Posted on 12/13/2006 3:17:47 PM PST by Bratch
Ford and General Motors have taken turns besting the Toyota Camry in quality surveys for the past two years, but if you talk to many Americans - especially the ones who would never consider supporting home-based auto companies - you’d never know it.
Last year, the Chevrolet Impala beat the Toyota Camry in initial quality according to J.D. Power & Associates, and Consumer Reports just announced that both the Ford Fusion and Mercury Milan scored higher than both the Toyota Camry and the Honda Accord this year.
After the announcement, Ford’s Director of Global Quality Debbe Yeager commented "It’s a perception gap," referring to the struggle American companies have had overcoming the perceived and seemingly untarnishable reputation of their foreign rivals.
Even as GM and Ford have accumulated award after award on vehicle quality, you’d almost never know about such quality gains made by American companies - or quality declines of foreign companies - by listening to the media. Did you hear about it when the National Highway Traffic Safety Administration announced that Toyota recalled more vehicles than it sold in the U.S. last year? Probably not. Did you hear about Toyota making an "elaborate apology" for their "worrisome series of recalls" that has "tarnished its reputation for quality?" Probably not. Did you hear about the Toyota senior manager quote that stated "We used to do quiet recalls called ‘service campaigns’ to deal with defects but we’re not going to hide anything anymore?" Such a statement suggests Toyota’s past recall numbers were probably much higher than we were led to believe, and they profited handsomely by having a perception of higher quality than they deserved. In Japan, prosecutors are looking into possible negligence on the part of Toyota for shirking recalls for the last eight years. How ironic. You probably didn’t hear about that one either because the American media doesn’t like to bash foreign auto companies - only American ones.
Then there’s the mythical perception that foreign automakers produce the most fuel efficient cars and that Detroit only makes gas-guzzlers when the truth is that all automakers - including Toyota, Honda and Hyundai-Kia alike - have allowed fuel economy to slide in the past 20 years since they all now sell bigger trucks and more SUVs. One of Toyota’s senior executives was even quoted in the Wall St. Journal September 28 saying that both the Toyota Sequoia and Tundra "are big gas-guzzling vehicles" and expressed "concern about the longer-term prospects." These longer-term prospects about their admitted gas-guzzlers are questioned because they know that Ford’s F-150 and Chevy’s Silverado have led the pack in sales year after year.
Yes, gasoline has been getting more expensive - at least until recently - but the fact that Americans continue to buy it in greater quantities qualifies us as hypocrites for suggesting GM and Ford stop building so many big trucks and SUVs. After all, GM and Ford are only responding to demand as any company would and should if they want to remain profitable in a cut-throat competitive market. According to a Business Week survey, we Americans bought 10% more gasoline in the first six months of 2006 compared to the first six months of 2000 even though gas prices rose 75% in that period. Maybe here I could also mention that the Chevy Tahoe beat the gas-guzzling Toyota Sequoia in quality surveys and gets better gas mileage to boot.
But what has happened since gas prices have been on the decline in recent months? The Wall Street Journal reported a "slight" increase in truck sales by American companies, as Ford Expedition sales were up 41% and Lincoln Navigator sales were up 44%. The American media even tries to restrain its applause for home-based auto companies by referring to gains of over 40% as "slight!"
Perhaps the biggest perception problem is that American automobile companies GM and Ford (Chrysler is now German-owned) squander all their money on plants overseas and foreign automakers build their factories in the U.S. Foreign car lovers will surely point to Kia’s plans to build its first-ever U.S. plant in Georgia, but they probably won’t mention that they received $400 million in tax giveaways to do it, which translates into $160,000 per job. Among the many benefits for the foreign-owned company, your tax dollars are going to be used for road improvements surrounding the complex, complete with flower beds and other beautification features. Hey, as long as we’re going to allow states to bid for private jobs with our public tax dollars, we might as well make it look good, right?
And the foreign car lovers will probably also not tell you (or maybe they just don’t know or don’t want you to know) that GM and Ford pour more money into existing American facilities than foreign automakers spend on new plants, usually with little or no tax breaks. GM has already spent over $500 million upgrading two transmission plants this year, and has spent nearly a billion dollars over the last decade, for example, for facility upgrades in Texas. And what do GM and Ford get for making their existing plants more efficient? It isn’t tax breaks. Instead, they get accusations of not being "competitive" enough! Maybe here I should also mention that the average domestic parts content for Kia is 3%, while the average domestic parts content of Ford and GM is 78% and 74% respectively. This means that buying a U.S.-assembled (or even foreign-assembled, for that matter) GM or Ford supports more American jobs than a U.S.-assembled car or truck with a foreign nameplate.
Fortunately for our benefit, the U.S. remains the overall global leader in research and development, and a big reason for that is that American automakers - according to the Level Field Institute - invest $16 billion in R&D (Research & Development) annually, which outpaces any other industry one could name. Admittedly, the Level Field Institute counts German-owned DaimlerChrysler as an American automaker, so Ford and GM’s combined R&D contribution to America is closer to around $12 billion. But who’s counting, right? Certainly not the American auto-bashing media.
Japanese companies do employ 3,600 American workers in R&D, but that still leaves the foreign competition behind in the dust staring at American rear bumpers. 3,600 sounds like a big number until you realize that 65,000 Americans work in R&D facilities in the state of Michigan alone. In fact, two of the top four R&D spending companies in America as reported by the Wall Street Journal are - you guessed it - Ford and General Motors. The other two are also American companies: Pfizer and Microsoft.
Ford has recently made headlines as the American automaker with the most challenges to its future, but these challenges certainly are not because they "aren’t making cars people want to buy." Toyota did outsell Ford in July, but since then, Ford has reclaimed the No. 2 spot and has held it ever since. GM has the highest market share, increasing over 2 percentage points from a year ago. So apparently they can’t be accused of not making cars people want to buy either. Ford sales are also up in Europe, and Ford doubled their sales in China, where GM has the highest market share of any automaker.
General Motors also reported a 3.9% rise in August vehicle sales despite high gas prices and a supposedly slowing economy. And even though Toyota reported record sales that month, they couldn’t match the non-record setting sales volume of Ford. GM’s sales rose 17% in October from the same month in 2005 and Ford sales rose 8% in the same period. Ford also sits on $23 billion in cash, so they have plenty of money to focus on and fix any problems.
And for all the talk about the lack of fuel efficiency of American automakers, it seems three-fourths of all automakers failed to meet Europe’s improved fuel-efficiency standards intended to cut carbon-dioxide emissions. Japanese and German automakers topped the list of the study’s worst performers, but according to an environmental group’s study, GM’s Opel division and Ford both "come out well."
In closing, I’ll leave some encouraging numbers for those of us who actually like to root for and support the home team. The J.D. Power 2006 Vehicle Dependability Survey reports that Mercury, Buick and Cadillac (in that order) grabbed the number 2, 3 and 4 spots to beat Toyota, Honda, Nissan, BMW and everyone else (except Lexus) in having the least number of problems per 100 vehicles.
Perhaps someday the American media will give GM and Ford the credit they deserve. And once they do, perception among the majority of the American public will rightfully change. GM and Ford aren’t only doing what they should to make gains in the American market to deserve American consumer loyalty; they’re also doing what they should to make gains in the markets of China, Europe and across most of the rest of the globe.
Roger Simmermaker is the author of "How Americans Can Buy American: The Power of Consumer Patriotism." He also writes "Buy American Mention of the Week" articles for his website www.howtobuyamerican.com and is a member of the Machinists Union and National Writers Union. Roger has been a frequent guest on the Fox News Channel, CNN and MSNBC and has been quoted in the USA Today, Wall Street Journal and US News & World Report among many other publications.
Good article, with lots of truth too but maybe the author has some wisdom on how Unions can shed their "image" problems too.
The American auto industry has a big hole to dig itself out of, but I can only hope they are on their way out. Good luck to them!
No perception problems here. I'm quite happy with my Ranger. It's about time someone started calling Toyota out on these recalls as well IMO.
The "Initial Quality" issue doesn't take into account the NVH (Noise Vibration Harshness) of a car. In that area, American cars have a long way to go.
I read about that. Toyota's recall was the largest vehicle recall in history btw.
Stop whining US automakers. Take the good size market share that you have RIGHT NOW and build on it. As dictatorial/socialist economies around the world collapse or get overthrown the demand for transportation will skyrocket.
Those dreaded American cars. The 3.4L Impala I rented averaged 28mpg, 72mph, over 150 miles through the mountians of VA.
It got 30 on the open road averaging 77 mph. And it rides nice too. I'd get one if I were not shopping for an SUV (GMC).
May 31, 2006 Toyota Motor Corp. is recalling nearly 1 million vehicles around the world to replace faulty parts that could cause drivers to lose control of the steering wheel. Included in the recall are 170,000 Prius models in the U.S. and 113,000 of the hybrids in Japan.
Too bad it looks like W is among those biassed against the Big Three.
One of my biggest peeves is today's auto commercials, they're not fun anymore. They're dark, always showing some (mainly) single guy that needs a shave acting like a smug idiot. Time was, families were shown enjoying the new model cruisin' our highways and byways.
Oh, excuse me, marriage and family are out, that's right, I forgot. Ain't fun anymore.
My perception is that when I drove Toyotas for ten years I very rarely went to the shop. When I have chosen to drive American cars I go to the shop at least twice a year for major repairs. The second and third degree burns I suffered from a Ford Ranger engine fire sort of changes my perception as well. That most American autos are badly painted beer cans is not just an American perception either. It's a world wide perception. American auto makers would better spend their time building better cars and trucks than spending it trying to convince consumers they do.
One of my biggest peeves is today's auto commercials, they're not fun anymore. They're dark, always showing some (mainly) single guy that needs a shave acting like a smug idiot. Time was, families were shown enjoying the new model cruisin' our highways and byways.
Oh, excuse me, marriage and family are out, that's right, I forgot. Ain't fun anymore.
We got an Impala right after 9/11 to add our vote of confidence in our American way, don't regret it one bit. Still have it, enjoy it.
wahhhh,ha,hah,ha
Priuses.
I blame the domestic automotive enthusiast magazines for being soft on critical reviews. This hurts in two ways: the automotive industry has less incentive to improve their gaffes, and public perception of vehicle quality winds up lagging behind actual quality ( one has to buy a crummy car sometimes now to realize that it's bad ).
Quite frankly, US automakers do not offer any vehicles in the segment I look for.
But when Ford, GM, or Chrysler offers a small 'hot hatch' with a luxury-class interior materials and highly bolstered sport seats...
...I'll be first in line for a test drive.
(But I'm not holding my breath.)
Sure, Toyota and Honda make fine cars. But the U.S. automakers have come a long, long way. Of course, I'm a basic transportation guy and have always been happy with our Saturns.
Perception problem? Let's see - If a person buys a GM or Ford and has problems with it, buys another and still has some quality problems, then finally buys a Toyota or Honda and doesn't have the same level of problems - what has that person learned?
The main issue that has prevented me from buying a non-American brand is cost. Although many same-class vehicles are cheaper for US models, the used prices are even more disparaged - with the American models nearly always taking a far larger depreciation hit, thus making them quite a bit more affordable.
And the "affordable" non-American autos are junk (see Kia).
And if we are really going to get into it - it is difficult to win back someone who is a very happy and satisfied Toyota or Honda owner. Just like a satisfied Ford or GM owner - people tend to stay with what they have had a positive experience with. Unfortunately, GM and the other US automakers really shafted US buyers for far too long. And even with the recent improvements in initial quality, the long-term quality is still debatable. And with US automakers being so slow to learn their lessons, it is no wonder that the "perception problem" exists.
And keep in mind that we currently own an Oldsmobile and a Chevrolet. The Olds has been a problem child since we bought it with 27K miles. The Chevrolet has only been in our family for about a year and a half. It hasn't had any real problems yet.
The most reliable autos we have owned have been Chrysler made. I hope to be a Chrysler or Dodge owner again in the near future.
I can understand the "payback is a b*tch" vs the UAW supporting only Democrats, but the Republicans attitude toward the US auto companies really hurt them in the 06 election in the midwest battleground, IMHO.
A lot of autoworkers were Reagan Democrats who have gone back to the Dems. Reagan IIRC helped out Harley Davidson without anybody making a fuss.
This study said the tariffs wouldn't work and Harley probably would still go bankrupt. Be glad the Cato folks aren't your investment advisors.
http://www.cato.org/pubs/pas/pa032.html
I prefer American vehicles but gotta tell ya.....I see no justification for charging over $50,000 for a pickup. Because of that, I don't buy new trucks unless mine is about ten years old. They need to clamp down on the benefits and unions so they can compete on the pricing. Japan will come out with bigger trucks one of these days.
Odd you should mention that. Slate did a whole article on that weird car commercial that had a divorced couple having a weekend together-the one that ended with her driving away with the kids, leaving him alone in front of his condo. I guess they feel images of happy intact families are too remote for too many people to identify with any more. :-(
This so called perception problem didn't crop up overnight, it came from decades of selling truly godawful cars that they should have been ashamed to let off the factory grounds.
Finally having competitive product is a start, the only start they can make, but it is going to take a lot more than 2 or 3 years to undo the prior 20.
I do like the new Mercury spokeswoman though. Hubba, hubba!
The quality has been much improved quite a bit longer then 2 or 3 years. I get your point, though.
Well I am on my second KIA, first had 201,000 and I had NO problems. Great car....so be careful how you condemn. Also have a Ford Ranger with 182,000
"One of my biggest peeves is today's auto commercials, they're not fun anymore. They're dark, always showing some (mainly) single guy that needs a shave acting like a smug idiot. Time was, families were shown enjoying the new model cruisin' our highways and byways."
Then, my friend, you need to point your browser over to:
http://www.plan59.com/main.htm
Fantastic 50's automobile ad-art. Really cool.
Just what ARE you driving, and what do you define as luxury interior components?
Blame the Fed for that one. Print so many dollars they lose a quarter of their value and the price of just about everything will increase, they did and it has.
As far as worldwide perception, I can tell you that at least in north Africa and in South America they don't drive American vehicles simply because of the high costs of repairs. I know because I ask them when I was there.
In truth, I've switched from GM to Toyota and back to GM, and even had a few Fords. I keep coming back to American vehicles because I want to support American manufacturers. However, each time I have come back to American cars and trucks, without fail, I've gotten badly burned (sometimes literally).
These sorts of arguments always seem to include more anecdotal evidence than fact. You may have had good luck with Rangers but I almost lost my life in one. However, if experience adds anything to this argument, I have been a licensed driver for fifty seven years and I can clearly see that Japanese automakers have taken the quality baton and beaten American car makers over the head with it, badly.
Your opinion is respected but not agreed with due to factual irregularities of your view that I have personally experienced. Read some of the recall information. Used Fords and Chevys are cheap because they are abundant, basic supply and demand.
Japan is even more unionized than the U.S.
http://www.forbes.com/business/feeds/afx/2006/12/06/afx3234262.html
I'd like you explain that Vette-Ferrari analogy a bit more. Sure, money being no object, I'd take the Ferrari! But speaking as a guy who has driven both the new Z06 and a F430, they're pretty close in all performance aspects, except gas mileage, where the Vette gets close to 30 mpg on the highway, the looks, where the F430 is a much prettier car.....Oh, and the price! LOL!
I will only add that I agree with your supply and demand theory. I would only add that not only is the price of used Ford and GM trucks adversely affected by the greater numbers of vehicles in the market but also by the declining number of buyers for them.
I got shoved into a broom closet by the general manager and head mechanic in a Ford dealership in Columbia, SC back in 1992 while I was trying to get my car fixed. While I was waiting amongst the cleaning supplies for my rental car to arrive, I realized that I made a mistake buying American. That mistake I made only once, and I can tell you I will not again.
The unions don't have an "image problem." They have a "business model" problem. They've refused to change with the times.
Great wallpaper, I have the '59 Buick ragtop on the screen!
Bad comparison I suppose as I would select for the Ferrari, then sell it and buy a Corvette. I just couldn't think of a good analogy between a Toyota Tacoma and a Ford Ranger. I've never owned a Corvette or a Farrari although I have driven several 'vettes over the years. An older brother started racing Corvettes in the early 1960s in California. The little cars are dear to my heart.
Me too. Luckily escaped injury there.
That sounds bad. Right now I drive a 3/4 ton GMC Sierra simply because I restore antique tractors and have to pull them some distances. However, as soon as my old back gives out and I have to give up my retirement hobby, I will go back to a Toyota. I've owned two Tacomas and loved them. My wife and daughter had a Camry and a Corolla there were unbreakable.
Having said that, I had a 2006 Malibu for a while, and it was one of the best cars I've ever owned. Quick, thrifty (I got over 30 mpg on a couple of tanks of gas), solid, comfortable. An amazing car, and MUCH better than a 2004 Toyota Camry that I drove on vacation. No comparison.
Twenty years ago, GM was a triumph of marketing over product. Now it's a failure of marketing to get out the news about a great product.
Of course, strictly speaking, I don't care about GM's fate one way or the other. I do hate the fact that Toyotas are seen as the "machines of the Gods". They're as bland as warm milk, just transportation, nothing more.
The BMW commercial with the screaming boy opening Christmas gifts has to be one of the all time worst in history. I do not know anyone that does not reach for the mute button. It is terrible. BMW should never hire that ad agency again. It sends buyers up the wall.
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