Wednesday, January 25, 2006

 

Trouble In Detroit (and surrounding areas)

Ford Motor Company has announced the closing of 14 plants and the elimination of 30,000 jobs.
Ford Motor Co. plans to cut up to 30,000 jobs and shutter 14 plants in a sweeping restructuring that the nation's second biggest automaker hopes will tackle declining market share and rising costs that led to hefty losses in its North American operations.
Problems continue at GM, too. Chrysler may be next.

CNNMoney.com asks "Are American cars really that bad?.
The answer is that, overall, GM and Ford cars are not that bad. In fact, depending on which survey you believe, they may even have become pretty good.

The problem is that "pretty good" has become "not quite good enough" in a world where quality standards have been raised so high and which many consumers still have bad memories of General Motors and Ford cars that have failed them in the past.
CNNMoney.com looks at JD Power survey numbers to support this conclusion. The figures are based on the "number of problems vehicle owners have after 3 years of ownership."

While this is a good measure, I use Consumer's Reports ratings and recommendations which don't show such a rosy picture for American manufacturer cars. These ratings are based on the reports of members of Consumers' Union and cover a longer time span than three years. Of the best and worst used cars CR lists 62 "Good Bets," only eight American cars make the list. Of the 32 "Bad Bets," 21 are American made. Japanese manufacturers dominate the "Good Bets."

Over the past 20 years, I've had American made cars and a couple of Toyotas. From personal experience, there's no comparison. As one used car salesman once told me, "I'd rather have a Toyota or Honda with 125,000 miles on it than an American car with 25,000." I like to drive a car till it drops. I put over 200,000 miles on my Dodge Neon and about 175,000 miles on my Ford Aerostar minivan. However, it required a lot of money in repairs and maintenance - head gaskets in the Neon, a lot of less serious stuff in the Aerostar and the roof leaked around the luggage rack. Now I have a Toyota with nearly 155,000 miles and only a new timing belt plus routine maintenance has been required. It still runs beautifully.

It's not hard to make a car that looks good, feels good and runs good off the showroom floor. But to make one that does after 150,000 miles is. Others I know have had wonderful experiences with Toyotas and Hondas. Totally, unscientific evidence but enough to convince me. Quality does count.

During the recession that began in the 1970's and ran into the 1980's, I read an article about how manufacturers that produced high quality products, such as Maytag, Anderson Windows and Honda, did just fine. Seems people are more careful with their money when things are financially tighter. They don't want to waste their money on inferior products.

For me, when I look at automobiles my top two priorities are quality and, because I drive over 100 miles a day, economy. I feel confident I can get both from Honda or Toyota, with American manufacturers, I feel it's a crap shoot. When the Big Three get serious about quality, they will make serious profits.

Comments:
I cover the auto industry for some websites I publish. Using Consumer Reports data on five year old cars may not be an accurate reflection of the quality of current production vehicles. Useful when buying a used vehicle, perhaps, but not an indication of current quality control efforts. Furthermore, CR is sufficiently politicized and hostile to American companies that I'm not sure even their data is reliable.

The fact is that Toyotas are more reliable than Chevys. Just barely significantly. We're talking about the difference between 11, 12 and 13 defects per thousand cars, based on initial delivery quality. That means that while Toyotas are truly more reliable, the difference is just measureable and won't be noticed by the vast majority of drivers. According to the same statistics, the Big 3 build better quality cars than Mercedes Benz and BMW.

The salesman who disparaged American cars is an idiot. "I'd rather have a Toyota or Honda with 125,000 miles on it than an American car with 25,000." But then, anyone who believes a used car salesman... Honda builds an almost bulletproof engine, and 200K is commonplace for their powerplants, but there is no way that a Toyota or Honda with over 100K miles is going to be in better mechanical shape than the 25K US car. Bearings, seals, all sorts of wearable parts will be in much worse shape on the high mileage car. All the car companies buy their components from the same vendors and Denso specs the same quality component for a Ford as they do for a Nissan.

I actually have a Toyota with 135K miles. The engine runs nicely, but has a stumble now and then, and the main rear engine oil seal leaks. It's got about the same number of problems as American cars I've driven with the same mileage. Toyota must have spec'd very cheap struts and shocks, because they are falling apart. Ever think it'd cost $900 for new shocks?

Toyotas are reliable, Hondas have engines that you can't break, and GM, Ford and Chrysler still build a decent car. Everyone today, including the Americans, builds quality product.
 
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