“Back to the Future” is Hollywood fluff, but the movie has its moments.  When Marty McFly takes his 1985 vintage nuclear-powered Delorean to Dr. Emmett Brown’s 1955 alter ego for repairs, “Doc” looks at the car’s complicated electronics and snorts “No wonder it broke down.  It was made in Japan.”  “What are you talking about?” McFly corrects.  “That’s where all the best stuff comes from.”  The throwaway line perfectly illustrates the sea change that's swept the American automobile industry during those crucial 30 years. 

From 1955 to 1985, Japanese manufacturers completely reinvented themselves.  They went from being producers of cheap, copycat products famous for near-instant obsolescence, to makers of high-tech, value-driven products built to last.  There was an equal, opposite and horrifying corollary to this astounding transformation: American manufacturers more or less switched places with their Japanese counterparts. Despite domestic carmakers’ gains in product quality over the last two decades or so, the perception that domestic cars are inherently inferior to their foreign competition has become deeply ingrained in the American psyche. 

But all is not lost.  Not to coin a phrase, there is a way forward.  To reverse the reversal, here’s what America’s struggling automakers need to do…

Can the discounts  I remember watching GM’s “employee discount for everyone” commercials and thinking how they reeked of desperation.  I figured the next step would be to have a line of UAW workers gnashing their teeth and rending their clothes as they begged me to please, please buy an American car.  This summer’s discounts may be less prominent, but Detroit's still using price as the primary way to sell cars and trucks.  The emphasis on cash gives consumers the impression (rightly or wrongly) that price is all the automakers have to offer.  They might as well run an ad campaign that says “Chevy: When you can’t afford anything better.”  

There’s only one way around these discounts: realistic sticker prices and no haggle pricing.  This two-pronged approach would send a message to the American heartland that GM, Ford and DCX are serious about value– and their customers' confort level.  If the vehicles aren’t selling, reduce the price.  

Make inexpensive cars that people want to buy  We’re not talking about “cheap” cars.  The domestics need to make beautiful-looking, sensibly-priced automobiles that don’t feel like automotive purgatory.  The mini-whips should have dramatic interiors made from quality materials.  They need convenient touches that make people think they’re getting superb value for money.  Theses entry-level vehicles also need sophisticated powerplants and superior dynamics.  And they need to be updated every two to three years.

Toyota and Honda clawed their way to the top following this strategy; it worked once, it’ll work again.  Yes, the Big Three’s labor and legacy costs make it nearly impossible for them to make money on small cars, but they’ve got to reclaim this territory at any cost.  The traditional domestic buyer is getting older, and competition for the middle and upper market is equally fierce.  If Detroit wants a future, they need a secure a toe-hold at the bottom of the mountain, and claw their way back.  

Innovate!  Detroit is so busy cranking out “Me too” vehicles that it’s hard to believe that the American car industry was once the pinnacle of fresh automotive thinking.  Where are the striking designs, or new directions?  What about diesels?  Detroit could build small, clean-burning turbo diesels that get near-hybrid levels of fuel economy (especially on the highway, where hybrid mileage sucks).  Right now, VW has the diesel car market pretty much to itself, but GM, Ford and DCX could one-up the competition by offering small, efficient diesels in their entry level cars.  The company’s could also offer the TDi diesels in small trucks, creating a unique product for the North American market. 

Attack reliability  If, in fact, Detroit is building cars that are as reliable as their “foreign” competition, they should offer a 10-year/100,000 mile warranty.  (If, in fact, they aren’t, they have even more reason to provide the coverage.)  A long warranty would go a long way towards convincing consumers that Detroit’s vehicles are the mechanical equal of Toyota or Honda.  Of course, it could cost the “domestics” a fortune, but there’s simply no cheap and easy way to win back consumer confidence.  The Big Three need to make existing and potential customers believe that they care about more than just collecting monthly payments.  

Clearly, Detroit is stuck in a time machine.  Retro designs like the Mustang and HHR might get people into the showrooms, but they won’t save Ford and GM from Chapter 11.  (DCX is doing better, but they face the same reckoning.)  If the Big Three can’t make customers confident about Detroit’s future, their image will remain stuck in 1985.  And if that happens, they’ll soon be history.  

Years ago, I found myself killing time in a London wine bar.  An English gentleman and I were busy amusing ourselves with fine wine and, um, English food when a pair of extremely attractive unattached ladies strolled into the bar. Uninhibited by the best Bordeaux, we enticed these French beauties to join us at the bar.  The women eventually escaped our charms to establish base camp at their own table.  I continued to stare longingly at our lost companions– until one of them stretched her arms above her head to reveal unshaven underarms.  The Nissan Versa was like that.  

Why in the world would General Motors want to hitch their wagon to Renault – Nissan?  Synergy?  Don't make me laugh.  I reckon the answer is simple: GM's Board of Bystanders and CEO Rabid Rick Wagoner aren't interested in hooking-up with Carlos "The Jackal" Ghosn's mob.  They gotta pretend to be interested on account a due diligence.  Lest we forget, Kirk "The Quiet Lion" Kerkorian launched this whole cockamamie scheme to inflate GM's stock price so he could recoup his $1b loss.  Done.  But now Nissan says it ain't giving GM a dime, no matter what.  Which takes the deal from dumb to dumberer ('cause the one thing GM could use from the Franco-Japanese conglomerate is cash money.)  OK, great.  But here's my question: why did Nissan – Renault play along with Kirk in the first place?  Do we really believe Carlos' claim that he wants to bulk-up against Toyota?  Did Kirk promise him a shot at running the world's largest potential bankruptcy?  I'd appreciate a little help parsing this bastard.  Your thoughts? 

According to BMW’s ad for its M products, “history and compromise cannot be made at the same time.”  Huh?  What about The Missouri Compromise, the Camp David accord and The SALT treaty?  The headline’s patent absurdity is capped by the copy’s intellectual inanity.  “Nothing about our M cars is a compromise.”  Anyone familiar with automaking knows it’s nothing but compromise: design vs. packaging vs. performance vs. technology vs. price vs. regulations vs. cost vs. time vs. internal and external resources.  To suggest otherwise isn’t just wrong, it’s nuts.  A very strange kind of nuts… 

Obviously, the German automaker fancies itself a company apart: the last great independent automobile manufacturer. Which is almost true and fair enough.  But it’s one thing to weave a less tangled corporate web than your conglomerated competitors, and quite another to advertise the fact.  It’s hard to imagine a potential Zephyr, 9-3 or LS430 buyer opting for an equivalent Bimmer simply because Lincoln, Saab and Toyota nestle within larger corporate structures.  On the sharp end, it’s “don’t know, don’t care.”

Of course, BMW’s latest ads are designed to make you care; to explain how the company’s independence ultimately produces ultimate driving machines.  Quite apart from the ads’ creepy subtext (Aryan purity produces purebred automobiles) and the strange non-sequiturs born of megalomania (“It is a high-performance vehicle that actually exists in the real world”), it’s simply not true.  The dreaded iDrive mouse-driven multi-media controller proves that BMW’s corporate independence doesn’t guarantee “the pursuit of great ideas.”  More to the point, BMW no longer produces “the ultimate driving machine.”

At the risk of being over-literal, which BMW model would that be?  Yes, the M3 is a truly magnificent motor, well worth a seat in the Driver’s Car Hall of Fame.  But anyone who’s driven a Porsche 911 or Ferrari knows the M3 doesn’t even play in the same league as these phenomenal foreigners.  You could argue the point on price– the M3 offers maximum pistonhead pleasure for a more accessible entry fee– if BMW let you.  Their M ad clearly states “We refuse to subject them [BMW’s M cars] to money-saving shortcuts or mass production.” 

In truth, enthusiasts have known for over a decade that BMW has lost the plot.  The company’s campaign to expand into every product niche extant has sacrificed their cars’ unique selling point on the altar of growth and profit.  How can an SUV– any SUV– be an ultimate driving machine?  Although you can credit the X5 for at least trying to satisfy the brand proposition, the X3’s execrable ride and handling demonstrate the company’s complete lack of commitment to their creed.  By the same token, the rest of BMW’s product line has become heavier in weight and lighter in steering.  The 6-Series is a travesty.

Look closely and the evidence of BMW’s ultimate brand betrayal is everywhere: the fitment of stiff run-flat tires (that tramline on smooth pavement), disastrous ergonomics (what happened to the driver-angled console?), compromised visibility, over-complicated driver interfaces (column-mounted shift knobs, starter buttons and the world’s worst gearbox); even Chris Bangles’ fussy exterior shapes reveal a distinct turn away from the company’s former focus on driver satisfaction.  The fact that BMW hasn’t built a convincing answer to Porsche's Boxster in ten years tells the tale.

And now BMW is putting Dr. Norbert Reithofer at the helm.  Dr. R is Bimmer’s production go-to guy, the man who ensured that the company’s factories in South Africa and Spartanburg, South Carolina created profitable products worthy of international export.  In his treatise “The Fascinating Power of Production – Worldwide Competence in Producing Premium Products,” Dr. R touted the fact that Bimmer’s production process meant that luxobarge customers could have it their way, choosing from variations that “amount to 10 to the power of 17- that is 100,000,000,000,000,000, which is an incredibly high number.”  Yes it is.  It’s also a very revealing one.  Instead of boasting that BMW makes one ultimate driving machine, Dr. R took pride in 100 quadrillion possible variations.

I suppose it only makes sense.  When a car company loses focus, it can either accept the fact that it’s lost its way and begin the long, painful and expensive process of returning to its roots (wither Cadillac), or it can widen its original remit to justify– if not celebrate– it’s more expansive agenda.  BMW's ad campaign and Dr. R’s appointment tell us which way BMW’s wind is blowing.  They formalize Bimmer’s hugely successful growth-oriented philosophy, and ensure its continuation.  Never mind that BMW no longer “sticks to the knitting.”  The company has never been so profitable.  

And yet, history will record that BMW’s decline began even as it entered its most vigorous period of growth.  Ironically enough, the automaker’s fate was sealed years ago, when the company compromised it core value in the pursuit of profit.     

Despite Toyota’s “when does a car become more than a car” zenvertising, Camry folk treat their rides like a household appliance: use, admire occasionally, forget.  For the 2007 model year, America's favorite four-wheeled conveyance has become… a stylish appliance.  That said, the new Toyota Camry is no Sub-Zero ‘fridge or Dyson upright.  For all its extensive improvements, the model has sacrificed much of its traditional depth of character on the altar of style and profit.  In fact, the new Camry raises an important question: has the perennial mid-size sales champ finally let down its guard? 

Noticed any Sprinters lately?  Not the kind that burn-up your local running track; the boxy, diesel powered Sprinter vans sold by Dodge and Freightliner.  If you’re a typical enthusiast, these vehicles are less likely to appear on your automotive radar than a Toyota Camry.  But the Sprinter should have been on Ford’s radar.  The commercial vehicle represents a rapidly growing market segment that DaimlerChrysler is busy claiming for itself. That’s a couple of hundred thousand trucks a year, with good margins.  Gone.

Mercedes launched the Sprinter in 1995.  The model arrived in a myriad of guises: crewbus, panel van or pickup; standard or high roof; with a choice of three different wheelbases and engine choices; and three window and seat configurations.  Freightliner first assembled the Euro-friendly Sprinter in the US for FedEx.  Chrysler now builds them and sells the machine through its Dodge dealers.  The Sprinter’s also found a following amongst civic groups and people who want a box on wheels to schlep seven kids, two dogs and four potted plants.

Another design coup by DCX?  Hardly.  Ford has been building a similar vehicle for some time.  The Transit is Ford’s Euro-spec commercial van, and it’s a huge success.  European commercial fleet magazines have given the Transit rave reviews.  People who’ve driven both rate the Transit superior to the Sprinter in many respects: user flexibility, seat configurations, number and position of doors and windows; the availability of various lengths and heights. The Transit is available in both front-wheel drive and rear-wheel drive, and offers an even wider array of diesel and gasoline engines than the Sprinter.  And the Transit’s flat bed and dump box options trump the Sprinter’s iteration count.

In short, the Transit is a worthy and logical competitor to DCX’ workhorse: a vehicle with all the versatility, economy, safety (ABS standard from the git go) and reliability America’s tradesmen need to help keep the country’s economy strong.  No wonder, then, that the United Parcel Service (UPS) started enquiring about a US version of the Transit for their enormous fleet.  Ford had a close and profitable relationship with UPS; the Blue Oval Boys supply the underpinnings for most of the parcel service’s brown, meat-loaf shaped trucks.  And yet Ford, awash in SUV profits, hung up the phone.  That was six years ago.

A year later, DCX’ announced that they were bringing the Sprinter into the US. Again, Ford chose to ignore the threat to their domestic market share and cold shoulder their easily-accessible potential response.  This despite the urgings of many mid-level managers in FoMoCo’s commercial truck division.  Again, the guys in brown repeated their request for a Transit.  Again, nothing doing.  Ford was concerned that a successful Transit might steal the sales from the Ford Econoline: the vehicle that dominated the US commercial van market for decades.   

This myopia has, once again, proved to be another lost opportunity for Ford.  Not only did DaimlerChrysler sell Sprinters to FedEx and other commercial users, but even American tradesmen are deserting Ford’s Econoline for DCX’ Sprinter. The square Sprinter is now seen all over suburbia, serving the men who service the furnaces, appliances, garage door openers and all the other appurtenances of suburban life.  A few early-adopters even bought them for personal use. DaimlerChrysler, having monopolized the minivan market for decades, now stands to own the boxy van market as well.

And now, even the men in brown have deserted Ford and equipped their delivery drivers with Sprinters. Perhaps they simply tired of asking Ford for a Transit of their own. The Ann Arbor area has at least four UPS Sprinters; UPS is putting them on the road all across America. GM’s refusal to enter the fray makes some sense; they don’t have a competitive product and they’ve got a lot more pressing issues to worry about (meeting the payroll, staying one step ahead of the bill collectors, etc.).  FIAT, Renault and Peugeot have similar products, but none of them have a US distribution network or name recognition.

But Ford has everything: a terrific product at a great price (most Transits are constructed in a hi-tech, low-wage Turkish factory), a strong reputation in trucks, and a stellar dealer and service network.  And just in case you’re thinking that the Transit isn’t sufficiently “American” for the job, clock this: as part of Alex Trotman’s Ford 2000 program, the Transit was designed and engineered in Dearborn.   

Ford’s product development team has shown themselves increasingly incapable of making more than a handful of products that appeal to large numbers of buyers. Now Ford marketing has shown themselves incapable of supplying an existing product to customers who are literally asking for it.  I’m sure there are plenty of “good reasons” for their reticence.  I’m equally sure they're turning a slam dunk to a game losing around-the-rim-and-out.     

I know, I know; there's been a lot of Ford and GM bashing on this site as of late.  All of it deserved.  As long as car companies make crap cars– and that's ANY company making ANY crap car– The Truth About Cars is ready, willing and able to provide a no-holds-barred reality check. But here's the important bit: every TTAC writer would love to see the former Big Three produce the world's best automobiles.  It literally pains us that they don't.  If and when America reclaims its mojo and produces world-beating product, be it a Chevrolet Corvette or a Ford Freestyle, we will give its maker its due.  To wit: Lieberman likes the Freestyle, Big Style.  [His review goes up tomorrow.]  It's both sad and symptomatic that Ford doesn't share JL's enthusiasm enough to dig down and make something more of a potentially great vehicle.  By now, Toyota would've been busy on gen II.  Will this misery never end?  Oh, and if you could please suggest a photo caption in the comments, I'd be much obliged. 

I’ve seen the car of the future.  It's not a diesel.  It’s not a hybrid.  It doesn’t run on electricity or natural gas or elastometric energy storage units recharged by rodents operating exercise wheels, supervised by domesticated felines. The future is sitting in a corner of your local Ford dealer's showroom gathering dust: a Ford Focus with the optional 2.0 E engine. This little runner is what’s called a PZEV (Practically Zero Emissions Vehicle).  That's a cut better than a ULEV (Ultra Low Emissions Vehicle) but not quite as good as a ZEV (Zero Emissions Vehicle).  Ah, but the Focus E is still the best a tree hugger can get.

If you think about it (a rare activity for people who focus more on politics than scientific facts), a Focus PZEV has less environmental impact than an electric-powered ZEV.  The ZEV rating measures only tailpipe emissions– not a vehicle’s the total impact on the environment.  Consider the infrastructure that supplies the energy for the electric car. Plug in an EV-1 every night, and someone throws on more coal at the powerplant.  In many cities, a PZEV car like the Focus E emits exhaust that is cleaner than the air it consumes.  In fact, creating instruments to measure the miniscule amounts of pollution from a PZEV car is a growth industry, and a real technological challenge.

Ford's joined in this technological accomplishment by BMW (325ci), Honda (Civic GX), Hyundai (Elantra), KIA (Spectra), Mazda (Mazda3 2.0), Mercedes (E350), Mitsubishi (Galant), Nissan (Sentra), Subaru (Legacy 2.5), Toyota (Camry), Volkswagen (Golf) and Volvo (V70); to name but a few makes and models. 

[GM is notably absent from the list of automakers building PZEV vehicles.  For 20 years, GM offered the most fuel-efficient cars in America. Starting with the Vega through to the three cylinder GEOs of the ‘80’s and ‘90’s and the EV-1 electric car, GM spent a great deal of money to top the EPA's mileage list.  All these cars had one thing in common: no one bought them.  Eventually GM gave up this unprofitable pursuit.  While GM cars usually have the highest mileage in their respective categories, The General only makes a token effort (e.g. the Saturn VUE hybrid) to compete with high-mileage “loss leaders” like the Civic or Prius.] 

Of course, the gasoline-powered, internal combustion engine hasn’t finished cleaning up its act.  Every year, the old dear gets a little better.  Evolving technology– direct injection, semi-stratified charge combustion, higher operating temperatures, more reductions in internal friction, etc. — promises even cleaner and more fuel efficient cars in the future.  None of this is "news" in the media's view.  A cumulative 2% improvement in efficiency year on year doesn't make nearly as good a story as fuel cells, hybrids or diesels.  But spread this incremental improvement over 20 years and tens of millions of vehicle and the cumulative effect– in terms of the engines' overall environmental impact– is astounding.

There is a single but significant fly in the near-organic ointment: Americans don't buy fuel-efficient cars.  No matter how much the general public complains about the price of gas or the planet’s ascending temperature, the cleanest and most fuel efficient cars are often the most unloved.  The media never misses an opportunity to chronicle the "skyrocketing" sales of hybrids, but fails to point out that they're a relatively obscure breed.  Last year, total hybrid sales captured around 3% of the new car market.  Toyota sells more SUVs than that.  Since Toyota and others lose anywhere from $2k to $4k per car on their low-end hybrids, there is little incentive to drastically increase production and sales.  No wonder Bill Ford has pulled back from his public commitment to produce 250k hybrid-powered vehicles by the end of [this] decade.

So why do carmakers offer money-losing high mileage cars?  They have no choice.  As we’ve discussed here before, every car manufacturer has to meet a CAFÉ (Corporate Average Fuel Economy) number.  If Ford wants to sell Lincoln Navigators at a $10,000 markup without incurring a substantial EPA fine and/or negative PR fallout, they need a produce a passel of PZEV Foci to boost their fleet average– whether they sell or not.  Every carmaker suffers this problem.  Toyota chooses to lose their money on hybrids, and reap some positive PR. BMW pays the fines.  Ford, GM, Chrysler and others suffer in silence.

Few things are certain. But the most likely scenario for the car of the future is that it will be a lot like today's Ford Focus (minus the strange taillights, we hope).  It’ll be relatively small and simple, with an extremely sophisticated internal combustion engine. And, no doubt, gathering dust in the corner of the showroom, while buyers flock to the latest gas-guzzler, and pundits bemoan the state of the nation's oil consumption.

“Small is Beautiful” was released immediately after the ’73 energy crisis.  German economist E. F. Schumaker’s collection of essays tapped into the prevailing gestalt: a growing fear that the institutions that defined capitalism’s success had become economically and environmentally unsustainable.  Contrary to popular belief (i.e. the people who used the book’s title as a mantra without reading it), Schumaker wasn’t predicting or recommending the end of big business.  He simply believed that large organizations work best as small, independent groups acting in harmony.  Someone ought to tell Dieter Zetsche.

"We are convinced that DaimlerChrysler provides [Chrysler with] more resources [and] know-how [than its competitors] in many areas," DCX' CEO pronounced at yesterday’s US launch of the German-engineered Smart two-seater. In case you missed the point of Dieter’s diatribe, the carmaker is launching an advertising campaign tomorrow that touts the fact that Chrysler products benefit from German – American cross-pollination.  In short, a Chrysler is a better car than a Ford or GM vehicle because it’s got Mercedes DNA.

There are some obvious problems with this strategy.  Mercedes’ reputation for bullet-proof build quality is long gone, squandered in the relentless pursuit of growth and cost-paring profit.  (Proclaiming that a Chrysler is built like a Merc will cause many a previous gen S-Class owner to smirk uncontrollably.)  Toyota, Lexus, Honda and Hyundai have a far more credible and accessible claim to mechanical reliability than the three-pointed star.  Besides, the American public considers Mercedes a luxury brand (even if it doesn’t boast Lexian quality).  DCX’ new campaign risks an association that whispers to its target demographic “Hey Mac, wanna buy a cheap Mercedes?”

Best case: advertising a garden-variety Chrysler as a Mercedes-under-the-skin raises the “domestic” brand above Ford and GM’s growing pile-‘em-high-and-sell-‘em-cheap reputation.  But the ad campaign also threatens to trigger a worst case scenario.  Connecting a luxury brand with a mass market manufacturer (not that Mercedes isn’t a mass market manufacturer, but we’re talking about perceptions here) may alienate Mercedes’ US customers.  Cadillac almost died for the sin of dragging the brand down market, and they didn’t even advertise the fact that their cars shared greasy bits with their less mechanically gifted GM counterparts. Psst.  Hey Buddy, want to buy an expensive Chrysler?

Of course, the line between uplift and collateral damage could well depend on the ad agency’s execution.  Apparently, Dieter will be a figure of fun, which is both surreal (fun Germans?) and appropriate.  After all, this is the same foreign-owned automaker whose outspoken PR Supremo has repeatedly and pointedly blasted Toyota for daring to suggest it was an American company.  And the campaign began when a Birmingham barber asked Herr Zetsche what Mercedes had to do with Chrysler (“Ve ate them.”). But even if DCX’ German – American shtick works, the campaign reveals a fundamental flaw in Zetsche’s business strategy, and the strategy of all his competitors: synergy.

In case you forgot, synergy is the concept that replaced Small is Beautiful, once the oil supply (and public anxiety) eased.  Synergy says it’s OK to be big, as long as the “whole is greater than the sum of the parts.”  Supposedly, synergy creates “economies of scale” that makes huge business conglomerations more efficient.  Modern car companies?  Efficient?  Anyone who’s dealt with one on any level ever may beg to differ.  In fact, Schumacher had a thing to say about that back when jeans had bells: "The most striking thing about modern industry is that it requires so much and accomplishes so little.  Modern industry seems to be inefficient to a degree that surpasses one's ordinary powers of imagination.  Its inefficiency therefore remains unnoticed."

In all the talk about domestic automakers’ market share, union contracts, legacy costs, production capacity, rebates, incentives and product quality, no one seems to be interested in the fact that American[ish] car companies could well be the most inefficient enterprises on planet Earth.  I’ve received dozens of emails from people inside The Big Three describing their employers’ Kafka-esque bureacracy.  The reason these companies can’t stay on top of market niches, or update their existing vehicles to fend-off the competition, or maintain brand differentiation, isn’t money or will.  It’s sheer size. And the fact that their corporate cultures are entirely antithetical to genuine decentralization.

Schumaker’s central precept was easily understood: quality above quantity.  Growth isn’t everything.  Perhaps it’s too much to expect a huge company owned by shareholders to sacrifice the prospect of every-increasing earnings on the altar of personal fulfillment and environmental responsibility.  But Schumaker was right about the dangers of excessive size and centralization.  Meanwhile, DaimlerChrysler, GM and Ford are busy talking-up international platform sharing.  And Porsche, the quintessential “small is beautiful” sports car company, is trying to take control of Volkswagen.  Sometimes, the more painful the lesson, the more important it is.  

Once upon a time there was an automobile company that was so big that it looked like it was about to drive all the other car companies out of business.  This behemoth made every kind of car, from sports cars to limos, and every kind of truck, from the smallest to the largest. They made almost all of the busses that took people to work, and most of the locomotives that pulled trains across the county. Their diesel engines powered most of the construction equipment, ran the pumps that pulled oil out of the ground and moved ships on the seas.  There was only one cloud on the horizon: they were too successful. 

That company was General Motors.  The times were the turbulent ‘60’s.  John F. Kennedy was the President of the United States, and he was determined to knock GM down a peg.  JFK had the tools, in the form of anti-trust laws and an activist justice department.  Their goal: destroy GM’s supposed monopoly by removing Chevrolet from its corporate parent.  An epic fight began, that continued for an entire decade.  Eventually, the federal government became preoccupied with war, inflation and civil unrest, and withdrew their actions against GM.  But what if…

The Kennedy administration had split Chevrolet from GM.  At the time, Chevy accounted for roughly 35% of all US automobile sales.  If the Justice Department had been able to detach the bow tie boys from The General, the resulting, newly-independent automaker would have been the largest car company in the world, about as big as Ford and Chrysler combined.  America would have been left with four highly competitive automobile manufacturers: Chevrolet, GM, Ford and Chrysler.   

No question, Chevy could have gone it alone.  The brand had their own engineering staff and a number of unique platforms (e.g. the Corvair, Chevy II and Corvette).  Although Chevrolet’s hugely successful BelAir and Impala line shared Fisher Body underpinnings with other GM products, the issue could have been easily resolved.  GM had a long history of selling components to other carmakers; Chevy could have simply bought its bodies from Fisher.  Other centralized functions, such as marketing and purchasing, would have presented more of a logistical challenge, but nothing insurmountable.

Imagine a Chevrolet brand focused on building low-cost cars and pickup trucks, with a world-class sports car for a halo vehicle.  Freed from the obligation to tailor their cars to corporate platform sharing, Chevrolet’s lineup could have been distinctive, focused and original.  Family cars like the BelAir and Impala would have evolved without GM’s baggage, emerging from the 60’s ready to fend-off Toyota and Honda in the low-end sedan market.  Chevy could have responded to the deluge of quality imports with quality domestics. 

With a corporate focus on product rather than interdepartmental politics and intrigue, Chevy would have never wasted billions on Saturn.  It wouldn’t have had to sell cars of dubious international parentage, or rebadged someone else’s idea of a brand appropriate product.  Meanwhile, bereft of Chevrolet, GM might also have become a much healthier, more nimble and innovative company. For one thing, Pontiac, Oldsmobile and Buick would have been forced to survive on their own, instead of coasting on Chevrolet’s profits and parts.

Since each GM division already had their own engineering staff, Pontiac would have been able to develop its performance excitement at a higher price point than Chevrolet.  (The Firebird, when it appeared, would not have been a Camaro clone, but a distinct and distinctive car.)  Oldsmobile could have built on its track record of innovative engineering established by the Toronado, America’s first practical front-wheel drive car.  Buick might have used the same clever platform sharing that let them build a rear-wheel drive Riviera from the front-wheel drive Toronado to build solid luxury cars at relatively affordable prices.

GMC would be free to develop heavy trucks, rather than people’s pickups and utilitarian SUV’s.  And Cadillac, the “Standard of the World,” could have used the profits from Pontiac, Oldsmobile and Buick to remain a world-class luxury car, unsullied by the Chevrolet parts mentality.  A properly-regarded, properly funded Cadillac would never have embarrassed itself with affordable front-wheel drive trash.  The brand could have stayed on the high-road and built vehicles capable of competing with Mercedes, BMW and Audi– and generated profits from, dare I say it, international sales.

Of course, who’s to say a Chevy-less GM wouldn’t have screwed-up their business just as badly as today’s GM.  Or that a GM-less Chevy could have responded to the Japanese invasion with something better than the Vega.  Even so, we now have a General Motors that’s significantly smaller than JFK’s trust-busters would have dared propose, just inches away from bankruptcy.  Once that goes down, the smart money is on GM selling off or dumping everything except… Chevrolet, GMC and Cadillac.  What goes around, comes around.  

I drive an iconic, high-performance European luxury car.  Well, let me modify that a bit.  I drive an iconic, high-performance European luxury car made in 1983.  And so could you, for the cost of a new Kia.  It’s a Porsche 911SC coupe— a car that’s no longer rare, collectible, fast, luxurious or particularly desirable.  But it is revealing.  A hundred and eighty horsepower!  A  pair of 225/50-16 tires in the rear!  A top speed of 135 mph!  Look out Kia, here I come!  My 25-year-old Porker highlights just how far automobiles have advanced since the time when Koreans were best known for their canine cuisine.       

My SC’s 3.0-liter flat-six originally came with a fuel-injection kludge (before I converted it to carburetors, just to rub in the antiquity).  It boasted an air intake system so convoluted the oxygen entered through the front door, walked upstairs to the guest bedroom, climbed out the window, crawled back in through the kitchen window and then went down to the basement to find the combustion chambers.  The less said about the tangled exhaust and constricted catalytic converters the better.  But hey, it had dual-zone climate control!  

We’re talking two levers that resemble lawnmower throttles, one left and one right.  The levers pull rusty cables that close trapdoors in the exhaust system.  (It’s a favorite path for mice seeking to occupy occasionally-driven Porsches.)  The movement forces air to circulate around the exhaust pipes before entering the cabin.  Bonus!  Any oil that leaks out of the lower cam covers (which seal about as well as a re-corked bottle of Argentinean Merlot) instantly vaporizes and blends with the hot air warming the cabin.  And if the exhaust springs a leak, you die of carbon monoxide poisoning.

The rest of a vintage 911’s cooling/fan/defrost controls remain a mystery– even to people who have owned these cars for decades.  Some levers go left, some right.  I carry a six-inch length of dowel to jam into the fan lever at full displacement, which sometimes seems to bring the windshield defogger to life.  The air conditioning never worked well, and you had to remove and bench-press the crappy compressor to do any minor engine work.  The Germans apparently did their hot-weather testing in Provence.   

And speaking of engine work, every 12,000 miles you had to gap the valves (Stuttgart had yet to discover hydraulic lifters).  If you didn’t, bad things happened.  My friend John Phillips III (Car and Driver scribe par excellence) admitted in a recent e-mail, “I had a 1974 911S whose valves I failed to adjust at the proper interval.  This resulted in a catastrophic engine event in Maumee, Ohio.  I had to leave the car at a gas station, call a cab, ride to the Toledo Airport, rent a car, drive to Columbus, rent a truck and trailer, go pick up the car, drop it at Midwestern Porsche-Audi, and leave it there for two months.”   Amor vincit omnia.

[A Porsche dealer charged the equivalent of changing your Toyota’s timing belt every 12k miles for this trickery.  These days, amid shrieked curses, slowly spreading pools of oil and dripping knuckle-blood, I perform the job myself.  I use a feeler gauge that looks like a laparoscope tool for a prostatectomy.  It beats working for a living.]

The 911 SC’s cruise control consisted of a soup can-size pneumatic cylinder and a Bourdon cable, most likely interchangeable with the one used for the “climate control.”  I threw all that away along with the a/c, so I have no idea how it works.  But I don’t think any electrons are involved.  Did I mention the SC’s road manners?  Probably not, since I spun the car so hard at Lime Rock last month I popped the windshield loose.  People who are serious about making older 911s handle put rods, bars, tubes, straps and welds all over the place in an often vain attempt to make both sides of the car fly in formation.

Had I purchased my SC back in the fall of ’82, it would have set me back about $35k moderately optioned: sunroof, a/c, manual leather seats, lousy Bosch fog lights, an even worse AM/FM Blaupunkt and some other stuff (all of which I’ve sacrificed to the Great God of Lightness).  That’s the equivalent of almost $73,500 in today’s money, or enough cash to buy a brand new, 325hp Porsche 911S (with no options whatsoever).

But what the hell.  Old 911’s respond to tweaking as well as a ’36 Ford flathead.  My heavily-breathed upon example puts out a dynoed 287 hp, and I love it when people ask me if it’s new.  Of course, just about any new car you can name would be faster, safer, more comfortable, more reliable, handle with greater assurance and stop quicker than a stock '83 911SC.  But it wouldn’t be better.

For a second consecutive year, GM’s Oshawa production facilities have received J.D. Power and Associates’ “Gold Plant Quality Award.”  The award is given to the production facility with the fewest number of defects per vehicle, as measured by J.D.’s famous “Initial Quality Study.”  Oshawa created cars with just 43 defects per 100 vehicles.  The industry average was 124.  So what do you do if you have the second most productive assembly plant on the continent?  If you’re GM, you do the only logical thing possible: you close it.  

There’s no question that GM has too much of everything: brands, models, dealers, workers, factories and suits.  Although the media hails GM CEO Rick Wagoner for cutting (a.k.a. buying off) production workers and eliminating plant capacity, they’re forgetting that the same stupidity that lead to the cuts could well mean stupid cuts.  As GM downsizes its vast empire to match its diminished role in the US automotive market, it runs the risk of making too many cuts in the wrong places.  Like Oshawa.

It may be a piercing glimpse into the obvious, but a plant that produces the fewest defects per vehicle is also building your highest quality cars.  GM needs higher quality products like a losing football team needs touchdowns.  The days when close enough was good enough are long gone.  If GM is going to claw their way back against the likes of Toyota, Honda and Nissan, they can only do it with virtually defect-free products.  They know this.  In fact, they already claim success; continually citing a supposed “perception gap” between old (i.e. crap) and new (i.e. high quality) GM vehicles. 

Again, it all seems pretty simple: produce better vehicles at your award-winning plants and reap the rewards, right? Well here's the thing.  The vehicles produced at GM’s Oshawa plants are some of GM’s best sellers.  Oshawa’s Number 2 Plant produces the Pontiac Grand Prix and Buick LaCrosse.  The LaCrosse is the best selling vehicle under the Buick marque, accounting for some 93k units in 2005. The Grand Prix has only just been eclipsed by the G6 at around 120k units.  But here’s the rub: GM (literally) has no business making “best-selling” products that drop as low 93,000 units.  Their huge dealer network and corporate infrastructure require gigantic hits, regardless of their quality.  And yet…

By killing Oshawa, GM is revealing two important defects in its “right sizing” game plan.  First, the General’s generals are demonstrating their lack of focus on product quality.  Why kill your best plant before your worst, even if that plant’s products aren’t best sellers?  If a hockey team doesn’t make the playoffs, you don’t trade your best player, you rebuild around him (unless you’re from Boston).  Oshawa builds some of the best-built products in GM’s lineup.  Throwing that skill overboard in favor of less capable factories is insane.  Which brings us to the second problem: flexibility.  

Honda’s American facilities can change the platform-sharing vehicles that a factory produces in a matter of hours, tailoring production to meet changing demand (e.g. Ridgeline pickup to Odyssey minivan).  The new, smaller GM will need to follow Japan’s lead, establishing factories that can create more than one product.  This trend increases the importance of any given factory’s workers and processes; product changeover is nowhere near as easy as building the same thing day in, day out.  Again, it makes sense to use your A-team, not the accidentally successful B, C and D teams.

A recent GM internal report supported the philosophy.  It recommended that GM invest $400m in Oshawa to transform and amalgamate the two plants into a single class-leading, platform-sharing production facility.  The plan: let the men and women of CAW local 222 produce the upcoming (and day late) rear-wheel drive, mid-size Zeta platform.  If implemented, the end result would be a Canadian produced Cadillac DTS, Buick Lucerne and GM’s latest halo, the Chevrolet Camaro.  When asked about this report to save the golden egg laying goose, GM Car Czar Bob Lutz scoffed and dismissed its conclusions as “merely speculative’.  Speculative because transferring production northwards would require closing the DTS’ and Lucerne’s current Detroit/Hamtramck home.  In the UAW-appeasing, YIMBY (Yes In My Back Yard) world of GM, that ain’t gonna happen.

It’s not right.  GM should use its Oshawa facilities to their utmost capabilities.  The factory has proven that they can produce over 500,000 vehicles annually that rank among the best for fit and finish.  The Detroit/Hamtramck plant only cranks out 170,000 vehicles with the same number of employees.  GM should consider Darwin’s theory and let the back of the herd die.  Right size the right plants, kill the stragglers that keep dragging the brands down and invest in what will ultimately make you a better carmaker.  After all, it’s one thing to talk about quality.  It’s another to actually build it.

Dear Mr. Nasscar,

How the hell y’all doin’?  I was down to the barber shop the other day when me and the boys got to talkin’ ‘bout cars an racing an stuff.  Clarence sed how he’d red that NASCAR was fixin’ to change all the cars all over again.  He said y’all was fixin’ to make all the cars the same, and the engines the same, and on top of that, they’s ugly.  He said they’s all gonna be slower too.  Then Earl piped-up and said that meant there weren’t gonna be no more good crashes no more.  Why them crashes is the only reason Ida Mae goes to the races in the first place!  Jake sed y’all gonna kill the sport ded.

And why in the name of Sam Hill y’all lettin’ them Toy Otas in?  My granpappy didn’t fite in dubya dubya two and lose half his damn cheek bone so they could come over here an run them thangs with hour Chevy’s and Fords.  He fawt for our rites.  And anyway, everyone knows them farn car’s got four doors and six cylinder engines and front wheel drive.  That jest ain’t gonna to cut it.  We wanna watch cars built rat cheer in ‘Merica, runnin’ on ‘Merican tars, like one them Ford Fusions.  You let them farn cars in and the next thing you know we’ll all be tawkin Jap’nese.  Hell, we’re jest getting’ used to aabling Espan Yol.  Yew thank about that some time.

And another thing, what’s with truck racin’?  It’s stock CAR racin’.  Trucks is how we git to the race track, not what y’all are supposed to run on the track.  ‘Sides, they ain’t trucks!  Ain’t none of ‘em got a rebel flag er gun rack in the back window, and y’all shore cain’t tie no dead deer ‘cross them flimsy hoods.  Monster trucks – now them’s trucks!  They jest pop a couple of wheelies over some of them farn cars, blow our eardrums all to Hell and we’re good.  Yew ever seen it?  Now that’s entertainment!

Now me and the boys got to thinking.  We came up with some ideals how y’all can make everthang better.  Git back to racin stock cars, not them college boy engineer cars y’all are running now.  It jest ain’t the same like when I useta could go down to Bobby Ray Ford and buy me a car just like what Cale Yarborough drove.  Us Ford boys can’t brag much when ain’t no difference ‘tween a Ford an a Chevy an a Dodge cept for the stickers on the front.

Sumtin else y’all can do is stop chargin us so much to see the races.  It cost me and Ida Mae so much to go to the last race that I had to put off payin for her granma’s new teeth.  Y’all are making all kinds of money on adds.  Y’all got adds on the cars and adds on the tracks and adds on the TV races and adds all over y’alls web site.  Y’all got more dam adds than even that edmunds web thing has.  Peers to me with all them adds and everthing y’all sell with NASCAR stuck on it y’all could let us plain folk into the races and sell us beer for about what they charge at the tractor pulls!  Jew catch my drift?

An stop changin’ all the dam rules.  Ever time I think I got things figgered out y’all up and change things, even in the middle uv th’ season.  Sometimes I think y’all do it just cause yew can.  I don’t know how them poor drivers can keep up with it all.  Us fans shore cain’t.

The main thing y’all got to fix, though, is all them dam purty boy yankees y’all are hirin to drive.  Ain’t hardly no good old boys driving none of them nasscars no more.  And y’all are runnin them in places with names like Poky-no and Watkins Glen, wherever that is.  (One of them Watkins boys who lives out to the old Turner place is named Glen, but he ain’t never heard of that place neither.)  Y’all need to Mason Dixon the dam sport fore them northern college boys rurn racin’ any more than they have, what with their ‘puters and tell ‘em a tree stuff.  That ain’t right neither.

Y’all know them races got started down here with a few of our boys runnin shine.  I know most them done retard, but it’s high time y’all gave them races back to us southern boys an quit actin all high-falutin, big city corporate-like like y’alls Walmart.  If y’all don’t, well, forgive me for sayin’ so, but it’s bin quite sum time since we gave someone in a suit a dam good ass whoopin’. 

Sincerely,

Billy Jim Blankenbaker

Ford and GM are launching summer sales.  The development reveals an open secret: the automakers are selling vehicles at a loss.  There are plenty of reasons for this.  The need to maintain cash flow, pay the Union, generate business for their finance arms and protect market share.  But this trend can’t continue indefinitely.  At some point, both of these companies need to produce profitable vehicles, and lots of ‘em.  But what kind?

Back in the “good old days”, Detroit made its profits with middle and high end cars and pickup trucks.  The Big Three only built small cars when recession and imports forced their hand.  And no wonder: there wasn’t any “real money” in small cars– at least not for Detroit.  Their bureaucratic manufacturing infrastructure and union obligations made it difficult to compete with smaller, leaner competitors.  Besides, it wasn’t much more expensive to design or build a big vehicle than a small one, and they always sold for more money.  

Eventually, American automakers surrendered the low-end domestic car market to the Japanese, Koreans and Germans.  As the years went by, the foreign competition gradually moved its products up-market.  Eventually, the Dai San launched luxury brands, created out of whole cloth (or leather).  These were worrisome developments, but dismissible.  Then, calamity: Detroit struck gold.

The SUV boom provided a serendipitous boost to the domestics’ bottom-line.  The ability to sell cheap-to-build vehicles at a premium price was worth billions (and funded a large number of dubious foreign acquisitions).  The SUV-fuelled “easy money” diverted The Big Three’s attention at the precise moment when non-Detroit brands were making serious inroads into the heart of the car market.  Now that the SUV market has cooled, the Big Two are left playing catch-up, looking for a new cash cow.  Unfortunately, the US car market has changed.

The middle market now belongs to the Japanese.  Before the SUV boom, the Ford Taurus was a major force.  Its two replacements, the Fusion and the Five Hundred, haven’t exactly set the class on fire.  Although the Mexican-built Fusion is a solid sales success, it’s smaller and cheaper than its predecessor; which doesn’t bode well for profitability.  The Five Hundred is big and plush and augurs more profit potential.  But sales have been weak.  GM wishes it had cars as distinctive (if underdone) as these.  Meanwhile, Toyota, Nissan and Honda are banking huge profits on highly-evolved– and continually evolving– mid-market motors.    

The size class above the middle has lost much of its volume and premium models to the SUV boom.  The “near luxury” class is also packed with killer competition.  BMW, Mercedes, Lexus and Audi have all reached down– joining Infiniti and Acura on their way up.  This combination of superb products, badge snobbery and customer service has marginalized Cadillac and especially Lincoln.  It’s worse yet for Buick.  And Pontiac.  And Mercury.  And Saab.  It’s hard to see what Ford or GM could do in the “near luxury” market to end well-earned “foreign” hegemony.  Even when The Big Two own a successful niche player (Volvo), fierce competition in the segment makes for slim margins.

And then there’s the crisis looming in the truck market.  Toyota and Nissan are bringing out new full-size trucks and ramping-up production capacity.  The same industry wags who said building small domestic cars was a waste of time now say US truck buyers are too brand loyal to defect to the new guys.  GM and Ford better hope so; neither company is in any condition to engage in an extended price war, and the loss of profits would be catastrophic to the rest of their holdings.

So where are the new “profit centers?”  Only two American cars are enjoying strong, profitable sales success: the Ford Mustang and the Chrysler 300 (and its Dodge cousins).  GM is planning a new Camaro to challenge the Mustang and maybe a rear-drive platform to challenge the 300.  But both the Mustang and the 300 have no direct competition at present, making the new models’ potential success hard to judge.  New, boldly-styled rear-wheel drive sedans may only fragment the existing market, rather than extend a profitable niche.

Which raises a scary question: even if Ford and GM come up with a hit vehicle or two, will they deliver life-sustaining profits?  A spot on the top ten list may guarantee profitability, but the ever-expanding number of product niches– and the number of automakers in each niche– makes it harder for any one product to achieve large (i.e. profitable) volumes.  The twin solutions: flexible manufacturing and foreign sales.  Neither of which are Ford and GM’s strong suit. In fact, GM and Ford’s best chance for profit now lies in creating a spread of must-have vehicles in smaller runs.  This strategy requires some serious money, which can only be generated by profits.  Uh-oh.

Last Wednesday, Mark Fields spoke at a Competitiveness Forum sponsored by the United States Chamber of Commerce.  Fields has an impressive title: “President, The Americas, Ford Motor Company.”  He also has an impressive international resume: Managing Director, Ford of Argentina; CEO of Mazda; Executive Vice President of Ford of Europe, and Chairman and Chief Executive of Ford’s Premier Automotive Group.  The auto exec’s speech touched all the usual bases: ethanol, currency manipulation, health care, tax credits, etc.  When Fields turned his attention to issues of national pride and policy, his remarks were measured and concise — and made about as much sense as a Ford GT entering the Baja 500.   

According to Mr. Fields, the auto industry is “iconic to America” and Ford is “an iconic American brand.”  Of course, by “America” Fields meant the United States; not Paraguay, Honduras, Guatemala or Mexico.  On the other hand, Fields admitted that FoMoCo “faces a tough 2006 in North America.”  So maybe “America” means the entire North American continent, including Mexico and Canada.  Or… not.  “The United States is the most open and competitive automotive market in the world.”  So he was talking about the US and not the rest of the Americas?  Or even the rest of North America?  

Maybe.  Field asserted that the Mexican-made Fusion triplets (Fusion, Milan, Zephyr) are “gaining share” and the “Fusion … is our way of saying … the Honda Accord and Toyota Camry’s reign at the top of the American sedan market are no longer unchallenged.”  So a Mexican-built car is Ford’s hedge in the American market against Japanese-branded cars built on US soil.  This is getting more and more confusing.  But wait – there’s more. 

Fields bragged that Ford’s new hybrids are “posting record sales of late” and their “innovations led to more than 130 patents,” with more pending.  The Ford exec conveniently omitted the fact that Ford’s hybrid technology depends on technology licensed from Toyota.  Nor did he mention the Japanese-made transaxles and battery packs and German-built regenerative braking systems which make Ford’s hybrids possible.

Halfway through his speech Fields finally explained what he meant by an “American” car.  Like the Ford-sponsored Level Field Institute pressure group, Fields’ definition of an American automotive product relied almost entirely on US employment statistics: the number of Americans employed in America by foreign-owned automakers vs. the domestic-owned carmakers’ American workforce.  Even though Daimler-Chrysler is German-owned, Fields grouped DCX’ workers with Ford and GM’s domestic workers.  Translation?  In Field’s world view, “American-made” refers to any car, truck, minivan or SUV built in an American plant that isn’t owned by a Japanese or Korean company. 

Fields then castigated his Japanese and Korean competitors because “most of their design and engineering jobs are not located in America.”  Maybe that’s because they’re GLOBAL corporations that decided to locate their design and engineering centers inside their target markets.  If you look at the top models Honda, Toyota, Nissan and Hyundai sell in America, the majority was conceived in design centers located on American soil, designed by American-born designers. 

Anyway, for industry watchers concerned with The Blue Oval’s impact on US industrial policy, Fields’ speech raised more questions than it answered.  Why, for example, did Ford’s president single-out Japanese and Korean manufacturers for criticism, instead of censuring all companies selling cars on American soil that aren’t built in the USA by an American-owned company?  Could it be because that definition would include Ford-owned “foreign” brands: Volvo, Aston Martin, Land Rover and Jaguar? 

If you think about it, the cars made by these companies are just as “foreign” as an imported Toyota.  So why did Fields denounce “foreign” automakers that come here from other countries and establish a brand identity and manufacturing presence in the US?  They’re only doing the same thing Ford did in Germany.  And England.  And Australia.  And Argentina.  And… and… and…

Not to put too fine a point on it, Fields’ hypocritical flag waving was stunning in its rational inconsistency.  Fields’ speech bitched about foreign governments helping their automakers with currency manipulation, and then bragged “states and local governments subsidize new investments, in some cases as much as $160,000 per job. Governors get re-elected winning new plants.”  How can Fields criticize Toyota for investing in American (US) production when (according to various press reports) Ford has just pulled the trigger on an estimated $9.2 billion to update and expand its Mexican operations — to replace lost production capacity from closing plants on US soil?

Despite his assertions to the contrary, Fields’ speech was nothing more than a thinly veiled plea for a bailout from the federal government via tax credits and for protection from the very same free trade market that companies like Ford helped build.  If that’s all Mr. Fields has to say, perhaps he’d be better off restricting his remarks to the viability of Ford’s products in the American marketplace.  Then again, maybe not.