"There is always a philosophy for lack of courage."—Albert Camus

Thursday, January 19, 2006

Superb Analysis of GM's Troubles

Over at my much beloved American Spectator, automotive columnist Eric Peters has an excellent analysis of what is troubling GM. He suggests that the company makes too many models in too great a variety, particularly given the company's market share.

I think he's right, at least in part. There are other reasons. I've become a Honda man all the way. So is everybody in my family. We are the type of people who would typically buy American, but the quality issue drove us over to Honda.

I still remember my first car, a 1980 Ford Mustang Ghia (everybody asks what Ghia means -- I don't know, like GT, I guess). That car looked good, had decent power, but just felt kind of loose and lazy in an undefinable way. The best way to describe it is to say that when I got my next car, a 1986 Honda Accord, I could immediately feel miles of difference in the quality, responsiveness, tightness, solidity, etc. of the car. It was just better. I moved on to my grandfather's Caprice Classic (can't recall the year, but still boxy). It drove like a sofa on wheels. Comfy, but didn't feel as good as the Honda.

The conviction settled in my mind, deservedly or not, that the Japanese imports really were better cars.

It is my suspicion that millions of Americans had the same experience in the 80's and early 90's and made the same long term call.

When in the market for a car a few years ago, I test drove a Ford Ranger. I was shocked by how solid and tight it felt. It felt like quality. It felt like a Japanese import. I didn't buy it because I still didn't trust the car to last like a Honda. Reading Eric Peters' article, I think it is possible that the American cars are much better made today.

The bottom line is that I suspect that general queasy feeling about American cars is just as much to blame for GM's troubles as Eric Peters' thesis about an excessive diversity of models.

11 comments:

The Classic Liberal Anonymous said...

I agree, diversity is part of the problem, as is percieved quality.

However, (to use the lexicon of
Junie B. Jones)
I think there is a much deeper problem, and its called, "There's too many different car names and there's no way to figure out what they mean, actually. Plus they change names all the time 'cause I think the names are bad or something."

European cars have names that make sense: Volvo, Mercedes, BMW have stuck with the same naming convention for decades, nameley a numbering scheme that tells the buyer something about size and/or class.

Honda and Toyota (Accord/Civic and Camry/Corolla) have used the same names for many years as well.

GM (and big three in general) change car names frequently:

What ever happened to the Corsica, Eurosport, Sunfire?

Reatta, Achieva, Lumina, Alero, Aztek, Luv, Bravada, Firenza, Astre, Fiero, Vue.

LeSabre, Greenbrier, LeBaron, Coronet, Crestwood, Diplomat, Dynasty.

I could go on ...

(I googled and found this).

Hunter Baker said...

Absolutely true, CLA. The old GM had the different brands set up as a progression for the buyer as his personal prosperity increased. Eventually, they just all blended into the same thing with minor design changes, like the pontiac tailights.

Now, they seem to have some cool new stuff out there, but you are right that the names tell you nothing about the car or where it fits into the overall brand scheme.

I think they should deal with the quality perception problem with a killer no B.S. warranty that exceeds Honda and Toyota.

The Classic Liberal Anonymous said...

I think they should deal with the quality perception problem with a killer no B.S. warranty that exceeds Honda and Toyota.

... a la Kia.

JC said...

They could go farther than Kia:
If anything breaks in your car for any reason, ever, other than you beating it with a metal bat or the Almighty destroying it with flames of judgement, we'll fix it. The warranty would be ridiculously expensive, but I bet a lot a people that hate car trouble and have a little money on their hands might go for it.

Tom Van Dyke said...

Mrs. TVD & I bought 2 Hondas in '91. First non-routine repair on either was last month, and it was $300.
\
Case closed.

Hunter Baker said...

Ouch.

Of course, those '91's are from the golden age. I've heard from dealers that they can unload the late 80's and early 90's models instantly. I recently sold one to a friend at a very friendly price. I would deeply regret it except that I love the guy.

"I can't quit you, Jackie, baby."

Platonically speaking, of course.

Kathy Hutchins said...

If you absolutely can't stand the idea of buying a foreign nameplate, get a Jeep. I have a '96 Cherokee with 160K miles on it. It's been through three Minnesota winters and it's hauled a trailer to Alaska and back. It has never required anything but routine maintainance, and it's gotten damn little of that. It just had its second tune up ever, only because it failed the Maryland emissions test. My daughter, who passed her road test yesterday and is now (shudder) a licensed driver, got a Wrangler for Christmas. When the Cherokee finally dies I'll probably buy a Commander, since I assume I'll have grandkids to haul around by that time.

I will reconsider buying a Ford product the day that hell freezes over or Ford apologizes for selling me a car whose head gasket was engineered to blow at 75K, whichever comes first. I'm not holding my breath. GM lost me forever with that crappy '85 Cutlass -- it would have been more fun to build a bonfire out of five dollar bills, and probably cheaper too.

Tom Van Dyke said...

True, Hunter. Mrs. TVD continually gets offers in parking lots for her very sporty 2-seat '91 Honda CRX High Fuel model (45 mpg).

My cheaper, disgusting-looking stock Civic gets 34, but I've gotten no offers. I guess esthetics matter.

To add to your previous, a co-worker of mine has already bought in his mind the new Camaro, precisely because it looks like the '69, back when cars had character, and lots of it.

(Me, I'm a putt-putter. My Columbo-like car runs on rendered roadkill and caribou carcasses. I'm an eco-rebel, baby.)

Hunter Baker said...

You may not know this, but I'm a Columbo fanatic. If you like him too, we can be best friends FOREVER.

Like that?

I've been working on a new genre known as grade school girl.

ChETHB said...

Just had to weigh in on this one since I became an auto enthusiast in the mid-50's -- IMHO, the quality of GM vehicles was without equal during that time period. I worked in a gas station summer of 1959 and had the opportunity to look very closely at many different cars - GM vehicles were the best. I believe this trend continued until, perhaps, the late 60's, based on my experience. For example, my new 1968 Chevelle SS396 rattled like a bucket of bolts as I took delivery and drove it away from the dealer. Sadly, I traded in a 1963 Impala SS that had zero rattles at 95,000 miles and got in excess of 18 mpg on the highway. With a high performance engine, I still never got below 13 mpg in that 1963 Impala and that was with some impressive hotrodding. The 1968 Chevelle (hindered no doubt by EPA regulations) never exceeded 11 mpg and generally got 6-8 mpg in the city. I was still firmly in GM's corner (although shaken) until the mid-70's when they began to introduce small cars that were shoddy junk. It was pretty much the same with the other members of the Big 3. After the oil crisis in 1973, Americans were clamoring for nice, smaller, fuel efficient vehicles. Detroit provided cheaply-made, small, junky vehicles - shoddy interiors, very few options, no luxury appointments, and so forth. The Japanese, on the other hand, after having been soundly beaten down with their initial introductions to the US, went home, did their homework, and came back with small, fuel-efficient cars that had the luxury appointments that Americans wanted and expected. The rest is history. Detroit, and especially GM, continued producing the kinds of cars that Americans didn't want and in addition, allowed their quality to sag lower and lower.

In summary, I think GM could have maintained their superior position had they simply responded to the market. Instead, they continued their view that they knew best what the customer wanted and consequently, their market share has continued to slide as the customer finds what he wants in the Japanese and European vehicles. The unfortunate part is that hundreds of thousands of Americans are directly or indirectly affected by the poor state of GM's business acumen.

I think all the different car names and models are an attempt to stuff one bad apple under the rug and replace it with something new, all the while hoping that the customer doesn't realize that it's the same thing with a different name.

I generally agreee that the newer American cars have been significantly improved over their predecessors. I drive rental cars occasionally and have noticed that the current American offerings have seen considerable improvement. These are basically new cars so I have no impression about the reliability and maintenance requirements. I can offer a final commment, however. When I get home from a business trip, it is always refreshing to crawl behind the wheel of my Acura and drive away. Unfortunately, I don't believe that GM currently builds a comparable vehicle.

Kathy Hutchins said...

I believe this trend continued until, perhaps, the late 60's, based on my experience. For example, my new 1968 Chevelle SS396 rattled like a bucket of bolts as I took delivery and drove it away from the dealer.

This comports with my experience as well. My very first car was a 1967 Chevy Camaro, straight 6 230, purchased in 1974 (for $795.00 cash. Would that such things were possible today, eh?). It had none of the features American consumers would demand today -- no a/c, power steering, power brakes. It did have a radio. I drove it hard, and often stupidly, for six years, put something like 120K miles on it, turned around and sold it to a kid in Texas for $1200. It was a great car, but unfortunately in 1967 you could no longer count on a GM product's quality from specimen to specimen. My younger sister's first car was also a 1967 Camaro, purchased in 1976, one of the souped up Super Sport models with a 350 V8, power everything. It was a piece of junk from start to finish -- electrics, hydraulics, finish work, seals -- the car was such a constant headache we called it "The Golden Bitch." I spent so much time giving that pile of manure jump starts I should have applied for a tow truck license.