By on July 25, 2006

005462222.jpg“Back to the Future” is Hollywood fluff, but the movie has its moments.  When Marty McFly takes his 1985 vintage nuclear-powered Delorean to Dr. Emmett Brown’s 1955 alter ego for repairs, “Doc” looks at the car’s complicated electronics and snorts “No wonder it broke down.  It was made in Japan.”  “What are you talking about?” McFly corrects.  “That’s where all the best stuff comes from.”  The throwaway line perfectly illustrates the sea change that's swept the American automobile industry during those crucial 30 years. 

From 1955 to 1985, Japanese manufacturers completely reinvented themselves.  They went from being producers of cheap, copycat products famous for near-instant obsolescence, to makers of high-tech, value-driven products built to last.  There was an equal, opposite and horrifying corollary to this astounding transformation: American manufacturers more or less switched places with their Japanese counterparts. Despite domestic carmakers’ gains in product quality over the last two decades or so, the perception that domestic cars are inherently inferior to their foreign competition has become deeply ingrained in the American psyche. 

But all is not lost.  Not to coin a phrase, there is a way forward.  To reverse the reversal, here’s what America’s struggling automakers need to do…

Can the discounts  I remember watching GM’s “employee discount for everyone” commercials and thinking how they reeked of desperation.  I figured the next step would be to have a line of UAW workers gnashing their teeth and rending their clothes as they begged me to please, please buy an American car.  This summer’s discounts may be less prominent, but Detroit's still using price as the primary way to sell cars and trucks.  The emphasis on cash gives consumers the impression (rightly or wrongly) that price is all the automakers have to offer.  They might as well run an ad campaign that says “Chevy: When you can’t afford anything better.”  

There’s only one way around these discounts: realistic sticker prices and no haggle pricing.  This two-pronged approach would send a message to the American heartland that GM, Ford and DCX are serious about value– and their customers' confort level.  If the vehicles aren’t selling, reduce the price.  

Make inexpensive cars that people want to buy  We’re not talking about “cheap” cars.  The domestics need to make beautiful-looking, sensibly-priced automobiles that don’t feel like automotive purgatory.  The mini-whips should have dramatic interiors made from quality materials.  They need convenient touches that make people think they’re getting superb value for money.  Theses entry-level vehicles also need sophisticated powerplants and superior dynamics.  And they need to be updated every two to three years.

Toyota and Honda clawed their way to the top following this strategy; it worked once, it’ll work again.  Yes, the Big Three’s labor and legacy costs make it nearly impossible for them to make money on small cars, but they’ve got to reclaim this territory at any cost.  The traditional domestic buyer is getting older, and competition for the middle and upper market is equally fierce.  If Detroit wants a future, they need a secure a toe-hold at the bottom of the mountain, and claw their way back.  

Innovate!  Detroit is so busy cranking out “Me too” vehicles that it’s hard to believe that the American car industry was once the pinnacle of fresh automotive thinking.  Where are the striking designs, or new directions?  What about diesels?  Detroit could build small, clean-burning turbo diesels that get near-hybrid levels of fuel economy (especially on the highway, where hybrid mileage sucks).  Right now, VW has the diesel car market pretty much to itself, but GM, Ford and DCX could one-up the competition by offering small, efficient diesels in their entry level cars.  The company’s could also offer the TDi diesels in small trucks, creating a unique product for the North American market. 

Attack reliability  If, in fact, Detroit is building cars that are as reliable as their “foreign” competition, they should offer a 10-year/100,000 mile warranty.  (If, in fact, they aren’t, they have even more reason to provide the coverage.)  A long warranty would go a long way towards convincing consumers that Detroit’s vehicles are the mechanical equal of Toyota or Honda.  Of course, it could cost the “domestics” a fortune, but there’s simply no cheap and easy way to win back consumer confidence.  The Big Three need to make existing and potential customers believe that they care about more than just collecting monthly payments.  

Clearly, Detroit is stuck in a time machine.  Retro designs like the Mustang and HHR might get people into the showrooms, but they won’t save Ford and GM from Chapter 11.  (DCX is doing better, but they face the same reckoning.)  If the Big Three can’t make customers confident about Detroit’s future, their image will remain stuck in 1985.  And if that happens, they’ll soon be history.  

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58 Comments on “Detroit: The Long Road Back...”

  • avatar

    Great points. I know that if Ford offered a TDi V8 or even straight 6 in their F-150 chassis, I’d definitely buy another one. The 5.4L plant is great, but after driving some new TDi’s in Europe this past spring, the stigma is gone and I’d like to drive something that hauls decent butt and doesn’t get low teens for gas mileage.

  • avatar

    Ford did offer a 300CID inline for about 35 years. Best engine they don’t make anymore, the truck usually rusts away leaving the engine idling away. Diesel is also persona non grata to the environmental types so that option is stripped.

    Diesels are the solution for larger vehicles like SUVs. No one would run a semi on gasoline, the same thinking should be applied to SUVs, and who better than detroit to come up with that package.

    You can’t turn a large ship on a dime, you need a couple of tugboats. And the tugs are bankruptcy, outsourcing, and model death. Not gonna happen.

  • avatar
    Dr. JP

    Warranty Info
    NEW Ford Five Hundred: 3 year/ 36,000 mile bumper to bumper (so the powertrain is 36,000 mile only)

    Certified USED Five Hundred: 6 year /75,000 mile warranty.

    Does this make any sense? A 75,000 mile powertrain warranty should obviously be offered from the original purchase.

  • avatar

    I agree completely with your second point – “Make inexpensive cars that people want to buy”. When I was looking for a new car in the mid-80’s, Detroit did not offer a decent small, inexpesive, sporty car with a manual. So I looked for the first time at the imports. I had quite a selection to chose from.
    When Detroit finally made a car that I was interested in (Cadillac CTS) the salesman was an obnoxious twit who thought the car was on par with much more expensive foreign cars and wanted a premium. Needless to say I again went with an import.
    The big question is when will Detroit and their dealers learn? They sell a product and it is the product that will bring in the customers.

  • avatar

    Actually, the environmentalists are getting more positive on Diesel these days, because of the fuel efficiency and ability to run on grease…

    However, the problem with diesel is the NOx pollution: the high combustion temperatures invariably produce high NOx pollution. This really is a huge pollution problem.

    But other than the NOx, diesels are very good: better efficiency -> lower CO2. Higher temperatures and very lean burning -> lower CO, lower hydrocarbon.

    I’m not sure, but I THINK Mercedes managed to get a waiver to get their urea-based NOx catalytic converter approved. With the urea-injection NOx removal, you really can make a diesel as clean as a car.

    Part of the problem with Diesel however, is people STILL remember those awful detroit diesels from the late 70s and early 80s. I learned to drive on an Oldsmobile Diesel. There was a reason we called the car “Big Stinky”

  • avatar

    Last year, I read an article in a collector car magazine about a 1964 Rambler Classic (my dad had one new), and the writer was absolutely SHOCKED at a) how shockingly much better this car was compared to the (cheap-crap) “big-3” US cars built in the same era b) how incredibly close it was in so many real ways to a new Lexus, except for the steering (too light and too slow for current tastes). Well, after all, the similar, all-new 1963 Rambler Classic and Ambassadors WERE Motor Trend’s COTY, believe it or not. The new for 1964 inline six AMC (Rambler) engine just recently went out of production (last used in Jeep Wranglers), well outlasting the highly thought-of Chrysler slant six engine, which was also near indestructible.

    The point for Detroit is this. Yep, build a fuel-efficient car. Make it simple. Maybe even, think outside the box. How about this for one idea?

    How about a simple alloy inline six with high compression, running exclusively on LPG – or – CNG (using a – gasp – a simple carburetor!), with a simple reduction catalyst (no computer needed), a 5 or 6 speed automatic and alloy castings for the TORQUE-TUBE final drive with locking axle (as used on the 1964 Classic, and Buicks of the era, too). (This is a one-piece T-shaped rear drive axle pivoting right behind the transmission). Rear coil springs. Front A-arms and coil springs or torison bars (McPherson strut increases steering effort – avoid!) No power steering would be needed (the engine being extremely light). The heavy fuel tanks could be in the rear, evening up the weight distribution of the car. The body could be welded galvanized steel, designed to crush on the ends. Front disc brakes with power assist, rear finned alloy steel lined drum brakes (mid-1960’s Buick tech – fantastic).

    Offer the car with a choice of seat-belt / ignition interlock and no air bags, or full complement of air bags for $1000 extra (which would require a law change to accomplish). This way, people who are afraid of airbags, don’t want air bags, or small adults at potential threat of dying behind an airbag, have an option. (Interlock? No seat belts = no engine start/run).

    Sell the mid-sized, quiet, 30 mpg, comfortable car for under $12,000 at a profit, giving customers a choice of two door hardtop, 4 door sedan, 2 door convertible, 4 door station wagon, or 2 door light pickup truck and choice of front bench or front bucket seats. Air conditioning (using a system I saw described 30 years ago, called Rovac, using no Freon or any refrigerant, for that matter) could be standard with a filter (required to keep snow from being created in the car by the AC in certain outside weather conditions!)

    Use self-energized windows which drop on a button push and must be pulled back up (with a handle at the top of the glass) just as used on a 1925 Durant. No power motors, no complexities to break or go wrong. Certainly, not difficult to raise the glass – I’ve done it myself on the said Durant that I saw at a local car show 2 years ago.

    Simplicity. Reliability. A 10 year 120,000 mile warrantee worth more than the paper it is printed on, unlike current GM warrantees. Fixed menu pricing.

    Then, offer an hydraulic hybrid transmission (the storage tanks under the hood next to the engine) as an extra-cost option to allow for 50% better fuel efficiency at an extra $1500 in cost. (Thus, the decision for a simpler-to-build inline six instead of V6 – which allows the tanks alongside the engine).

    A great engine could be developed from the current DCX-Mitsubishi-Hyundai “global” alloy inline four, for example. A “six” sharing parts and production machinery could be built with 2.7, 3.0 or 3.6 liters displacement. GM could utilize their current 3.5 liter inline 5 as used in Colorado pickups, if they chose to “go simple.” The inline five has a unique “beat” slightly reminiscent of a V8 (I’ve owned an Audi, I know).

  • avatar

    Chrysler would seem to be the company to lead the diesel trend. They just needs to see Dr. Z for more of that German engineering!

    GS650G is right about Ford’s 300 inline 6. That engine was indestructible but delivered miserable economy and anemic power.

    Detroit’s powerplants can compete with their Japanese couterparts (just need a little refinement). The problem is that they are addicted to bargian-basement parts bins. Most perceptions about “quality” come in the interior. If the Big 2 (or 3) would concentrate efforts in just building world-class interiors, that would do more to eliminate the perceived quality deficiency more than anything.

  • avatar

    The day the made-in-USA dealers accept corporate-wide no haggle pricing is the same day that Detroit recovers which is also the same day that we’ll be building snowcastles in the depths of the biblical netherworld.

    EVERY consumer in American has a horror story about a Big Three Dealer. Good luck changing THAT perception. Not in my lifetime.

  • avatar

    Absolutely agree with point 2, Detroit needs to make inexpensive cars, not cheap cars. If Ford/GM want any hope for the future they need something that will take the Civic/Corolla head-on. Being reliable, low-maintenance, low-cost to own is just the price of entry. These cars need to have some style, and be fun to drive (i.e. lightweight). If Detroit can catch buyers when we’re young, we would not be so hesitant to buy again when we’re looking for a mid-size, then a few years later when we’re looking for a wagon/van, then a few years later when we’re looking for a luxury car, etc. I think younger buyers would be more willing to take a “risk” by buying blue than our parents/grandparents were, if Detroit could only put out something tasty.

    The Cobalt is a step in the right direction, but it’s over 400 pounds overweight. Detroit has no excuse: if the competition can build small cars with high safety ratings, they deserve our business.

  • avatar

    “Most perceptions about ???quality??? come in the interior. If the Big 2 (or 3) would concentrate efforts in just building world-class interiors, that would do more to eliminate the perceived quality deficiency more than anything.”

    I agree 100%. look at Audi. not the most reliable cars…but man who wants to get out of one! they are THE benchmark for interiors.

  • avatar

    DCX already offers a diesel option in one of their small trucks: the CRD Liberty.

  • avatar
    C. Alan

    I have to agree on the warrenty part. This is what helped the korean automakers come into the american mainstream. I also would hope that having the 100k warrenty would also affect the reliablility of the car. If you know your company will be working on the car for the next 10 years, you are not going to skimp on the quality when it leave the factory.

  • avatar

    Also, the warantee is a BIG deal. Its one of the things which changed Hyundai from “Amazingly Cheap Korean Krap” in the early 80s to “Almost as good as Toyota” today in the eyes of buyers: they actually stand behind theri cars.

  • avatar

    Detroit’s answer is to intensively badge engineer their Japanese partner/subsiduary which always leaves them five steps behind Toyota, Honda etc.

    The loading of optionals as standard, power steering, aircon, autobox, 8 speaker CD/radio, electric mirrors, seats and remote opening for trunk, hood and gastank means the power and circuitry to support all these have to be engineered in adding weight, cost and complexity.
    Clearly no one is gonna accept a car stripped of all this (eeep!) but designers need to start with a floor pan and put in only what’s needed to give a base model at a low price.
    Let’s not forget that most of the original Thunderbirds and Mustangs rolled out with a 6 pot motor and standard suspension and brakes…

  • avatar
    Sid Vicious

    Great article. Detroit has truly lost it’s way.

    Too much time, effort and money chasing someone else. In the end it’s 3 years too late and “thrifted” to the point of being a joke. Pathetic rip off styling (Lincoln LS), surprise and delight features too late (analog clocks in the dash 3 years after Infinity did it), next to worthless warranties simply because they can’t afford 5/50 or 6/60, and on and on.

    I used to administer the warranty for a Detroit maker, so you could say I knew it inside and out. A couple years down the road I owned a pickup from the same maker where the rotors and drums warped within 12,000 miles. Brand X wouldn’t repair/replace the brakes even though they were covered by the verbage in the warranty, even when in years past they had replaced them by the millions. (Fact) The warranty HADN’T CHANGED. Only the way it was honored changed, because they couldn’t afford to replace any more rotors.

    This POS then proceeded to self destruct by by 30,000 miles: transmission fell apart, head gaskets leaking, steering fell apart (someone forgot to install the Jesus cotter pin at the factory) and finally – the frickin’ thing started to rust EVERYWHERE. The Toyota dealer was happy to point this out at trade in….

    So – I have without a doubt bought my last domestic vehicle. I don’t care if their road back goes right off a cliff. Good riddance.

  • avatar

    GM needs to die.

    Ford needs to die.

    Both of their ENTIRE dealer networks have to die a miserable death.

    Then, and only then, do they have a mild chance of rising from the ashes and remaking themselves as you suggest.

  • avatar

    If you want more details on the problems with diesels, look here. Standard diesel fuel has this problem of Nox becasue of the sulfur content. there has already been research, and a substance has been invented ( i do not remember the name). It is some catalyst that removes nearly all Nox. The problem is the sulfur. it negates the catalyst. biodiesel (veg oil, soy beans, etc) has no sulfur. this fact is lost on a lot of the arguing about diesels. the catalyst then can be used on biodiesel and remove all nox, leaving a clean fuel, that can be grown here(not enough soy fields to do currently) that gets good gas mileage. while the whole corn/gasohol situation is murky, with the degrading aspects, low energy content of corn, etc., biodiesel is as good as regular diesel (the last I read). Now the new clean diesel specs that are coming out, I do not know the sulfur content, or if the catalyst can be used with it. to summarize, you can do something with diesel. if gm tried to pioneer this, they could revolutionize everything. They are trying with hydrogen, but it is further off. more money is dumped into R&D into future ideas, rather than developing the ideas we have already come up with. i am not saying we don’t need to R&D new ideas. What I am saying is develop the ones we have. gas engines we pitiful when firs developed. if we gave up on it like we do everything else now, we would still be puttign around in 10mph golf carts. wait, what was the topic?

  • avatar

    The domestics are getting a lot advice these days on how to reverse their fortunes. Most of this is coming from enthusiasts who read and contribute to sites such as TTAC. Do we really think anyone is listening? The upper management of these companies are being paid huge amounts of money, so they must know better than their customers what needs to be done. Why else would they be compensated so well? Shareholders are frightened, have no power and see the future in 3 month units. UAW membership is conditioned to think defensively. They will fight tooth and nail to keep what they have – at their root, all unions are based on self- interest. UAW management is the same as company management. They will not tell their members the truth because they will not be re-elected to their lofty positions. It is said that where there is a will there is a way. The problem is that there is no will.

  • avatar
    Martin Albright

    Much of what I wrote above really applies to GM and Ford more than DCX. They do indeed offer vehicles like the Diesel Liberty, as well as some interesting and innovative small designs like the Caliber. I don’t know if it’s the ‘foreign blood’ that has improved DCX or if it’s their traditional stance as the 3rd place company that’s made them more likely to take risks, but either way I think it’s a good sign.

    Now, by way of disclosure, I have to confess that the only Chrysler product I ever owned was a 1952 Dodge M-43 ambulance, so I really don’t know that much about their current levels of reliability and/or build quality.

  • avatar

    Dr. JP…check again. Ford just announced 5 yr/60K Powertrain across the board. I agree it should be 75K, but it an improvement for sure!

  • avatar
    Martin Albright

    GS650G (hmmm…another motorcyclist?) wrote:
    Diesels are the solution for larger vehicles like SUVs. No one would run a semi on gasoline, the same thinking should be applied to SUVs, and who better than detroit to come up with that package.

    Yes, diesels would be great for SUVs and trucks, but not just the big vehicles. As anyone who has been to Europe has seen, small vehicles with diesels are quite common. A 1.8l TDi is fine for most smaller vehicles and even a mid-sized SUV can do fine with a 2.5l TDi. I think one thing that has to change (and yes, I know it’s blasphemy here at TTAC) is the notion that “There’s no replacement for displacement.” If you’re talking about the race track or the drag strip, that may be true, but for everyday use, there has to be a replacement for displacement because when gas is $5-6 a gallon, even a 3.5l motor will be too much.

  • avatar
    Sid Vicious

    Ford’s new warranty. Once again, too little, too late. The damage is done.

    Would love to be a fly on the wall to know what that is going to cost. To be sure – they know to the penny. It is an incentive to improve, however.

    As to the comment about no one listening – it couldn’t be more true. Detroit’s arrogance (including the UAW) is the root of their problems. I’ve sat elbow to elbow at the bar and listened to way too much BS.

  • avatar
    Martin Albright

    jschaef481: That's all well and good, but all it does is bring them up to parity with the imports. Honda now offers a 100k warranty (although if I read the fine print correctly, in order to be eligible you have to have all your scheduled maintenance done at the dealer) and I know Subaru has had a 60 month/60k mile powertrain warranty since at least 1999. I'm sure Toyota, Nissan, and the others also have a similar warranty on the powertrain. The point I made above is that it's not enough for the US makers to merely equal the imports. Because they've polluted their reputation, they have to go beyond the imports if they want to reverse their downward slide.

  • avatar

    Another great truth article…

    The biggest pill Detroit can swallow is engine efficiency. Mr. Albright drove it home perfectly – diesel. GM in particular has the most outdated engines on the market. TDI engines would be a true “American Revolution”. I’d buy a pickup with a TDI.

  • avatar

    Sure. This is all great advice. Obvious, actually. If GM rounded up a few interns at that Starbucks in the Ren center, and asked them how not to be f–d up, surely the interns could reproduce this list over their mochas and lattes in a few minutes.

    And yet — we all know that Detroit will impode into nonexistence before it succeeds in implementing ANY of these ideas. Weird, huh?

  • avatar
    Martin Albright

    Ronin: I’ll echo that and add that if Chevy offered a Colorado or Ford offered a Ranger with the following:

    2.5l TDi
    4 or AWD
    4 full size doors
    And a decent, low-maint, non-cheap interior

    And could offer that for under $25k, I’d be camped out in front of their doors right now.

    And I’m pretty sure I wouldn’t be the only one.

  • avatar
    Don Whitefield

    As logical as these suggestions seem, I don’t think that they are realistic goals. Nevermind outdated management, unions, poor employee attitudes, way too many nameplates and dealers.

    Even if GM and Ford would shead all these disadvantages after emerging from bancruptcy they are still with a huge cultural disadvantage they can not overcome. Having worked in the German and American auto industry, I don’t believe that the US can ever compete with the obsessive, competitive even reckless cultures driving German and Japanese product.

    It simply runs contrary to the American way of life. I believe that this cultural difference has been always there and would have caused these countries to dominate the car market anyway in the end, regardless of the American shortcomings mentioned in the first sentence.

  • avatar

    “The biggest pill Detroit can swallow is engine efficiency. Mr. Albright drove it home perfectly – diesel. GM in particular has the most outdated engines on the market. TDI engines would be a true ???American Revolution???. I???d buy a pickup with a TDI. ”

    I noticed last night that the new G6 convertible with its 4-speed auto gets worse EPA mileage (something like 16 city and 21 hwy) than the new Porsche Cayman (23 city, 32 hwy)!!!

  • avatar
    Claude Dickson

    You have to get people back into the showrooms and, IMHO, there is only one way to achieve this result quickly: standout designs. HOWEVER, the standout design also needs to be a very good car as well. Chrysler made any number of well/distinctively designed cars that just weren’t very good cars. The PT Cruiser comes to mind immediately.

    But it only takes one well designed car that is good to start changing things around. Witness the Chrysler 300C. If any car in the line needs to be really good, it needs to be these flagship cars. They may not be the most expensive in a car maker’s line, but these cars go a LONG way to establishing perceptions about the maker. If you doubt this, think about the changed perceptions of Cadillac once their cars became better designed.

  • avatar
    Dr. JP


    Those links were good 5 mintues before I posted, so I’m sorry if I missed something.

    You’re right; They just haven’t update the internal site pages yet.
    (hope that link works, otherwise search for “warranty”)

    My original point is still there, but weaker. Why is a used car warranty longer than the original warranty?

  • avatar

    GM has at least tried option #1. They constantly say they aren’t going to go back to huge discounts. The problem is that Ford and DCX haven’t embraced the concept of no discounts. When one of the big 3 start offering big discounts and incentives, the other have to follow suit. Whether is is Employee Pricing Plus or 0% financing or whatever, they always resort to it. This only perpetuates the feeling of many Americans that GM, Ford, and DCX are lesser cars. These things aren’t something one company can do it on it’s own. It must have full cooperation with the others. Now this does bring up issues of collusion.

  • avatar
    Don Whitefield

    You guys are funny. You talk about engine design and discounts as if these are still the nineties. I really don’t think that either will make much of a difference anymore.

    None of that would have saved the British automobile industry, so why would any of that matter to the US auto industry?

  • avatar

    GM/Ford/DCJ are operating quite differently than Toyota/Honda/Nissan, making huge profits on a few hit products (cheap to build cars such as the 300C and body-on-frame SUV’s) and breaking even or losing money on CAFE-required smaller vehicles, vs. making less money consistently across the whole range with very few loss leaders (i.e. Prius).

    How do you get the former to run like the latter? I don’t know, and I suspect no one else does either, from the CEO’s down to the interns.

  • avatar

    The first US OEM who brings to market a $10,000.00 car that is built to last and gets 70 mpg will OWN the US market. I wish Bill Ford would actually “Be Bold” and be the one to do it, instead of just making little simpering noises about boldness.

  • avatar

    You’d think the US automakers would look at Hyundai as a perfect example of what they need to do. Hyundai was known for poor quality cheap cars (sound familiar GM and Ford?). they didn’t bitch and moan, they just made their cars better, and now the sonata is breathing down the neck of the camry/accord twins. i do have to agree with the consensus, however, i think GM and Ford are going down because of the staggering costs and inept leadership.

    The Car Connection has an interesting link to a piece by Jerry Flint on why Ford needs to be run by someone other than a Ford family member.

  • avatar
    Martin Albright

    Ilex: I think they could do it with a $15k car. But the car would have to be worth the $15k.

    I often wonder why inexpensive cars have to have top-of-the-food-chain luxuries like power windows, mirrors and door-locks. Some even have automatic climate control and power-adjustable seats. Common sense tells me that deleting these items (which often fail while the rest of the car runs fine) would reduce the cost of the car and wouldn’t drive away a truly bargain-hunting customer.

    OTOH, I guess there’s also the argument that the manufacturer saves money by, for example, only having power windows and mirrors (which can and should be standard on the more expensive vehicles) in their supply chain rather than having to stock one set of parts for the bargain cars and another set for the more expensive ones. So maybe it wouldn’t save money in the long run.

  • avatar

    The legacy of US automakers’ failure to match their foreign competition has an even more intractible component: having to admit failure.

    Imagine if Ford/GM/DCX actually developed a world-class breakthrough product such as several have described above. As soon at it hit the market, it would become painfully evident how poor the rest of the cars made by that manufacturer are in comparison.

    The unintended marketing message: “We used to suck, but now we’ve come up with a really good car”.

    Unless that message is cleverly spun, such as with Hyundai’s 10-year/100k mile warranty, the “golden child” will, at best, simply be an orphan to the rest of the brand (e.g. the first years of Saturn, the Mistubishi Evo vs. the rest of Mitsubishi’s lineup, etc.) or, at worst, a spotlight on its failures (ever wonder why the same company that developed the C6 Corvette also puts out dreck like the Cobalt?).

    Buzz L.
    (looking forward to purchasing a 2008 Honda Fit Hybrid)

  • avatar

    interesting thread. especially the part about how the us and japan essentially traded places (in consumers’ perceptions) over a 30 year period. my guess is that it would take that long to erase the negative associations most americans have with domestic products, and it doesn’t look like detroit has that much time left. my prescription: start by admitting that building “cars that last” is a viable recipe for long term success, and embrace it whole-heartedly. next, match the koreans’ 10 year 100k warranties. shed more badge-engineered look-alike brands. let the asians have the fleet market. (after the comeback, you can always get it back.) work with the unions and workers to demand universal government paid healthcare, to level the playing field with foreign competitors. embrace just-in-time and continuous improvement more fully than ever. it’s not rocket science.

  • avatar
    Claude Dickson

    Does ANYONE belive Detroit can make a good small car at a price which competes not only with the Japanese but the Korean car makers as well??? I say start with what you know and work down, not start with small cars and work up. Detroit will never get past first base trying to build a small car. Heck, they might not even get to first base.

  • avatar
    Martin Albright


    I don’t believe that’s true, but if it is, then Chevy and GM are dead men walking. What will happen when the Toyota, Honda and Subaru buyers of today are in their mid-40s and ready to buy a prestige car? Will they think of GM’s Cadillac or Ford’s Lincoln? No, they’ll think of that POS Celebrity or Escort they owned in High School and they’ll pass right on by the Detroit dealers in favor of BMW, Lexus, Infiniti, Acura, et al.

  • avatar

    All good advise to be sure. Some combination of y’all’s suggestions would be really helpful but you know, I think it’s too late. Well for GM anyway, I am not sure about Ford and I think DCX will do okay (They have shown a willingness to change and think differently). Even if GM dodges this bullet and recovers somewhat, it will only be to Die Another Day! IMHO, GM just does not get it and I can’t understand it. In a sense they deserve to die. GM needs a radical overhaul from the ground up with no holdback! It will either be with the full cooperation of the corporation, UAW, CAW and even the Federal Government or it will be done in a bankruptcy court. As someone else pointed out, both the company and it’s union want to maintain the status-quo. This is their doom, sad to say. If that’s the MO at Ford, the same goes for them too. It’s sickening really. Yes GM has enormous legacy costs but I gotta ask, Who in their right mind would sign a bargaining agreement that would see un-needed workers enter a job bank with a sizable proportion of their normal paycheck and nothing for them to do? GM have only themselves to blame, good luck to the Union if they can get away with it!

  • avatar

    I partly disagree with the prior comments on how difficult it would be for Detroit to overcome the “perception gap.” While there are certainly many people who have bought terrible cars made in Detroit who would swear to never make that mistake again, many youthful buyers may not have that same experience.

    Young people are now especially keen on how globalization has affected where money flows in the world, regardless of where a product is made or sold. I know many people in their 20’s today who have never owned a product made by the classic Big 3, but have casually adopted their parents’ anti-Detroit biases. But these feelings are not so deep, since they rely on second- or even third-hand accounts of crappy car experiences, not personal car stories. And the mantra of “Buy American” is now so meaningless that it is hard to believe it ever actually made people think twice before making such a major purchase. If Detroit wants our dollars, and even more, our respect, you have to give us something to work with. And for those who say the fall of GM is the fall of America: I should hope America can do better than GM.

  • avatar
    Don Whitefield

    Martin is right on when he calls GM and Ford dead man walking. Yes, there will always be a Chevy and Ford, but they will not dominate the market as they used to. What pains me is HOW OBVIOUS this is and how many people (especially employees) have not arrived at that conclusion yet.

  • avatar

    I might be the exception here. My first new vehicle was a 1987 Mazda pickup. Since then, all of my new-car purchases have been American cars — ranging from a 1990 Dodge Daytona to an Oldsmobile Alero. We’re on our third Dodge Caravan in 10 years (first one was a two-year lease; second one was rock-solid but just got old) and my latest purchase was a 2006 Cadillac CTS.

    I’ve seen the best and the worst of the U.S. manufacturers. All of our Caravans have been tremendous. I had a 2001 Olds Alero; I would have bought a 2006 Alero with V6 and leather if GM hadn’t made the stupid decision to kill that brand instead of Buick. I had a Chevy S-10 and a Dodge Neon, both of which were unmitigated pieces of crap.

    With each of those purchases, I looked at the corresponding Japanese offerings. One thing was consistent among all those efforts: I’ve NEVER been treated well by a foreign car dealer. Why? I’m guessing it’s because they know they’ve had no need to treat me well. They have better product. The attitude: buy Japanese or be stupid. I was treated that way when I bought the Daytona rather than a Mazda 626; I was treated that way when we bought the third Caravan instead of a Honda Odyssey; and I was treated that way when I bought the Caddy instead of a Nissan Maxima or a Hyundai Azera.

    Wait a minute … I was cross-shopping a Cadillac and a Hyundai?

    Hell, yes, I was. And when I had an Azera as a rental a few weeks ago, I started to have the “you made the wrong decision” pangs — until I threw the Azera into a hard corner and was reminded of what I didn’t like about it. The damn thing handles like a Buick. My CTS handles like a dream.

    Hyundai figured it out. Build better cars and stand firmly behind them. It’s really that simple. It doesn’t require a lot of technobabble or some idea that nobody else has thought of. Hyundais — even the $28K Azera — are pretty basic cars. There’s no whiz-bang under the hood, just basic fours and V6s. But they’re comfortable, reliable and priced right.

    It took Hyundai 15 years to get past the damage done to its brand in the late ’80s. The Formerly Big Three don’t have 15 years. But they also don’t have to look far to find a role model.

  • avatar

    “Chevy: When you can’t afford anything better.”

    If it hadn’t been true for the last 35 years, I’d be be dead from laughter by now.

    The sad truth is, if it says GM (we’ll exclude the C6) it says you got to the rental lot late, you work for a lousy company with lousy company cars, or you just don’t give two good flyin’ f’s what you drive. In fact, you might even be proud of that. Good for you.

    The is no road back for the formerly-big-2.

    The is a road forward. It has almost 2 lanes. In places. It is generally unpaved.

    Ford has a small prayer of reorg completion without court intervention. GM has no such hope. They will right-size to maybe 20-30% of total domestic market share between the 2 of them. They’ll sell trucks and fleet vehicles. And some outmoded automobiles assembled in Mexico to people who think they’re somehow helpin’ Amurrica.

    Maybe 20 years from now, by doing something novel to Detroit like focusing on product, they can return to having 35-40% of the market. Unfortunately, that requires hardwork, dedication, and love of the automobile.

    Three things that are in very short supply in DET once you get past the interns.

    FWIW, I’ve driven most of GM’s “current” lineup recently for one reason or another. XLR looks ain’t bad for a Caddy, when they make it drive a little better they might have a winner. The C6 is the only car that I actually kind of enjoy driving. If only the interior materials didn’t feel/look like it was out of a Citation. At least the C6 interior is a great improvement over the Playskool Special Ed Edition interior of the C5. Remember the C5 seats? The ones that had all the craftsmanship of 4 Twinkies sewn together under recycled Members Only leather jackets taken off the homeless at a Detroit soup kitchen?

    The best part is they still wonder why we laugh at them.

  • avatar

    Attention GM: You remember the Vibe? The little Corrolla-based crossover sportwagon you started cranking out in about ’03? I have one in my driveway. I actually bought a GM CAR, a PONTIAC, because I DESIRED IT. It was inexpensive, styled well, incredibly utilitarian, ergonomically sound, adequately dynamic, and appealed to a giant demographic. They’re good road trip cars, comfortable commuters, and can haul people or stuff well. What you need to do is start applying that sort of thinking to every brand. If all of your products were as good as the Vibe, you’d be in fine straits.

    Oh, and start advertising the damn thing, willya?

  • avatar


    BTW, I love the handle…it brings back memories of listening to Dr. Demento back in the ’70s…

    Your “Pontiac” Vibe is the all-but-badges twin of the Toyota Matrix, based on the Toyota Corolla platform, as you noted.

    Hence, the vast majority of the design and engineering for that car were done by Toyota.

    I suspect that Toyota would love to take over NUMMI (the joint GM/Toyota plant in Fremont, CA) completely and not bother with the Vibe, but political /PR considerations prevent them from doing so.

    Buzz L.

  • avatar

    Isn’t GM considering pulling out from the NUMMI joint venture that produced its Corolla-clones?

    FWIW, despite being made in the same plant, despite being the same car, the Geo/Chevy Prizm and now the Vibe depreciate faster than the Corolla and Matrix.

    It is a handy little thing though, and all over the place. A friend is picking his up soon. Test drove it on Sunday. Signed the deal on Monday, taking delivery on Wednesday. No haggle pricing, no muss, no fuss. Isn’t it supposed to be that easy to spend 5 digits?

  • avatar

    I’ve owned both American and Japanese cars, and American cars are not as bad as a lot of the comments above suggest. My 92 Miata had more issues than my 92 Taurus, and I sold the Miata never undertanding what was so great about the car – replaced it with my 67 Galaxie convertible and never looked back.

    The problem for Detroit is they are trying to copy the Japanese, and my favorite American cars were the ones that were the most “American”.

    I used to own a 92 Taurus – it was a GL (midlevel) model. I rented a Taurus SES on vacation this summer – the 92 had a much nicer interior and styling than the 2006, and was more comfortable. Had the old pushrod 3.8 liter v-6, which gave it very good torque. The newer one reminded me of nothing – it was completely devoid of any American car personality.

    Ditto with my 94 and 2002 Grand Marquis – both have been bulletproof, but the older one had much nicer carpet, was quieter, had a smoother drivetrain (like completely isolated) and had better road isolation. The newer one handles better and has more power, but I want the smoothness and isolation more than handling or more power.

    I don’t understand this compulsion to try to win customers who will never buy their products due to personal biases. All they are doing is ruining the cars for people like me who like those traits. If I wanted a Toyota, I’d buy a Toyota.

    I’m actually thinking of looking for a late 80’s Grand Marquis for my next car, and keeping a Japanese crapwagon around for commuting to work.

  • avatar
    William J Toensing

    I hope the CEOs in Detroit as well as other auto makers will read this. Listen to what your customers want & give them some feedback. The only car maker who is doing this that I know of, is DaimlerChrysler with their adds featuring Dr Z. They have a website called “Ask Dr.Z”, . I sent an email to Dr Z asking when & will I be able to buy a diesel powered Dodge Caliber in the USA? I said I like the Caliber, & I do, but WILL NOT buy one unless I can can get a diesel like you can on Calibers exported to Europe. Why? Because a diesel gets from 30% to 50% more MPG than a gas engined car! To me, fuel economy is far more important than preformance. Listen to this, you auto makers. I WILL NOT BUY ANOTHER GASOLINE POWERED CAR IF I CAN HELP IT! The only possible exception would a Toyota Prius or similar hybrid. I WANT A DIESEL! One that gets at least 50 MPG! There are diesels in Europe that can get over 70 MPG, a few up to 90 MPG! Don’t buy Detroit’s BS that they can’t make them. GM & Ford already make such vehicles in Europe & elsewhere for the European & other foreign markets. I am told the VW Polo & Lupo 3 cylinder TDIs can get from 80 to 90 MPG. Detroit & others may argue the EPA & the Calif. CARB won’t allow diesels. THIS IS AN ELECTION YEAR! Laws & regulations can be changed! If the auto manufacturers would take out adds pointing out the much improved MPG diesels can get & ask the people to put pressure on congress & the Calif. State Legislature to allow the sale in the USA of any diesel that can get over 40 MPG & meets European smog limits, we could get the laws changed. With the very low sulfur limits the EPA has mandated thru out the entire USA as of July 2006 (some say delayed till till Oct. 2006), European diesels will be able to run on our diesel & be equipped with catylitic converters & particulate traps as they do in Europe. Thus equipped, they are as clean as most gas engines! Further, diesels will cut down on CO2 emissions. It is stupid that we can buy diesel trucks in the USA including Calif. but not a VW TDI in Calif. How much can a VW TDI pollute when it gets 50 MPG? This could be a major political issue with $5 & $6 a gallon gas on the horizon! If you believe as I do, please send Dr. Z a message. If he gets lots of requests for diesels, I think they will listen.

  • avatar

    Don’t forget that Americans have time and again rejected diesels as being undesirable–especially on small cars. At least that is what some Americans indicated on some driving tests that were performed years ago and that caught the eye of American product developers. Americans are used to the gasoline power curve, not the diesel power curve.
    So don’t hold your breath–it will be a long while (if ever) before the ex-Big 3 get small car diesels. It is lousy for the Americans who are willing to be “adventurous” and who would love the advantages of diesels.

    The warranty thing won’t happen very easily. Why incur the cost when most all it will do is dissuade people who are in the new vehicle market from “trading up” every three years? They don’t want to discourage those new car sales, after all!!

  • avatar

    William, diesel cars are very polluting compared to hybrids, to be perfectly honest.

    This is not to say that there is not a place for clean diesels – but wow, are you going to pay for the technology.

    European diesels are filthy compared to US standards, and in fact, Volkswagen cannot make their current diesels meet new, more stringient 2007 emission standards so will temporarily discontinue diesels in the US.

    Here’s a fact. My 2005 Prius puts out 89% LESS pollution than is allowable in more stringient California emission states. No new diesel cars may be sold in California emission states because they are “dirtier” by a factor of several times over. Let’s say 2x as bad – if that is the case, then one used VW Jetta diesel pollutes about as much as a full neighborhood of Prius cars.
    Think about that.

    Plus, you can buy a Prius now if you want to (or a Civic hybrid, if you don’t need as much luggage space, and don’t mind riding several inches lower and having a bit less interior room). One final factor – gasoline is less expensive than diesel in many areas of the US.

    Here’s a final statement to make you consider a hybrid. My Prius? I have literally obtained 63 mpg on the highway, on a hilly 45 mile journey from the town where my folks live, back to my own home – and I’ve repeated this in my Prius (with AC on), though in less optimum conditions I “only” get 57 mpg. Thus, you can see, hybrids are not “only” efficient in the city, contrary to popular opinion. I think it is down to two factors; the excellent aerdynamics of the car, and also the Atkinson Cycle engine, which is far more efficient than the Otto Cycle engine, and nearly as efficient as the Diesel Cycle engine.

    Chrysler are going to be building diesel, gasoline AND gasoline-hybrid Calibers, so hopefully within a couple of years, if you just “gotta” have a Caliber, you’ll be able to make a decision.

    But, my suspicion is that the diesel will cost MORE than the hybrid to buy and fuel, compared to the gasoline-hybrid, because the extreme expense of the planned diesel scrubbing systems is going to be quite high, plus diesel engines cost quite a significant amount more to produce than Otto or Atkinson cycle engines, due to the technical demands placed upon them by the inherently requried, extremely high compression ratio.

  • avatar

    Can anyone here seriously say that ANY politician is going to say “ok, sure, let’s eliminate the 2007 emission standards on cars and allow cars 20 times dirtier to be sold – just because they use diesel”.

    I cannot see this happening.

    Plus the California emission states already ban them and aren’t going to go back on the ban.

    Thus, diesel cars will have to use highly expensive systems to be “allowed” in the US, if any are allowed at all. I think at this point, only DCX (with one Mercedes and one Jeep) may be the only diesels sold on the US market in 2007.

  • avatar

    yournamehere: This is why I bought an 06′ A4…the interior was even better than what BMW or Mercedes had to offer.


  • avatar
    Steven T.

    After all these years Detroit still suffers from what Brock Yates once dubbed “Grosse Point myopia.” You can’t blame it on the workers — the foreign automakers have proven that they can design and build superior cars on American soil.

    The problem is cultural. Replacing a few top managers won’t change GM or Ford. Nor will yet another “reorganization.” Look how many GM has been through in the last two decades.

    Ford’s predicament is particularly instructive. That automaker’s most promising products are coming out off its Volvo and Mazda arms. And even when Ford’s North American operations throws up the flag and uses the platforms from its European and Japanese affiliates, the results have generally been mediocre, e.g., what reasonably savvy car buyer wouldn’t choose a Mazda3 over a Ford Focus?

    What’s sad is that this was both predictable and avoidable. Ford’s U.S. arm CHOSE to milk the aging Focus design for a few more years when the European version was updated. Ford CHOSE to invest the bulk of its product dollars in trucks and SUVs when it was painfully obvious to anyone outside of Detroit that the boom wouldn’t last forever — and the Big Three desperately needed to diversity its portfolio of offerings. These highly paid managers failed to follow a basic law of business: Minimize risk resulting from potential market swings.

    C. Wright Miller wrote of how the power elite can become so insular that begins to suffer from “fatal conservatism.” That’s exactly Detroit’s problem. Not even the huge ego of a Ghosn could overcome that problem without a cataclysmic event such as GM being forced into bankruptcy.

  • avatar

    The problem with Detroit is mirrored exactly by their European offshoots – GM here (Opel in Europe, Vauxhall in the UK) only really sell cars on price. And its not hard to detect that when you get into them and drive them. Apart from a few notable features (like superb 16v Diesel engines) they are motoring porridge. Fords are starting to get a quality image – at least initially – and then the dealers have to discount like mad to keep the sales. That new Mondeo that sells for ??15k, wait a few months and pick up an ex company car with 10K miles on the clock for under ??10K. Why buy new ?

    The problem is that there are no real stand-out models from either maker. The old Focus ruled the hatchback stakes for a while but the new one is fatter and heavier as you would expect as its engineered by the same team (poached) who did the Golf for VW. GMs new Astra is basically a hire car favourite – and thats about it really. You could buy one of those nice CC coupes, but pay through the nose for something heavier, slower etc.

    All of these makers assume we still want the lardier, gadget stuffed, barges they want to sell us. Except the French (and their Japanese partners).

    Renault still make the Twingo, a no frills, cheap to make and buy hatchback. Sadly its so cheap they won’t make a RHD one for the UK although the mechanical bits are shared with other models. Renault also initiated a project to build a cheap car – the Logan – in Romania with an intended target of Eastern Europe only – under 6,000 euros. Well, due to popular demand they are bringing them into Western Europe too. Sadly again not for the UK and no RHD.

    And we have the Pug 107/Citroen C1/Toyota Aygo joint venture from Eastern Europe. Basically the same car badge engineered for each maker. Buts its a good car (for Europe anyway). Small, light, simple. Its small but not too small, no narrow track/awful ride a-la Daewoo (now marketed as Chevrolet!!!) matiz, its light enough for the 1 litre petrol engine to be useful, simple enough to be cheap – pop-open rear windows instead of weighty and expensive winding mechanisms for example.

    Its also very clever (self-shifting semi auto available) and economical. In fact its the only model I’ve seen where the petrol model beat the diesel one in a comparison test.

    Diesels still rule here though, even though the cars cost more to buy (they also hold their value better) and the fuel is more expensive. And if you think Diesel is dirty, remember petrol has all that benzine in it and it vents around the car all the time.

  • avatar

    If there is to be a change at GM or Ford it has to start at the top! The attitude of the workers is directly influences by the actions and attitudes of their managers. The main problem I see in other areas of manufacturing as well is that the companies are run by accountants or MBAs who only have one thought on their minds – stock price! They need to relegate these managers back to their department – the accounting department. They need to put an Engineer in charge who understands that the product, if designed, built and priced well, will sell.
    You can argue engine type all you want but it is ultimately the well engineered product that sells.
    But this will never happen at GM (Ford has a chance – the family name is at stake) as Rick ‘Ride the Wagontrain as long as I can’ Wagoner and his board of cronies will not let it.

  • avatar

    how long until people stop calling chrysler american? it’s getting old. they haven’t been a domestic company in years.

    did anybody see the news a week ago that “domestics” are now below 50% of the american market? ironically they went into detail about how, since it’s hard to tell what makes an “american” car anymore, they calculated market share by where the company was headquartered. doesn’t that mean that the domestics went under 50% of market the day mercedes bought chrysler or thereabouts?

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