Sunday, 16 November 2008

the State of the American Automotive Industry

The American auto industry is in a terrible condition right now and I feel that the parties that are being blamed are not totally to blame.

The other day I was talking with a friend who is a sales guy at a GMC, Pontiac, Cadillac dealership. He had a customer drive over two hours to buy a car from him. That sounds good until you find out that it was a used car, a Toyota Corolla. That is all fine and dandy I guess if that is what the guy wanted. The gentleman made a series of comments about how the great the foreign manufactures are doing and how bad the American’s are doing. I asked my friend if he suggested the gentleman buy a Pontiac Vibe. We both laughed over the irony of that comment. If you are lost at this point then you are not a lone in the world.

The reason for the suggestion that you might not be a lone in not understanding that comment is because there is a lot of cooperation between manufactures these days. So much so that the line between them gets blurred a lot. Take for example Ford. Ford gets a horrible reputation for the quality of their vehicles, especially when compared to Mazda. But what most people don’t know is that Ford owns and builds Mazda. In fact, when my uncle recently rebuilt a Mazda 6 that had been in a front end crash we discovered that the engine block has the letters f-o-m-o-c-o on it, which stands for FOrd MOtor COmpany. What does that mean… it means that when you buy a Ford Fusion or a Lincoln Zephyr you are buying a Mazda 6.

Let’s look at a new deal that was recently finalized by Chrysler llc. The deal would mean that the next generation Nissan Titan, hailed by so many as a breath of fresh air and one of the best new pickups in the industry, will be built by Dodge. Conversely, the mid and small cars for Dodge will be built by Nissan. (I am unsure if that deal extends to the Chrysler and Jeep lines though.)

Let me throw this out there too. Ford Motor Company owned Land Rover, Jaguar, Mazda, Aston Martin, and Mercury. They had a close relationship with BMW because of the purchase of Land Rover from them, which to my understanding is still open. Now lets consider GM with Pontiac, GMC, Chevy, Saturn, Buick, Cadillac, Hummer and those are the brands that are more obvious to the general public but what about Holden, the GM of Australia, and Opel in Europe and a controlling stake in the parent company of Subaru. The Holden Commodore is considered one the most amazing cars in Australia and was being imported by the sister company Pontiac as the new GTO for a couple years and currently imports the G8 in its totally complete ready for sale form. Dodge, the child company of Chrysler and sister company to Jeep, just released the brand new 2009 Dodge Ram. This truck was developed during the time that Mercedes owned the company that means that this truck is basically a Mercedes. There are other products that are currently on the road that a Chrysler dealer sells that are basically a Mercedes such as the Chrysler 300m and the Chrysler Crossfire, which is basically a SL500.

After all of this I finish by going back to my original comment made to my sales friend. The Pontiac Vibe is a modified version of the Toyota Matrix. The car is actually built by Toyota along side the Corolla for Pontiac. Toyota makes the parts and assembles them into a finished car that is then delivered to the Pontiac dealers for sale to you. Did you know that? Did you think about that when you purchased the Honda saying to yourself that it will run forever and that the quality of the car is better than any of the American manufactures? Next time you go to a car show, count how many vintage Hondas, Toyotas, Nissans, etc that you find and then consider how long your new Honda will last.

After reading and think about this post for a couple days, it seems that I forgot to mention two companies. Volvo and Saab. Volvo is known for its safety, known for it to an insane degree. But did you know that Ford owns Volvo.... and constantly dips it aged fingers deep into the Volvo parts bin. As for Saab... well, it is a GM product. And Saab for all its wonder hasn't had an completely new car, from the ground up brand spankin' new, for approximately thirty years. (Until the new Saab X9)

It seems that I also neglected to include a conclusion to my thesis that the wrong people are being handed the full weight of the blame for the state of the American auto industry. I blame the American public and its inability to make informed decisions in contrast to the usual pattern of emotional decisions made everyday. If the American public viewed the car as a privilege rather than a right then drivers would understand the responsibility they are taking on themselves when they put a key in the ignition. So many people have decided the automobile is nothing more than a necessary evil. You have to have one, in most of the country, or you can't get around. What happened to being a "Driver"? What happened to the experience of driving. Anyone that has driven an old car will tell you about the "experience" of driving. You don't find someone driving a pickup from the 1960's talking on a cell phone. How about the days when you went out and put on some leather gloves and goggles and went "for a drive." Cars today have given up the experience and are simply something that people expect to get into and suddenly arrive at point B. I dread the day cars drive themselves because I LOVE the experience of driving. I love the power, I love the freedom, I love the technology of controlling an EXPLOSION!!! If it were up to me, I would drive an vintage vehicle everyday so I can feel the road beneath me. The engine twist when you step on it. The sound of each cylinder firing through the exhaust pipes. And ultimately, seeing the two black stripes behind me at a traffic light. I am a driver and would willing drive a heavy, V8 powered gas guzzler, while paying gas prices because I don't care about getting from A to B as cheaply as possible but getting from A to B having had as much fun as possible. The automobile is NOT a right, it is a privilege that needs to treated as such. And if we did we would want to be informed enough as consumers to know what the manufactures are offering us and what the facts are.


Rob said...


I read an article that there are two large reasons that american cars are having a hard time. Well actually three. First, companies need to stop hiring idiots. Just because a possible CEO has a MBA doesn't mean they know what they are doing. Second, american car dealerships are over competing. As an example, go out to some random small town and look to see what kind of car dealership is out there. Chances are it's an american car dealer. The ratio of american dealerships to foreign is 3:1, so to make a sale. American dealerships are over competing. The last point I would like to point out is manufacturing. It takes almost two work shifts longer to produce an American car. In ANY business salaries are one of the biggest expenses, both foreign and domestic manufactures pay the same union wages. (Japanese cars are built here in the US)

Just a couple of points to think about. On a side note America cars have sucked till recently. The Pontiac G8 is a awesome car and glad they built it.

Panelrodder said...

I recently read an article that talked, briefly, about the United Auto Workers union and its impact on the American auto industry. They said that had the auto industry taken them on when the industry was strong then they could have weathered the storms a bit better. Point in case is that the recent settlement with the UAW will put GM in a great position to make a lot of money come spring/summer and had this economic down turn waited until then to hit, they would have weathered it just fine... according to MSN news. Since the deal doesn't come into effect till the January GM is in trouble, this is all backed up by the details in the recent requests for money. GM's requests for money are all for enough to retool and restructure in anticipation of the forthcoming up swing. So, if it was for the contracts with the UAW saying they will only use UAW members and the UAW putting its heavy boot on GM's neck for so many years we would be in a better place. Yes, I agree.

As for the over population of dealers, that is true too. I read during the sale of the Chrysler to Cerebus, that Chrysler has five times as many deals nation wide as Toyota. Considering Chyrsler doesn't even rank in the world standing of the largest manufactures and Toyota is in such a close second place to GM, that is pretty ridiculous! As I recall there were some very real concerns that when Cerebus took over that the number of dealers nationwide would experience massive cuts. Especially dealers that only sold one or two of the three brands. Also, I seem to recall that number to be 7 Chrysler dealers to every 1 Toyota dealer. That equals bad no matter what equation you use.

How to explain the amount of time to build an american car vs. a foriegn, I can't. I can suggest some problems with that thought process though. First, Americans are freakin' lazy and traditionally don't work as hard as other ethinc backgrounds, stereotypes had to come from somewere, ie "Working like a Mexican". Secondly, American manufactures are trying a lot of new things to try and bring the buyer back to them. You once said something about gimics and special features are a good way to set yourself out from the pack. And GM is stuffing a lot of stuff into their cars. Like the multi panel sunroof in our G6. Third, and lastly, I see a problem with the targeted audience, to use a phrase from my work. Look at the majority of cars that are selling for american's vs everyone else. Untill recently huge suv's and trucks were selling for us and things like the Yaris and Versa sell for the other guys... without knowing what was compared to arrive at the two hour difference it is hard to take the statistic at face value. Are they comparing apples to apples or apple to oranges? (Or just accross the board, which would be even more slanted.) Stats are only as good as the information that spawned them.

Once again, I am only pointing finger of blame at the American public for PART of the problem. The problem goes much deeper and I will probably continue to think about and puke out my jumbled thoughts on the topic in the future.


Rob said...

Ive been reading about the auto exec and they all arrived in a private jet and drove foreign cars! There are pictures of it!

Rob said...

Here is the link to that article:

Panelrodder said...

I read about the jets stuff last night and some more this morning with my bit-o-news. Blah. Something has to be done and hopefully something will happen. I'm am mixed on paying for them to design new cars but I am for providing them money to stay alive.