There’s a certain raw satisfaction to be had in seeing a man go utterly, completely mad in public, particularly when there’s a plateful of free bacon in front of you and an attentive server standing behind you, ready to swap your newly emptied bacon-plate for a full one at the slightest, Sotheby’s-private-bidder-esque, wave of a hand. This happy spectacle was available to all and sundry at the media breakfast that opened the 2009 Chicago Auto Show yesterday morning, courtesy of Hyundai’s American CEO, John Krafcik.
“Let me start my short comments today with a pair of quotes from two great Americans,” Krafcik opened. “Thomas Jefferson said that a government big enough to give you everything you want, is strong enough to take everything you have . . .
“For example, it’s difficult to put a finger on exactly when China moved from a purely Communist country, to an energetic proponent of a new form of capitalism.” The statement led one colleague to wonder aloud whether that “new form” included the “energetic” harvesting of organs from members of the Falun Gong. Another one observed, “If this guy’s lucky, nobody back home cares enough to translate this speech into Korean.”
The irony that the Chinese government is strong enough to take everything that South Korea has seemed utterly lost on Hyundai’s senior American executive.
But before anybody could stop chewing their bacon long enough to ponder Krafcik’s iffy grasp of the geopolitical scene, he dropped all remaining un-dropped jaws by stating that “change” called for “a more equitable distribution of income.”
The steady susurrus of surreptitious cell-phone use and side conversations came to a crashing halt as various members of the Midwest Automotive Media Association, the folks who traditionally host the Chicago morning breakfast, started nervously catching each other’s eye, wondering exactly who made the decision to invite Chairman Mao to speak at this event.
Having swiftly disposed of the American way of life in just a few opening paragraphs, Krafcik got into the real meat of his speech: a two-fisted attack on the “industry” and its “greed.”
“Turning our industry around will require some revolutionary thinking,” he said. And to prove it he went to declare that Hyundai would meet a fleet average of 35 miles per gallon by 2015. “A bold position perhaps, but we were honestly surprised to be alone amongst all automakers in taking a position like this one. Going forward, we’d love to have some company here.”
This “bold position” was revealed, in post-speech questioning, to be anything but: Hyundai will have a “Sonata-class hybrid” in 2010. But Krafcik was quick to assure the audience that the fleet average would come from “downsizing engine packages, taking weight out of the cars, a thousand little things.”
In other words, a provider of relatively crappy little cars is going to make more crappy little cars, with smaller engines and aluminum decklids.
[It’s worth noting that this “revolutionary thinking” actually dates back to when Lee Iacocca unveiled the Plymouth Horizon “Miser,” a car which had been so ruthlessly optimized towards 50mpg on the highway that they had, apparently, left the final “y” off the nameplate.]
With this not-entirely-revolutionary disclosure, Krafcik returned to his Timberlakian mission of bringing Trotsky back by suggesting “a more inclusive form of capitalism” in which executive salaries would be limited to a certain multiplier of average pay. It was not immediately clear as to whether this form of capitalism would be exactly like that exciting new Chinese form to which he had referred earlier, but if I were a member of an obscure religious sect in America right now, I’d be counting my kidneys.
Last but not least, it was time for some bragging.
Hyundai has managed to increase both market share and sales in the past few months. Lest anyone think that this was a simple matter of newly impoverished consumers buying cheaper vehicles, Krafcik took some time to lavishly praise the “Hyundai Assurance” program.
“The Assurance Program did not require government support. But it has delivered benefits to all stakeholders, and to society . . . This is how private enterprise should work. Somewhere, Thomas Jefferson is smiling.”
And why shouldn’t he smile? After all, Hyundai is on the way to becoming an American company! “The lines between domestic and import will become increasingly blurred. We will exercise more sensitivity, more discipline, and be more inclusive, in all aspects of our business.”
Having unintentionally closed an insensitive and undisciplined speech by calling for sensitivity and discipline, Mr. Krafcik allowed the media to finish their bacon and stumble, blinking, into the light of McCormick’s million-plus-square-foot arena, wondering what the hell they’d just heard.
I reckon Mr. Krafcik chose the wrong Thomas Jefferson quote. The one that comes to my mind: “He who knows best knows how little he knows.”
” a provider of relatively crappy little cars ” ?
OK, so having confirmed a strong bias against this manufacturer before the guy started his speech, lets hear the biased backup for this comment. Use current products please. I mean, why not, might stir things up a bit, add to the “numbers” etc.
And as you were about to ask, no I don’t have any affiliation to Hyundai in any way and don’t even own one of their cars. The quote just struck a chord that sounded off key based on most things I’ve read and heard over the past year or so.
That’s some chutzpah. He who laughs last…
Ouch, odd speech aside, I think John Krafcik is an outstanding automotive executive. When I worked for him I admired his balance of engineering and pragmatism and his passion for cars, as well as his all around nice guy personality. I’m not even saying this just because I hadn’t realize he had ascended to such a high rank at Hyundai and I’m about to send him my resume.
Krafcik talked about meeting the 35-mpg-standard by 2015 and the Sonata hybrid for ’10 at the LA Auto Show.
In other words, a provider of relatively crappy little cars is going to make more crappy little cars, with smaller engines and aluminum decklids.
Please…I’m not wild about Hyundais, but the bottom line is that the time to dismiss them as “crappy little cars” ended at least five years ago.
If this is the prevailing attitude regarding the competition among Detroit and its apologists, it’s no wonder GM and Chrysler are on the verge of bankruptcy.
“he dropped all remaining un-dropped jaws by stating that “change” called for “a more equitable distribution of income.”
Hmmm, maybe he’s running for Governor of California in 2010. He might need a new job if he keeps making these types of speeches.
I find the author biases probably more distasteful than John’s. Hyundai is currently rising while the US automakers – who have not innovated, who have sold the old way, who would never have thought of the assurance program – continue to hold their hands out in some pathetic caricature of need. He is pointing out that if you take government money, you are handing power to them over your businesses (which is fine in the cases of GM/Chrysler since their execs basically have been looting their companies for years to pay themselves).
“For example, it’s difficult to put a finger on exactly when China moved from a purely Communist country, to an energetic proponent of a new form of capitalism.” The statement led one colleague to wonder aloud whether that “new form” included the “energetic” harvesting of organs from members of the Falun Gong.
Well, to be fair, capitalism doesn’t mean nice or equitable. After all, if there’s a market for organs, it’s fulfilling the basic principles of the free market to murder people and harvest them if they can’t afford to defend themselves.
But before anybody could stop chewing their bacon long enough to ponder Krafcik’s iffy grasp of the geopolitical scene, he dropped all remaining un-dropped jaws by stating that “change” called for “a more equitable distribution of income.”
He’s right about this, too. A wealthy middle class is the engine of a healthy, prosperous democracy, not to mention a vibrant market. We’re gutting the middle class wholesale, and the end result is a lot of poor people who can’t afford much, and a handful of rich people who aren’t enough to sustain a mass market. One very big reason for the debt loads a lot of people find themselves under is that net spending power has steadily eroded since the postwar boom. If you want a market for cars or other goods, you have to have people who can afford it, and the only way you’ll get that is to try and redistribute wealth.
We (the west) are stratifying economically, and it’ll be a bad scene if we let it go too far.
Having unintentionally closed an insensitive and undisciplined speech by calling for sensitivity and discipline,
I don’t think it was undisciplined or insensitive at all. I think it was uncomfortable thing to hear, especially when it runs so counter to common American economic dogma. If some of his points came from an academic, analyst or paragon of leftist economic principle, people would have written it off. To hear it from someone in industry is a big, lovin’ spoonful of cognitive dissonance.
Imagine Jessie Jackson condemning affirmative action and you’ll get the idea.
I can’t even imagine Red Ink Rick saying anything bold. The best I can come up with for a bold quote from him is: “I hope Congress lets me keep my job”.
Good for Hyundai that someone is thinking about something other than the lack of gross sales. Good for them that they’re planning for success rather than hoping to not fail.
And seriously, “crappy little cars” is just silly, old Detroit-style jealousy that the other guy did it right. I should know, I live there. Hyundai has come a long, long way and GM could do much worse than to follow the path that they have chartered. In fact, they are doing much worse.
“In other words, a provider of relatively crappy little cars is going to make more crappy little cars, with smaller engines and aluminum decklids.”
LMAO. Wow, Jack, drive a Veracruz, a Sonata and a Genesis. If you still think this way then you’re purposefully being obtuse.
“…bringing Trotsky back by suggesting “a more inclusive form of capitalism” in which executive salaries would be limited to a certain multiplier of average pay.”
How is this concept, practiced by Toyota and other Japanese companies, have anything to do with Trotsky or Marxism? I think it’s just correct. Why are Wagoner and Lutz being paid more than their Japanese counterparts for essentially running a company into the ground?
JTI: LOL. Hey, Jack, your “crappy little car company” just made a 460hp supercharged V8. [ http://jalopnik.com/5152215/hyundai-shows-off-460-hp-prototype-supercharged-tau-v8 ]
While I don’t share the man’s politics Mr. Krafcik has to be admired for his cajones. Refreshing change from the whingeing coming out of Detroit.
As for the author’s channeling of Maximum Bob by calling Hyundais “crappy little cars” … from where I sit no set of carmakers have taken a dramatic positive jump in overall quality and value as those coming out of Korea. What took the Japanese to pull of in 30 years the Koreans did in 10. Meanwhile Detroit wallows in mediocrity, hits, and (lots of) misses.
Mmmmm… bacon.
–chuck
Haha, an executive makes a call for sensible compensation and he is derided as an anti-American Maoist. Phooey. For once a member of a failing industry talks honestly and passionately about the problems facing the industry and the economy in general. Way lame to try and beat him up over it. It’s been made evident by our current economic situation that things have gotten way out of hand and that executive compensation needs to be reevaluated. Also, I’m not going to break anybody’s balls for making a strong statement regarding improving efficiency.
Hyundai has made fabulous cars for a decent while now. My opinion of the company has just risen several notches. Please, though, continue bitching about Hyundai once they belly up to the bailout counter – until then, they seem to have a pretty good thing going.
I think it was Gary Hart who once said business leaders want capitalism for themselves and socialism for everyone else.
From his position it’s easy to make such stupid statements but knowing it will be published means the overlords have to at lead tactically approve of the message.
I like Hyundai and it’s impressive what they have accomplished. I would not taint the cars or company with what one leader said, they are easily replaced these days.
I think it was Gary Hart who once said business leaders want capitalism for themselves and socialism for everyone else.
Yet it turns out that what business leaders really want is socialism when they fail, capitalism when they succeed, and feudalism for the rest of us.
This “bold position” was revealed, in post-speech questioning, to be anything but: Hyundai will have a “Sonata-class hybrid” in 2010. But Krafcik was quick to assure the audience that the fleet average would come from “downsizing engine packages, taking weight out of the cars, a thousand little things.”
In other words, a provider of relatively crappy little cars is going to make more crappy little cars, with smaller engines and aluminum decklids.
As opposed to promising magical hybrids across the product line without any impact on the price point? Sorry, but this plan sounds eminently practical and incremental.
“In other words, a provider of relatively crappy little cars is going to make more crappy little cars, with smaller engines and aluminum decklids.”
Maybe this is why Detroit is failing. You cannot assume that what you dislike is what everyone else dislikes and then wonder why people have abandoned your products for another automaker.
“a provider of relatively crappy little cars”
That can make a modern RWD luxury sedan. A feat that Ford cannot accomplish. The best it can do is throw a Lincoln badge on a platform it got from the Volvo purchase. And Ford’s small cars are relatively crappier (and uglier) than Hyundai’s.
I’ll take a US built Sonata over a Mexican Fusion.
And the lines are blurring. For all Chrysler’s secret investors and foreign label rebadging plans, not to mention the possible Fiat scenario, Hyundai is a more of a domestic car company than Chrysler.
And saying that America needs more equitable distribution of income, and that executive pay is out of control makes Krafcik sound like Teddy Roosevelt, not Mao.
Someone that argues that the government should get involved with and bailout failed, mismanaged companies, now that person would sound more like Mao.
Re: “a more equitable distribution of income.”
Krafcik is simply expressing his economic self-interest. If he has 20 potential customers, one of whom has $1,000,000 and 19 who have nothing, he sells perhaps 5 cars (assuming a millionaire would buy Hyundais).
If those same 20 potential customers have $50,000 each, then Krafcik gets to sell those people something like 20 cars.
It’s just good business.
Re: “…a more inclusive form of capitalism” in which executive salaries would be limited to a certain multiplier of average pay. It was not immediately clear as to whether this form of capitalism would be exactly like that exciting new Chinese form to which he had referred earlier”
No, it would more strongly resemble the American economy in the 1950s, 1960s and 1970s.
Average ratio of CEO-to-worker pay in the 1950s: about 20:1
Average ratio of CEO-to-worker pay in the 21st century: about 200:1
I don’t recall the 1950s United States significantly resembling modern-day China (or maybe it did and we just don’t want to admit it…)
Krafcik’s remarks are complete idiocy.
That, unfortunately, is what passes for executive leadership in the environment being created by this obamanation of a government, and commenced in the last adminstration. He’s simply trying to drink the cool-aid that the current liberals in government insist the auto industry consume if it is to stay in business.
Of course, the cool-aid tends to be poisonous to those that consume it.
But that doesn’t bother the Krafcik’s of the world.
Rick Wagoner is their role model. His company may have tanked, but not his bank account.
Krafcik was kissing Barry O’s ring, not making a speech.
The Falun Gong situation in China is either:
a) a repression of the personality cult by the PRC Government or:
b) propaganda used against China by the western world.
I lived in China for years and I’ve been an American all my life. I’ve never ever heard of any FG member committing suicide outside of China, but when I lived in China, they claimed that it was a common occourence. I know the PRC government is full of lies.
As for China becoming a major economic powerhouse using capitalism, the truth of the matter is, China is seperated into the RICH and the POOR.
The middle class there make far less than $30,000 US per year while the poor make far less than $8000 a year. Those living in the countryside live on less than $1 a day.
If you’re rich in China you can afford things like a nice apartment, a car and diverse banking/stock accounts. The rest of the Chinese – the whole 1.2+ billion of them are mostly broke and the current economic situation is hurting them even more.
As for Hyundai, THIS IS AN EPIC WIN.
When is the last time you saw a Hyundai featured in DUBZ?
The slur is uncalled for. I’d rather put my money on Hyundai in this case, than in, for instance, GM. Hyundai has clearly proved the last ten fifteen years that they are up and coming and a force to be reckoned with.
Jack – I disagree. Hyundai has a comparative advantage to other automakers in the current economic environment and they are driving it home. Not just with economy cars but also with the Genesis Coupe and Genesis Sedan.
Henry Ford introduced $5 a day pay and Billy Ford called for national health insurance to help American manufacturing compete. Communists all of them.
The politics of Teddy (not Franklin) Roosevelt and Dwight Eisenhower would to labeled as socialism by the current fringe.
As others have said, a middle class is needed to support mass produced car manufacturing.
Liberals have not helped with immigration policies that undermine US wages while providing a relief valve for the kleptocracy in power in Mexico. And with a switch from FDR’s dig a ditch and refill it, at least you’re doing something, policies to the just stay at home welfare of the late ’60s and ’70s.
But conservatives quickly forget the 90% top tax bracket during the golden age of the 1950’s.
US executive pay is not driven by performance but by a state law race to the bottom that has lead almost every major corporation to incorporate in Delaware because it provides for the least shareholder rights. The challenge is not to run the company well, but to stack the board with quid pro quo friends that are elected with no other names on the proxy.
Krafcik is simply expressing his economic self-interest. If he has 20 potential customers, one of whom has $1,000,000 and 19 who have nothing, he sells perhaps 5 cars (assuming a millionaire would buy Hyundais).
If those same 20 potential customers have $50,000 each, then Krafcik gets to sell those people something like 20 cars.
Well put.
“crappy little cars”
Really? My wife’s Sonata has made it to 43,000 miles with nary a problem. Can’t say that about any of the GM, Ford, and Chrysler vehicles we’ve ever owned.
John
Thanks, as always, to everybody who reads and comments on the article.
As you all know, TTAC has an approximate 800-word limit. For a preternaturally prolix individual such as myself (I once wrote a 5500-word piece for a magazine on BMX bicycle gearing, sad but true) it can be a challenge.
In my 800 words this time, I made two mistakes:
1) I failed to adequately make my point: namely, that Krafcik’s so-called “revolutionary thought” dovetails perfectly with Hyundai’s existing product plan, perhaps more so than for any other automaker, and is therefore an example of raw self-interest. Thanks to the poster above me who made the rest of that point.
2) I used a loaded phrase of “relatively cheap, crappy cars” that would be acceptable among the B&B if it referred to the Big 2.8 but is not acceptable for other automakers.
I’d like to apologize for #1; that’s my fault as a writer. I make no apologies for #2. Hyundai does make “relatively cheap, crappy cars” and talking about the Genesis is no more relevant than it would be if I used the Phaeton to defend the MkV Jetta.
Hyundai is in the cheap, crappy car business, plain and simple. They, along with their subsidiary Kia, own the majority of the low-cost car market in this country. That’s not opinion; it’s fact. The average transaction prices for Hyundai and Kia are below the industry average. The “average” car by price, size and sales volume in this country is a Camry or Accord. The average Hyundai or Kia is not as good as a Camry or Accord. The fact that they expect to meet 35mpg without major tech demonstrates that. Who else could do that with their current model mix. Toyota? Not a chance. BMW? Mercdes? Porsche? Of course not.
Perhaps the word “crappy” was what set everyone off, but compared to an Accord, an Accent is crappy. Sorry about that. Compared to an Audi A4, it’s amazingly crappy. This is by design. This is how Hyundai makes money; by selling cheap cars.
I find it amazing that the same people who are so eager to step over the Malibu/CTS/Enclave/Corvette/Solstice/G8/et al to piss all over GM then expect to turn around and justify Hyundai with the Genesis or the Sonata. There’s some bias on all sides here, clearly. I make no secret about my biases: I’m in favor of fast cars, stitched-leather dashboards, and automotive character. What are yours?
Amen to Jack’s comment^.
“I find it amazing that the same people who are so eager to step over the Malibu/CTS/Enclave/Corvette/Solstice/G8/et al to piss all over GM then expect to turn around and justify Hyundai with the Genesis or the Sonata. There’s some bias on all sides here, clearly. I make no secret about my biases: I’m in favor of fast cars, stitched-leather dashboards, and automotive character. What are yours?”
Hyundai did build little, cheap, “crappy” cars for years. Now they have a nice RWD sedan platform, and I almost choked on my Cheerios when I saw the supercharged V8 this morning.
I have more faith in seeing a stitched leather, go-fast enthusiast car from Hyundai in 5 years than from GM at this point.
I don’t have demographic data, but I think it is quite likely that Hyundai’s growth is not based on “newly impoverished consumers buying cheaper vehicles.” Newly impoverished people are not buying new cars. Middle class people are buying Hyundais because they are considered high quality, high value cars.
A couple years ago during the boom people bought Escalades because they screamed “I’m rich, bitch”, or they bought a Prius because it screamed “Um, yeah, I care about the environment.” Now people are buying Hyundai’s because they scream “I’m financially responsible, not and idiot overextended on credit.”
As ironic as it may seem people are buying Hyundais both for their inherent qualities and for their image. Austerity is the new conspicuous consumption.
I am looking forward to showing my financial prudence with a Hyundai Genesis Coupe R-Spec after any possible first year issues have been worked out (I would not buy a first year car from anyone).
Also, “crappy” has two general uses in the automotive industry. One use is subjective, the other definitely no longer applies to Hyundai.
First, there is “a car is crappy doesn’t have soft enough interior plastic, or some other doesn’t meet some other subjective standard”.
Second, there is “a car is crappy because it quickly falls apart and breaks.”
Using the first standard an Accent is crappier than an Audi (but a Sonata, Azera or Genesis might not be).
Using the second standard an Audi is quite possibly crappier than any Hyundai.
One thing I do not have is a bias against is cars made by yellow people. Hopefully anyone that does will admit to it.
I am very biased against both front wheel drive and conventional automatic transmissions.
ellomdian:
Wow, if this makes it into the coupe a lot of car are in trouble.
http://jalopnik.com/5152215/hyundai-shows-off-460-hp-prototype-supercharged-tau-v8
@no_slushbox:
“One thing I do not have is a bias against cars made by yellow people. Not that I’m pointing any fingers.”
That’s okay, other people are happy to do it for you. I’ve been accused of being anti-Japanese, biased, or just plain racist at least a dozen times on TTAC. I’d suggest that many of the B&B are as enthusiastic about Japanese or Korean makers as I am about Kiton. Telling me that Kiton is “merely okay” is an invitation for me to punch you in the mouth, and I think that same reactionary response pops up among the B&B from time to time when somebody dares to question the status quo.
For the record, I have an extensive competition and employment history with Japanese brands. I have worked at the dealer level for one major Japanese brand and as an in-house factory consultant for another. I use a Mazda RX-8 to compete in SCCA National Solo, I took my NASA comp exam in an Acura TSX, and I have run a Mazda Miata and Toyota Supra in sanctioned wheel-to-wheel competition. This year I am scheduled to drive Japanese-brand products in both club-level and professional W2W sanctions.
On the other hand, five of the six street-legal cars I own were made in Germany. The sixth was finished by the Finnish.
awesome comments, awesome response by Jack. I love these posts.
I’d be a lot more interested in this speech if it indicated a specific public relations push on the part of Hyundai. With rhetoric like this and that genius no-fault return policy Hyundai could be angling for the modern day “people’s car” image. I’d say Jack is correct about them selling cheap and crappy cars (mostly) so they’re already more than half way there.
It wouldn’t be a bad thing at all for struggling industries to tie executive compensation to average salary. I would not support a broad government mandate along these lines, but I would respect a board that instituted such policies, and in the case of certain companies it would go a long way towards relieving the political pain of accepting government money. On the other hand it looks like Mullaly is doing a great job, and that sure as hell wasn’t cheap.
I have nothing but good to say about this executive’s speech, much of which was reported on with a different (and less desparaging) perspective elsewhere.
I’m certainly no socialist, but I can see that the situation where you have one group of elites running car companies, other companies, governments local, state and federal – all into the ground yet taking huge proportions of a shrinking money pie for themselves, has got a very limited shelf life in this country.
Americans (or at least some Americans) are for hard work, fair play, fair pay, espouse awork hard and get ahead attitude, and a do well and get money attitude as part of their mindset. But increasingly watching these elitists with gold parachutes raking in massive amounts of money while the true, real American unemployment rate (as measured before the prior several administrations from Carter through Bush moved the goal posts) are running at 17% now, with real suffering and a disappearing middle-class, well – it’s going to come around to a backlash for the elites.
Why else do you suppose they are so terrified? And it’s not just here in the USA, either. None of these people know what to do to “fix it”. They also may well know history, as in France with guillotines.
America is not headed for demise; it’s headed for 2nd world status alongside places like Brazil and Mexico, where you have almost no middle class to hold up the rest of the economy.
Krafcik is not only way ahead of the ball on all of this, by all appearances, but he is making sure to place the company at which he manages, is in a good position to walk alongside general public opinion. That’s his responsibility as a leader.
As for Hyundai cars being cheap and crappy? Well, I guess that is one descriptive term for what used to be referred to as the “low priced 3” in this country (Chevrolet, Ford, Plymouth) for decades.
But as I prefer to view the glass as half full, rather than half empty, I’d rather refer to the pricepoint where Hyundai and Kia excel (no pun intended) as the value pricing market. You know, the one that Chevrolet and Ford can only vaguely even compete in by importing stuff from Mexico, South Korea (as many Hyundais and Kias also hail from) or fit them with cheap Chinese engines and parts. Or as Chrysler planned, whole cars built in China (though that has now fallen apart).
As for the political statements, I’d rather see our nation with Krafcik and his pragmatism as a political leader than the empty suits we have now or have had since, oh, the Carter administration….
“…and talking about the Genesis is no more relevant than it would be if I used the Phaeton to defend the MkV Jetta.”
We didn’t just mentioned the Genesis. The Sonata was mentioned at least a half a dozen times. Is that car a niche player? When did the NF Sonata come about? 2006? What did GM have..oh yeah, this Malibu And why are you comparing a that car to an Audi A4? A Camry is “crappy” compared to that.
“The fact that they expect to meet 35mpg without major tech demonstrates that. Who else could do that with their current model mix. Toyota? Not a chance. BMW? Mercdes? Porsche? Of course not.”
And WHO’S fault is that? What is wrong with making fuel efficient products using inexpensive, practical solutions? Did or didn’t Volvo showcase a miserly C30 last year using a whole bunch of bargain basement tricks? Aren’t we (the enthusiast community) always complaining about fuel efficiency tech making cars overly complex or expensive or heavy. I remember a number of time people here, on this site, touting the Cobalt XFE and now all of a sudden when Hyundai does it its Hyundai being cheap?
I’ll put this another way.
Isn’t there major cognitive dissonance in the fact that the Japanese automobile companies have been run extremely successfully (especially given the Japanese economy being somewhat collapsed since the 1990’s) even while “only” having 7 X the pay of the average guy on the assembly line,
versus
What was that figure? 43 X the pay of the average guy on the line for the American executives who are obviously guilty of running their companies straight into the ground?
As for the government telling executives what they can make; bunk. But the Corporate Boards? That’s totally acceptable AND WHAT IS NEEDED.
ellomdian
“I have more faith in seeing a stitched leather, go-fast enthusiast car from Hyundai in 5 years than from GM at this point.”
I have more faith in seeing Hyundai still here in 5years rather than GM?
Jack, you blew all your credibility when you said Hyundai made “crappy little cars”. When was the last time you drove one? The Sonata may be dull, but it is as good as a Camry. The Genesis may be inexpensive, but it does a reasonable impression of a Lexus. Santa Fe? I’d take one over a RAV4 any day. And if you compare prices and look at all the discounting that Hyundai doesn’t do, the cars really aren’t that cheap. Clearly, your attitude is that Hyundai will never build anything better than an Excel, and dammit, you’re not about to let reality get in the way of your viewpoint. You go, boy!
John’s got a good point — the lifestyle most Americans have been leading has dragged our economy down into the toilet, and a good part of the world’s with it. I say good for John for saying what he thinks (and not what will preserve his lifestyle), knowing full well how it will irk the laissez-faire crowd. John’s company posted a 14% YOY sales increase in the same month that the rest of the industry was down 37%, and that was after introducing their most-expensive product ever. Could be the guy knows what he’s talking about. — Aaron
Oh, and if I may plug an article on another site, I have an interview with John Krafcik here:
http://cars.about.com/od/detoursanddiversions/a/jkrafcik_pt1.htm
Parts one and two posted, part three to come Tuesday or Wednesday.
Jack,
I don’t think the problem most people have with Hyundai vis a vis GM is product as much as it is marketing. Both companies have a mix of decent and great products, both have reasonable quality. And both companies have a perception gap, and both address it in very different ways:
* Hyundai addressed it as a whole company initiative, one that was theirs to fix. They priced the stuff fairly and backed it up with solid coverage.
* GM addressed it by either complaining about the media, or trumpeting how good their current cars are. No increase in warranty coverage, no attempt at fair pricing, no mea culpa.
The “Surprised” campaign shows how out of touch GM really is when it comes to instilling confidence in customers. People don’t care that your car won Fill-In-Blank Car of the Year, or that you won some ephemeral quality award they’ve never heard of and they certainly don’t want to be surprised that you actually make a decent car. They want to know that you, the manufacturer, are committed to your products.
I’d love a G8, Malibu or CTS, but even prior to their financial collapse, GM Marketing was not giving people confidence buy their cars. Now, with the company’s viability in doubt, that’s even taller an obstacle to cross. No one’s arguing (or at least, they ought not to) that GM makes universally bad stuff, or that Hyundai makes universally good stuff. The problem is that people like Mark La Neve—let alone Rick Wagoner—are really bad at their job.
The attitude is all wrong: GM marketing gives me the impression that I should be so lucky to own their product, where Hyundai (well, up until the Genesis) tells me I’m smart for buying theirs.
Jack,
Hyundai’s may be cheap, but they aren’t crappy. The Hyundai to compare with an Accord is the Sonata, not the Accent. The Accent competes with the Fit. My wife drives a Sonata, 62,000 miles and the only problem was one blown brake light bulb. How many US or German cars can do that? Hyundai make cheap, feature loaded boring cars, not crappy cars. Toyota better look out. Hyundai makes boring cars that are just as good as Toyotas now. If they only made one thats a little more exciting to drive I would buy a Hyundai.
@autonerd:
“Jack, you blew all your credibility when you said Hyundai made “crappy little cars”. When was the last time you drove one?”
Oh, it’s been at least… oh, two weeks since I drove a Hyundai, maybe three. And it’s been at least two months since I performed any service on one; I did a brake job on an Elantra for a friend. You know those things still have drums on the back?
To be fair, I haven’t driven a Genesis yet, but given that it is smaller, chintzier, and louder than my Phaetons, I don’t expect to soil myself from amazement when I do.
“The Sonata may be dull, but it is as good as a Camry.”
The market disagrees with you. The Camry outsells the Sonata something like 3 or 4 to one, maybe more, while maintaining a significant price gap.
This is a little hypersensitive of you. Hyundai’s core business is crappy little cars. This should come as no surprise to anybody. Is there any Hyundai you would rather have than the equivalent Honda? Most people would say no. So why do they sell? Price, plain and simple. If Hyundai could command equal prices to Honda, they would charge equal prices to Honda, the same way that Honda would charge Boxster money for an S2K if they thought they could get away with it.
Jack Baruth:
Fair enough, before your response I toned it down to “Hopefully anyone that does will admit to it.”
I highly recommend you stick to why you think some of the Hyundai lineup is crappy, possibly with something like “relatively small and underpowered cars” in the future. You lose a lot of an otherwise open minded audience with “relatively crappy little cars”. “Crappy little cars” is loaded with a bad, racist history.
The Focus also has rear drum brakes. Drums are just as good for the first stop, but I will let anyone that plans to take an Elantra on the track know that there might be some brake fade issues.
no_slushbox said:
I’ll take a US built Sonata over a Mexican Fusion.
Where was that Sonata designed and engineered? It sure didnt just jump off the line all by itself did it? I have said it before and I will say it again….just because your vehicle is aswembled in TN doesnt mean it’s an American car. Assembly is just a small part of the entire process that it takes to create a vehicle.
Funny thing about drum brakes. The Fit had them in the back up until this year.
“The market disagrees with you. The Camry outsells the Sonata something like 3 or 4 to one, maybe more, while maintaining a significant price gap.”
This is a bit of a cop out. The Camry practically prints money, because they’ve been making a good car for longer than I’ve been alive. The NF Sonata is three years old.
@derm81:
Valid point. However, wasn’t one of the reasons the transplants didn’t want to see the domestics go away because of the lack of work for the suppliers? Hint: they share a lot of the same suppliers.
Here’s a third take on Mr. Krafcik’s comments:
http://www.autoobserver.com/2009/02/hyundai-boss-blasts-auto-industry-says-its-viewed-with-contempt.html
I forwarded it as a link to friends and colleagues with the commentary:
“A smart auto executive. Wow, what a refreshing change. Notice what company he works for. Yes, they do build vehicles in the United States.”
One of my (leftie politically oriented) pals couldn’t help responding with a stroppy little comment:
” And they gave 300k to 911 relief. Yes they build cars in the US. The big 3 gave 10 million each.”
To which, I responded: “True, I recall that too; but virtually no other foreign based car companies gave a penny.
Besides which, it may be somewhat of a moot point anyway, within a few months (or even weeks), we may not even have a “domestic auto industry”.
Just as happened in the UK.
You can buy new cars manufactured in the UK right now.
Hondas, Nissans and Toyotas.”
derm81:
On the other hand, from what has been reported the Fusion is a light modification of a Japanese design.
Jack Baruth:
“The Sonata may be dull, but it is as good as a Camry.”
The market disagrees with you. The Camry outsells the Sonata something like 3 or 4 to one, maybe more, while maintaining a significant price gap.
This argument doesn’t fly. The Camry outselling the Sonata does not speak to the quality of either car. Does the success of “Paul Blart: Mall Cop” make it a better movie than other movies?
Jack Baruth: The “average” car by price, size and sales volume in this country is a Camry or Accord. The average Hyundai or Kia is not as good as a Camry or Accord.
Neither are most GM and Chrysler passenger cars, particularly the Pontiacs and Buicks you lamented we may not be able to buy in the future in another editorial.
Jack Baruth: To be fair, I haven’t driven a Genesis yet, but given that it is smaller, chintzier, and louder than my Phaetons, I don’t expect to soil myself from amazement when I do.
Aren’t they considerably less expensive than a brand-new Phaeton was? That’s not quite an apples-to-apples comparison.
Jack Baruth: “I did a brake job on an Elantra for a friend. You know those things still have drums on the back?”
Umm, I don’t think you should use that as a measure of crappiness. I just checked the website for the 2009 Elantra, 4 wheel discs along with ABS and EBD are standard on both the GLS and SE.
I just checked Toyota’s site, all 2009 Corolla models except for the XRS have drums in the rear.
Whoops, just checked Honda, the Civic DX and LX both come with rear drums..
Nissan Sentra? Yep, rear drums…
Chevy Cobalt? Rear drums except the SS
Ford Focus? Rear Drums
Mazda 3? Rear Discs!
Does this mean that the only non-crappy small cars are the Elantra and the Mazda 3? By your logic, it seems so….
autonerd:
That’s a damn good interview:
http://cars.about.com/od/detoursanddiversions/a/jkrafcik_pt1.htm
menno:
Good link also, the voluntary part of the executive compensation limits missed getting quoted in the above article.
“Krafcik holds a Bachelor of Science degree in Mechanical Engineering from Stanford University and a Master of Science degree in Management from the MIT Sloan School of Management”
This is not for the CEO of Hyundai, this is for the CEO of Hyundai Motor America. GM can’t muster this for the CEO of the entire company.
I’m not quite sure the Chinese could conquer South Korea that easily. There is, after all, a very heavily armed and xenophobic nation between the two. While the North Koreans may be communists, they are Koreans first, and allowing the Chinese to dominate the peninsula wouldn’t be very Juche. Not Juche at all.
There’s very good reasons why the South Koreans have been propping up the North with food and other aid. Fellow Korean-ness is only part of it. It is, after all, a lot cheaper than allowing the North to collapse and then taking over – and having to face defending yourself from the Chinese.
To the person who would prefer the Santa Fe over the Rav4, I hope you enjoy paying the same price for a slower, weaker, heavier, less efficient car that will end up costing you extra at trade-in time.
:/
romanjetfighter,
I too chose the Santa Fe over the Rav4, for its more robust body structure, better materials, engine that won’t sludge, longer warranty and 42% guaranteed residual value after 5 years.
If I wanted faster 0-60 times in a Hillary Duff wrapper I’d get a pink Corvette.
This editorial is so full of editorials that I’m not quite sure what John Crafcik actually said that was so horrendous. And the “crappy little cars” remark is several years out of date.
What happened, Jack, did a Hyundai nearly run you over on the street today?
Jack, I love the fact that you stirred the pot, but I have to agree with many of the commenters here. I had a 4cyl Sonata rented for a few days last year, and kept saying to myself, wow, this is near Honda quality.
Nothing fancy, but cheap, screwed together well and somewhat of a tight ride considering what it was.
Oh, and it had something like 13000 miles on it. In the rental car world, that equates to 40k, as I’m sure the car had been ridden hard and put away wet. I sure did.
Assembly is just a small part of the entire process that it takes to create a vehicle.
It’s the part that counts, especially when determing where the dollars of the purchase go.
I did a brake job on an Elantra for a friend. You know those things still have drums on the back?
Rear drums are perfectly adequate on an economy car: it’s not heavy enough, nor driven crazily enough, to require rear discs (Front? Yes. Rear? No.). Plus, drums have the benefit of being cheaper, longer-lasting and less prone to damage or warping.
Is there any Hyundai you would rather have than the equivalent Honda?
This is a good point, and you’re entirely correct. Honda can still command a premium, and get people to pay it. Where Hyundai differs from the domestics is the lack of a “Value Pricing” scheme (another GM marketing winner) that obfuscates information, pisses off customers, kills resale value and serves only the protect an increasingly irrelevant dealer base that depends on the occasional sucker who pays MSRP. Hyundai has no pretenses about what they can do with regards to pricing.
That said, I would buy an Elantra over a Civic (but only because I can’t effectively fit in a Civic) and certainly a Veracruz over a Pilot.
Seriously folks…
these are CRAPPY LITTLE CARS!
I would take the bus before owning one
and the bus stop is 2 miles away!
# akatsuki :
February 12th, 2009 at 12:01 pm
I find the author biases probably more distasteful than John’s. Hyundai is currently rising while the US automakers – who have not innovated, who have sold the old way, who would never have thought of the assurance program – continue to hold their hands out in some pathetic caricature of need. He is pointing out that if you take government money, you are handing power to them over your businesses (which is fine in the cases of GM/Chrysler since their execs basically have been looting their companies for years to pay themselves).
Well Said.
no_slushbox :
February 12th, 2009 at 12:19 pm
“a provider of relatively crappy little cars”
That can make a modern RWD luxury sedan. A feat that Ford cannot accomplish.
Yes it can, it’s called a Falcon.
Hyundai is in the cheap, crappy car business, plain and simple.
That’s what Kia is for.
The Hyundai brand is far from crappy. Indeed, some were comparing the Genesis sedan’s interior and packaging to the best from Europe.
Hyundai used to be making cheap crappy cars. Not so much now. As opposed to say, late 90’s early ’00’s Mercedes, which was just expensive crap.
@Jack Baruth
“Telling me that Kiton is “merely okay” is an invitation for me to punch you in the mouth, and I think that same reactionary response pops up among the B&B from time to time when somebody dares to question the status quo.”
I’m not sure I get it. If someone makes a deliberately provocative statement about (presumably) your hand-tailored Italian suit, you feel you are entitled to get bent out shape.
How many people would say anything made by Kiton is “merely okay” in the first place?
Next, if you make a deliberately provocative statement (AKA “question the status quo”) about a successful foreign automaker, it is also likely to create a similar “reactionary” response.
Is your indignation more acceptable or constructive because Kiton is a ridiculously exclusive brand and Hyundai is a cheap, crappy brand? I don’t get it.
My Dad probably bought 20 new Lincolns from the same dealership in Chicago starting in the 1960s. He recently bought a Hyundai Santa Fe. He is not “newly impoverished.”
I don’t see how name-dropping or class warfare helps your argument.
It’s hi-lari-ous that Hyundai makes a V8 that uses a supercharger to get “460” horses and people act like it means shit. 500+ is what any one should get for a modern blown v8. Unless it’s a weird super small displacement v8 then it’s not that good. LS engines beat that N/A when built right.
Mr. Baruth echoes my sentiments that there is still no reason to buy anything from Korea while the big 3 are in business and Japan still makes cars. Anything they make is done better by some one else.
Wow, everyone is still ragging on the “cheap and crappy” comment. What’s to dispute?
Hyundai’s cars have typically been the bottom of the barrel in their segment because they are made to be cost competitive. Now, it’s obvious that this is supposed to change soon, but until I see scores of Genesis (i?) roaming the land then they still make cars that aren’t as good as the Civic, Camry, Accord, Malibu, Golf, Mazda3 etc… Basically this list includes almost every mainstream offering. Another company that obviously follows this strategy is Chevy (Aveo, Impala), and it’s not a slur to acknowledge it. In fact many major companies produce these types of cars (Versa, Yaris, Sebring) There simply is no pretense that what they’re making is Quality with a capital Q, it’s value.
You could make the point that this is highly relative I guess, but then you’d be forced to compare the interior trim and performance credentials of some other sacred cows (say Honda and Toyota) and realize that they make “cheap and crappy” cars compared to Volkswagon. What’s the point? You get what you pay for. It seems like that was original point anyway.
Jack:
>I did a brake job on an Elantra for a friend. You know those things still have drums on the back?
Not anymore, then don’t. But the 2009 Toyota Corolla and the 2009 Honda Civic both do.
In the same vein, did you know that the Camry still doesn’t come with standard ESC, and Nissan doesn’t offer it on the four-cylinder Altima? Meanwhile, the cheap, crappy Sonata has it as standard.
>I haven’t driven a Genesis yet, but given that it is smaller, chintzier, and louder than my Phaetons
I happen to think the VW Phaeton is, or should I say was, a wonderful car. It also cost more than twice as much in 2005 as the Genesis does in 2009. You might as well say that Toyota makes crappy cars, because the Avalon is not as nice as your E-Class.
>The Camry outsells the Sonata something like 3 or 4 to one, maybe more
Last I checked, Toyota has a 16% market share in the US. Hyundai has a 3% market share. If I was Toyota, and a company that had less than 20% of my volume overall had a car that was reaching 25% to 30% of my best-selling model, I’d be worried. Wouldn’t you?
>If Hyundai could command equal prices to Honda, they would charge equal prices to Honda
Check out the interview that I linked to above. Part two. According to Hyundai, their prices are a lot closer to the Japanese mainstream brands than I realized.
No_slushbox: Thanks for the kind words on the interview.
— Aaron
My issue with Krafcik’s comments is the glaring omission of the facts regarding Hyundai’s deeply corrupt Korean management team. Sanctimoniousness is the most annoying part of his mea culpa.
Google is your friend.
http://www.edmunds.com/insideline/do/News/articleId=115384
Also, Hyundai makes some crappy cars, as well as some nice cars. The Genesis is a great vehicle, but not as great as some here would lead you to believe.
Just face it- Hyundai and Kia are cheap cars and will always be thought as such. They’re the car you buy for a young driver. Or when things are tight financially. You don’t say “Look, I bought a Hyundai!” Rather it’s more like- “Yeah, things are so tough right now that we had to settle for a Hyundai.”
autonerd:
For someone to get that access but then actually ask pointed questions like, to paraphrase, “why is anyone going to buy your cars instead of a Versa or Fit” is rare. The MSM are usually the only ones that can get access to CEOs, and they ask generic, softball questions.
Bridge2far:
With the Genesis Coupe a lot of people are going to be saying “Look, I bought a Hyundai!”
People see Hyundai as a company that is growing and moving upmarket, not dying.
Hyundais are niether crappy nor boring !!
I really can’t understand when people talk about cars they haven’t actually driven themselves.
I had driven four different Hyundai models to the limit. I had a Santa Fe for three years, only thing I changed was engine oil while family and friends who owned Toyotas, Nissans, Hondas, GMCs, etc,, were paying the doctor a lot of visits.
I am someone who admires Honda, think they are really special auto company. but when I got a ’08 civic, reality kicked in. Auto magazines and websites have this rating system that propelled whomever paid more. the quality of a U.S. or Japanese made Honda is far less than that of a Hyundai.
yes, they were crappy 8 or 10 years ago but no more. for all of you who think you know a car just because you saw a picture of it in a website, plz go and take an Azera for a drive. a proper drive, not just around the block!
I wonder what is an example of auto company that is not crappy?
Ford? Chrysler? the GM pack?
A lot of car companies no longer live up to the name they made for themselves. It’s not just the US market, look at other countries and see for yourself where Hyundai stands….
Ummm, Hyundais and Kias are junk.
I’ve owned a few. The people defending Hyundai here need to buy one and keep it for 100,000 miles. Just because the TV tells you its reliable doesn’t make it reliable, and just because the TV tells you to compare it to Toyota and Honda doesn’t make it comparable.
Oh, and at 100,000 miles I want them to sell it. That $500 can then go towards a couple of therapy sessions.
drum brakes (rear):
cheaper, lighter, more than enough stopping power for compact and sub-compact cars.
sure, disks are ‘nice’, but not required for this type of car…
seen, by the fact that most ‘non-premium’ small cars still have rear-drum only…
Many are applauding Hyundai for their perceived improvement. Reality is that they were so sub par 8-10 years ago that their quantum leap to join the pack is seen as an astounding accomplishment. OK, so they now are in the same conversation as many main stream cars. Whoop de doo. They still have the stigma of inferiority attached and that will take time to change. You can tout the Genesis as much as you want- I still haven’t seen one anywhere.
Sorry sixspeedtrick, but you send my BS meter off the scale faster than the Sham-Wow guy on TV.
Exactly how many Hyundai/Kias have you driven 100,000 miles lately? Year, make, model and VIN please.
It is unfortunate that the author had to use such “crappy” language to make his point.