6 Myths About the Detroit 3

[1gobluedem]

From today's Detroit Free Press:

"The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are six myths about the companies and their vehicles, and the reality in each case."


http://www.freep.com/article/20081117/COL14/811170379

[crispini]

1. Well done! Here's a snip

Myth No. 1
Nobody buys their vehicles.

Reality

General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of about 560,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota.

Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.

Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

[greyl]

4. How many went to fleets instead of individual consumers?

The Army bought Hummers...

[nichomachus]

2. Here's the problem

All of this may be true. However, they have a quarter century of bad reputation to overcome.

As the nuns used to drill into us in grammar school, you need to protect your reputation because, once you lose it, it's very hard to get it back. So, maybe the US automakers have changed their ways, but they put themselves behind the 8-ball by 25 years of lagging foreign automakers and turning out some egregious crap. They're not going to lose that reputation overnight.

It's sad -- but that's the way it works.

[Dyedinthewoolliberal]

3. It reads like something from

the PR department. As a one time, very short term auto worker, (early 70's, Wixom plant)I really used to hope the Big Three would wake up and realize that foreign cars were worthy competition. As it is, it seems as though they never believed anything could challenge their supremency. By the time they acknowleged something had to change, it was too late.
It's very sad to see my hometown shrivel and slowly disappear........ :cry:

[1gobluedem]

6. First of all it's never too late

And even if foreign cars are acknowledged as worthy competition, which they certainly are now, what about the unfair trade practices that allowed foreign automakers to flood the US market while closing theirs to US imports?

Consider this from yesterday's Free Press:

"The United States is the only country with an auto industry that it does not support, subsidize or in some way protect against outside competition. All we do is regulate it. The $25 billion Congress approved in September for loans to car companies was expressly for the retooling of factories to make vehicles that can meet new government mileage standards.

You can say the auto companies should not be rewarded for making bad decisions, like building big cars and trucks. But until recently, the auto companies were building what Americans wanted to buy. When gas hit $4 a gallon, as it will again, the public's appetite changed faster than the auto plants could."

Entire column is here: http://www.freep.com/article/20081116/COL32/811160392/1069/OPINION01

[Dyedinthewoolliberal]

9. To be honest,

I don't really understand the tariff and trade protection stuff. I always assumed the government took care of that.
I do know that most American corporations, no matter what business they are in, like to trumpet the fact they don't get any 'government subsidys'. Except they forget to mention how they don't really pay their fair share of the income tax, so therefore, they are getting a subsidy, and one that is far more dangerous to the whole country.
Please understand, I was born in Mt. Carmel hospital, grew up on the west side, am proud of being from what was once the poster child for blue collar, union stong cities.
But I despair the damage is done........

[1gobluedem]

10. Tariff to import to US is 2%

China's is 21%. There's your difference.

[kirby]

13. Hogwash...

You do realize that the Big 3 get huge tax breaks and subsidies from State/Local Gov't. Their entire business model
is made possible by taxpayers maintaining roads/infrastructure through taxes, tolls, fees, gas tax, etc.

While I agree there is no 'centralized national policy' concerning the auto industry. It is not fair to say we are the only country that does not 'support' its auto industry. That is just a sales pitch talking point for the bailout that has been circulating.

[Nederland]

5. Disconnected from reality

If all six of these items are really "myths", why are these companies losing money hand over fist? I'd be curious to know what the author believes is wrong with these companies. I'd be curious to hear his explanation of why Japanese car manufacturers can make money making cars in this country but US automakers seemingly can't.

[1gobluedem]

7. Nationalized health care

Building plants in 'right to work' states and paying workers $10/hour (can YOU support a family on $10/hour?). Union busting. That's how.

The Detroit 3 have made mistakes, sure. But the GOP is dragging their feet on assistance because they want to see the UAW go under. Why does the overwhelming greed from Wall Street get protected, why do their workers get to keep their jobs? Simple. They're non union.

[Trajan]

8. Thanks ....

Im not sure why many DUers buy into the 'hate American cars and the workers who make them' meme, but these points need to be heard ....

I support my union brothers ....

[Burma Jones]

11. Another perception problem

Amongst the college educated crowd, buying an American car is seen as foolish. When I go to the office I might see a couple of American Cars, but the lot is full of Toyotas, Hondas and Suburus. When I go to the USMC Base at Quantico, the parking lots are full of American Pickups and SUVs and a sprinkling of US made minivans, but the Cars are overwhelmingly Japanese and German, and these are Marines and their contractors......

Amongst all of my friends and my Wife's friends, the few that have bought US vehicles all have US made pickups or SUVs. Not a one has a US made passenger car. Now, my 72 year old Dad drives a Dodge Magnum he says that he just can't buy a German or Japanese car because of WWII and my Stepmom, a Detroit native, drives a PT Cruiser. My Mom drives a Cadillac STS and my Stepdad drives a Corvette. I have four brothers, two of whom live in Manhattan and do not own cars. The other two drive Ford Pickups. I drive a Toyota Hybrid Camry, my wife drives a Kia minivan. The first new car I owned was a 1987 Taurus, the only car I owned that had more problems was a Fiat 850 with about 75,000 miles on it. My In Laws, without exception, own foreign cars. My Mother in Law and Father In Law each own a Lexus. My two Sisters in Law drive a Honda and a Prius. Of all my family, only two members did not graduate college - the two that drive Ford Pickups.

Might this be a long term effect of the culture wars that started between the Hard Hats versus the College Students 'way back in the 60s?

Oh, and I am not nearly as concerned with "initial quality" as I am with quality at 100,000 miles.........

[Chef]

12. Detroit

If these are true, why the need to talk about a bailout? I suppose the main reason they are in financial straights is the volume is down. No one wants to buy anything right now. One reason the volume is down is that for years low interest rates and money available from home equity loans enabled people to trade cars often. There gets to be a point where a sizable part of the market has been saturated. The rise in gas prices didn't help much as well, but this hurt big truck sales of Toyota and Nissan as well. When that point is reached and the home equity ATM is shut down and lenders aren't willing to loan to just everyone, people stop buying cars. Even if the makers could bust the union and reduce the wages to those of southern, non-union and foreign workers ($70+ to $40), no one will buy. The market just has to adapt and if that means bankruptcy, so be it.

However, now seems the time to do some things that would help. First, take health care out of the employee/retiree equation. Provide a single payer system to just those employees/retirees of the auto industry. This should reduce the net outlay for overall medical insurance costs and take the issue off the table in labor negotiations. This has the added benefit of setting the stage for weaning the US off of its "health care tied to employment" mindset and eventually taking care of the uninsured. Second, even though we are in a global economy, we need to provide incentives the manufactures to shift overseas building of cars back to the US.

[acmavm]

14. #3 ought to put the Detroit Haters into a tizzy for sure:

<snip>

Myth No. 3
They build gas-guzzlers.

Reality

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 m.p.g. on the highway, 2 m.p.g. 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. A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate.

[kirby]

15. Not really..

It is just a statistics game. It is based on product portfolio averages and includes the auto industry lobbying the Feds to redefine the averages and how to measure them. It also doesnt reflect which cars they actively sell and promote. Typically they will add a few entry level high fuel economy cars to counter the SUV's and Light Trucks. Or some higher mpg vehicles only available to 'fleet customers'. However, the vehicles they make the profit on, the gas guzzlers, are the one they promote, advertise, etc.

This entirely misses the point that our MPG, had their been true innovation, should really be around 50 mpg right now, not the 29-33 range.

[acmavm]

16. You're funny. What they 'promote' is the criteria? Not what the

American people go in and buy on their after making their own decision? Detroit held a gun to the SUV Mom's and the Hummer Dad's heads and said 'YOU WILL BUY THE GAS GUZZLING POLLUTERS'? Is that how it happened?

Damn, I guess then it is Detroits fault.

[1gobluedem]

17. Everything is Detroit's fault

And absolutely NO foreign car company jumped onto the SUV bandwagon after the launch of the Ford Explorer.

Toyota doesn't make the heaviest truck on the market either. :crazy:

[kirby]

18. Basically...

It all depends whether you think an industry is a leader in the products they offer or if they are passive participants who only produce what people 'demand'.

Detroit would have you believe the latter, but I dont buy it.

Detroit set up a culture that designed and promoted SUV's and Light Trucks. They did not use their engineering resources to increase fuel efficiency overall. Instead they increased the weight of the vehicles by the amount of efficiency gains, thus negating it.

If the primary product that is sold is an SUV and the financing deals are for SUV's and 80% of the advertising is for SUVs, that steers people to SUVs (which had the highest profit margin). So there was not a literal gun to someones head, but there was a lack of any leadership to confront the issues. BTW, those higher profit margins were because of legal loopholes that SUV and Light Trucks did not have to have the same safety features as cars--another perverse incentive.

[acmavm]

20. Must be those mind rays that made them people buy those

SUVs. Yep, not their fault dammit. Detroit made 'em do it.

[lelgt60]

19. It is Detroit's managements fault, not Detroit's workers fault

Please make the distinction.

Everything I have read indicates the actual quality of Detroit cars is similar to Japanese cars. My own experience with my 2003 Silvarado truck is that NOTHING has broken in 5 years of actually using it as a part-time work truck (> 75000 miles)

And even in some of the quality issues, the fault is short-sighted decisions of management. It's not the worker's fault if management decides to use some part which is guaranteed to fail after 2 years. So, in that respect, I think initial quality is an indication of how the US auto worker is doing. Which is pretty good.

As to decisions about what type of vehicles to market and make, those are clearly not made by the average auto worker.