it’s all about ME” becomes so deeply entrenched that it’s like pulling wisdom teeth to extract and rid yourself of such ideas.

    Why? Because in truth it really IS all about them!

    Is that so far-fetched?

    I’m talking personal family relations here. The honest-to-gods truth is that yes, they will GLADLY sell you a stinking pile of sh*t called a “Vega” or whatnot and tell you what a wise decision you have made. Why? Because you are supporting (name your item….be it “family”, “nationalism”, “HONEST American labor”, etc.

    Yes, it is enough to make your want to vomit. Why? Because I, along w/ millions of other Americans, have been suckered into that very mode of thinking.

    Hey, I can only go to the office and chat amongst my co-workers and state “Hey, they REALLY aren’t as bad as you make them out to be!” one too many times without making myself to be a complete liar …if anything, a liar to myself.

    Like a previous poster mentioned, a head gasket (and associated milling) here, a transmission there…and soon enough, even a “Loyal” customer feels nothing but contempt and disgust (if anything, at being taken advantage of…let alone sticking up for such a rotten company).

    Me? I’m living and driving proof!! I’m of the opinion that I’m going to drive my current POS till the day it drops….and when I do, I’ve crossed the Rubicon and will never turn back (not that I’ve had such GREAT service out of a Toyota or Hyundai…as I have not….it’s based upon the very fact that I have had such ROTTEN and CORRUPT service out of my existing ride). Truth is, I’ve never owned a Japanese product, nor a Korean product…but GM has *CERTAINLY* given me every reason to switch…and switch I will.

    Thanks GM, that’s from the heart. Regarding you “perception gap”, …some Psychologists claim that perception is REALITY.

  • avatar
    P.J. McCombs

    I’m inclined to agree with 213Cobra that the Corvair represented an opportunity for significant culture change within the Big 3. I also agree that this opportunity was largely squandered by an ambitious (and likely well-meaning) young zealot who, if he were really concerned with public safety above all else, would have taken pains to update the public on the evolution of this “unsafe” vehicle over its decade-long shelf life.

    GM’s small-car offerings went (relatively) downhill after the Corvair all through the ’60s and ’70s. GM ultimately dug its own hole, and must be held accountable as such, but one cannot help wondering what might have been if GM had been encouraged, rather than discouraged, to take risks and prioritize innovation in the small-car segment.

    Where I’m less inclined to agree, Cobra, is that the Big 2.8’s current small-car offerings are likely to impress skeptics partial to transplant rivals. The Cobalt, designed to target the prev-gen Jetta/Golf, is numb and noisy to drive and has marginal interior materials. The Caliber is even worse on all three points, with an overcompensatory, hyper-masculine image to boot. The Focus is a joy to handle, but feels as slow, noisy, and cheap as the others.

    In that slice of the market, no one has offered a convincing reason to buy anything but a Honda Civic or Mazda 3.

  • avatar

    GM and Ford will get a fair shake but what they will not get is that which many employed by GM and Ford seek. Consumers of any product who have deliberately switched from brand A to brand B due to dissatisfaction with brand A are probably never going to even try brand A again unless and until brand B screws them over.

    Its called brand loyalty. Remember when some families were Chevy families and some were Ford families. You couldn’t convince a Chevy man to buy Ford or vica versa. So why does Detroit or their apologists think that some how a Toyota or a Honda owner is going to give GM a try.
    Back in the day as long as the Chevy owner was happy he or she was never going to buy a Ford. So why does anyone think that Honda and Toyota owners will suddenly just jump up and say by golly its time to give GM a try.

  • avatar
    213Cobra

    Where I’m less inclined to agree, is that the Big 2.8’s current small-car offerings are likely to impress skeptics partial to transplant rivals. The Cobalt, designed to target the prev-gen Jetta/Golf, is numb and noisy to drive and has marginal interior materials. The Caliber is even worse on all three points, with an overcompensatory, hyper-masculine image to boot. The Focus is a joy to handle, but feels as slow, noisy, and cheap as the others.

    A Focus is nimble and PZEV and would be my choice if I were looking for a small car of domestic origin, but the weaknesses of the domestic field you cite are real. This category isn’t my first concern. In the volume classes, where Camry and Accord compete with domestics, and in the mass segments for crossovers and trucks, the domestics are far more credible and often better.

    So why does anyone think that Honda and Toyota owners will suddenly just jump up and say by golly its time to give GM a try.

    Because it’s crunch time in Detroit like never before, relevant domestic alternatives are good, and it is in Americans’ social self-interest to buy competitive domestic iron. Do people think that they are insulated from the costs of their vanity if such vanity impedes them from supporting domestic products they might like or prefer? Well, they’d be wrong.

    Remember, there’s no suggestion here that people should buy uncompetitive products or that any maker should benefit from regulation. You can buy an import out of spite for GM or for any other reason, but don’t assume you’ve cut yourself a bargain. The social erosion caused by an imploding domestic automotive manufacturing industry will put a tab on everyone’s table. Now, is that Camry really better and more interesting than a Fusion, Taurus, Malibu, Impala, G6 or 300? This is what you have to ask yourself. What kind of country do I want, and how can I use my spending to move it in that direction?

    When it was GM vs Ford, the consequences of brand loyalty were largely local. Dearborn vs. Flint. San Jose vs. Framingham. For Detroit 3 vs. The World, the consequences are national and the stakes far higher. The Japanese understand this. So do the French, the Chinese and the Koreans. Free markets properly reject or discourage government intervention, but they don’t preclude consumers making economic decisions informed by a holistic view of the consequences of their purchases, beyond the vanity of their attachment to brands.

    Phil

  • avatar
    AGR

    The Corvair for its time was a “tour de force” spearheaded by Ed Cole. Today such a car would be considered leading edge. Flat six, air cooled, rear engined, 4 wheel independent suspension, turbo charged, coupe, sedan, hardtops, station wagon, mini van, truck.

    The Corvair was at the cusp of the “intermediate size” which Detroit was embracing at the time.

    The Vega was not a good car, the improved engineered on the aluminun block with without metal cylinder liners is still used today by many manufacturers. The Vega was the first car with such an engine.

    The Pinto was a popular car, although prone to catching fire when rear ended in a collision.

    By the early 70’s Detroit was focusing on meeting pollution regulations, bumper regulations, catalytic converters and so on. The quality of the product started deteriorating. At that time every manufacturer on the planet was struggling to meet North American regulations.

    The fuel crisis of the mid to late seventies accelerated Detroit’s demise, and for whatever reason at the time, Detroit also became its own worst enemy by “pushing product” which was dramaticaly worse than their prior product.

    Were other products better than Detroit? Every manufacturer has its own closet full of skeletons, Detroit is the convenient scapegoat of choice.

    Did Detroit deserve a kick in the groin?…Absolutely!! Is other product that much better than Detroit, probably not, with a global automotive industry, global suppliers, global parameters, global cost cutting, most vehicles are assembled with components from the same suppliers.

    The engineering, for this platform is done at location A, for that platform at location B, and routine enginneering tasks are done elsewhere.

    The robots that assemble these vehicles come from the same suppliers.

    The life expectancy of these vehicles is all in the same range, there must be unwrtitten industry standards as to how long components should last.

    It becomes a question of “Do I prefer to buy a collection of components from the same suppliers, assembled by the same robots, from this manufacturer or that manufacturer?

    Which dealer will give you a better purchase and service experience while groveling for a high CSI score?

    The manufacturer in its ongoing quest to cut costs, and pay for the subsidised rate when you bought the vehicles, will put you through a few hoops for a warranty claim that encompasses a grey area.

  • avatar
    KatiePuckrik

    Another reason why Detroit’s reputation is perceived to behind the transplants is their inability (might be a bit harsh, but you know what I mean) to think around corners and rubbish new technology.

    One case in point was a time back in the 1970’s when new emission standards were set. Detroit cried like a bunch of GM investors when they saw the latest stock price girls saying “We can’t meet these standard without a catlytic converter” and as far as they were concerned that was the end of it and the law had to be changed.

    Then a small company who made lawnmowers said “Yes, you can! We’ve developed an engine for it!” The company was Honda and the engine was the Compound Vortex Controlled Combustion (CVCC).

    The difference in attitudes is stark. One cried “unfair” the other rose to the challenge.

    Need another example? How about hybrids?

    Detroit refused to invest hybrids saying “People who buy SUV’s don’t care about petrol costs”. Yet, the trend seems to be that whenever petrol prices go up, SUV sales go down. Even the Europeans (especially the Germans) dismissed Hybrid techonology as pointless and that their lovely diesels engines were the way forward. 4 years later, which scenario is being played out?

    1: the Japanese are ditching Hybrids and trying to make more efficient diesel engines?
    or
    2: The Europeans and Americans are scrabbling to get their hybrids (even collaborating with their competitors or licensing the technology from Toyota) to market, whilst Toyota and Honda have a 10 year head start on them?

    P.S. To anyone about to say “Oh, the VW Polo Bluemotion churns out 102gm/km which is less than the Toyota Prius at 104 gm/km!” May I also point out, that the Toyota Prius is the size of a Volkswagen Jetta! So either compare the Polo Bluemotion to a Toyota Yaris with a Hybrid Powertrain or a Toyota Prius against a Volkswagen Jetta diesel. Either way, diesels will come off worse and Volkswagen KNOW this…….

  • avatar
    KixStart

    213Cobra: “But time is short and they need a fair shake now. Is it really so much trouble to give GM, Ford and Chrysler a chance to convince you?”

    Are you covering my losses if my new Detroiter doesn’t work out?

    I buy a burger meal every few days, for about $5. If I get burned by a particular burger shop, I’ll go to another. If the first looks to have made improvements after a few product purchase cycles, maybe I’ll risk another $5. So, a burger shop has more opportunity to win a customer back.

    Did Detroit not notice that people don’t buy cars like burgers? If I buy a bad car, it’s years before I can correct that problem. It’s many more years before I even look at another car again. Will I be ready to look at what didn’t satisfy just one product purchase cycle back?

  • avatar
    CeeDragon

    Sorry, still catching up on this topic and saw the earlier discussion on Deming…

    I read about how GM tried to mimic some of Toyota’s practices in some their plants. Specifically, they allowed workers to stop an assembly line if they saw a serious defect that was happening repeatedly. Toyota does this, so it must be good for GM, right?

    Unfortunately, the GM managers used this as a performance metric. So, they would claim in month 1, we had 10 stops; in month 2, 8 stops; month 3, 5 stops; etc.

    Naturally, it led to dissuading workers to stop the line and NOT improving quality, while GM executives were sratching their heads, wondering why Deming doesn’t work for them.

  • avatar
    CeeDragon


    KatiePuckrik :
    September 17th, 2007 at 8:02 am

    May I also point out, that the Toyota Prius is the size of a Volkswagen Jetta!

    Actually, the Pruis is larger than the Jetta, especially inside. Shocking amounts of usable room.

  • avatar
    barberoux

    The obvious answer is to give the auto executives a raise and cut back on retiree’s health plans. Then have a press conference and blame poor morale for the problem.

  • avatar
    KatiePuckrik

    Ceedragon,

    That only adds credence to my point! I was giving Volkswagen a fighting chance! ;O)

  • avatar

    Phil I am not trying to be mean nor am I trying to “win” the argument as to which car the average consumer should buy. I am simply trying to let anyone who works for GM or Ford understand the true dilemma they are in.

    The average consumer out here where I live who owns a Honda or a Toyota (or a GM or Ford) not only likes their car or truck but they think of Toyota and Honda just like GM and Ford. They are brands to us. Burger King, Tollhouse Cookies, Nestle, Aunt Jemima,
    Norelco, Seven Eleven, Michelin. Some are companies, some are products but they are all brands and guess what?

    No one I know does the following. Hmmm lets see I could buy some Nestle instant hot chocolate mix but I want to support the home team lets see if Hershey has an instant hot chocolte mix.

    Its the same thing with cars so I’ll ask again why would anyone expect a Toyota or a Honda owner to suddenly jump up and try a GM if they have been happy with their prior Toyota or Honda?

    I understand its crunchtime in Detroit but thats because I follow the auto industry via the Detroit news, this site and a few others. Most people don’t and not to be mean but Detroit and their employees should know that most people out here where I live do not give GM and Ford any special thought or points for being or even think of them as “the home team”, “the good guys”, or “we”, or similar terms that I see bandied about on the Internet.

    People out here also don’t think of Honda and Toyota as “they”, “them”, “foreign” “japs” or other such endearing terms.

    My earlier post tried to point out that just like a loyal Chevy owner back in the day would never switch to a Ford, its the exact same thing today with a Honda or Toyota owner.

    Back in the day a Chevy man would not suddenly buy a Nash or or Hudson just because by Golly Hudson’s back is to the wall and you know it will devastate this town in ,,,,,,

    Nope they were a Chevy or a Ford man because they had great repeat experiences with their brand of choice and they became proud of that fact.

    It is the exact same thing with Toyota amd Honda. Out here people like their cars and they like the companies that make their cars as long as they keep making good cars. Toyota is not seen as “they” or “them” and GM is not seen as “us” or “we”.

  • avatar
    geeber

    Interesting discussion regarding the Corvair, Ralph Nader, and the American manufacturers’ small car efforts.

    Ralph Nader did not kill the Corvair. GM had already decided to stop development on the car prior to the publication of Nader’s book.

    The first-generation Corvair didn’t sell well against the Falcon, and GM was ready to give up on the car, until the sporty Monza variant appeared in the spring of 1960. The Chevy II was ready for introduction in late 1961 (as a 1962 model), which shows how quickly GM had moved to bring out a more conventional model.

    Sales of the Monza took off, however, and showed Ford that there was a market for a small, sporty (as opposed to a pure sports) car. Ford created the Mustang from the Falcon, and it promptly slaughtered the all-new 1965 Corvair in the sales race. GM quickly abandoned the Corvair and commenced work on the conventional Camaro in response.

    By 1966, GM had also abandoned the aluminum Buick V-8 and the “rope-drive” Pontiac Tempest, neither of which were targeted by Nader. The simple fact is that GM’s bean counters were against the Corvair, and didn’t like GM’s other forays into unconventional engineering for less expensive cars. Chevy dealers and plant managers also didn’t like the Corvair (it complicated the assembly process in Chevy plants because it was so different from other cars).

    Nader’s book was unfair in some ways, but GM bungled its response so badly that one wonders if Nader’s staffers weren’t on GM’s payroll.

    As for the Pinto – the memo that Ford supposedly drafted weighing the cost of payouts for death and injuries versus the cost of improvements to the Pinto is a myth. In 1981 a noted product liability lawyer examined the Pinto case for Rutgers Law Review. The memo in question compared ALL safety regulations to expected deaths or injuries, and was drafted by Ford at the demand of the federal government.

    The article also compared the death rates for the Pinto to other subcompacts available at that time (Gremlin, Vega, VW Beetle, Datsun B-210, etc.), and found that the Pinto’s death rate was average for all cars of its class. It did have a slightly higher than average rate for fire-related death, but was actually better than average in other respects. And the famous 1978 Mother Jones article, which really blew the Pinto story wide open, wildly exaggerated the number of deaths resulting from Pinto fuel-tank fires.

  • avatar
    KixStart

    Why buy from Detroit?

    213Cobra: “Because it’s crunch time in Detroit like never before, relevant domestic alternatives are good, and it is in Americans’ social self-interest to buy competitive domestic iron.”

    Well, 213Cobra, I understand you, now. You’re suggesting what amounts to a self-imposed, voluntary tax to support Detroit.

    In which case, one wonders, why voluntary? Why not just have Congress bail them out?

  • avatar
    213Cobra

    Well, 213Cobra, I understand you, now. You’re suggesting what amounts to a self-imposed, voluntary tax to support Detroit.

    Not at all. If you read my posts on this subject, I am asking those who omit cars by the Detroit 3 from consideration to instead include Detroit’s competitive offerings and objectively evaluate them. If anti-domestic bias is truly set aside and new competitive products are comparatively shopped, enough domestic purchases will follow. There’s no tax to this, and in fact you have a better chance of avoiding one.

    In which case, one wonders, why voluntary? Why not just have Congress bail them out?

    There might be a publicly funded bail-out or some sort of amelioration in our future. However, the American new vehicle consumer today has the ability to make sure such a burden remains unnecessary.

    Phil

  • avatar
    213Cobra

    Ralph Nader did not kill the Corvair. GM had already decided to stop development on the car prior to the publication of Nader’s book.

    Unsafe was published in 1965, but chatter about the book began depressing public perception of the Corvair before that. On publication, despite the fact that only one chapter pertained to the Corvair, the public quickly pinned Nader’s criticism to this one car. Remaining contexts were pretty much forgotten.

    Of course, the Corvair was a comprehensively improved car by the time the book was published, compared to the 1960 – ’63 models that drew Nader’s ire. The Corvair had plenty of detractors within GM, but if the decision to kill it had been made before Nader’s book, it didn’t have to take four more years to end production. The car saw further improvements in the remaining years.

    No doubt, the internal opponents of the car were manifold within GM. A band of progressives kept it and a few other interesting initiatives going, and sales success was their best weapon to maintain support. Nader’s book made it impossible to maintain market momentum for the Corvair, effectively killing it. Had the new 1965 and later Corvair sold in Chevy II numbers, the outcome likely would have been different.

    The Corvair was a much broader initiative than the Monza version represented. Nader’s book was the leverage everyone inside GM who disliked the Corvair’s non-conformity, needed to prevail.

    Phil

  • avatar
    yankinwaoz

    What Wagoner and others fail to realize is that the “Perception Gap” has a wide spectrum. They focus on the narrow “initial experience” and assume this is the only factor in the purchasing decision by a customer.

    It appears that they assume that the customer makes their purchasing decision in a vacuum where the only information is (a) the initial driving experience of a make & model, and (b) the price.

    But customers don’t live in information vacuums. And they don’t make impulsive car buy decisions.

    Winning, or surviving, the Initial Experience Test is only one battle in a war to win a customer. The customer also factors in other information. There are long term factors like long term reliability, resale value, and operational costs. There are relationship factors such as dealer experience, manufacturer experience, and the customer satisfaction of having problems dealt with.

    These other factors are based on past personal experience. And feedback from friends and family about other brands and models. The friends and family feedback is very important because is has very long shelf life. A friend’s or family member’s bad experience still carries a lot of weight, even it it was 20 or 30 years ago.

    So when it comes down to making a purchase decision, the customer has to consider all these factors. And more often than not, the customer decides that spending more on a foreign brand and model is, on the whole, a safer bet and a more satisfying experience.

    Frankly, Detroit lost all these battles over the last 30 years. They surrendered the battlefield to the Japanese, Koreans, and Germans. Detroit may dazzle and delight potential customers with test drives of their new cars (“Wow… it is not total crap anymore!”). But that does not mean it will override the customer’s decisions after the other long-term factors are added in.

    Unfortunately for Detroit, these other battles can only be won and lost over time. There are no short cuts. Showing up at the battlefield with a shiny new gun does not mean you won the battle, or have a reasonable chance of winning the war.

    Double unfortunate for Detroit. The competition is not planning on rolling over and playing dead. They are not going to surrender the battlefield. Just showing up isn’t going to do anything.

  • avatar
    KixStart

    … self-imposed, voluntary tax to support Detroit?

    213Cobra: “Not at all. If you read my posts on this subject, I am asking those who omit cars by the Detroit 3 from consideration to instead include Detroit’s competitive offerings and objectively evaluate them.”

    Well, no, it’s still a tax. Your definition of “tax” just isn’t broad enough. Certainly, it’s a tax, which I pay with my time, to go shop a car I wouldn’t ordinarily consider and it’s a pointless waste to cross-shop Detroit unless I intend to buy one in spite of my belief in the value of a Toyota, in which case it will be a tax paid with my peace of mind. Finally, ten years down the road, if the Detroit car doesn’t have the reliability, durability and, ultimately, resale value of a Toyota, then it will be a tax that I do end up paying in dollars.

  • avatar
    P1h3r1e3d13

    KatiePuckrik:…which scenario is being played out?

    1: the Japanese are ditching Hybrids and trying to make more efficient diesel engines?
    or
    2: The Europeans and Americans are scrabbling to get their hybrids (even collaborating with their competitors or licensing the technology from Toyota) to market, whilst Toyota and Honda have a 10 year head start on them?

    My answer: both.

    Honda will be “ditching” the Accord hybrid for a four-cylinder diesel in the Accord in 2009 and putting a diesel V6 in the Odyssey in 2010 and the Ridgeline and Pilot after that. That will make 4 diesel cars from Honda (6 with possible Acuras) compared to 2 hybrids. (It’s worth noting that the two hybrids will be the smallest cars, while the diesels will be the biggest.)

    The domestics are certainly trying to make more hybrids, but 10 years behind is a bit of a stretch, the ’05 Ford Escape Hybrid coming 8 and 5 years after the ’97 Prius and ’00 Insight, respectively.

    How the domestics really fell behind is in where they put their hybrids; the first five domestic hybrid models were trucks and SUVs. Not until the ’07 Saturn Aura Green Line did an “American” company produce a hybrid car.

    The Japanese (rightly) figured that the marketable aspect of a hybrid would be really high MPG numbers, so they went small. The Americans, betting on a smaller hybrid premium and improving the worst performers in the fuel economy department, put mild hybrids in trucks and SUVs, where the green crowd wasn’t shopping anyway. It was this product strategy/marketing blunder that pushed the domestics from one to two product cycles behind.

    The truth in your 10 year figure (I know you weren’t this concerned with its precision, but it works) is that Detroit is 10 years (’97-’07) behind Japan in producing what buyers apparently want: a hybrid car.

    So, to clarify my answer to the question at the top of my post, both scenarios are being played out, because there really is more than one legitimate play in the fuel economy game.

  • avatar
    213Cobra

    Well, no, it’s still a tax. Your definition of “tax” just isn’t broad enough. Certainly, it’s a tax, which I pay with my time…

    Nothing is free. You also pay a tax for your participation in the destruction of the Detroit 3, it’s just a different kind and might linger for many years. There are always ancillary costs to any decision. By your view of “taxes,” the two are a wash. There are also a lot of “ifs” in your scenario: if I don’t buy a Toyota my peace of mind will suffer; if my Detroit 3 car isn’t as reliable, durable and holds resale comparable to my Toyota, etc….

    It depends on what you buy. No one is suggesting you should buy an inferior alternative. I have neighbors and co-workers who have Toyotas and Hondas. None of them have had as few or fewer problems than I’ve experienced with specific American cars in 19 of 27 years of new car ownership. The fact of the matter is, you have no idea how your next specific sample of a vehicle will perform in terms of durability, repairability or retained value.

    Phil

  • avatar
    P1h3r1e3d13

    213Cobra:
    The fact of the matter is, you have no idea how your next specific sample of a vehicle will perform in terms of durability, repairability or retained value.None other than reputation and experience.

    And there’s the crux of the whole issue.

  • avatar
    210delray

    In regard to the Corvair, I think Geeber has it pretty much nailed. The car was doomed right from the beginning, when it sold in lower volume than the conventionally engineered Ford Falcon. There is simply no other reason that GM brought out the conventional Chevy II just two model years later.

    At the time of the Chevy II’s debut in late 1961, the publication of Nader’s book was still 4 years away.

    In regard to “trusting” Detroit, how long does the “statute of limitations” on NOT trusting them last? As I said way back in the beginning of these posts, I had a new 1990 Sable that developed lots of problems including a failed transmission before 100K miles. I got rid of the car in 2000. I’ve had 3 Camrys and 1 Nissan since 1997 (all currently in my “fleet” except the oldest Camry). All have been extremely reliable, with very little cost for service and maintenance.

    I think it’ll be a long time before I’m back again in the market.

  • avatar
    Dynamic88

    There are a lot of people who won’t consider a foreign car when they shop, yet we never hear about that gap. Execs from Toyota don’t whine about it.

  • avatar
    quasimondo

    That “gap” isn’t based on people thinking foreign cars are unreliable like people think domestic cars are. I doubt it can even be called a gap at all. To be honest, I’d like to meet the folks who would never consider a foreign car, perhaps we can down a beer or two.

  • avatar
    Nemphre

    “To be honest, I’d like to meet the folks who would never consider a foreign car, perhaps we can down a beer or two.”

    I hope you like cheap beer and NASCAR…

  • avatar
    213Cobra

    I hope you like cheap beer and NASCAR…

    I’ll pick you up at LAX in my Caddy. We’ll go to Nobu or Capo, and then I have some 23 year bourbon and some 35 year old scotch to share.

    Phil


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