Filed under: Etc.
Automotive News wonders: Why all the vitriol towards the Big 3?
Automotive News' engineering reporter Richard Truett is disgusted (disgusted I say!) with the amount of negativity floating around the blogosphere's comment sections regarding Detroit's Big Three. The AN scribe goes into detail about the people he cares about that work for Motown's finest, and asks how long it will take for GM, Ford and Chrysler to get over being "punished for making Chevrolet Vegas and Oldsmobile diesels or relying too long on the fat profit of trucks and SUVs?"
In an attempt to understand (and avoid offending) the countless commentators on the Web, Truett peddles forward, saying, "For the most part, these are angry people. But they don't seem to be unintelligent people who are just making uninformed negative comments... They do have valid points." And then he slams on the brakes, "Or did have."
Not until the end of his diatribe does Truett disclose what comment finally sent him over the editorial edge, but low and behold, our very own "Daniel" gets quoted in the trade pub with his comment about GM's decision not to bring a minicar to America. The only problem: Truett cuts Daniel's comment up, taking it partially out of context to suit his own needs.
The quoted comment in Truett's editiorial: "With incompetent clowns like this running GM and Ford and Chrysler -- it is no wonder that the Big Three is well on its way of becoming the Big Zero. How could the leadership of these companies be this bad?"
Daniel's original comment in context: "With incompetent clowns like this running GM and Ford and Chrysler -- it is no wonder that the Big Three is well on its way of becoming the Big Zero. Americans don't want small fuel-efficient cars? Ford does not offer it's best European products in the U.S.? Chrysler doesn't have a clue? How could the leadership of these companies be this bad?"
See the difference? We do. But apparently Truett's friendships and associations won't allow him to see the truth.
[Source: Automotive News - Sub. Req.]
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Reader Comments (Page 1 of 4)
Kitko 8:06PM (10/15/2008)
Normally, I don't like journos commenting on one another's work in public - the only exception being self defence. As in this case.
There is THE difference.
Apart from that, Richard Truett assums that people have valid points ... most of them are about the past. So when he declares, that those people no longer have valid points, has the past changed?
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Damon Lavrinc 8:09PM (10/15/2008)
We're not too hot on it either. But thought there was an important distinction between what Daniel said and what Truett quoted.
Kitko 9:38PM (10/15/2008)
Mr Lavrinc, that was exactly my point, there was a difference. I'm with you on that one. I'm sorry if that wasn't clear from my post:-)
nataku83 7:55AM (10/16/2008)
@Damon - I don't see the difference between what Truett quoted and what Daniel said. Truett simply removed the "evidence" in Daniel's quote, which is a common thing for the sake of brevity when quoting someone. The point that the quote is trying to make is still exactly the same, and it carries over the same tone as well.
Derek 12:05PM (10/16/2008)
I actually don't think the editing takes things out of context. If anything, the "evidence" points out Daniels bias.
Americans only want fuel efficient cars when it's trendy. Why does the Camry outsell the Corolla? Why does the Accord outsell the Civic? Why does the F-150 outsell all of the above? Why are the roads full of monster SUV's when there have always been reasonable cars as an alternative to buy?
It's not just domestic automakers either. NO company sells a minicar in the US and nearly every maker has developed SUV's in the last 10 years - some of them nearly exclusive to the US market, so why do domestics take the heat? Why not blame others who already have fully developed minicars in other markets? (Kei car, anyone?)
Secondly, no maker brings their desireable European offerings here. Ford isn't alone in that. BMW, MB and Audi all keep small cars (1 series aside, but it's pretty big) and diesels to themselves in Europe. People moan and wish that we could drive them here, but never give other automakers the hatred that the Big 3 recieve over this issue.
So, if these decisions are what is wrong with the big 3, why aren't they also what's wrong with Toyota, Honda, Subaru, Audi, BMW, MB?
Matt DeCillis 12:10PM (10/16/2008)
Excellent post Derek! Couldn't have put it better myself!
Geeky1 12:40PM (10/16/2008)
Derek hit it right on the head. +1
Aki 12:41PM (10/16/2008)
Derek - Your posts mirror the mentality that of the old Big 3: behind the times, and oblivious.
Ford sales have been on the decline for 22 consecutive months. Ford F-150 sales at one point dropped BELOW Honda Civic sales. They're constantly shutting down plants, renegotiating union contracts.
Americans only want fuel efficient cars when it's trendy? What barbiturate did you take this morning to come to that conclusion? Maybe you're not noticing how GM and Ford have lost so much marketshare over the years by ignoring key segments (Corolla, Camry), and putting all their eggs into SUV/crossover SUV/truck market.
To put it simply, Richard Truett is probably a domestic fanboy. Yes, minicars aren't huge in the US right now. But it's the Big 3's failure to predict trends that got them into this mess to begin with. Ford has always lagged behind the trends, *reacting* instead of being on the cutting edge.
The Big 3 could play it safe, wait till minicars become big, then rush to bring a haphazard, mediocre implementation to market. But that'd be the same mistake they've been pulling since the rise of the economy cars in the 70s.
Funny how history repeats itself. People scoffed at tiny Hondas three decades ago, only to see their popularity soar. Thirty years later, you still have clueless people scoffing at the demand for fuel efficient cars. Amazing.
Mike 11:59AM (10/17/2008)
Aki,
Your the example of the import fanboy, always on here ripping on the domestics, you've never had anything good to say, is it surprising that your little rant is more of the same?
Derek brings up a good point, you just refuse to accept reality. If Civics and Corollas were that popular and financially profitable, why is it that they were such a minor part of the market for so long?
Save for one month, pickups have been the best selling vehicle for years. SUVs were huge too until the gas crunch. Sorry to burst your little import fanboi bubble but was Toyota so visionary that they launched their new massively sized Tundra the year before the bottom dropped out on full size trucks? You really think that was a great idea?
Please.
Eric 8:07PM (10/15/2008)
If the big 3 want to be a part of the future, they're going to have to get out of the healthcare and pension business. A huge part of why they're having trouble competing with foreign brands is their soaring legacy costs.
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zamafir 8:28PM (10/15/2008)
that and indulge those who have the foresight to see beyond 3 years.
AZZO45b 9:48PM (10/15/2008)
Eric: You should update your automotive mogul want-a-be talking points. The Big 3 have (for the most part) gotten out of the "healthcare & pension" business.
DaimlerChrysler drastically cut retiree benefits & Cerberus eliminated heathcare coverage & life insurance last year. GM has recently done the same to their retirees . Ford has also made similar cuts & all three have offered a number of programs to cut current staff, as well as dropping contract personnel.
I know the younger AB readers have little respect for the Big 3 & their business practices over the last 15-20 years. However, its easily forgotten that the Big 3 attracted top level people from the world's finest colleges & trade schools. These people (union & non union) were promised a laundry list of benefits & for the most part EARNED them.
My father was a designer (stylist) for GM for 9.5 years & then Chrysler for 30. His generation did not jump around like newer eras of our workforce... they gauged their retirement based on pensions & corporate backed insurance plans & . Where does a mid 70's man (with a heart condition) go for reasonable life insurance after being dumped by Chrysler? Thats just ONE of the many complex stories in your oversimplified "healthcare & pension" comment. Real life is a bit more complicated
Honda , Nissan & Toyota have had N/A operations for 25-30 years. Some of those staffs are ex Big 3... they didn't jump ship for sub par benefits. The big difference is these Japanese corps are selling more than they are giving away. These people get good insurance & are also planning on cashing in on what they were promised. So these guys have "legacy costs as well. They can just afford to honor them.
The executives didn't risk anything... if they failed they were BOUGHT OUT to leave. The retirees RISKED! They put their faith in CEO's to keep the companies running strong & allow them to enjoy retirement after working for 30-40-50 years.
The current workers are RISKING... Do you seriously think workers in their late 40s & mid 50s are going to find work in new fields? Not likely. Youth is cheaper to employ. They also know not to expect many corporate perks.
Please, lets not blame the workers who once helped these companies profit & grow for their current, deadly economic problems.
To my generation this just shows that retirement & the "golden years" is an extreme fantasy for most people. Pensions are dead & numerous 401K plans have been pretty rocky the last few years. Dot-com millionaires one quarter & Wal*Mart budget retirement the next.
Eric 10:44PM (10/15/2008)
Last I checked, the Big 3 still incur around double the legacy costs per vehicle that the Japanese automakers do. Granted, they've been around longer and have more retirees, but it's pretty irresponsible to be offering oversized compensation packages that are calculated based on your company operating at peak efficiency and profit levels forever.
Having gone to school in Michigan, I happen to personally know several executives at both Ford and GM. It is my opinion that for what they do, the benefits they receive are outrageous. Not only that, but all of the Big 3 are enormously inefficient in their operations, from the plant floors all the way up to management. They employ far more people than is necessary, thereby compounding the problem of legacy costs.
It's no wonder that the Japanese automakers are outselling the Big 3. A walk through the showrooms of the respective companies companies will tell you why - the Big 3 has for too long relied on cutting costs in the wrong places. Only recently have we begun to see them correct their ways.
I don't blame the workers for the Big 3's problems. I blame the executives at the Big 3 and the UAW for agreeing to and demanding, respectively, huge wages and benefits packages for what are basically unskilled workers. They are operating on what has now been proven to be a failed business model, and unless they move to change it immediately there will be no hope for them without a massive government bailout.
Gabagool 11:38PM (10/15/2008)
Wow, amazing...........................that is just amazing. You did not even bring up the fact that GMs management is arguably the most incompetent and corrupt management in USA.
What is it that you do not see about Wagoner's record that made you forget to blame management? Name one car that GM released under him that is making money? Name ONE.
Wagoner was behind Aztek, he was behind Aura, Astra,G8,Sky/Solstice, 4 LAMBDAS, Impala, Cobalt.........................not a single one of these cars is on sale without HUGE discounts. The only reason people are buying GMs product is because it is WAY cheaper than Toyota's or Hondas. You can get Cobalt for about 13K while similar Corolla and Civic are in 15-16 range. People are not willing to pay market price for GMs cars because they have seen turds that get better MPGs and are more reliable.
AZZO45b 12:44AM (10/16/2008)
Eric: My father was white-color & college educated. He retired 12 years ago. Chrysler was very healthy, & Daimler Benz soon "merged equally" with a very cash rich company. UAW contracts were also not negotiated at gunpoint. White collar employees often got many of the union perks (but had no formal, written agreement).
As for "unskilled" line workers.... (1) Honda & Toyota employ the same level of worker. Yet they don't seem to receive the venom the UAW workers do.
(2) Union workers scored a sweeter deal than non-union, but workers assembling Japanese cars are NOT paid fast-food worker level wages & benefits.
(3) Over 50% of the UAW work force is college educated & many factory jobs incorporated their post HS training (especially in plant management jobs).
I worked at Chrysler for 10 years (also in design/ styling) & left in part because I saw some of Chrysler's problems coming. I can tell you the styling & engineering staff #s in the Product Design Office was far less than GM & Ford. We had designers from VW, Ford, GM, Renault, etc & many commented on how UNDERSTAFFED we were (& this was in good times!)
I just wanted to deflect what you had said about the Big 3's "side business" (legacy costs). It was misleading IMO, but also didn't address the numerous men & women on the sidelines.
They finished the race & collected their "winnings". When they entered the race the promoter listed the prizes. I don't feel they were "overcompensated"... as both parties agreed to the terms.
To continue my racing theme: When the Indy 500 entered tough times during the OW "split"... the Speedway didn't come back to past Indy 500 winners & ask for some of their prize money back to pay the current champion, eh?
I feel the "legacy costs" issue is basically a distraction technique. It allows these current executives to take the focus off themselves (& their poor performance as executives) & assign it to an unprotected (& unrepresented) group of people.
I see from your follow-up response that your views are not as harsh as I first thought. We actually agree on many of the same issues.
Eric 12:52AM (10/16/2008)
It's been a couple of months since I've read anything about it, but I seem to recall that Honda and Toyota pay their line workers something like $18-20 an hour? Isn't the typical UAW wage closer to $28-30? That, and I'm sure the UAW workers receive more in benefits as well. Sure, it's not a night and day difference between what the employees at the Japanese automakers' plants make, but multiply it hundreds or thousands of times over for several decades and it adds up. I'm fairly certain the gap in legacy costs per vehicle between the Big 3 and the Japanese automakers is still very significant.
I'm not surprised that many of the line workers at the Big 3 are college educated. But how many of those positions required a 4 year degree? I'm guessing not many. It's no surprise though that college graduates end up working there when the average entry-level position for a college grad pays $40-45k and the UAW starting salary and benefits exceeds that.
Tony 8:28PM (10/15/2008)
Truett: I know you'll read this. The reason is 35 layers of bloated and redundant managers with little to no value and golden parachutes. That's not jealousy talking - I have been blessed with a rewarding and decent paying job - it's just the reality. The top execs may be paid huge salaries, but they take the risks and steer the ship; the UAW has a bad rep and deserves some of the blame - but the problem is the protectionist culture of middle management and their associated political rather than productive ambitions.
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Horst 8:44PM (10/15/2008)
Thank you Richard Truett.
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catgirlshyla 8:49PM (10/15/2008)
Howabout cars that we want, coupled with the fact that their inventory needs to be "liquid" enough to change with the times at a moments notice?
Look at all the cars in the past that people now lust for: Muscle Cars, Japanese Sports Cars, Rear-Wheel Drive, Keicars/Microcars, etc.
What has the Big 3 provided us? SUV's and other gas guzzlers, and stupid variant rehashes of designs stolen from the past.
And it's not even the US automakers that shoulder alot of the blame: The Japanese and Europeans have also done the same mistakes, only in recent times, it's becoming even more stupider. It took Nissan how long before they finally wised up and gave us the GT-R??
And let's not forget: The US Government has over-regulated the safety bar so high, many foreign car makers refuse to bring over desired cars simply because one car can get crushed by a huge monster International CXT.
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Shipey 7:59AM (10/16/2008)
"Look at all the cars in the past that people now lust for: Muscle Cars, Japanese Sports Cars, Rear-Wheel Drive, Keicars/Microcars, etc."
That's what they're lusting for now... three years ago they were lusting after Hummer H2s, Escalades, and Navigators.