Eamonn Fingleton is the author of insightful books titled “Blindside: Why Japan is still on track to overtake the US by the year 2000” and “In Praise of Hard Industries – Why manufacturing, not the new economy is the key to future prosperity.” Whoever followed his advice either has committed suicide by now, or lives in a place where sharp objects are banned. Except for Bill Clinton and Ralph Nader, who think Fingleton is a swell guy. In truth, the Tokyo-dwelling Irish author has few friends left. He just found a bunch of new ones: the editors of The Detroit Free Press (Freep).
The Freep was so desperate to find a new scapegoat for The Big 2.8’s woes that they scoured the Internet and found and republished a two-week-old rant on Fingleton’s whacko blog “Unsustainable.”
“Detroit’s problems are partly – but only partly – its own fault,” Fingleton states in his opening salvo. The trouble with Detroit, Fingleton wrote, is not managerial incompetence, greedy unions nor wrong cars. Blame those numbnuts in Washington who failed to lock-out the foreigners. Without foreign competition, Detroit would be just fine.
“For 40 years the Detroit companies have been systematically undermined by foreign competitors’ predatory pricing in the U.S. market,” writes Fingleton. Whoever priced an import lately will beg to differ, but neither Fingleton nor the Freep are fazed.
The theorist then asserts that the Japanese “have kept their home market as a protected sanctuary, operating in cartel fashion and free from effective foreign competition.” As in: if the market be open, the Japanese would all drive Chevys. Living in Japan, Fingleton must be blind. But let’s play the numbers game…
Statistics from the Japan Automobile Imports Association show that the island nation imports some 300K cars a year. The U.S. only accounts for 15K of model year 2007’s imports, including, of all things, HUMMERS (favored by the Yakuza.)
According to Japan’s Automobile Inspection Registration Association, Mercedes makes the most popular imports, with 633,402 on the road. Next up: VW, with 623,089. And a little less than 200K units later, BMW accounts for 489,106 cars in the land of the rising yen. (We’ll get to the yen part soon.)
In Fingleton’s original piece, these statistics were misrepresented as “two German manufacturers, Mercedes Benz and BMW, enjoy token positions.” The Freep wisely (or maliciously) left it out. It would have begged the question: how many American cars are on the road in Japan? In all, just 50K Chevys. That’s less than 10 percent of Mercedes’ total. Not including 1473 of the aforementioned HUMMERS.
At some point, it should have dawned on Fingleton and the Freep that American exports have been on the rise. According to the Federal Reserve Bank of Chicago, “exports of light vehicles have increased by 52% since 2002, with exports of new vehicles up 21% and exports of used vehicles up almost fourfold.” Ignoring that factoid, Fingleton fingers another culprit for Detroit’s dementia: “the unrealistically high dollar.” Excuse me?
Until July, the greenback was so dirt cheap, that – damn the real estate crisis – there was a bubble in Manhattan condos, snapped-up by the Euro trash with wildly depreciated greenbacks. And now the dollar is heading back down, in the “unrealistically low” direction last seen in July.
The unrealistically weak dollar had its effect. “Between 2002 and 2007, exports to the NAFTA countries actually fell by 5%,” writes the Chicago Fed. “In contrast, Europe received 52% of the net increase of 287 thousand in new vehicle exports over that period; the Middle East accounts for about 40%.”
The rise of the Japanese Yen is the talk of Tokyo. Fingleton must not be just blind, he must also be deaf.
The Nikkei writes today: “The yen’s steep appreciation and the global economic meltdown have turned the tables on Toyota Motor Corp. and other Japanese manufacturers that had sought growth in foreign markets in recent years.” Even the Financial Times, which certainly is not biased towards Japan, concedes that “Dented consumer demand is exacerbated on the bottom line by the strong yen , which lopped a third off Toyota’s November forecast operating income.”
“So, yes, the U.S. car industry’s fate reflects in large measure American incompetence,” Fingleton’s piece ends, undeterred by simple facts. “But the main source of this incompetence has not been the engineers of Detroit but the opinion makers of New York and Washington.”
Apparently, even the Freep must have come to the conclusion that the $17.4b of taxpayers’ money is the last Detroit will ever see. The begging has ended. So let’s throw dirt at those who gave. Let’s demand quotas. Let’s demand a Detroit cartel. Let’s demand high prices. Let’s demand inflation. Nothing short of a full frontal assault on the forces ranged outside Fortress Detroit will save the Big 2.8. At least, according to Fingleton and the Freep.
They just rioted in the streets of Russia in protest of the sort of protectionism Fingleton is advocating.
Hilarious. This business amazes me.
Every time someone brings up the protectionist chestnut I invariably ask them, “Do you really think a Cobalt or a F-150 would sell well enough in Japan to render that argument NOT moot…if it were true?”
@John R: the Toyota (rebadged Chevy) Cavalier and GM’s attempt to market Saturn in Japan were both very short lived.
As far back as the early 1980s, the American car industry lost its so-called incumbent’s advantage — its historic position of productivity leadership based on being first into the business. This development resulted largely from being worn down by years of unfair trade.
This has to be my favorite. Yeah, the Big 2.63 were so productive until Toyota and Honda “wore them down.” Get real.
John
The one argument that halfway works about government intervention causing Detroit to die is that CAFE forced them to pump out shitty sedans to up the average fuel economy.
Of course, the reason why they are crap is because of higher labor costs and bad engineering, but I suppose GM would have been better off brand rep wise if they hadn’t been shoveling Impalas out the door to make the average and just been building trucks and luxury cars.
The duty and tax on imported vehicles in Japan is astronomical. BMW and Mercedes are popular imports because their buyers are well-heeled and will pay the premium for an elite brand. However, when faced with a decision of buying a Toyota or Nissan versus comparable Chevy or Ford, the 25%+ burden on US brands makes it a no-brainer for the mainstream buyer.
As for the cars themselves, there is the case that US cars are… for the most part… too big for the Japan market (and historically – too crummily built… but that’s changing). Small European Fords and Opels could fare well in Japan, but they lose to the price premium argument.
It is protectionist, and some can consider unfair. But it’s just one argument in a long line of defenses the 2.8 will argue without looking in a mirror.
Oh my god:
Eisenhower’s interstate system.
A 25% tariff on foreign trucks and 2.5% tariff on foreign cars.
CAFE regulations that were drafted by Detroit lobbyists to create demand for SUVs, Detroit’s last competitive advantage.
Safety and emissions regulations that keep out Chinese, Indian and a number of European and Japanese cars.
When Washington DC stop harming helping the failed Detroit automakers.
toxicroach:
CAFE did not start until 1978, what forced Detroit to make shitty small cars before then?
(Not a pro-CAFE argument, but I don’t think Detroit can use CAFE as an excuse for any of their problems, if anything it helped them sell SUVs)
The five stages of death are denial, anger, bargaining, depression and acceptance.
The Detroit Defenders are really hung up on the first two stages, and can’t get past them. I guess that this is going to take awhile.
@JGH: My friend, I’m typing this in Japan. Have you ever been here? Where 600K Benzes fit, other cars should have no problem. The roads here are fine. Better maintained than in Manhattan, where potholes could swallow small cars. My father-in-law drives a 7series. He has no problem getting through.
You overlook the brand that’s nearly as popular in Japan as the Benzes: VW. The small European cars that don’t seem to lose the price argument.
Morgan Stanley:
“The imposition of trade and investment barriers could lead to the return of the closed-economy inflation dynamic at just the time when slack has diminished in America’s labor and product markets. And, of course, the dreaded dollar-crisis scenario – hardly a trivial consideration in a protectionist climate – could lead to a much sharper spike in import prices than has been evident in a long time. All in all, such an unfortunate confluence of circumstances could exacerbate domestically driven inflationary pressures at the wrong point in the business cycle – in sharp contrast to a globalization that has acted increasingly to offset such cyclical pressures over the past 15 years.
There is great irony to congressional attempts to “fix” globalization: The odds are that the most extensive damage will be inflicted on the very constituency in the US economy that the politicians are trying to assist – America’s middle-class. One of the most important lessons of the 1970s is that inflation is the cruelest tax of all.”
http://www.morganstanley.com/views/gef/archive/2007/20070507-Mon.html
Flashback – remember the “voluntary quotas” in Japanese imports? From Time Magazine 1987:
“While Detroit’s automakers have been aided by six years of quotas on imported Japanese cars, guess who else has benefited handsomely? Answer: the very rivals that the quotas sought to curb. The trade limits created a shortage of Japanese autos in U.S. showrooms, thus enabling their makers to raise prices and boost their revenues by as much as $2 billion a year. That extra profit, which came out of the pockets of U.S. consumers, gave the Japanese automakers even more money for research to improve their competitive position against Detroit.”
Quotas drive prices up. We pay.
The five stages of death are denial, anger, bargaining, depression and acceptance.
The Detroit Defenders are really hung up on the first two stages, and can’t get past them. I guess that this is going to take awhile.
Now they’re in bargaining (with the feds for money), then depression (the great depression to follow), then acceptance (of bankruptcy).
John
Good read:
http://www.mesothelioma.net/thoughts-big/
The Freep is just hilarious. Much better than The Onion, IMHO.
Now they’re in bargaining (with the feds for money), then depression (the great depression to follow), then acceptance (of bankruptcy).
Sorry, but that doesn’t work. The last stage of death is not “filing.”
This could be a problem.
CAFE did not start until 1978, what forced Detroit to make shitty small cars before then?
I think the beginning of the End of Detroit as we know it could be traced to the Corvair. It had its faults, but what you did see come out of GM was a very innovative, risky, tiny car to compete with imports. It would be the first of many failures.
The Corvair is unique in the hall of compact-disasters made by Detroit in how innovative the vehicle was. Its DNA seems more like a Porsche than a Chevy, what with the flat rear-mounted engine and the turbocharger on it. Very weird for its time.
Of course, throwing your motor on the back like that makes for some “interesting” handling as old-school 911 drivers know. Proved to be the Corvair’s undoing with the arrival of Nader. I do think GM got a raw deal in that mess. Porsche makes a car where the ass flies out in front of you and people talk about the car’s “character” and “pedigree.” Corvair does it and GM gets their pants sued off and births a whole new cottage-industry of consumer product nanny-crats lead by their Apostle, Nader.
The stigma the Corvair got was the first instance of the American companies being perceived by Americans as making junk in that segment. They never got over it. GM tried to keep the Corvair around as a two-door “sporty” car. The success of the Mustang convinced the bean-counters that a small, relatively efficient sporty car didn’t appeal. So the Camaro shows up and the Corvair dies off with a whimper.
The D3 then responded “naturally” to their market, they got out of the business they weren’t good at. Oil-shocks and the resulting importplosion in the 70’s aside, the only reason Detroit kept trying to compete in such a low-margin segment where their cost-structure just couldn’t add up to non-UAW shops was because of CAFE after that. All of a sudden there was this artificial incentive to keep grinding at something they sucked at, small cars.
The fact they continued to embrace the suck for twenty years after CAFE is definitely the D3’s fault. But the foundations that set the stage for this I think were laid by a “bipartisan” coalition of “consumer advocates” and bureaucrats in conjunction with inept blue-blood management. But the Corvair is a great example of a company that broke its own mold and tried to be innovative, with artificially-inflated losses engineered by Nader and company convincing GM in this case to never even TRY being innovative or different in small cars again.
How is it that the Japanese car makers manage to make quality cars that meet these burdonsome Washington DC mandated specs? Yet Detroit can’t? The Japanese and Germans are not exempted from the regulations, as Detroit somehow seems to want us to believe.
Toxicroach: I’m sorry, but I don’t think labor costs had anything at all to do with America’s lack of product investment.
It’s a case of three companies largely isolating themselves to compete with one another, because, despite their yearly gains, foreign makers didn’t comprise enough of the market to be a meaningful adversary.
Until of course, they all of a sudden do, and then the management of GM et al. need to catch up on years of incremental improvements to all of their model lines as well as squandered consumer loyalty.
What they needed to do, instead of buying up foreign companies for short term stock gains and industry buzz, was to reinvest in their own product and brands across a wider model range, and not just do the right thing by trucks. Maybe they did this b/c foreign cars used to have a drastically different flavor from the domestics, and the American sales lead led them to complacency and arrogance, who knows?
It’s obvious though that the cause is an upper management problem first and foremost, and that something is very very wrong with the way that auto executives are hired, compensated and disciplined in our country. Let’s not forget, billions were spent on mergers and buyouts, while the core sedan products were probably the worst cars available in the US market, the money was there.
I would agree that tough union contracts make a company harder to turn around quickly, but really, the problem has to exist already for this to crop up.
CarnotCylce: good point about the corvair. I’d even say that the Omni K’s were a reaction to foreign product as well. Lack of continued investment is what I’d argue killed these cars though, not initial reaction. (GM screwed the pooch on handling Nader all on it’s own, perhaps making the Corvair unfeasable as a refresh-worthy option)
Lack of continued investment is what I’d argue killed these cars though, not initial reaction.
That is a good point about mailing-it-in and giving up too easily. Though in the Corvair’s case they made the car (and a Bus-looking van too, I think) for what, ten years or so? Its sad to realize, but GM hasn’t maintained a on-going model of car that long unless it was one of those cars they were totally ignoring and not investing in. Odd pattern there, and one with consequences they we all are paying for now.
Does anybody here know the actual tariffs that are imposed on American built cars in foreign markets (not just Japan, but what about Korea, or China, or…)? Was having an argument today in the lunchroom at work about this, but neither of us actually knew any facts.
Does anybody here know the actual tariffs that are imposed on American built cars in foreign markets
For Japan, the answer is zero. As in none. The US has higher tariffs than they do.
Japan makes it difficult for imports by having strict inspection requirements that delay the importation process. The delays raise the price, which discourages competition.
Irrespective of that, new American cars have no cachet value in Japan, so people don’t want them. They want Buicks as desperately as we do, which is to say that they don’t.
In any case, I don’t see why US producers would be eager to play in Japan. It’s a mature, losing market, even for most of the Japanese companies.
CarnotCycle:
The big-3 forced the “‘bipartisan’ coalition of ‘consumer advocates’ and bureaucrats” by disregarding safety (even cheap things like seatbelts) in the design of their cars.
The safety regulations have helped the big-3 a great deal by keeping out foreign competition, and it’s hard to claim that regulation kills auto companies when BMW and Mercedes thrive under German regulation.
The lesson from the Corvair was that nickel and diming the engineering of a rear engined car has more serious consequences than nickel and diming the engineering of a conventional car.
GM had been nickel and diming all along because “customers don’t care about what they can’t see”, but with the Corvair it caught up with them.
In what has become a habit for GM the Corvair was killed shortly after its design problems were fixed.
The world changed in the 1970s. People stopped wanting big, flashy cars every two years and started wanting reliable, safe cars every four to eight. The big-3, dealers and UAW refused to accept this.
The big-3 finally make some good cars, but it’s too late to save their current structures.
The cars are no longer the problem, the Detroit automakers now need to shed thousands of dealers, tens of thousands of UAW workers and billions of dollars of debt to become competitive.
The big-3 forced the “‘bipartisan’ coalition of ‘consumer advocates’ and bureaucrats” by disregarding safety (even cheap things like seatbelts) in the design of their cars.
I can see how the nickel-and-diming cost the D3. You could say it didn’t even catch up with them with the Corvair, it only caught up with them – finally – last week. But the reaction, the “solution” to the chintzy safety on those cars cooked up by our sage bureaucrats and the likes of Nader has been to create a mandated regulatory nightmare, that as often as not makes no sense.
Eurocrats and D.C. crats between them have probably cranked literally a million pages of safety regulations that carmakers have to adhere to, that aren’t even compatible with each other. Emissions is equally banal and the stepsister of Safety from a regulatory point-of-view. A Bimmer 5-series I buy in Munich is not street-legal or tail-pipe legal in the States though I imagine its just as safe and relatively clean as the 5-series I can buy in the States.
It also does not “solve” the safety problems originating from Detroit, which makes me wonder what the Safety Establishment is good for. I’ll take the handling problems in a Corvair over the rolling-detonator that was Pinto ten years later, a vehicle which had to jump through all the newly established Safety Net, unlike the old Corvair. I find it telling that the Safety Establishment wants the power to grant “legality” on one car or another, or demand certain things (like airbags) in cars. But then when the lawyers come-a-knocking when the mandated things like airbags start blowing tot’s heads off, the Safety Crowd is nowhere to be seen – no one ever sues the Consumer Product Safety Commission because of something they approved erroneously, or even corruptly. All power yet no material accountability, kinda like the CEO’s we’re blasting all the time around here. Same goes for our SafetyCrats over at the FDA. don’t like it as implemented whatsoever.
That bureaucracy has also made start-up and time-line-to-market costs so prohibitive it essentially has cut-off the chances of scrappy automotive start-ups originating in the States to take the places of the Bailing 3, or at least keep them on their toes. One of the biggest costs with government meddling like this isn’t just what it dilutes or impedes, but the things that you never see because they never had a chance to exist at all.
Fingleton is correct about manufacturing, else why would China want to be #1 in that area. Basic economics of wealth creation.
Detroit’s downfall? An inability to see beyond their noses, and 100% lack of effort in engineering cars for the rest of the world. No exports for the USA. Let Opel do it.
Morgan Stanley and the “inflation is the cruelest tax of all”. BS from a self-serving recipient of bailout money. Hyperinflation, sure, we all hate that, but decent inflation, we need it – not deflation. How else are we going to pay for the vast economic stimulus now in place? How else are we going to get going again? Responsible money managers such as Jarislowsky in Canada argue for it, and since he is a billionaire and free of BS, I’ll trust him over this site for advice, especially as I have a lot of my IRA equivalent with the man, and it’s down oh, 3% so far.
Try some excerpts:
http://finance.sympatico.msn.ca/investing/insight/article.aspx?cp-documentID=15166803
or
http://www.thestar.com/Business/article/548002
Bertel, what about Japan keeping out rice from the US? Not protectionism? Are the Japanese and Chinese as pure as the driven snow? Methinks not. Japan is about to pull a soccer “injury” and is lying on the ground moaning and blaming the other guy, while they dream up a way to devalue the yen and save Toyota from loss of face. And I like Bill Clinton, so trashing him here makes me wonder, what? Well, the US had a balanced budget when he left.
Fingleton is correct about manufacturing, else why would China want to be #1 in that area. Basic economics of wealth creation.
Yes and no. Traditional manufacturing includes a high labor cost component. So if you’re going to build products in a country with high labor costs such as the US, the products need to be expensive enough to hurdle the cost.
Cars can actually fit that bill, which is why cars are still made in the US while televisions and a lot of cheap trinkets are not. There’s no advantage if the items can’t be produced for a profit, and many of them can’t.
Fingleton is correct about manufacturing, else why would China want to be #1 in that area. Basic economics of wealth creation.
China is into manufacturing because it fits their current assets, which is lots of literate people who will work hard on the cheap, and a regulatory authority that can be efficiently greased to get things done, quickly.
Where China desperately wants to be – and where it will never get to so long as its a police state controlling thought – is as a place where all these neat things they manufacture are invented. That place right now bar none is the United States.
jgh :
December 23rd, 2008 at 11:33 am
The duty and tax on imported vehicles in Japan is astronomical.
False. The import duty on vehicles imported into Japan is zero.
CarnotCycle:
We might have to agree to disagree a bit on whether the US regulations, on net, hurt consumers or help them, but I think we can agree that US regulations have not put the Detroit automakers at any competitive disadvantage to the Germans or Japanese.
In fact, as you point out, US regulations require changes even to very advanced foreign market cars like the BMW 5-series, so if anything the US regulations give the Detroit automakers a competitive advantage in the US market.
We might have to agree to disagree a bit on whether the US regulations, on net, hurt consumers or help them, but I think we can agree that US regulations have not put the Detroit automakers at any competitive disadvantage to the Germans or Japanese.
We might disagree on the US regulations, but I am in complete agreement that Detroit holds no advantage via those rules vis-a-vis the foreigners, with one caveat:
Initial pollutant-regs requirements for cars in the 70’s were defined as cars made in the United States, not sold in the United States. I believe (though I could be wrong) that CAFE itself “fixed” that discrepancy. That was a small boost to the foreigners for a time, however.
I have read somewhere on this site a post where someone was saying CAFE was cynically constructed to make it so Detroit could manufacture SUV’s with a tax-advantage, in a segment where Detroit was strong. I tend to think it was the other way around, CAFE drove manufacturers to start making “light trucks” in lieu of “large cars” because of that. Minivans became all the rage within a couple years of CAFE, followed by the Explorer – which was the genesis of the SUV business and vehicle archetype as we know it today.
It also leads to the absurd, a Subaru Outback Wagon is a “light truck” and that classification (I have no idea what hoops need to be jumped for “light truck” status) was a significant technical priority in the re-design.
Same goes for CUV’s. They strike me as what they are, a jacked up car that can pass for being a “truck” with the regulators. Bizarre.
Why Manufacturing, Not the Information, Economy, Is the Key to Future Prosperity
What a joke! The so-called “Information Economy” is driving advances in automation technology that will start taking away traditional manufacturing jobs at an exponential rate. Even dirt cheap third world labor won’t be able to compete. Fingleton is clueless.
“The stigma the Corvair got was the first instance of the American companies being perceived by Americans as making junk in that segment. They never got over it. GM tried to keep the Corvair around as a two-door “sporty” car. The success of the Mustang convinced the bean-counters that a small, relatively efficient sporty car didn’t appeal. So the Camaro shows up and the Corvair dies off with a whimper.”
Biggest myth in automotive history. Look at the sales numbers. Look at the press at the time. Read the books of the people who were there.
It had (very) little to do with Nader and GM. And everything to do with the Mustang. It’s like GM fans can’t admit it, so instead they move into self-loathing mode and blame themselves. Weird.
CarnotCycle:
Where China desperately wants to be – and where it will never get to so long as its a police state controlling thought – is as a place where all these neat things they manufacture are invented. That place right now bar none is the United States.
This is hilarious. China suppresses political thought, which I guess this commentator confuses for all thought, especially technical thought.
And the reason the US is ahead of the tech r&d game is because talented people abroad tend to emigrate here due to the demand and higher average standard of living, and also a fairly open culture and immigration laws for those specific niches.
Bertel, what about Japan keeping out rice from the US? Not protectionism? Are the Japanese and Chinese as pure as the driven snow?
This site is called TheTruthAboutCars. Our mission is not to save the world from all idiocy, just from car idiocy. This is also not a site to defend or attack any country. It’s a site where the truth about cars is excavated.
Having said that: The Japanese rice import quota angers the Japanese to no end, because they pay a multiple of world market prices for their staple. Used to be 7x, I lost track of it in the recent food turmoil. Even the Europeans instated braindead banana quotas to protect their strategically indispensable base of European banana farmers. The agricultural world is full of quotas, everywhere. Don’t get me going on it. Who pays? We do. Quotas are a protectionist racket: Blackmail against the people it claims to protect.
Back to cars: Listen to the Fingleton, Friedman & Co dolts, and you will get higher prices, crappier cars, high interest rates and high inflation. Or worse, stagflation. The infamous Smoot-Hawley tariff of 1930 was one of the many causes for the Great Depression. Be careful of what you wish for.
I leave for a moment, and PCH goes back to being correct again. I am wondering if he doesn’t sometimes argue with me for the fun of it.
Without foreign competition, Detroit would be just fine.
Well, Fingleton is absolutely correct. If American consumers were denied access to quality cars from abroad, they’d have to settle for crap from Detroit. And Detroit would prosper — very much at the expense of the 99.8% of us who are not autoworkers.
Where Fingleton is wrong is in not understanding the most utterly basic premise of all: the entire point of the economy is to satisfy the needs of the consumer. Producers are just the hired help, and they can either be competent, or they can go straight to hell for wasting our scarce resources not doing what the are supposed to do.
Government policies that obsess about the fate of producers are misguided, and lead to such idiotic things as pissing away 4 billion dollars on a doomed Chrysler so that its billionaire masters don’t have to risk any of their yacht & caviar money tending to their own investment.
Bertel,
The problem with blowing off the “rice” argument is that as a country we get screwed either way. When we admittedly can’t penetrate a market with products that aren’t competitive, it would be nice to balance our trade deficit with those things we can produce competitively.
Besides, if the Japanese were that angry about paying so much for rice, wouldn’t that anger translate into changes in their import restrictions? It appears that Japanese farmers have more political power than Japanese consumers in Japan. Unfortunately, with their Southern transplants and Southern Senators, Japanese automakers now appear to have more political power than American automakers have in the US.
It appears that Japanese farmers have more political power than Japanese consumers in Japan. Unfortunately, with their Southern transplants and Southern Senators, Japanese automakers now appear to have more political power than American automakers have in the US.
How does that logic work?
Unfortunately, with their Southern transplants and Southern Senators, Japanese automakers now appear to have more political power than American automakers have in the US.
It’s not the Asian automakers that have the power, it’s the multiple generations of disaffected consumers that the Detroit brands have cultivated over the years.
Pch101: The Detroit Defenders are really hung up on the first two stages, and can’t get past them. I guess that this is going to take awhile.
And it’s going to be extremely painful to watch.
no_slushbox: The world changed in the 1970s. People stopped wanting big, flashy cars every two years and started wanting reliable, safe cars every four to eight. The big-3, dealers and UAW refused to accept this.
Detroits V-8s and I-6s built during the 1960s and early 1970s were quite reliable. They were very low maintenance for the times, too. They led the world in these areas. And Detroit built the best automatic transmissions, stereo systems and air conditioning systems in the world, too.
The problem was that fuel economy was terrible – in its “Owners Report” surveys for the 1969 standard Chevrolet, Popular Mechanics reported that drivers of the Chevrolets equipped with the biggest V-8 were averaging about 10 mpg. This was a family car, not a muscle car or a Corvette.
Second, Detroit’s suspension systems were not very sophisticated. Detroit cars either rode like a mattress and handled like one, too, or rode like a truck and offered some degree of handling prowess. But even with the heavy duty suspension options, Detroit’s offerings could not match the nimble handling of the imports.
Detroit’s cars in the 1960s were safer than virtually all of the imports – except for Mercedes and Volvo. But those two marques were the exception even among the foreign manufacturers. VW Beetles, for example, were deathtraps at that time compared to the average American car.
Every time I hear or read something from Detroit apologists, I have a nearly uncontrollable urge to trade my Ford in on a Prius.
American rice is not being kept out of Japan by tariffs and quotas. It’s rice from Thailand and other Asian countries that Japan is worried about. Just as good as Japanese rice, and much cheaper.
The American rice industry is not a good example to showcase as being held back by trade barriers. Believe it or not, the Japanese-style rice grown in the United States is all grown in California’s Central Valley.
Farmers growing rice in a near-desert is one of the more brainless products of our government agricultural programs. Charles Schwab, among others, gets paid a nice subsidy for growing rice on his huge acreage here (a 1,550-acre duck club). A joke if you can bring yourself to laugh at it.
Not to say that the Japanese do not try to keep their markets closed to imports. They do. But American companies have done almost nothing to penetrate the Japanese market.
Do you think it has been easy for Toyota, Honda and Nissan to succeed in the American market? It’s taken them decades of persistence and billions in investment to do that.
If American companies made that kind of effort, they would find success in Japan. But they don’t. I’m an attorney who lived 10 years in Japan, have been married to a Japanese woman for 20 years, and speak Japanese fluently. In spite of my best efforts, I have yet to be able to find any real American clients who have me work in Japan. Only Japanese companies will hire me.
The carmakers have been some of the worst at this. They sell a few cars in Japan, and complain about the markets being closed, but that’s about it. They won’t even make right-hand drive cars to sell there. Pretty pathetic.
Patrickj :
Every time I hear or read something from Detroit apologists, I have a nearly uncontrollable urge to trade my Ford in on a Prius.
Ouch!
Well, the Prius is a great car; I’m still enjoying my 2004, and I’m no greenie. I say go for the navigation and sound systems. I got mine new but there weren’t any used ones available in ’04. Today you can get a used one and use it like a pickup truck like I do mine.
Just be mindful of the weight limits. Only 5 bags of concrete at a time. Luckily, my concrete project is over with. You can carry a lot more woodchip mulch and cow compost than you can concrete!
Without foreign competition, Detroit would be just fine.
Of course the American consumer would be significantly less than fine.
Ignoring that factoid, Fingleton fingers another culprit for Detroit’s dementia: “the unrealistically high dollar.”
Give him the benefit of the doubt; maybe he was thinking of the Canadian dollar? the devaluation of the US dollar was one of the reasons given by many if not most people for the rise in oil prices over the past several years until very recently. Is this guy braodscasting his ideas from a hole in a mountain on some remote island with no incoming communication from the outside world?
@CarnotCycle
I read Nader’s “Unsafe at Any Speed” years ago. The thing I remember most about the Corvair was that in a front-end collision the driver would be killed as the steering column speared him in the chest, even if he was wearing a safety belt. (Safety belts were not mandatory in those days.)
This is a defect on a par with flammable Pintos. No wonder the public rejected it. They must also have had second thoughts about a company willing to sell death-traps for profit.
A modest proposal for Mr. Schmitt
I have only just now become aware of your commentary on my Detroit Free Press article of last December. I stand by my article. Also by my books, which you evidently have never so much as opened. You take issue, for instance, with my point that the dollar is massively overvalued, but all you can say by way of rebuttal is that Europeans some months ago were buying a lot of apartments in Manhattan. Your perspective is local and short-term: mine is global and long-term. You evidently aren’t aware that America’s current account deficit has ballooned sixfold from the already disastrously high level it recorded in 1989. By comparison Japan’s current account _surplus_ has soared threefold from a level in 1989 that already then had earned that nation the sobriquet “juggernaut Japan.” Judged by its trade performance, the United States is now weaker than any major nation since the last “basket case” years of the Ottoman Empire. I calculate that for the United States ever to balance its trade again it would have to increase employment in manufacturing industries by 40 percent — and all the new jobs would have to be at the top end, which is to say in highly capital-intensive and knowhow-intensive activities. When do _you_ think America will again record a trade surplus?
I have a modest proposal: if you really believe the Japanese car market is open why don’t you join me for a debate on the subject — before the Council on Foreign Relations in Washington. I will pay your fare.
Eamonn Fingleton
—
Aoyama NK Building 2F
Minami Aoyama 4-3-24
Minato-ku, Tokyo 107-0062
Telephone: (81) (3) 5476 8727 or 5770 5087
Fax:(81) (3) 5770 5088
Website: http://www.unsustainable.org
now THAT is interesting. New thread RF?