GM’s ex-Vice Chairman of Global Product Development left on a sour note. Bob Lutz claimed America is a nation that hates its own auto industry. It’s a remarkably nasty remark that’s almost as paranoid as it is insensitive. But not quite. The truth is much more specific and the other way around: GM executives hated their own customers. Why else would they have treated them with such contempt, selling them non-competitive products and inflicting such abysmal dealer service? (Heard the news?) Never mind. GM has built some tremendous enthusiasts’ cars: Corvette, G8, CTS and more. And now, the U.S. auto industry in general is about to experience a convulsive, cataclysmic change. Is that a good thing?
Where the future of automobiles is concerned, we, the American consumer, have become hostage to fortune. In any hostage or abuse situation, there will be some victims who come to identify with their captors. It’s no surprise, then, that some enthusiasts have reacted to the industry’s impending collapse by adopting the words, attitudes and beliefs of our “captors” in the worlds of finance, business and government.
Across the Internet, even here among the B&B, people are responding to this crisis, not as enthusiasts, but as craven cowards who believe that appeasement of, and identification with, those captors will somehow “save us” from what lies ahead. In doing so, these people are not only betraying their fellow enthusiasts, they are ignoring their own self-interest in favor of ephemeral, dimly understood goals.
Consider, if you will, the oft-repeated canard that “cutting brands, product variety, and dealership presence is a good thing.” For whom, exactly? Every time a manufacturer cuts a brand, thousands of enthusiasts are denied the chance to buy the car they really want. You may not have been an Oldsmobile fan, but somebody was, and that person can no longer purchase a new Oldsmobile.
Here on TTAC and elsewhere, pistonheads are ruthlessly cheering-on the death of Pontiac. But what about the people who have driven and loved Pontiacs all their lives? Are “they” less important than “we” are? Are we superior to them because we don’t like ribbed lower-body panels or superfluous eyeball vents?
When our favorite brand, whether it be Porsche, Lexus, or Hyundai, falls under the knife in the future, will we find it as ironically amusing as the death of “the excitement company”? Where has our empathy for fellow enthusiasts gone?
What about cutting product? The business press applauded when Chrysler cut the Dodge Magnum from its lineup, but why did we? How can reducing choice be a good thing? Sure, it may make business sense, at least according to the wizards of Wall Street. But who here values a number on a balance sheet more than a rip-snorting, tire-smoking Magnum SRT-8? I continually read members of the B&B talking about how a particular product needs to be “put to death.” Where’s the fun in that?
Here’s another slice of reality for you: when dealership counts dwindle, the customer suffers. The primary reason Honda and Toyota hold retail price levels better than the Detroit competition isn’t the excellence of the product. Rather, it’s the lack of intra-dealer competition, plain and simple. When dealers compete, to paraphrase the TV ad, you win.
I cannot think of any reason for anyone outside Wall Street to want a reduction in operating dealers. Trust me on this: unless you have a seven-figure investment in an auto company, you stand to gain more personally from saving money on a new car than you do from some stock-price bump resulting from closed doors at your local Ford store.
The facile response to every concern I’ve raised above is always “Toyota.” Toyota doesn’t maintain superfluous brands. (Except, um, Scion.) Toyota doesn’t pamper enthusiasts with money-losing models. Toyota doesn’t have enough dealers to result in bare-knuckle newspaper-ad price wars. Toyota holds its nose, curbs its enthusiasm, and sells more cars than anyone else in the world, primarily to people who hate cars.
Unless you’re a major Toyota stockholder, however, this doesn’t help you one bit. The companies that do go out of their way to connect with you, the automotive enthusiast . . . well, they may be irrationally exuberant, they may not always show a nine-figure profit, and once every so often they may require a helping hand. But they are on our side.
The bankers don’t care about cars; they care about money. The government, in general, hates automobiles and everything they represent. The mainstream media finds automotive enthusiasm to be amusing at best and despicable at worst. Who’s on our side? Who’s trying to provide exciting cars at affordable prices?
Answer that question for yourself, honestly, and then see if it doesn’t affect your attitude towards everything from gas tax to the much-derided bailout. Stop being ashamed, stop loving your tormentors and aping their discourse. The future those people envision—an endless series of identical, zero-impact crapwagons shuffling in a low-speed line down a carpool lane to nowhere—may be good for business, but it’s bad for us.
wow……..there is someone around here who gets the big picture
Your logic is flawed.
You seem to assume that cars will go away completely or that consumers will have a single plain-vanilla only option. The end of choice, the end fun cars.
I once held you view – in the 70’s when American cars were dying because of pollution control requirements and worker indifference to quality.
For 10 -15 years it WAS ugly.Cadillac made “the last convertible”. Triumph, MG, Alfa and many others vanished from our streets. The year that Car and Driver reported that the fastest car in America was a pickup truck is seared, seared in my memory. I still have the hat.
But in 1986 I bought a car from a brand that hadn’t existed 5 years earlier that had all the performance features -DOHC engine 4 wheel discs, 5 speed, fuel injection – that my Alfa had had 10 years earlier, and the new car was a faster and better car. And cars just got better from there. New brands entered the market – Acura, Lexus, Infiniti, Hyundai, others…
Every time a manufacturer cuts a brand, thousands of enthusiasts are denied the chance to buy the car they really want. You may not have been an Oldsmobile fan, but somebody was, and that person can no longer purchase a new Oldsmobile.
Not enough people wanted to buy Oldsmobiles to make it worth manufacturing them. In fact, if somebody really wants a new Oldsmobile, I’d bet $20 that there is STILL some unsold new/old stock out there somewhere.
You have my sympathy, Jack, but you sound like a buggy-whip salesman crying in his beer.
I love the United States, I am a flag waving patriotic nationalistic Pro USA American. However GM is not synonymous with America. I love my country but GM is not my country. It seems that most people who work for the former big three have this warped convoluted bizzaro world logic that GM equals USA and Toyota equals Japan. Sorry I would no more confer GM with equal status of the USA than I would on a potato chip manufacturer Frito Lay. If you don’t buy their potato chips you hate america. Yes Bob Lutz that is how stupid you sound.
“Here’s another slice of reality for you: when dealership counts dwindle, the customer suffers. The primary reason Honda and Toyota hold retail price levels better than the Detroit competition isn’t the excellence of the product. Rather, it’s the lack of intra-dealer competition, plain and simple. When dealers compete, to paraphrase the TV ad, you win.”
We pitted three Toyota dealerships (each ~50 miles apart from the other) against each other when we bought out last car. One didn’t want our business, but the other two slugged it out to the tune of over $1100 off MSRP. Not as much as the domestics, but they will wheel and deal.
Dude I don’t know if you are just be facetious or not but man I am so glad to come across someone that at least is willing to look at things this way. “You may not have been an Oldsmobile fan, but somebody was, and that person can no longer purchase a new Oldsmobile.” Well I was. At that time the Intrigue was the best family sedan GM made and it was rather sporty in styling and handling. Yes Honda had way better quality but folks still ask me what kind of car it is. Olds last year in existence it sold over 130thousand cars which is more than everyone at GM but Chevy right now. I like the Dodge Magnum as well, the interior sucked bad though.
I certainly don’t disagree with you on most counts. However, I would separate even more clearly the attitudes of car companies from that of their customers.
I don’t like Toyota products very much, but admire the company’s focus until recently.
If anything, I’d be more likely to buy some of the fun GM products than almost any Toyota product. (Disclaimer: I’m a 31 yr-old guy who loves car marketing, and driving).
However, I won’t shed a tear for Bob lutz. Why? Because he put his own view, or “vision” above that of anyone else, generally going for either: powerful sports cars
or hail mary passes when in charger of less fun vehicles, it oscillated between the pretty good (Malibu) and plain average (HHR). Not a single game-changing product in the line of a Mazda2. And no focus in execution either.
So, sure, all those cars, and divisions, and dealers are fun. But shareholders care about getting their money back. That’s what capitalism is all about. And if a company cannot provide that, then no amount of SRT-8 tire smoke should save it. That’s the simple logic of the markets. It doesn’t matter that the B&B or anyone else rants for or against a vehicle. If a company loses money, it will cut dealers, vehicles, and employees. period.
And since cars cannot exist in a vacuum, I simply cannot agree at retreating in our V8-shaped shell and calling “those people” for trying to kill the automobile. Car companies and their customers have been adept at doing that themselves. If large SUVs had not rules U.S. roads for the best part of 2 decades, there wouldn’t be talks of a gas tax.
A gas tax is actually a very capitalist way of correcting one element that had been lacking from the market: externalities. A large vehicle with high emissions has an impact on all other members of society, and yet nobody was paying for that. A gas tax corrects that. unlike CAFE, it does not mandate which vehicles should be built or bought, but acknowledges increased responsibility.
Ya know, no on is claiming choice and competition is bad. On the contrary, we love it.
But that love stops when they start extorting me for tax dollars to maintain their business model. Then I hate them.
Resources spent propping up dead brands walking are resources that are not being used to develop new products or improvements.
Fewer choices ahead, yes. Better choices from what remains and is to come, I think so. Who will lament not being able to buy a G6? Isn’t the Malibu a much better version of the platform? Without a huge number of brands and models to support, doesn’t it seem logical that more development dollars can be put into the remaining models, maybe even making incremental improvements year-to-year? And cars aimed at enthusiasts just might make it to market in a timely fashion, unlike, say, the new Camaro. How long have we been waiting for that?
When the models that “must die” from Pontiac are simply a Chevy with a different grill and some triangle logos stuck on random parts then YES they must die. I’m one of those people that bought a Dodge Dakota because it was different (not too, not too small). I like lots of choices when it comes to vehicles since there are many niches that need to be filled so someone should do it. However trying to fill every possible niche by creating variations on theme just to satisfy another division is silly. Pontiac gets an SUV too? Why? Is the GMC, Cady, or Saturn version not good enough? Everyone seems to understand this concept except GM… as I do not currently see a Scion version of the Camry or Tundra.
Many of GM’s brands have glorious pasts. But GM’s various brands do not stand for anything anymore. Slap a bowtie on a G8 and call it an Impala. Change the name of the Sky to the Wildcat and sell it at Buick dealers.
There, I’ve just killed Pontiac and Saturn while saving their only unique products.
Now that the Detroit automakers are on welfare, or in the case of Ford, soon will be, the question is what will make them viable.
That is the only question.
Unless one is happy endless bailouts being doled out by a Car Czar.
The quickest route to consumer choice would be to get rid of the Chicken tax.
Americans are no longer held hostage to the Detroit automakers product range. Hyundai is about to release a RWD 6-speed coupe with the choice of a turbo-4 or powerful V6.
Forgive me if I fail to see the oppression in that.
We are well aware that killing some of the cut throat, inter-competing domestic dealers will raise prices. That is the point.
I would rather have GMs cost more than have GM live on government bailouts forever.
Many of us, while enthusiasts, would rather save the concept of private industry in America than save unpopular, redundant GM brands.
Jack, reality can suck. Take an aspirin, get a good night’s sleep, dream of endless Magnums, and you’ll feel better in the morning.
At the end of the day, making cars is a business. In business comes making decisions and the best results come by focusing on what your company is good at. Being all things to all people may be a utopian desire, but is ultimately an unsustainable ideology.
Enthusiasts are a part of the car buying public, but they are not the only part. Therefore they must be accommodated according to the share they constitute.
Money, being the great equalizer between supply and demand, has, does, and will dictate our choices, and subsequently the success or failure of particular vehicles. He who has the money has the power. How it shifts is as natural of a swing as the rising tides.
“The primary reason Honda and Toyota hold retail price levels better than the Detroit competition isn’t the excellence of the product. Rather, it’s the lack of intra-dealer competition, plain and simple.”
If it’s really plain and simple, then surely you have of proving this beyond question. I, of course, would put forward that people will pay more for a vehicle they trust won’t die in the driveway and depreciate to worthlessness.
I have to disagree with you on brands. There is no such thing as Pontiac any more, other than a name. When I was a kid, there was a thing called the Pontiac Motor Division. It designed and built its own cars. 326, 389, OHC 6 are designations that still rattle around the heads of old Pontiac enthusiasts. Mate one of those V8s to a big sedan with the 4 speed HydraMatic and you had plenty of reason to avoid the Chevy dealer who could offer you nothing but a 2 speed Powerglide. My point is that the argument over whether to kill Pontiac is about 30 years too late – because GM did it a long time ago, along with all the other “Motor Divisions.”
The G8 is a great car, but it is not a Pontiac. It is a GM car that someone decided to put a Pontiac logo on. It could just have easily been called a Buick Wildcat or a Chevy Impala SS.
Those of us who call for the culling of brands see a business model that slowly destroyed the value of the GM nameplates and now is saddled with the legacy cost of trying to support the brands (only it is now 8 instead of 6 from the days of yore)with about a third of the volume as before.
GM is like the guy who squandered his fortune on booze and gambling and can no longer afford to live in the ancestral estate, but can’t bear to leave, so he just stays there and watches if fall down around him. Everyone in town remembers what a grand place it used to be. But it isn’t any longer. This is GM. It is no longer the evil empire (I was a mopar fan). It is just a sad shell of what used to be. We have to deal with what we have, and the question is what can be done to save it. If it takes a C-11, culling brands, and paring the company to the bone, there will still be a lot more vehicle choice for us car people than if we try to keep it like it is and watch it swirl into liquidation.
Hell, maybe they could merge with Chrysler, kill all the brands and call all the new cars Hudsons. If they can’t sell it as a Pontiac G8, maybe this is the chance to resurrect the Fabulous Hudson Hornet!
Lokkii, I remember the 70’s well, and using the same logic I come to the opposite conclusion. 10-15 years for someone already used to buying new cars which are interesting can be more than a lifetime (figuratively and also literally), with many new car $ literally thrown down the toilet buying what turns out to be garbage.
I’m not against the US auto business in anyway, but they do need to “re-evaluate” some of their brands. I’m all for GM having a ‘excitement’ brand, but Pontiac is not it! Excitement has to be built into their products, not their marketing documents!
I would gladly buy a Pontiac that was a superior product to it’s competitor. The Vibe, Solstice, G5, G6, Torrent, Wave all SUCK! The G8 is close to being a cohesive product to it’s Brand identity, but with the exclusivity of the manual tranny to only the top-spec models, it’s not on my shopping list.
The products have to fit the brand. I’m all for keeping Pontiac around if they had great products to sell. but they don’t so kill it!
GM executives hated their own customers
I would say it a different way: GM executives think their customers are people like THEM: Rich, isolated in Grosse Pointe or Bloomfield Hills, the wife needs something to drive to the country club, the high-school age son needs a slick roadster to take to college, etc.
Now it’s great to want to have those customers, But the truth is that the overwhelming majority of GM’s customers are the polar opposite….older, less educated, blue-collar, rural, fixed income, etc. They’re the ones buying the Impalas and base level Cobalts (not to mention $15 K Silverados). Half of them probably can’t change their radio presets and are asking where the 8-track or CB-holder is.
The truth about management is that what they think their target market is stopped looking at American cars 20-30 years ago, and unless they have some sort of affiliation/relation to Detroit, they will probably never look again.
But the execs’ families sure look good driving them (believe me, plenty of Solstice/Sky/CTS/SRX/SSR/G8/GTO driven by jewelry-jangling bedazzled wives and snot-nosed kids of execs around here).
This fundamental misunderstanding of the customer leads time and again to the wrong discussions and the wrong decisions and ultimately the wrong products. Ultimately the execs have no clue that they missed their mark, and the cycle starts again.
Every time a manufacturer cuts a brand, thousands of enthusiasts are denied the chance to buy the car they really want. You may not have been an Oldsmobile fan, but somebody was, and that person can no longer purchase a new Oldsmobile.
Ok, yes, but that’s survival of the fittest. I hate like hell that all these icons of my childhood/lifetime are falling to the wayside (just for a small example – RCA, Polaroid, Caldors, HoJos….). As the owner of one orphan (Isuzu) and soon-to-be another (Saab), I’m disappointed about their leaving these shores, but also understand growing and developing with the market (and a little luck) is necessary to survive. Neither brand did very well with that (once again… thanks GM).
Still, if someone had the time or care to investigate, I bet we currently have more automotive brand choices in our market than since anytime post-WWII.
The author is totally off-base here. We don’t cheer for the downfall of Oldsmobile and Pontiac just because we don’t like their cars. We cheer because they are bad businesses that take resources away from making better cars. And by “better cars”, we don’t just mean enthusiast-oriented products, we mean cars that appeal to a variety of consumers. Just because I don’t personally like the Toyota Camry doesn’t mean I don’t appreciate the quality of engineering and manufacturing with which it was built.
And I’m all for choice, but that’s not the whole equation. You could give me a choice of six colors of poo, but ultimately they all still smell like s**t. As auto enthusiasts, we’d much rather have a choice between two gems than six turds.
So your argument is that enthusiasts should promote an Alamo scenario where companies keep up their self-destructive practices for our amusement?
Where does that leave the enthusiast when his favorite company is dead or on welfare?
Oh right. We’re seeing it, and its ugly.
Also, I kind of like the fact that while I paid list on my Honda, it doesn’t depreciate faster than I can pay off the loan! So hurrah for not having a bunch of cannibalistic dealers and fleet sales eating away at me from on the back end.
Maybe part of this is the General’s obsession with brands – the very idea of brands is becoming silly. There was a time when, just to take an example, a guy named Saul Marantz made stereo equipment. He stuck his name on them, and it meant something: until the late 1960s Marantz gear was well-made and worth the money. Then Marantz sold out to Superscope, and Superscope started cheapening the brand. It never exactly got to be a joke, but it no longer stood for rivet-like reliability and good sound. This is just about exactly true with the decline of the Cadillac brand but it fell a whole lot further.
There are many too many products being sold on what was, and not what is, good about them and that is about all brands accomplish when they are sold and traded like aging mules.
Brand means nothing if the owner doesn’t support it; and “support” in the General’s case has been “that’s the nameplate and it stands for this particular amount of money we want.”
Jack, – you say: “The truth is much more specific and the other way around: GM executives hated their own customers. Why else would they have treated them with such contempt, selling them non-competitive products and inflicting such abysmal dealer service?”
I would extend this contempt for the American consumer to most every large American corporation. The arrogance of excessive and outrageous pay and bonuses, poor customer service, stupid jingoistic corporate “messages”, outsourcing of jobs. The whole lot of executives, err thieves…and their “all in bed together” boards of directors should hang – – together.
I guess I’m confused about what Jack is trying to say here. Car companies should continue to make crap cars that people won’t buy because somebody likes them? And those of us who breathe a sigh of relief when a company makes a business decision that will allow that company to, you know, stay in business are “craven cowards?” We should be celebrating badge-engineered sub-brands because they used to make cool cars 40 years ago?
Companies can’t continue to make cool cars if they can’t make a profit, and while “Love” might make a Subaru (whoever came up with that ad slogan should be whipped in public) it damn sure won’t save the Detroit car companies, no matter how intense that love might be.
“..selling them non-competitive products… ”
Are you running for Congress? I expect better than that kind of BS here. You may be able to give away non-competitive products but if you sell them to anyone, to that person they are not only competative, they are the best choice. Might not be yours, so don’t buy one. Bigotry isn’t pretty or productive.
FOR SURE! I agree….I loved my SAAB 9-3SS and I love my new/used 9-5 SportCombi Aero. I must have been lucky because I have never had any “SAAB” stories for either one.
Oh! I was lucky enough to have a Magnum as a rental a couple months ago…I thought it was a very cool car and wondered what the hell was so wrong with it. (A little more R&D would have helped, but oh well.)
I cannot think of any reason for anyone outside Wall Street to want a reduction in operating dealers.
How about Soviet-grade state laws that turn many car dealers into organizations with customer service and job protection levels of East German Border Guards?
The dealer model is broken. I don’t know what’ll replace it.
I’ve suggested large, direct from manufacterer dealers for the sales mission. Use the internet to move slower sellers or for home delivery (for those who just want another white Camry).
For repair, how about certified repair shops with real time video of all repairs for verification / validation of defects and warranty claims?
Jack Baruth: Every time a manufacturer cuts a brand, thousands of enthusiasts are denied the chance to buy the car they really want. You may not have been an Oldsmobile fan, but somebody was, and that person can no longer purchase a new Oldsmobile.
The same thing could have been said when American Motors discontinued Nash and Hudson in 1957, Studebaker-Packard phased out Packard in 1958, and Studebaker ceased selling automobiles in 1966.
As someone once said regarding the old car hobby, the smaller following a brand has, the more fanatical said followers will be. To talk to some Studebaker fans today, you would think that South Bend was building the best cars in the world in 1963, and it only shut its doors because Americans were too dumb to realize this.
Reality, however, was quite different.
While enthusiasts are nice and certainly appreciated, the bottom line is that car companies exist to make money, and successful ones do this by selling vehicles at a profit to lots of customers who read Consumer Reports, not thetruthaboutcars.com or cheersandgears.com or even Road & Track.
Oldsmobile’s total sales had been declining for years, and by the time GM announced the decision to discontinue the division in December 2000, over one-third of its total sales were to rental car companies and GM employees. That wasn’t a viable business model in December 2000, and it still isn’t viable today.
Buick’s sales are now LOWER than Oldsmobile’s were when GM made its announcement. Pontiac’s sales are still higher, but, if I recall correctly, it sells an even larger percentage of total production to fleet customers and GM employees than Oldsmobile did in December 2000.
The bottom line is that very few enthusiasts were buying Oldsmobiles in December 2000, and very few enthusiasts are buying Pontiacs and Buicks today.
Jack Baruth: Here on TTAC and elsewhere, pistonheads are ruthlessly cheering-on the death of Pontiac. But what about the people who have driven and loved Pontiacs all their lives?
I feel sorry for them, but these fans need to direct their anger at GM management, which has run their beloved brand right into the ground. Last time I checked, Mr. Farago and the posters on this site didn’t have anything to do with axing the Firebird, bringing out the G5 and G3, and importing the G8 and then letting it wither on the vine without any promotion.
I was a long-time Oldsmobile fan, and a member of the Oldsmobile Club of America when GM made the announcement in December 2000. I was sad at the time, but given what Oldsmobile was making in 2000, and what it had made during the 1950s, 1960 and even the 1970s, it almost seemed like a mercy killing. I feel the same way about Pontiac right now.
Jack Baruth: When our favorite brand, whether it be Porsche, Lexus, or Hyundai, falls under the knife in the future, will we find it as ironically amusing as the death of “the excitement company”? Where has our empathy for fellow enthusiasts gone?
Pontiac hasn’t been the “excitement company” for decades. I would gently tell Pontiac fans that there has been a considerable gap between what the ad slogans say and what their favorite division has made available on the showroom floor.
Jack Baruth: The primary reason Honda and Toyota hold retail price levels better than the Detroit competition isn’t the excellence of the product. Rather, it’s the lack of intra-dealer competition, plain and simple. When dealers compete, to paraphrase the TV ad, you win.
Sorry, can’t buy it. You can’t discount superior reputations (which have been earned), better control over production schedules, more frequent updates of existing models (although Detroit is getting better at this) and more realistic forecasting of demand for new models.
And urban areas around here have enough Toyota and Honda dealers that buyers can still shop around for prices.
Jack Baruth: Toyota holds its nose, curbs its enthusiasm, and sells more cars than anyone else in the world, primarily to people who hate cars.
You are confusing people who don’t get excited about cars with people who actually hate them.
People who HATE cars don’t buy them, period. They generally live in urban areas and use mass transit.
People who don’t particularly care about cars do care about reliability, quality and safety, and Toyota has generally delivered on these counts.
I’m also amused at the idea that Toyota is to be blamed for getting Americans hooked on boring appliances.
I’d like to know how a Chrysler Sebring, Dodge Avenger, Buick LaCrosse, Chevrolet Malibu, Chevrolet Impala and Pontiac G6 are any more exciting than their Toyota counterparts.
I’m not thrilled the the domestic companies are in dire straights. I love cars, and I recognize that GM, Ford and Chrysler have made many interesting and exciting cars in the past. But the bottom line is that all three companies have been seriously mismanaged over the past few decades, and they are now reaping the results.
Crying over a few models that virtually all shoppers were ignoring, or complaining that a few fans may not be able to buy a brand-new model from their favorite marque, can’t distract us from that fact.
TRL :
February 11th, 2009 at 1:25 pm
“..selling them non-competitive products… ”
Are you running for Congress? I expect better than that kind of BS here. You may be able to give away non-competitive products but if you sell them to anyone, to that person they are not only competative, they are the best choice. Might not be yours, so don’t buy one. Bigotry isn’t pretty or productive.
Maybe in economics wonderland people always behave rationally and make they best choice.
But this is a world with Nigerian email scams. There are a lot of people who pretty much head to their favorite brand and buy whatever they have on offer.
General Motors HATES its customers, dealers, suppliers, and the government. It HATES cars, building cars, selling cars, and its role in maintaining cars.
Instead of a thorough house cleaning, which is long overdue, the politicos throw what will become $30B over the next year at it. Don’t be too concerned about people complaining on TTAC: nobody seems to be listening.
Jack Baruth,
You are confusing people who are in favor of axing brands as a means to save an entire car company with people who are just in favor of axing brands. We do not want to see GM axe Pontiac, Buick, Saab, and Hummer just for giggles, but we recognize that it is the only possible way GM can survive. It is questionable whether they are viable even with that, but it is impossible if they don’t drastically restructure. I am sorry for their dealers, I am sorry for their employees, and I am sorry for their customers who really like their products. But being sorry doesn’t change the hard reality. GM is in huge trouble. Truly drastic measures are need to stop it from disappearing. If they don’t kill some brands, including perhaps the ones you like, then ALL of their brands are going to die.
Great article.
How many of these ‘enthusiasts’ clamored for GM bringing over / introducing the Pontiac G8, GTO, Saturn Astra, Aura, Chevrolet Malibu and Cobalt SS only to later shout “Kill Pontiac/Saturn”
Homogenization is terrible in the auto industry, and we need more niche players. Look how Camry-fied mid-size sedans have become… we’ve lost the Honda Accord and Mazda6 as fun to drive cars, and I fear Subaru is going the same way.
We’re going to go through another dark ages. Toyota is doing well in terms of selling cars but they’d probably be the first manufacturer I’d have killed off as I find their cars boring, cheap, and shoddy. In fact, GM probably builds far more ‘good’ products than Toyota does, and I fear for the loss of the product, not the company.
I’m nostalgic for models not brands.
Bad for me? Well, I doubt it. Of all the GM products, I would spend my money on the Malibu/Aura, Tahoe/Suburban, G8, Solstice/Sky, CTS, Corvette and that’s about it. Killing off the G6’s, Equinoxes would leave plenty of room to fit the better models from across their brands in just a couple. So really, the end result is no difference at all.
And since Toyota seems to be the reference point, if Toyota had 8 brands and 4 versions of the Highlander, I would be saying they should kill brands too. They could certainly use some product trimming today.
“Toyota holds its nose, curbs its enthusiasm, and sells more cars than anyone else in the world, primarily to people who hate cars.”
i have to agree with this line: toyota has rarely built a car that was fun to drive. i had a first generation mr2, my kidborther’s crx was more fun. i had a tercel, walking was more fun. i fobbed my wife off with a yaris, …
Unfortunately, this is the most sensible post I’ve seen on the car industry for a while. We entering some lean years ahead — with a lot of brands disappearing, new government regulations, high gas prices and the rise of the Chinese market. Car lovers everywhere are going to hurting. Sure, things will be better in ten years, but that doesn’t mean we will have lost of the cars we love.
Here’s a brand spanking new, unloved and unwanted 2007 Magnum, $6500 off MSRP. You really have got to want to take the depreciation hit to buy this one.
Sociologists describe a phenomenon called tyranny of choice: more choices are not always a good thing and can be overwhelming. Scientific American has an article with the same title and it’s filed under depression.
Jack,
Give it up. Some of GM’s brands are unsustainable and they lack real value. GM must make some hard business decisions and they must do it soon. My grandfather had a couple cool Oldsmobiles and my parents had one I liked, very much. If Olds was in business today, it wouldn’t be building the ’64 Oldsmobile that I remember, anyway. They’d be rebadging the Aveo, Cobalt and Malibu, again. I think we can all live without that.
Jack Baruth: “Toyota holds its nose, curbs its enthusiasm, and sells more cars than anyone else in the world, primarily to people who hate cars.”
Uh, no. Toyota has sold many cars to people who used to hate cars. I hated my Monza, my Aerostar, my EuroVan and didn’t care much for the others, either. I love my Ravs. They are fun to drive, tolerably quick, easy to park, brick-reliable and fairly thrifty at the pump. I even love my Sienna. Yes, a minivan! It’s very quiet, it’s very comfortable, it has a very powerful motor (for its day and class) and it has been supremely reliable.
Go look on Edmunds and see how many people sum up their Toyota Echo experiences with “Love my Echo!” The newer ones are “Love my Yaris!”
GM is just a bunch of accountants who can’t see much beyond their stock price. They can make some fine cars and trucks. Unfortuanly they are so slow and short sided to react to change. Meanwhile Honda comes out with a “new” Accord every three years.
I think a distinction Mr Baruth is trying to make, that many people in the comments don’t seem to be completely understanding is that there is a difference between a car enthusiast, and a car business enthusiast. A lot of the “B&B” seem to be car business enthusiasts.
(Waiting for responses of “but I’m both”) Even if most Pontiacs are rebadged Chevys, someone out there wants the grills to be vertical instead of horizontal. Just view it like those Pontiacs are trim lines of the Chevy.
From the article, “Bob Lutz claimed America is a nation that hates its own auto industry.”
I think Maximum Bob actually didn’t single out the auto industry. “We are a country that hates its own industry,” is how Maximum Bob was quoted in the NYT.
I noticed this, today:
GE Makes a Big Sale
A billion-dollar sale of turbines to the Saudis. Who could hate that? I admire GE.
There are plenty of other industrial companies I admire. I work for an industrial company. If I wasn’t proud of our products, I’d work elsewhere.
This country does not hate its own industry. But if you sell us products that do not satisfy, we’re likely to remember it and take corrective action. And if you then whine about the bed you’ve made for yourself, well, some of us have little tolerance for whiners.
I think a distinction Mr Baruth is trying to make, that many people in the comments don’t seem to be completely understanding is that there is a difference between a car enthusiast, and a car business enthusiast.
This is a pointless distinction. Last I checked, cars were made by businesses. How can you be a car enthusiast without also wishing for the success of the businesses that make them?
Jack: thanks for your thoughts, made me feel good.
But… always there are at least four types of customers:
– Those who know and understand the product, and those who don’t
– Those who are interested in the product, and those who don’t
We car enthusiasts (hope I am) belong in the “knows, is interested” group. But the majority of the people are neither knowledgeable nor interested.
Most people do not care about the car more than to believe it will start when the key is turned, stop only when the same key is turned back, rain and cold don’t intrude and make the driver and owner look good/successful/interesting.
All the talk about power-to-weight ratios, torque, handling, AWD, ABS, ATC, etc. are meaningless and frankly boring, stuff men brag about over beer.
And these people buy the large majority of cars. Volume versus meaning.
Remembers me the music business. Pop music is formula-based with the intent of making people feel good, move and be thirsty, it does not matter if there is anything musically interesting about it. Madonna has sold millions of records of catchy, danceable, meaningless music, while Marsalis sells little music you need concentration to understand.
Toyota, Honda, Nissan are like pop music. No substance, you can forget about them while you’re not inside, take you from A to B reliably.
Enthusiast’s cars need attention, care, takes time to fully appreciate their value. You are required to know, and to learn you need to be interested.
So… successful companies sell pop products, cars you can take to work and buy groceries while looking good.
I only hope somebody keeps making cars for us that care and try yo know. Thanks Porsche, Saleem, Ferrari, Mastretta, Corvette, etc. May you continue to sell your expensive brain food.
Thanks to Marty Marshall at HBS for the customer classification
The consumer is better off if he has good choices, not lousy choices. Companies need to be profitable to provide those choices, for if they aren’t profitable, they will either fail or need bailouts. Accordingly, it makes sense if these firms pursue product policies that make them money, so that we get the good choices that make us happy.
When GM devotes time, effort and money to cars that people don’t want, profitability disappears, and the landscape is littered with unwanted product. That is ultimately bad for the consumer, the company and the dealers. Nobody wins from bad product.
The potentially good products also suffer, because they compete for scarce resources with the lesser products. By making too many products all of them are compromised, with the better ones not as good as they could be. It would be better for the consumer if the resources were dedicated to creating fewer products and to making those products better than they are now.
It also doesn’t help the consumer who wants good service to have too many dealers in the network. The sales tactics become more nasty and underhanded when the retailer is desperate for business. It will be difficult for the domestic dealers to serve their brands if they are struggling to keep the lights on. Having fewer dealers would harm those of us who are strongly price-motivated — that would be me — but it would be a benefit to most consumers.
In any case, it makes no sense to argue that the public benefits from stuff that it doesn’t want. If people wanted the vehicles, they would show their support by buying them. They aren’t buying them for a reason. There is almost no love lost for Oldsmobile; had there been much there, it would still be with us.
I think this is an interesting and laudable editorial. Well-written, too. As I understand it, Jack is saying that automotive brands have a cultural value, and that we car people should cherish such carriers of value. Otherwise, we might as well just live in a world of Wal-Marts and Louis Vuittons, with nothing in between.
In a way I agree, because I miss the Panhards, the Facel Vegas, Rovers, the MGs, the Talbots of old times. On the other hand, I have to disagree, because to love the values of an old brand does not mean you have to love the brand after it has been run down by management.
What exactly is the value of the Pontiac brand nowadays? I see none at all, which just shows how soft I am, because others would say the value is negative.
Sorry to say, but I think that if America had a modern capitalist system of car dealerships like most other countries do, then those brands Jack is mourning in advance would have been culled years (if not decades) ago.
Hey Farago, make Geeber a writer and pay him the big bucks!
Excellent post.
There has to be an optimum number of dealers.
Too few, and each one has a local monopoly and can gouge you on price, and treat you like dirt.
Too many, and competition cuts their margins to the point where they have to cheat you somehow to make a living — high pressure selling, skimpy workmanship, reneging on warranty claims, whatever.
Not sure what the optimum is, though.
Look, enthusiasts don’t mean crap to the car industry. Sorry, but it’s true. They are mass market manufacturers looking to shift the most product to the most people – period.
If every single subscriber to C&D, R&T, poster to TTAC and all the other boards bought a new car every single year it would not be a blip on the radar. (You should see the wailing and moaning by the BMW Car Club folks – many of whom have never bought a new BMW in their life!)
The only reason brands even exist is to find a market niche where you are at a competitive advantage (ie. more sales). That’s why Porsche doesn’t make Camrys and vice versa. BTW, if there is a sales volume opportunity somewhere way off a brand’s radar, a company will go after it (see “Cayenne” for an example) – without a care for the “purists.”
This “pity the poor Olds fan” is BS – if THEY won’t buy Olds why should my tax money prop up the brand? just for the sake of diversity? No thanks. Now, if all the die hard Pontiac and Olds fans want to buck to save GM they are welcome to, but I’d prefer to keep my own tax dollars for myself.
“TRL :
February 11th, 2009 at 1:25 pm
“..selling them non-competitive products… ”
Are you running for Congress? I expect better than that kind of BS here. You may be able to give away non-competitive products but if you sell them to anyone, to that person they are not only competative, they are the best choice. Might not be yours, so don’t buy one. Bigotry isn’t pretty or productive.”
Can’t argue with that. On the other hand, one could also argue that when GM went from selling 50 out of every 100 cars, to 20 out of every 100, that it lost quite a bit of competitiveness. You are right, it’s not pretty or productive.
Jack,
Hooey. Your article is “Exhibit A” of what Bob Lutz is talking about.
NO OTHER COUNTRY has local car industry haters the way America does. Heck, even the Germans like Opel better than some folks here like GM.
Oh, and I buy American wherever possible. I AM American, I love America, and I want to support my friends, neighbors, relatives, and fellow American businesses.
(That includes Frito-Lay! It would be pretty pathetic if I insisted on “non-Frito-Lay” products.)
Pretty damn simple.
Jack,
Sometimes when you try to talk to fish about the water, they say “what water?”. That’s the problem with fish. [The author would like to state that he does not in anyway denigrate fish and the great contributions they have made to life on this planet, nor are the opinions expressed here necessarily those of the fish themselves, your mileage may vary, not available in all states, etc.]
Want to hear a really horrible thought I just had? I don’t know how much this audience knows about computers, but the plants that manufacture chips, called “fabs” are hideously expensive to build and operate. In recent years, many US chip design companies have become “fab-less” companies. They design the chip, then subcontract someone else, usually Taiwan Semiconductor Manufacturing Corp. to actually manufacture it. This is an economic win for both. The US company doesn’t have to pay for new fabs, and TSMC gets to keep its fabs running full blast 24×7, getting the most bang for their buck. Imagine if Chevy, Caddy, etc. became mere design studios, with all the manufacturing being outsourced to the lowest bidder. If we think build quality is variable now… That would really take all the fun out of new cars, and devastate the US manufacturing industry to boot. But somehow, I can’t help thinking that some people in Detroit are thinking of doing this, post C11.
Thing is, in a competition, you’re supposed to do your best to win, and when you don’t, you lose.
Lose often enough, and people won’t be coming to see you perform anymore. Some car makers just stopped bothering years ago.
Mr. Baruth
Though I do not agree with everything you said, it was great to see a different POV taken. Very refreshing. Thanks for the editorial.
Want to hear a really horrible thought I just had? I don’t know how much this audience knows about computers, but the plants that manufacture chips, called “fabs” are hideously expensive to build and operate. In recent years, many US chip design companies have become “fab-less” companies.
Not to get off the road here, but Intel just announced it will spend $7B on US fabs to build its next wave of chips, so somebody thinks it is better to build its own products. I think even GM is proud enough not to even contemplate the idea of going ‘hollow’. Chrysler, otoh, maybe not…
I really appreciated this editorial, I definitely get a little carried away with “kill chrysler” or whomever without thinking about what that means to some very enthusiastic car-people.
But when it comes down to it I’m the guy who answers the question, “Are we superior to them because we don’t like ribbed lower-body panels or superfluous eyeball vents?” with a big, “YUP”. I feel the same way about people who prefer Toyotas, Buicks or Oldsmobiles and about those who get nervous driving in traffic so they buy the ladder-on-frame SUV. If Toyota went bankrupt tomorrow I’d probably laugh every time I saw a despondent Solaris owner (“but my Depends fit in the glove box!”).
I think that most of us are car-enthusiasts until the cars we like are threatened by bad business practices. Finding out why that happened (and preventing future occurances) becomes a focus.
Imagine if Chevy, Caddy, etc. became mere design studios, with all the manufacturing being outsourced to the lowest bidder.
It was likely that the Cerberus-Chrysler plan was similar to that — outsource the cars, while building trucks and minivans for others, moving Chrysler away from being a full-line producer and turning it into a branding and distribution channel. As it turns out, they may not have a chance to prove out their theory.
Jack Baruth said:
I cannot think of any reason for anyone outside Wall Street to want a reduction in operating dealers. Trust me on this: unless you have a seven-figure investment in an auto company, you stand to gain more personally from saving money on a new car than you do from some stock-price bump resulting from closed doors at your local Ford store.
Let me give you a reason: I want my tax dollar back ASAP.
Is that a good reason?
Incidentally, my gain from buying a new car at cheap is ZERO as of right now, because I won’t touch any D2.8 model. So there is no saving.
The models that I intend to buy are still selling at sticker in my local dealers (eg. Subaru Impreza, or Honda Fit). Trust me, the showroom is crowded and the dealer won’t bulge one cent. I lived in Edmonton, Canada. So, point to me which dealers in a 100 mile range can give me a real discount, if you want to refute me.
On the other hand, if the demise of Pontiac can increase the likelihood of GM/Chrysler paying me back by 1%, then I have a totally legit reason, right?
Oldsmobile died because they sold Chevys in drag and not Oldsmobiles anymore.
Pontiac is dying because they sell Chevys in drag and not Pontiacs anymore.
Toyota will eventual kill Scion because it is starting to sell Toyotas in drag and not Scions.
Consumers aren’t dumb, in fact they are more sophisticated than ever. The brands they love stopped having all the attributes that made them love them in the first place so they stopped buying.
Most automakers haven’t learned that the consumer defines brand essence, not them.
nathaniel, I agree.
Only losers blame the consumers.
I think any point I want to make has already been made, so I’ll just say this:
BRING BACK DESOTO!!!!
How dare they hurt all those diehard Desoto enthusiasts by killing off the marque.
Okay, I’m going to throw this into the fire.
The Japanese protected their industry for decades and REALLY DID dump their cars into the North American market.
We let them get away with it.
The South Koreans continue to protect their home market, to the exclusion of virtually everyone else, and have a rather nasty history of price dumping as well.
We let them get away with it.
Now, we have a domestic industry that effectively employs millions of people. We won’t let them deep six their brands or dealerships without effectively bankrupting them. We won’t let them use a non-union labor force to assemble their products without bankrupting them. We force them to adhere to pointless standards that effectively make it difficult for them to export their most competitive models. And we open our home market even though their competitors have for decades worked with their governments and other special interests to exclude foreign products.
We let them get away with it.
I don’t blame these automakers for playing the game well. I do blame those who cast a blind eye to what is an amazingly uneven playing field.
If the big three were able to modify their businesses in the ways needed, we wouldn’t be having Deathwatches or ‘Carmageddon’. The real issue here is that the system stinks, and no bailout is going to save these companies from a stacked deck.
“The primary reason Honda and Toyota hold retail price levels better than the Detroit competition isn’t the excellence of the product.”
Bunk. 89% of the economic activity in the USA happens in the urban areas, and in those areas there are multiple Toyota and Honda dealers competing for every sale. When I bought my last Honda I cross-shopped (in-person and on-line) five different dealers within 45 minutes of our home. I bought the car for a few hundred over invoice, similar to the deal I could have gotten on a competing Chevy. In fact, I had many times more units to choose from with Honda than I did with Chevy because all of the Chevy dealers around here stocked 90%+ trucks, and I wanted a car! The larger Honda dealers in the area had 50-100 Accords in stock. The biggest Chevy dealer had one Impala and four Malibus!
The low retail prices of Detroit’s products are due to REBATE MADNESS, not dealer’s skinny margins. Rebare madness is in turn caused by low consumer demand, which in turn is the result of years of lackluster products and the pent-up-anger of previously burned customers.
Look at it another way. The average Toyota dealer moves several times more units per month than a GM dealer. Which of them can afford to be more agressive on pricing?
Contrary to Jack’s argument, the primary reason the Japanese brands typically hold pricing better than the domestic brands is due to a better demand:supply balance. When that balance craters, the Japanese branded vehicles going on deep discount sales just like the hometown ones. Check out to deals you can make on Odyssey minivans right now.
What I draw from the majority of posts from an enthusiast’s perspective is it would be nice if GM’s brands offered the distinctive attributes they did in the past. Nice yes, reality no. GM has little choice in dropping brands to survive. I think most everyone agrees the problem was caused by badge engineering and the damage is done. If GM is to survive they need a radically different approach which just may be mandated by the Feds to get more bailout money. In fact that’s exactly what the Treasury Secretary said.
Try as they might, GM can not support all their existing brands. They don’t have the resources or the market share. Nostalgia is great but it won’t make GM viable. Demands for change from the Feds may accomplish something GM itself was unable to do. If I wasn’t a life long metro Detroit resident I’d be far less concerned about GM’s survival and can certainly understand why the majority of the public do not want them to be bailed out with taxpayer money. Bottom line is GM needs no more than three brands and Chevy should be combined with the third leaving Cadillac as the only stand alone brand. We knew all along GM was a ship too large to right itself and unless the Feds say otherwise I don’t look for any change of direction internally. The only way GM can return to profitability in NA is to cut brands.
Consider, if you will, the oft-repeated canard that “cutting brands, product variety, and dealership presence is a good thing.” For whom, exactly? Every time a manufacturer cuts a brand, thousands of enthusiasts are denied the chance to buy the car they really want. You may not have been an Oldsmobile fan, but somebody was, and that person can no longer purchase a new Oldsmobile.
If there aren’t enough people to maintain a brand, why should a company keep a brand? Perhaps they could keep the brand if other parts of company are making money. But as soon as all divisions start losing money, then cuts need to be made. These sorts of things happen all the time, the automobile industry is no different. How many times has a critically acclaimed TV show been canceled because of poor ratings?
Sorry, but to me this editorial is nothing but a Peter DeLorenzo rant dipped in chocolate and wrapped in a bow.
What utter, dripping claptrap.
Toyota and Honda owners don’t “hate cars.” They don’t hate “fun to drive cars.” They hate the unreliable piles of GARBAGE that the domestics have been pushing off on the “Buy ‘Merrican” patsies.
“Stupid cars for stupid people.” Do you really want to buy the least reliable, least refined vehicle in the segment (just visit your Chrysler dealer), or could you invest just a few minutes doing a little research, and get some value for your automotive dollar?
The above is my personal bias. The “article” is just as full of personal bias, and draws hogwash conclusions from just about anything but actual, factual information.
Crimony.
You lost me at “Except, um, Scion.”
@Jack Baruth: Toyota holds its nose, curbs its enthusiasm, and sells more cars than anyone else in the world, primarily to people who hate cars.
I couldn’t agree more. That line is golden. Toyotas are wonderful cars for people who don’t like to drive.
I have a Cadillac CTS now. Dollar-for-dollar, other than having rear-wheel-drive, it is not a better car than the Oldsmobile Alero I traded for it.
And it’s not just American manufacturers who dilute their brands. Maxima or G35? G35 or Maxima? Choice is good, as long as it is a real choice.
Bunk. 89% of the economic activity in the USA happens in the urban areas, and in those areas there are multiple Toyota and Honda dealers competing for every sale. When I bought my last Honda I cross-shopped (in-person and on-line) five different dealers within 45 minutes of our home.
I disagree with you. I think the point about Honda dealers not having to compete with each other was sound. Most people aren’t going to drive 45 minutes to shop another dealer.
I have 6 Chevy dealers within 10 miles. I have one Honda dealer.
@ njdave: It’ll probably happen. GM is already feeling out that possibility by having engines built in China. Now imagine if GM merely designed the cars and left the actual component manufacturing solely to Chinese plants, with final assembly in Mexico. It’ll definitely solve the whole union issue, and it’ll probably spell the bloody end of the vast majority of manufacturing in the U.S.
Too bad we won’t have the change to buy the finished product. Kinda hard to do that in a service-based economy
There were fans of Chrysler’s DeSoto brand, fans of Chrysler’s Plymouth brand (which was, after all, for some six decades – the major competitor against Chevrolet and Ford), fans for Ford’s Edsel brand (believe it or not, there still are), fans of AMC’s brands (which had included Hudson and Nash, Metropolitan, later Rambler, then AMC), there were also fans of Kaiser and Fraser cars, Willys cars (did you know they made a compact from 1952-1955? – way ahead of its time; it would have sold well from 1958-1961 for them had they stuck it out). There were even fans of Crosley mini-cars (pre-dating the Smart cars and even the popular Volkswagens).
These cars did not succeed for varous business reasons, but generally speaking, had there been ENOUGH fans to keep them going, the companies would not have stopped building them. In other words, if a company could have been profitable and had a good business proposition, then we’d see new DeSoto cars available now at your friendly Plymouth-DeSoto dealer, down the road from your Dodge-Dodge Truck dealer, and down the road yet from your Plymouth-Chrysler dealer.
Pontiac is fading away just as Oldsmobile did, just as Saturn is (unless it is retained as a small/inexpensive brand – see my other posting elsewhere)
Obviously, if GM still had 52% of the US auto market as they last did in about 1961, things would be different.
But then, things at GM were different, too!
One small example: 1961 GM vehicles shared little among brands and each brand was engineered in-house, not at corporate level. Fisher bodies were used with some (few) shared pressings, especially the expensive ones like the windshield posts and firewalls; otherwise not. Even the engines produced by each division were different. Buick manufactured their OWN automatic transmissions, used torque-tube drive, and engineered their OWN highly successful finned alloy drum brakes (which were phenomenal).
Pontiac engineered their OWN engines, used Hydramatic automatics (from Hydramatic division), engineered their OWN massive finned alloy drum brakes with small bolt-on rims for high performance cars.
Chevrolet engineered their OWN engines, and their OWN Powerglide and Turboglide automatic transmissions.
Oldsmobile used Hydramatics but their own engines, as did Cadillac.
Clearly, when you only have 18-20% of a market, you can no longer afford to do any of this, with so many brands.
Hence, it is time for GM to cull the herd.
Mustn’t forget, too, that GM took their customers for fools by simply badge-engineering “everything” from the late 1970’s on.
Why pay more for the Buick name than the Pontiac or Chevrolet name? Why indeed – when they are virtually the same car underneath.
The Japanese protected their industry for decades and REALLY DID dump their cars into the North American market.
We let them get away with it.
Ah, geez, not that shlt again…..
The Japanese made little cars that nobody really wanted until the oil crisis combined with new pollution and safety regulation (and the lousiest quality of any major industry)made American cars undesirable.
Volkswagen was the largest selling import for the 60’s and early 70’s. The Japanese had nothing. I remember when my girl friend’s brother bought a Toyota in 1971. People laughed at him. My girl friend told me that her father said the Toyota “had exactly the same size tires as the forklifts used at his manufacturing plant”. That wasn’t a compliment.
However, between 1970 and 1978 my dad got two Plymouths that wouldn’t run. So he got a Caprice that ran better but came from the factory with the rear axle malaligned, among other problems. So,1980 he had an Accord. Six years later, he said to me in amazement, “90,000 miles and all I’ve done is change the oil”. He never bought an American car again.
That certainly wasn’t America allowing the Japanese to dump their products on the American market. America didn’t DELIBERATELY allow Japanese car makers to slip in unnoticed. We fell into the law of unintended consequences.
1. The big 3 were lazy and sloppy in developing cars to meet the new market demands of high milage, cars that ran well with pollution controls, and cars with safety bumpers that still had decent styling. In plain english: they bolted crap pollution controls and crap bumpers onto crap quality cars.
2. The Japanese were in the right place at the right time with their small cars. They had efficient engines that were easier to put pollution controls on to simply because efficiency was important in Japan where gas was expensive.
3. When Japanese cars grew in popularity in the states, America forced Japan (with threats of tarriffs) to restrict their imports. So Japan imported upscale cars in order to keep profits up. By that time they had the reputation for quality that allowed them to sell the more expensive models. People trusted them.
4. Detroit didn’t respond to the increased prices forced on the Japanese by offering better value – Nope. They INCREASED their prices too, taking more profit for the same old shlt stuff.
5. The Japanese responded, out of fear of tariffs, by building factories in the U.S.
We (Including the UAW) insisted that they build here. The theory was that, using American Workers, the Japanese couldn’t build cars that were any cheaper or better than the domestics. Well, on a level playing field, they proved that they could build better cars for less money.
6. Here we are today. But Blaming the Japanese for the failures of Detroit is banging a “Cry-Wolf” drum that was worn-out by 1990.
Go find somebody else to blame.
Here are a couple of links that are interesting on this subject.
http://www.heritage.org/research/tradeandeconomicfreedom/asb37.cfm
home.wlu.edu/~smitkam/272/powerpoint/Japan_auto_talk.ppt –
carmad: Toyota, Honda, Nissan are like pop music. No substance, you can forget about them while you’re not inside, take you from A to B reliably.
Enthusiast’s cars need attention, care, takes time to fully appreciate their value. You are required to know, and to learn you need to be interested.
The article isn’t mourning the potential loss of the Corvette, Ferrari or Porsche.
He is talking about the potential loss of Buick, Pontiac, Saturn and the Dodge Magnum. Only one of those could remotely be considered an enthusiast’s car – the Magnum, and then only when equipped with the Hemi.
And while Toyota and Honda may build the automotive equivalent of a summer blockbuster movie, they are the GOOD summer blockbuster movies – think Jaws or the original Raiders of the Lost Ark.
GM, with few exceptions, is building its own version of the summer blockbuster, but they remind one of the latest installment in the Indiana Jones franchise. Namely, a tired retread that goes on for way too long…
Buick and Pontiac are sold out of the same dealerships already, so I propose that GM either picks a single brand or differentiate the two by making the plainer, cheaper versions of two or three basic cars Pontiacs and the loaded versions Buicks. Pontiacs and Buicks could share platforms with Chevies for manufacturing economy’s sake, but should not share body shells.
Neither Pontiac nor Buick should sell trucks, vans, SUVs or CUVs, GMC is the brand for that.
Chevy should sell basic, hose-out-interior work trucks and the bling-ier trucks should all go GMC.
The GMC Denali should be GM’s fanciest truck and Cadillac should sell only cars.
After killing Hummer, Saab, and Saturn, give those dealers the options of Chevy, PBG, Cadillac, all 3, or 2 of 3, dealerships as replacement.
Dynamic88, I don’t agree with you that “Most people aren’t going to drive 45 minutes to shop another dealer.” I live in the Bremerton-Port Orchard area in Washington and see plenty of license plate frames in town from dealers in Seattle, Tacoma, and other King and Pierce – and Snohomish – county locations.
Automobiles are a luxury. No one is entitled to an automobile. Cheap gasoline isn’t an entitlement. The widespread belief that Americans are entitled to luxury items has led to overwhelming consumer debt. And consumer debt is at the root of the economic meltdown.
Mr. Baruth, you should see some of the anti-GM and anti-Chrysler messages I’ve seen posted on some of the blogs I visit while surfing the Internet.
The tone of these messages is such that they left me thinking that we in America do indeed hate our auto industry … which worries me.