Are U.S. Automakers really building cars no one wants to buy?

by Bill Zervakos
December 2008

There is a lot of hyperbole about how bad the vehicles coming out of Detroit are; ergo American automakers are in trouble. Are American automakers really building inferior products? Let’s look at the numbers from November of 2007 through November 2008 for a few of the key players:

Chrysler, down 47% Nissan, down 42.2% General Motors, down 41.3% Toyota, down 33.9%
Honda, down, 31.6% Ford, down 30.6%

You’ll notice that Ford is down less than anyone else and Nissan sales are even worse than General Motors.

No doubt labor costs for unionized shops are higher than those of non-union shops but are labor costs the reason for the collapse in sales? Leaving aside all the differences in compensation between the U.S. makers and importers, I don’t see how any manufacturer can exist for long with over 30% losses in sales.

We’ve clearly seen the incompetence of CEOs’ on Wall Street, seemingly without consequence or accountability and certainly without any oversight, given billions of dollars specifically, we were told, to loosen up credit for consumers. Instead they chose to use those billions to pay dividends and bonuses while buying other financial institutions, choosing to do nothing about making money available for loans. To then watch Congress address the CEOs’ of the U.S. automakers as though they’re inept seems a bit self serving.

It’s important to point out here that Ford President Alan Mulally has been with the company for just over 2 years, Chrysler CEO Robert Nardelli has been with them since 2007 and GM CEO Rick Wagoner took over the controls of General Motors in 2005. So while there were problems in the past, linking the ills the industry faces today exclusively to these executives performance is short sighted, and appointing a car czar is not the answer.

Rick Wagoner of GM has acknowledged that allowing the EV1 to be eliminated was not the right thing to do. But GM, Ford and Chrysler have made huge strides in developing electric vehicles, some that will be on the road by 2010. They’ve been doing this without government or a car czar telling them they had to. But here’s what we must remember: Detroit built what people were buying. It’s true that some gas guzzlers were incentivized but in a capitalistic society businesses are all about making money and big vehicles were money makers. Proof of that is the 22% increase in truck sales this November, with gas under $2.00 a gallon, over July sales when gas was $4.00 a gallon. The consumer drives the market and will continue to do so.

With legislators pontificating and blustering about how outraged they are with the big 3 CEOs’ and the media right there with them, talking about how irresponsible Detroit has been in product development, without laying out all the facts, it’s no wonder that people aren’t buying American cars. The facts are that there were several automakers, including some importers, that made some pretty bad cars in the past, but today everyone is building pretty solid vehicles. The prevailing perception is that American cars aren’t as good, yet in a Consumer Reports study as far back as 2006 provided results showing that the Ford Fusion and Mercury Milan outperformed the Honda Accord V6 and the Toyota Camry V6 in reliability studies. Interestingly those same studies indicated that people will still buy the imports. Perception is true even if it isn’t fact and when a false perception is promulgated, change takes even longer.

So, are U.S. automakers really building bad cars? Not at all, and if people would do their homework and not buy into all the negative hype, they’d be very pleasantly surprised with what’s coming out of Detroit.Other countries are supporting their automakers and we should do no less. If we were in a normal economy and automakers weren’t manufacturing the right products, then the market should be allowed to correct itself. That isn’t the case today.

Generally speaking, I’m not for government intervention but this is a critical industry for America and the three CEOs’ weren’t the cause this financial crisis and they can’t fix it. But allowing any one of the heretofore big three to die could create a tragedy of epic proportions. The facts are, until the consumer starts buying again, all automakers are in peril.

Community Tire Wins 2008 Small Business Impact Award

Congratulations to Howard and Patty Fleischmann of Community Tire and Auto Service, The recipients of the 2008 Small Business of the year Impact award honored by the Greater Phoenix Chamber of Commerce. We are so proud of you and thank you for your continued support of Two for the Road USA.

(PHOENIX) — The Greater Phoenix Chamber of Commerce is proud to announce the winner of its 21st Annual IMPACT Awards 2008 Small Business of the Year: Community Tire & Auto Service Specialists, Howard Fleischmann, Sr.Community Tire & Auto Service Specialists has grown to more than seven stores in three cities through innovative marketing, honesty and integrity. Likewise with its commitment to community, whether hosting fundraising events or simply giving of their time, Community Tire & Auto Services Specialists has become synonymous with the word for which it is named.The Chamber’s IMPACT Awards honor business owners and leaders from companies with fewer than 100 employees for their outstanding efforts.

Taking the shine off new cars

In the ever more difficult search to stand out from the maddening crowd car buyers are taking a shine to a car with a matte finish. While it isn’t surprising to think of some small concept cars like Chevy’s Groove or Jeep’s Renegade diesel-electric or Mazda’s concept Furai with a matte finish, how does a Lamborghini Gallardo Spyder or Audi R8 V12 sports car strike you?

Well, a matte finish is available in all the above, and according to a lot of people at the North American Auto Show in Detroit, people have well, taken a shine to matte finishes. Not that matte finishes haven’t been used on vehicles before, it’s just that it was mainly used to accent and highlight special features on a car like on this Jeep Renegade Concept.


Interestingly, a matte finish allows the design features of a vehicle to stand out because the eye is not drawn to the finish of the vehicle because there are no reflections to detract the focus from the car itself. Not surprisingly manufacturers understand that Millennial’s are used to matte finishes on their cell phones and laptops so it stands to reason that they’d look for the same finish in their cars.

Chevy Groove Concept

It will be interesting over the next few years to see the emergence of exotics that use more matte finishes to enhance the visual effects of their intricate design cues. These are just a few of the cars that you’ll find with a matte finish.


Mazda Furai Concept

News from Chevrolet

What’s coming up for Chevrolet as far as new product goes? Well for starters there is talk about restyling the Malibu for 2008 which finally shows some styling elan. While the new iteration is a very nifty looking car, for me, I can't help but think back to the days when the Malibu morphed into the ultra cool Chevelle line that brought us the likes of the 396 and 454 cubic inch rat motors in the Super Sport Chevelles of the 60’s and very early ‘70’s. While it would be nice to see something like that happen again, I'm not sure I’ll hold my breath on that ever happening again but who knows.

Clearly the big news for Chevy is what I hope will be a 2008 debut of the all new Camaro. Lines are forming as we speak for this renaissance of an icon that has been missing far to long. While Ford owners as well as Ford may not be quaking in their garages, you know they’re fully aware that with this new iteration of the F-Body, and Dodge’s Challenger coming back, the pony car wars will be on full force. For those of us fortunate enough to have been there at the beginning, it can’t happen soon enough.

Other plans for the lineup sometime in ’09 include refreshing the HHR and the Colorado, a new mid-size CUV will be debuted, and an even more potent Corvette will happen. While Pontiac and Buick are in a way trying to reinvent themselves, Chevrolet is not a brand that has that problem. GM is just trying to make their lineup even better. To that end some future improvements, beyond what I’ve already mentioned will include a rear-wheel-drive Impala which I truly hope happens, and a microcar that was introduced at the New York auto show in April, in a 3 and 5 door configuration.

The car is even smaller than the new Mini Cooper and the Aveo, which is the smallest car Chevy offers to date. There have been questions as to whether or not the car would sell in the U.S.
but to my way of thinking, with the Smart Car making such a splash, the Microcar may just work. Don’t expect it before 2010 or 2011 though.

Clearly aimed at the youth market, the models feature very interesting color schemes which to me clearly define not only the demographic but also the psychographic of the target buyer. ‘There is some concern in the upper echelons of the industry that hip young people have no aesthetic sense but when I think back to my youth, what we did with our cars could certainly beg the same question.


Unique color choices range from an electric green for the Beat to a blaze orange for the Trax, and the most understated of the bunch is the dark purple that’s on the Groove. And how about those names, Cath and I keep threatening to do a show devoted to names of cars past and present one of these days.

Truth is though, with the ecology and economy growing ever more important in our lives, this little trio may jump start the American manufacturer’s development of small fuel efficient yet fun cars. All I can tell you is that after spending a full day on an Arizona road trip driving the tiny Smart Car for an article we did in AZ3Sixty’s magazine recently, I found the Smart Car more than capable and not uncomfortable at all. Except for the times an 18-wheeler blazed by us on the highway making us feel very small indeed.

Only time will tell whether or not we’ll embrace the “little” fuel efficient cars. I for one hope we do, at least for buzzing around town in. It would save a lot of money and actually, they're kinda fun to drive.

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