At Witz' End: Other Views on Detroit
by Gary Witzenburg on Jan 1st 2009 at 7:50PM 
"I hope GM goes bankrupt," said the young California man in the Japanese restaurant. Really? Why? "Because I hate the UAW," he responded, ignorantly equating America's largest automaker to its most powerful union. I guess, like so many Americans, he was unaware, or didn't care, that hundreds of thousands of good, smart, incredibly dedicated and hard-working non-union designers, engineers, researchers, marketers, purchasing, finance and human resources folks also owe their livelihoods to what's left of our domestic industry. And that millions more who are toiling at suppliers, dealers and surrounding small businesses depend on it to feed, clothe and shelter their kids.
The Big Three companies are not all the same, none today remotely resembles the negative caricatures in some peoples' minds, and the UAW has been only one small part of their high-US-business-cost problem. Clearly, such pinheads whose views of "Detroit" remain stubbornly stuck in the 1980s – including auto-ignorant politicians, Wall Street gurus and non-automotive media – need to pry open their minds to what knowledgeable observers are saying:
"GM is probably the strongest of the three right now," manufacturing expert Ron Harbour ("The Harbour Report"), told me nearly two years ago, well before 2008's $4 gas killed profitable products and Washington's economic meltdown and the credit freeze stopped auto sales virtually cold. "They really get it and have made very significant improvement. Ford has done pretty well. They're right in there. And Chrysler has worked hard to catch up fast."
Click past the jump for a sampling of what leading automotive media and others who actually know these companies, their leaders and their products are saying today.
"The Detroit Three automakers do create cars people want," writes Autoweek Editor and Associate Publisher Dutch Mandel. "Their cars are fuel efficient; GM's fleet, for example, has more vehicles that attain 30 mpg than any other automaker – and they make more hybrid models than Toyota. As for their quality, it is unparalleled; Ford products sit atop one quality study after another."
"The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo," offers Detroit Free Press auto writer Mark Phelan in a column challenging "myths" about the Detroit Three. "Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.
"All of the Detroit Three build midsize sedans the Environmental Protection Agency rates at 29-33 miles per gallon on the highway. The most fuel-efficient Chevrolet Malibu gets 33 mpg on the highway, two mpg better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient non-hybrid Honda Civic."
"Detroit's problem isn't poor products or lack of products," adds Warren Brown of the Washington Post. "It's a national government still wedded to the debilitating siren song of cheap gasoline. It's a nationally collapsed financial system. And it's governmental hypocrisy - our willingness to pour tax dollars into foreign enterprises, most of them not unionized, while griping about doing the same for homegrown, unionized manufacturers largely responsible for building America's middle class."
Detroit Free Press columnist Mitch Albom takes on the hypocritical, mostly southern Republican senators who refused Detroit life-saving loans: "History will show that when America was on its knees, a handful of lawmakers tried to cut off its feet. And blame the workers. How suddenly did the workers - a small percentage of a car's cost - become justification for crushing an industry? And when did Detroit become the symbol of economic dysfunction? Are you kidding? Have you looked in the mirror lately, Washington? Who is more dysfunctional in business than YOU? Who blows more money? Who wastes more trillions on favors, payback and pork? When was the last time a U.S. senator resigned over a failed policy? Yet you want to fire [GM CEO] Rick Wagoner?
"At our nation's most uncertain hour, you senators stood ready to plunge hundreds of thousands of American families into oblivion. Leave them unemployed, with no health care, on public assistance. And you were willing to put our nation's security at risk -- by squashing the manufacturing base we must have in times of war. And why? So you could stand on some phony principle? Crush a union? Play to your base?"
Business Week's Ed Wallace sings a similar tune: "By refusing to bail out General Motors and Chrysler, Republicans see a way to end the last vestiges of unionism in America and the unions' longtime backing of the Democratic party -- a political base the Democrats will fight tooth and claw to save. If these individuals bring down the American economy by destroying Detroit, they'll simply walk away from the disaster saying, 'It was the other guy's fault.' Somewhere along the way this debate seems to have overlooked the fact that Detroit...is still a viable economic engine, providing jobs to millions and creating some of the world's best cars.
"Other industrialized countries around the world will be stepping in to ensure that their own automobile industries will still be working when whatever financial downturn we are looking at is finally over.... In the rest of the world, elected officials understand serious downturns in the economy and that the automotive industry is cyclical in nature. As for Congress, shame on you for playing politics when so many jobs and, in many ways, the future of American manufacturing is at stake."
WardsAuto.com's Steve Finlay defends favored Detroit scapegoat Wagoner: "It may shock certain members of Congress and other self-anointed 'experts' on the U.S. car industry, but General Motors CEO Richard Wagoner is one of the best auto executives around. He is just about everything his critics say he isn't, and vice versa. Under Wagoner, GM has made huge strides in vehicle quality. Its plants have been cited for major productivity improvements. It has repaired dealer relations that were damaged before Wagoner took the helm. And GM has become a leader in key global markets, such as China, Latin America and Russia. He has instilled a spirit of teamwork within GM. His managerial style is like the coach of a team, rather than the imperious leader of a global business.
"Wagoner has a global perspective, in part, because of management jobs he's held outside the U.S. during his 31-year GM career. We're seeing attempts to transmogrify an able auto executive into someone who should be fired for incompetency. The people trying to do this are the ones who seem truly incompetent."
Financial columnist Ben Stein puts a potential Detroit collapse into perspective: "To allow our largest heavy industrial component to fail at this delicate moment is suicidal. To put a couple of million more Americans into unemployment is just not sensible. There are millions of Americans hard at work making great American-made cars and trucks. Why not keep them on the job? And why are we so angry at the car companies' executives? They get miserable pay by Wall Street standards and have much harder jobs.... And what about the retirees? They get the benefits they were promised. If those can be taken away, then whose benefits are safe? And do you think it will be cheaper if the government takes on those costs directly?"
Detroit Science Center President and CEO Kevin Prihod praises Detroit's cadre of dedicated scientists and engineers in a Detroit News editorial: "Engineers from General Motors, Ford and Chrysler are leading the world in the development of battery technology, fuel cells, vehicle safety technology and sophisticated on-board microprocessing that puts NASA and Boeing to shame. American automotive process engineers have enhanced basic Japanese production techniques and quality systems to create the country's most integrated high volume production network of assembly plants and multi-tiered suppliers.
"Yesterday's 'Arsenal of Democracy' is truly today's 'Arsenal of Technology'.... While the great engineering minds of Silicon Valley fret over packing more songs into an iPod or downloading television shows faster, the engineers and scientists of the automotive industry are searching for the technology to reduce America's reliance on foreign oil and the world's consumption of fossil fuels."
We welcome your comments on this topic, but I recommend bringing contradicting facts and figures, not tired, old misperceptions and uninformed opinion, to credibly disagree with such acknowledged experts. And while we're debating, can't we all get behind America's critically important auto industry, enlighten ourselves about their current products, forgive their long-ago mistakes and hope they'll survive for the good of the country ... and all of our jobs?
Award-winning automotive writer Gary Witzenburg has been writing about automobiles, auto people and the auto industry for 21 years. A former auto engineer, race driver and advanced technology vehicle development manager, his work has appeared in a wide variety of national magazines including The Robb Report, Playboy, Popular Mechanics, Car and Driver, Road & Track, Motor Trend, Autoweek and Automobile Quarterly and has authored eight automotive books. He is currently contributing regularly to Kelley Blue Book (www.kbb.com), AutoMedia.com, Ward's Auto World and Motor Trend's Truck Trend and is a North American Car and Truck of the Year juror.
Reader Comments (Page 1 of 4)
John 8:16PM (1/01/2009)
"The Detroit Three automakers do create cars people want," writes Autoweek Editor and Associate Publisher Dutch Mandel. "Their cars are fuel efficient; GM's fleet, for example, has more vehicles that attain 30 mpg than any other automaker – and they make more hybrid models than Toyota. As for their quality, it is unparalleled; Ford products sit atop one quality study after another."
What planet is this guy from?
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carfacts 9:24PM (1/01/2009)
Hey, John: "This guy" drives and evaluates every car and truck, import and domestic, as part of his job. What are your credentials, and where is your data proving him wrong?
anoldbikeguy 10:20AM (1/02/2009)
Thanks, Gary - but, again as you suspected the same old tired, ludicrous rhetoric is repeated over and over by the haters. I have to believe that every one of them is really crappy at their jobs as they believe no one in the US can do anything better or even as well as their beloved 'insert over-rated worshipped foreign based OEM here' (hows that for a blanket statement without any research behind it). Look in the mirror people - this is what you sound like to those of us who look at facts, not useless drivel repeated over and over. If a foreign based OEM'S vehicle is rated highly by an independent agency, it is accepted without question. If a domestic based OEM's vehicle is rated highly, whether for quality, design (car of the year, etc.) or fuel economy, the response seems to be 'you can't believe that', or 'they can't be trusted'.
Over and over again with no attempts to look at things with an open mind. Mostly, it is just a herd mentality that drives them I would guess - incapable of independent, reasoned thought.
And one other thing - 'Chapter 11 is the solution'. Not so much - it does not get rid of the union as so many of you want to believe. It does make it extremely likely that hundreds of thousands of jobs go away right away at the suppliers! They are hurting right now with the reduced volumes - capital expenditures (manufacturing plants, machines, etc.) have to be paid for over time and significantly reduced volumes severely hurt their cash flow to allow them to continue to make payments, which is where most are now. Add in losing receivables for the previous 2-3 months (every OEM, including the anointed and worshipped ones) makes payment after receiving their parts - and now suppliers who have been scraping by can't keep up their payments to their suppliers, employees, etc.
Wake up people! This is not some silly ass game where what happens has no consequence for you, your family and your neighbors - look at the real estate meltdown - are there any areas of the country that were not severely effected by Wall Street's idiotic pursuit of indecent profits, salaries and bonuses? And our illustrious leaders in Washington lack of understanding (or caring, who knows anymore) what their refusal to have any oversight on the insane lending practices and ever more risky investment strategies practiced for the profit gorging of Wall Street could result in is what is responsible for this.
Jack 11:11AM (1/02/2009)
carfacts,
"This guy" has an obvious interest in seeing the US car industry thrive. I'm happy to rely on surveys and sales data to draw my conclusions.
For the statement that Ford's quality is the best in the industry, you can see that Ford ranks 8th on JDPower's 2008 initial quality study, behind nearly all non-Big-3 (Mercury is 6th):
http://www.jdpower.com/autos/ratings/quality-ratings-by-brand/sortcolumn-1/ascending/page-#page-anchor
And people don't want their cars, at least not as much as they do the Japanese ones. First hit in google: WSJ has some auto sales stats here:
http://online.wsj.com/mdc/public/page/2_3022-autosales.html
Of the Top 10 best-selling vehicles for the month, 3 are pickups (not "cars" per se); 6 of the remaining 7 are non-Big-3. Didn't the Honda Civic become the best selling vehicle in America this year?
And bragging about mpg? That's a joke.
This is the usual stick-your-head-in-the-sand approach that's gotten the US car industry in the position it's in. Not what I expected from the allegedly "green" blog.
johnceberhardt 11:45AM (1/05/2009)
Earth. What planet are you from? People just like you or your neighbors bought minivans, large pickup trucks and SUVs. The big three were supplying vehicles that were demanded by U.S. citizens and foreign car makers were right behind them. Toyota, Nissan and Honda were still playing catch up as oil prices reached record levels. Toyota alone has six different SUV models to choose from. Heck, Toyota just introduced another new one a few months ago. And let's not forget that the gigantic Toyota Tundras and Honda Ridgelines. I'm sure those are very economical vehicles as well. Gary is right, you are wrong. It took $4.00 a gallon gasoline to finally stop Americans from buying larger and larger vehicles. Even when gas was $3.00 a gallon, the news reporters that were interviewing people filling up their tanks at a local gas station in California found out that people were not interested in buying those unsafe little cars. The people responding stated that they would still buy large pickups and SUVs.
When we had kids my wife wanted a minivan and she got one. My parents bought a Honda minivan and SUV. I bought a Volkswagen TDI diesel and I get around 55 miles to the gallon every tank. What do you own and what do you get for MPG?
The only reason things are this bad is because the housing market collapsed due to incompetence in the lending and banking sectors. If people still had equity and the credit market was healthy, I believe that many would still be buying large vehicles.
JCE
http://johnceberhardt.wordpress.com/
Boyprodigy1 4:56PM (1/11/2009)
You guys really should look into those "unsafe little cars". Give me an example and i will give you a reliable source that gives it a higher safety rating than any other SUV that you can think of. To add to this conversation though, they may get high MPGs but none of those cars are all wheel or front wheel drive, which is what well over 50% of america needs to commute. I am from colorado where if it really snows, you probably arent going to get far in rear wheel drive. So please, take a good long look at how useless gm's cars are to me. Honda does front wheel drive with fuel efficiency. Hell they do all wheel drive better than america. Lets not even talk about toyota... Subaru is a clear winner. GM Ford and Chrystler are at the end of my list of cars to look at when i want to buy...
Arthur 9:19PM (1/01/2009)
Chrysler has worked hard to catch up fast my ass. Have any of these fools driven an HHR or a PT Cruiser? The seats in the HHR make my Corolla CE feel like a freaking luxury car. Did you know the Corolla is made in California? In the Bay Area? Where labor costs are through the roof? See that's why I don't buy the pensions and med benefits excuse. GM (which made the HHR) makes the Vibe here too and the Vibe doesn't suck. Somebody please explain all this to me!
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TIMMAH! 6:06PM (1/02/2009)
Uh, that's because the Vibe is a re-badged Toyota Matrix...
Brady 6:36PM (1/07/2009)
The Vibe is a Toyota in Pontiac clothing.
JH 9:29PM (1/01/2009)
I'm not auto expert but what I was hoping to get from your posting but instead got many scare quotes with out much data...
-- How much current union labor and past union labor (benefits, ect) factors into each auto's cost?
-- How much of our auto manufacturing is done by private, aka non-union people now?
-- Why would a bankruptcy of GM or Ford NOT be like the airlines or other large companies... in that the company doesn't disappear...the assets are bought... the company re-negotiates it's labor agreements and comes out in a better competitive situation?
-- I would argue the big three were building problematic cars past the 1980's an well into the late 90's. They have gotten better but having to make this admission is at least admitting an organizational problem. Add to it... we have much fat from the 70's-80's in benefits that drag down the companies today.
I guess, I was hoping for some facts to make me think differently. Some insight that I don't have that the poster would from his time in GM. Instead we get quotes from Ben Stein. God love'm and his Nixon speeches but I don't care what him or other financial rags are saying. Who trusts such "wise" fiancial minds right now anyway?
I wanted to hear what you think from your inside knowledge. Numbers...ect. To not get that is disappointing.
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Paul 1:30AM (1/02/2009)
JH, the one "fact" that I will give you is with regard to bankruptcy and how it is different than the airlines. Buying a car is a 3-10 year relationship that you are making with a company. Buying an airline ticket? A few HOUR relationship. People will still buy airline tickets from a "restructuring" airline because, worst case, they are out a few hundred bucks (and likely not at all since either their credit card company will refund the ticket price of a worthless ticket or another airline eager to pick up the loyal business will honor it). Worst case with a car is a worthless warranty and perhaps a car that is not serviceable due to lack of service technicians and (more likely) lack of replacement parts. Given this distinct possibility, no-one is going to buy an American car. Even now, I know of folks avoiding American cars for this reason. If they go into protected restructuring, it'll become worse unless the government provides some level of guarantees to consumers that restructuring won't eventually turn into liquidation.
This is one reason. Others are related to the size of the companies companies relative to the airlines and more so to the size and nature of the value chains. Any form of bankruptcy of any of the big three (except MAYBE Chrysler) would likely lead to a domino effect that could bring down the entire industry very quickly.
This is why it is different.
kevin 10:38AM (1/16/2009)
Do you think Toyota has huge legacy costs in Japan? There people live a long time. I heard that the average lifespan of an American auto worker after 30 years of service is 18 months. Very interesting.
gorr 9:42PM (1/01/2009)
Quote '' they get miserable pay by Wall Street standards and have much harder jobs.. ''
It's exactly what i said early on. Wall streets financing jobs and credit something compagny have tried to put everything near bankrupcy to buy them cheap and preserve the oil cartel. the only mistake of car manufacturers managers is that they don't sue bush and friends in justice so they still are on control by 'aliens' pretending they are ruling u.s.a and the world. Truth is hidden by these victims managers. But that quote reveal a part of the mystery, if you read between the lines
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UH2L 10:46PM (1/01/2009)
JH,
Read my article about this. I link to some of the same articles that Gary Witzenburg references, but many of those are based on facts like the quality, and fuel economy data.
Check it out here...
http://uh2l.blogs.com/things_ive_noticed/2008/11/weve-heard-a-lot-of-news-from-the-press-lately-about-the--dire-situation-the-american-automobile-industry-is-in-in-pa.html
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Torbjorn 11:16PM (1/01/2009)
Spoken by a true "socialist" and "idealist". Every other major type of industrial manufacturing has left the U.S. The U.S. Government allows China and other counties an unfare uncompetitive advantage. Add UAW "socialist" programs to the equation and "walla"...a mess that will never go away regardless of bailout money. China does not have to live up to the West's iealistic and unprofitable moral values. They don't want to in any shape or form. We cannot compete with governments that do not want to live in our "world". That is why so many companies figured out years ago that in order to be competitive they were REQUIRED to move to those same crappy countries. Fact of life....and we are the ones who will pay for it all. Now, where's my burger and fries...!!!!
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Rob O. 11:23PM (1/01/2009)
These hucksters are still making a supremely handsome profit off manipulating our desires and then selling to them. That's what advertisers do. But the Detroit folks are still perpetuating the antiquated (but quite profitable) notions that bigger & more cylinders are better and that we need the horsepower to do zero-to-60 in 6.5 seconds or else we’re pansies. If you’re driving a small, inexpensive car with a fuel-efficient 4-cylinder engine, you must either be destitute (because affluent people drive big cars with beefy engines), or some kind of treehugging, rice-eating, commie-lovin’, hippie.
By golly, if you’re not driving a big-ass, rubber-burnin’, God Bless America, gas-guzzling GM truck, well, Bob Seger & John Mellencamp are going to come over to your house, beat ya up, drink up all your beer, and prolly take your girlfriend!
I didn’t even know what the heck a Hemi was when that Dodge advertising campaign launched, but I sure was checking the contents of my shorts, feeling so inadequate over not having a ride equipped with a Hemi engine. Think that doesn’t sell vehicles? Think again! Take note of how many big hinkin’, 8-cylinder, 4-wheel drive, quad-cab trucks and lumbering, oversized SUVs are on the road serving as nothing more than single-occupancy commuter vehicles.
The Big 3 may make some fuel-efficient sedans so they can look good on paper, but they're pushing mostly the same ol' stuff throughout the remainder of their product lines.
After more than 50 years of raking in billions by skillfully shaping our desires & subsequent purchasing habits by building false perceptions and stroking our redneck egos about how horsepower equals manhood, the automotive industry & their marketing geniuses have a social responsibility to apply that same moneygrubbing fervor towards making Americans feel OK about buying smaller, less resource-wasteful cars.
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ug 12:55AM (1/02/2009)
Why does autobloggreen continue to give this guy a forum for his propaganda? You'd think after his EV-1 apologist series that got skewered in the comments they'd kick him to the curb. But no. You know what? Consumers are fickle. If you want people's business you have to do whatever it takes to win them back. You have to sell to them on THEIR terms, not YOUR terms.
nmt 10:19AM (1/02/2009)
I don't understand what you are complaining about exactly. That Detroit Automakers market their products? So what? Should they not market them? Who are you to say they are wrong? They sold tens of millions of those big V-8 powered trucks and SUV's at a profit.
The problem is not that customers respond to marketing, the problem is that artificially cheap credit encouraged people to buy a lot of vehicles they really couldn't afford. That's not GM or Ford's fault, that's government and Federal Reserve policy. The government and the Fed made the credit crisis and that's Detroit's number one problem right now.
So I agree that the UAW is not Detroit's number one problem, however, it is at least one of their major problems. The ability to pay workers equilibrium wages is a huge advantage. The UAW argues that current workers in non-union factories make as much. True, but they aren't promised the benefits UAW workers are, and that is a huge cost. The UAW strong armed American automakers into unsustainable labor agreements that took away flexibility from their business models. For decades they've been forced to overproduce vehicles and keep factories open that should have been shut down due to the leverage of the UAW.
Firms like GM, Ford, and Chrysler need the flexibility to be able to lay off workers as needed and shut down or mothball factories when necessary without the threat of strikes or the drag of job banks and guaranteed pay. Their competitors have this and it's a huge advantage.
the vegas style guy 10:39AM (1/02/2009)
Small penis huh?
stevezilla 8:05PM (1/03/2009)
he's cutting-and-pasting a response from a different thread. This anti-marketing rant makes no sense here.