Big 3's biggest challenge rebuilding trust?
Detroit Free Press columnist Tom Walsh believes the Detroit Big Three are wasting precious resources trying to answer why Americans are not buying their cars. The problems are not prices or how to beat Toyota in environmental issues, writes Walsh, but that domestic automakers need to rebuild the public's trust in their products by making ownership hassle-free.Walsh states his arguable opinion that the domestics' strengths are low prices, trustworthy service and high quality. Chrysler, Ford, and GM must not only maintain such qualities but keep the public continuously aware of them. That way the consumer may one day forgive them of years of slipshod products and mediocre service. Ford's 'Bold Move' campaign, Chrysler's daring 300, and the new Saturn lineup show that Detroit still knows how to make great looking, fun-to-drive vehicles. Walsh believes all they need to do now is prove they can be counted on.
[Source: Detroit Free Press]
Reader Comments (Page 1 of 2)
MarkWeb 7:21PM (5/09/2006)
I think Walsh is pretty perceptive; I also think that someone like Ghosn is one of the few individuals who can get and hold the right focus. The tendency right now for Detroit to try to fight too many battles in too many fields is what could rip them apart.
Hey, what about matching Toyota's (and now Honda's) 5 year, 60,000 mile power train warranty? F&I guys can still make dough upgrading those to bumper to bumper warranties. But at least the rest of us won't be stranded with a broke-down power train.
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bgdc 7:43PM (5/09/2006)
The thing is, they lost a generation. Generation X grew up with either reliable/quality Japanese cars or neighbors who had them and we swore off American cars. I help lots of people look for cars. Nobody in my circle - graduate degrees, successful, astute, taste for finer things - will even consider American cars. They'll look at Japanese brands, Korean brands and European cars but American cars are totally off the map. They won't even set foot on American lots! And they're raising kids now; those kids will be exposed to the same prejudices that cause the parents to laugh at the notion of American autos - regardless of stats, reviews, etc.
If Ford/GM want to come back they need to look at three examples: 1989 Lexus LS400 intro, G35 introduction and Hyundai's emergence. Build a car almost as good as the competition, don't mark it down with obvious incentives and price it well below the competition.
The Zephyr is a prime example of Ford missing the mark. Already that car had incentives attached to it. It was priced on par with a 325i/G35/TL for god's sake. Big mistake. That car should have been released with the 3.5, nearly fully optioned and at a price point 2-3k below a TL/G35. A 27k Zephyr loaded up (save for Navi at 2k more) would get people looking. A34k Zephyr makes buyers laugh. It's American, how can they price it on par with Japanese products?!
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Commander 8:11PM (5/09/2006)
Thats the joke, Those American consumers have developed neighbor envy in wich one believes that his neighbor might think he paid more for anything NOT American made sitting in his driveway so he must be rich. Look at me...I am too rich and classy to drive a plain ole American car. American autos have NEVER been less of a car than anything overseas price comparably. That idea was planted in the 70's when your neighbor hid the fact that his new Datsun was giving him trouble cuz then he might seem like an idiot for buying one.
I AM biased, I don't even let someone see me glance at a Toyolet. I don't care where they are built, I don't care if my Ford is made in Mexico, I will ALLWAYS buy American Roots Automobiles! Well, maybe something from BMW! But thats were I draw the line...!
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naggs 8:18PM (5/09/2006)
bgdc, you havent been inside a $34k zypher have you. if you had you would see why they can charge that much for a ford.
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tcc3 8:24PM (5/09/2006)
Commander - I guess if you tell the same lie enough you begin to belive it. The US automakers certainly seem to.
I call shenanigans on the idea that US cars have just "gotten a bad rap." There is a reason why US automakers have a bad reputation these days. They've sold too many peopel too many bad cars. Sure they make a nice one now and then, and then they go right back to cutting corners when they think they have every one fooled.
You can afford your delusions - US automakers cannot. The sooner they buckle down and start making quality, reliable cars that people want and stop whining about their unfair reputation the better off they'll be.
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Corey 8:31PM (5/09/2006)
Inconsistency in quality has been the biggest dealbreaker. Everyone plays the reliability risk game when buying a car (and yes, that includes imports like the Camry). But when the odds are significantly better on the imports, it would be silly to play against those odds on $20-30K.
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AR 8:48PM (5/09/2006)
>>> Look at me...I am too rich and classy to drive a plain ole American car.
You hit the nail on the head Commander. I am also too smart to drive a plain ole American car. GM and Ford can crumble to dust for all I care. Chrysler is the only "American" company building good cars right now and that's because they're owned by the Germans.
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Artie43 8:50PM (5/09/2006)
With their exorbitant labor and overhead costs I don't think Detroit can build as good a car as the Japanese for anywhere near the same price. Detroit may be able to one day when they shed the UAW contracts and pensions. But until then, they will have to cut corners just to try and survive.
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Michael Karesh 8:52PM (5/09/2006)
These companies simply don't know how to interact with their
employees, their suppliers, or their customers. So this trust thing
isn't likely to develop that way. But...I also agree that the
difference in reliability is smaller, maybe even much smaller, than
most people think it is. The way Consumer Reports reports its results
in relative terms hides the absolute differences. I'm working
on a fix for this at http://www.truedelta.com.
TrueDelta will be reporting absolute numbers for times and days in
the shop, among other things. This will make it much clearer how bad
a bad car is and how much better a good one is. This is far from
clear right now.Once the sample is large enough, TrueDelta
will also be reporting what many people really want to know: what are
the odds of getting a thoroughly unreliable car, the "lemon-odds."
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bernie 9:03PM (5/09/2006)
As I have said for over a year on this blog, the Big 3's short-sightedness in offering their vehicles at fire sale prices, flooding the market when prodcution cutbacks were needed, huge incentives on overpriced cars and SUVs, and pushing a thrid of their unwanted trash off on fleet sales has irreperably tarnished their brands.
How loyal do you think owners of $25,000 SUVs that are worth $14,000 after 18 months will be next time they buy? Sure, quality is up to admirable levels on some vehicles, but others are crap. Walsh is a great columnist and he's right on the mark...Trust is shaken. But I have to disagree with Tom on the fix. I don't think trumpeting PR long and loud is going to work. Look at the circus sideshow they put on at the Detroit auto show. It's become a joke, and the incompetence in management, marketing, sales and the UAW ha become so pervasive I think they've lost a huge percentage of American buyers FOREVER.
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jeff 9:24PM (5/09/2006)
Problem is too when they do get a hot car like the Saturn Sky and Pontiac Solstice they then try and screw customers who try and buy them, even despite those cars flaws. Instead they should be doing everything they can to offer great warranties and Lexus like customer service.
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Scott Byer 9:33PM (5/09/2006)
I've rented a number of cars over the past few years, and without exception, the GM cars drove like crap (lost-puppy steering, pretend-it's-got-power throttle response) and always had at least one "feature" (daytime running lights, auto-lights-on, foot-pedal parking brake, column shifter) that would have driven me bat-shit crazy if I had to live with it long term. Even if these cars stayed out of the shop 100% of the time, I consider them very low quality. Heck, the Ford F150 dualie (it was the last thing on the rental lot one time) drove better than any of the GM cars, and that's saying a lot.
Even though the rental-level Camry was boring as all get-out (and I'd never own one), at least it's drivable and doesn't have anything so stupid as the parts-bin driven gaffes that still plague many American cars.
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John Smith 9:47PM (5/09/2006)
"As I have said for over a year on this blog, the Big 3's short-sightedness in offering their vehicles at fire sale prices, flooding the market when prodcution cutbacks were needed, huge incentives on overpriced cars and SUVs, and pushing a thrid of their unwanted trash off on fleet sales has irreperably tarnished their brands."
They flood the market sir, because with the UAW on their backs, they cannot be flexible in production at all.
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bgdc 9:52PM (5/09/2006)
Naggs, I have. The entry lux sport sedan buyer doesn't pick his car based on the interior alone. the zephyr could be covered in gold inside and that still wouldn't get most buyers to look at it. they'll go to the tl, a4, 3, c, g35, is250/350. The Zephyr doesn't pop onto their radar. Why would it? It's priced at the same level as a G35/TL. There's no way an informed buyer would be willing to look at a Ford product priced comparably to proven competitors.
The G35 is a prime example of how to enter a market. Infiniti aimed at BMW, fired and came up with a car 90% as good for 4-6k less. They built a following and the next gen builds just as the original LS400 appeared at way below BMW/MB prices and now it's considered a legit competitor (to some, still a lifeless barge to people like me).
In 5 years or less Hyundai will intro a RWD entry lux competitor that will be 85-90% as good as a G35 and they'll start it 3-4k lower. They'll get buyers while the Zephyr (or Mark whatever) will languish on lots like the Lincoln LS.
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Michael Karesh 9:58PM (5/09/2006)
The reason these companies won't do the Lexus strategy is that they'll only approve a new product if the plan guarantees profitability from day one. That's why the Cadillac SRX was priced even with the BMW X5, and the XLR was priced between the SC430 and SL.
A long-term strategy won't sell to upper management because too many losers were sold to upper management that way in the past: "don't worry, it'll make tons of money beginning in year four." They don't trust each other within these companies.
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jb 10:23PM (5/09/2006)
The biggest reason foreign BRAND automakers are more successful than domestic brand automakers is Unions. I am sure I will get alot of anamocity over stating this but it is a fact. There quality is poor because so what I have a union to protect me from getting fired. A group of people in the union decide to go on strike instead of working and building quality vehicles.
Add in the healthcare that they shouldn't have to pay for even though everyone of them probably average $60000/yr. Jealous, not a bit. Wouldn't want to work for an Domestic brand due to the commute back and forth to Mexico is not worth it.
I would guess there are at least the same quantity if not more American workers working for import brands than domestic brands in the US. Not sure have not bothered investigating.
If they are American brand, the need to be American made not in Canada or Mexico.Support the American worker by Import brands
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Koba 10:40PM (5/09/2006)
WARNING: Extremely long rant
Well, first and foremost the Big 2 will not survive in their current form. Their corporate cultures are typical profit mongering maniacs. The companies have tried to make money by all sorts of smoke and mirrors, the fact is, they need only to focus on 2 things, product and customer relations, the money will follow these two ideas. Without serious restructuring, cutbacks, and a** kicking, GM will wither away into chapter 11 land, and Ford will exist only to rebadge imports for the American market. The reason why the imports are so strong here is because they build their strengths around detroit's weaknesses, while ensuring that their own weaknesses are not vulnerable to their competitors. In other words, they have simply structured their business plan around either building strengths where their competitors are weak, or reducing their weakness so that they are less weak than their competitors. Sorry to be redundant, but I have no great ability with words.
And Mr. Walsh raises an excelllent point, an obvious (but most definitely not easy, thanks in large part to lawyers) area for improvement would be the dealership system. The dealership is the FRONT trench in this war, and Detroit needs to act like it is. A consistent attitude of being fair to the customer (you know, doing things that may not be the most profitable strictly for the sake of treating customers the way you want your family treated) will keep many buyers, and maybe even win some. In my experience, import dealerships tend to be some of the worst, while most domestic dealerships are just as bad.
It really is pitiful when dealerships use the fact that many buyers won't come to their showrooms (don't consider their cars) as an excuse to disrespect the buyers who do show up on their doorstep.
Mr. Walsh's experience is atypical (friendly service), as I recently spoke with the owner of a construction company that buys Chevy work trucks. The old fellow has bought them consistently for 30 years, six at a time, every six years, pays CASH. These are in addition to his personal vehicle which he replaces every three years. All are extended or crew cab three quarter ton diesels (read: high dollar trucks). First of all, the dealership he uses for buying AND servicing the trucks refused to pay NADA trade in value for his old fleet, they offered him 3k less than book per truck. He told me he can deal with that. What drove him away from that dealership and Chevy as a whole, was his issue with an 05 silverado 2500 with the allison automatic. The truck's transmission went at 42k, yes, he does drive a lot. The dealership told him to talk to GM since it was out of warranty, GM told him to talk to Allison, and after all was said and done, they gave him 1500 bucks towards a tranny job that cost 5k at that dealership. The transmission now rattles in reverse. All this time he was dealing with the General Manager at the dealership, and all he was told was, tough luck. Well, if Toyota is building a 3/4 ton diesel in 5 years, they will have six new ones sold, or at least that's what I was told. Moral of the story, treat customers who have dropped over 1 million dollars on your product like family, especially if you want to see the next million. After you get down pat how to treat big spenders with respect, move down the line.
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Howard Kerr 11:20PM (5/09/2006)
I reluctantly started buying Japanese cars in the late '80s. Why? I was in the market for a small car and having owned a Cavalier-clone ('82 J2000) that was somewhat unremarkable, I thought I would go back to Ford. I wanted an Escort GT and found 2 nice ones at a Ford dealer. So why did I buy a Civic instead? I didn't fit in the front seat of the Escort and didn't want to buy a "freshened" nearly 10 year old design. In 127,000 miles, the Civic never let me down. The Ford Ranger I bought after the Civic was totalled went only 75,000 before problems started to crop up. STILL, I'd buy another Ranger, but I don't want a "freshened" 14 year old design.
Notice a pattern here? Ford's (and presumeably GM's) cars start out "almost on par" with a typical Japanese sedan, then stay in production forever. Then, after falling behind the rest of the market, they eventually throw out the design and start over.
As has also been pointed out, domestic dealers and especially their sales staff, are the pits.
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david 11:38PM (5/09/2006)
koba, my son has an 'o4 tundra sitting in his yard with a blown tranny, 61k. toyoda says tough shit, so i suppose it's his fault for never carrying anything in it but groceries or an occasional beer cooler. young lady down the street has a maxima that has been in the shop seven times in eighteen months. my dodge '05 ram has 235k on it and only repair was a fuel pump at 195k. all cars have their share of problems, but i still stand behind american brands. hopefully when we get a president that has brass ba##s he will deport the illegals in toyodas and end this nightmare. oops, hope i didn't offend any rich, classy, yuppie wannabes
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AutoFan 11:57PM (5/09/2006)
Does Detroit need to rebuild trust among young buyers? Hmm...let me see if I can answer this one properly.
DUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUH!!!!!
In other news, water is wet, and the sun rises in the east.
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