7 myths about Detroit automakers – UPDATED

Monday, December 08, 2008

Considering that most people can’t figure out how to change a flat, I suppose I shouldn’t be surprised when the average schmuck doesn’t know squat about the auto industry and our auto-driven economy.

The following updated list comes to us from Mark Phelan of the Detroit Free Press and deserves its own post.


The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are seven myths about the companies and their vehicles, and the reality in each case.

Myth No. 1: Nobody buys their vehicles
Reality: General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of nearly 700,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota.

Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.

Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

Myth No. 2: They build unreliable junk
Reality: The creaky, leaky vehicles of the 1980s and '90s are long gone. Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers."

The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high as or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

J.D. Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.

Myth No. 3: They build gas-guzzlers
Reality: All of the Detroit Three build midsize sedans that the Environmental Protection Agency rates at 29-33 miles per gallon on the highway.

The most fuel-efficient Chevrolet Malibu gets 33 m.p.g. on the highway, 2 m.p.g. better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient non-hybrid Honda Civic.

A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate.

Myth No. 4: They already got a $25-billion bailout
Reality: None of that money has been lent out and may not be for more than a year. In addition, it can, by law, be used only to invest in future vehicles and technology, so it has no effect on the shortage of operating cash the companies face because of the economic slowdown that's killing them now.

Myth No. 5: GM, Ford and Chrysler are idiots for investing in pickups and SUVs
Reality: The domestics' lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have spent billions of dollars on pickups and SUVs because trucks are a large and historically profitable part of the auto industry.

The most fuel-efficient full-size pickups from GM, Ford and Chrysler all have higher EPA fuel-economy ratings than Toyota and Nissan's full-size pickups.

Myth No. 6: They don't build hybrids
Reality: The Detroit Three got into the hybrid business late, but Ford and GM each now offers more hybrid models than Honda or Nissan, with several more due to hit the road in early 2009.

Myth No. 7: Their union workers are lazy and overpaid
Reality: Chrysler tied Toyota as the most productive automaker in North America this year, according to the Harbour Report on manufacturing, which measures the amount of work done per employee. Eight of the 10 most productive vehicle assembly plants in North America belong to Chrysler, Ford or GM.

The oft-cited $70-an-hour wage and benefit figure for UAW workers inaccurately adds benefits that millions of retirees get to the pay of current workers, but divides the total only by current employees. That's like assuming you get your parents' retirement and Social Security benefits in addition to your own income.

Hourly pay for assembly line workers tops out around $28; benefits add about $14. New hires at the Detroit Three get $14 an hour. There's no pension or health care when they retire, but benefits raise their total hourly compensation to $29 while they're working. UAW wages are now comparable with Toyota workers, according to a Free Press analysis.




21 comments:

Sopor 1:40 PM  

I've historically not been very easy on the Big Three... But there's not a point in there that I can disagree with.

The problem? Public perception is SLOW to change. I'm a perfect example... for the last 10 years I've basically written off the Big Three and their cars, so I was completely ignoring them while they started to improve! I think the same thing is happening to the American Public as a whole.

Bob 1:58 PM  

"The problem? Public perception is SLOW to change."

I agree.

Worse, people read moronic publications like Consumer reports instead of forming their own opinions - that deserves a post one day.

Smitty 3:21 PM  

Nice article. Love it. This seals the deal for me.

The last argument, then, is too little too late. And that one gets beat by saying that that is what competition does: forces you to change to win. Not only did the Big 3 change, they did it at massive expense and risk, and have, by this article, outdone their former competition.

Bob 4:00 PM  

they did it at massive expense and risk, and have, by this article, outdone their former competition.

Massive is right. When people say these companies have not changed, they are complete fools. The D3 have rebuilt nealry every one of their plants, making them efficient, flexible and making quality products. This has ranged in cost from $1B to $1.5B for each plant. GM has 65+ US plants. Do the math.

The D3 have dumped billions into advanced propulsions systems, especially GM, which has spent a fortune on the Volt.

B Mac 4:16 PM  

for the last 10 years I've basically written off the Big Three and their cars

Congratulations, you could be a member of Congress!!!

For the record, I drive a 2005 Chevy Malibu. LOVE. IT. I get 30miles per gallon (38 MPG when I drive 60 mph... but that's rare). One burned-out lightbulb and a broken visor mirror cover are the only problems after 65,000 miles. Would buy another one in a heartbeat.

Sopor 4:54 PM  

"for the last 10 years I've basically written off the Big Three and their cars

Congratulations, you could be a member of Congress!!!
"

DUDE. I am all over this.

This whole bailout thing has actually opened my eyes about how much better the D3 have become. Something else has helped too... Every week I watch a BBC TV show called "Top Gear". Top Gear just a few weeks ago did a trip to the USA to review the new Corvette ZR1, Cadillac CTS-V and the new Challenger. They LOVED every single one of them. Now I shouldn't put a lot of value in some Brits opinions of some of D3's cars... but normally these guys HATE anything coming out of Detroit. It says a lot that these cars thuroughly impressed Top Gear.

Bob 5:09 PM  

It says a lot that these cars thuroughly impressed Top Gear.

I normally don't like top gear. I remember one of the earlier tests of the standard Corvette. Clarkston was seen pushing on the real panel and making a big deal because the fiberglass had a lot of give. This isn't a structural part of the car. Had it been stiffer, it would have been heavier, which is a huge negative for a performance car. The only reason to beef-up the panel around the rear lights would have been to support Clarkson's fat ass.

This si the type of stupid nitpicking, unrelated to the car's performance, that poses as automotive journalism.

steves 9:47 PM  

Like Sopor, I had kind of wrote off the B3. We had a Malibu that we bought in the late 1990's that was an absolute piece of shit that needed new brake pads every 15,000 miles or so. I currently drive a Jeep Liberty that I have been very pleased with, so I am always willing to consider any company (except for GM...give me a few more years and I may change my mind) when it comes to buying a car.

Myth No. 7: Their union workers are lazy and overpaid

I am generally pro union, but I am wondering what percentage of the Big 3 workers are union compared to 20 or 30 years ago? When they build a factory in another country are those workers union? The problem is that most people in this state probably know some lazy slob that works for a car company. In my family it is my wife's uncle that used to drive a grabage truck for GM. Besides being an asshole, he probably worked about 2 hours a day and made a good living. I wouldn't say he is representative of all auto workers, but it still makes you shake your head.

Worse, people read moronic publications like Consumer reports instead of forming their own opinions - that deserves a post one day.

And what should they base their opinions on? JD Power, a company that, just like Consumer Reports, uses survey data to rate things. Anecdotal evidence? Just buy the same thing over and over again? Cool ads?

I certainly don't think that CR is infallible, but they do a better job than most groups in putting together ratings. Traditionally, they have been hard on the Big 3, though I don't think that is totally underserved. The past few auto issue have seen the Big 3 do much better and they have plenty of cars in the top tier.

Bob 10:35 PM  

And what should they base their opinions on? JD Power, a company that, just like Consumer Reports, uses survey data to rate things.

This deserves a post of its own. I hate consumer reports because their data is complete BS. They survey only their readers. It's as if the NY Times polled their readers to ask who they were supporting for President. The results would not be the same if you asked the same thing of readers of the Washington Times. It's not a representative sample of the public.

No one is perfect, but JD Powers, when combined with other data is better than CR. Eventually the readers of CR may catch up, but when CR keeps calling one car the "worst" and one car the "best" when the best and the worst aren't very far apart, they are interpreting the results to sell magazines.

Your late 1990's Malibu might have gone through brakes, but where did you live? City or Country? That car did statistically very well by many survey as far as trips to the shop. Jeeps on the other hand aren't real reliable.

You shouldn't judge a car by its nationality. A VW or a Mazda have very poor reliability ratings, while a Buick kicks ass. Go figure.

steves 7:44 AM  

It's not a representative sample of the public.

Their data is based on several million surveys, so while it may not be completely representative, this sample gets pretty darn close.

It's as if the NY Times polled their readers to ask who they were supporting for President. The results would not be the same if you asked the same thing of readers of the Washington Times.

Apples/Oranges, the CR data is basing it's data on people that have owned that car or used that product. Are you suggesting that the readers of CR have some inherent bias against the Big 3? Do you have any proof?

No one is perfect, but JD Powers, when combined with other data is better than CR. Eventually the readers of CR may catch up, but when CR keeps calling one car the "worst" and one car the "best" when the best and the worst aren't very far apart, they are interpreting the results to sell magazines.

JD Power is not all that useful to me. They give out so many awards that it is hard to take them seriously. They are entirely funded by the companies they rate, so I have to wonder somewhat about their objecticity. Many of their ratings are based on "initial customer satisfaction" and only cover what people think in the first 90 days. Who doesn't like a new car? I want to know what they think after the warranty is up.

CR gives out a numerical score in most of their ratings, so a person can easily see how close. In many cases, they also point out how close the scores were.

Your late 1990's Malibu might have gone through brakes, but where did you live? City or Country? That car did statistically very well by many survey as far as trips to the shop. Jeeps on the other hand aren't real reliable.

I live in a suburb and do a mixture of driving. Unless I am a cab driver, brakes should last longer than 15,000 miles. The unreliable Jeep I have laster 80,000 before needing new pads. We had a Camry that went 130,000 miles and never needed anything except oil changes. That Malibu may have just been a lemon, but I will still disappointed. It was loud and the dash rattled and was otherwise sloppily put together. It wasn't a high end car by any means, but it (along with several other clunkers) has soured me to GM. I know this probably isn't rational, but it makes as much sense as people that only buy one brand.

You shouldn't judge a car by its nationality.

I agree. My wife and I have always gone into the car buying process with a clean slate. We decide on what kinds of things we need and test and research everything that fits. For instance, when we wanted a small SUV, the Jeep is what we liked the most. A minivan, a Honda. We have mostly owned Big 3 cars, followed by Japanese.

Sopor 12:36 PM  

"A VW or a Mazda have very poor reliability ratings, while a Buick kicks ass."

I have GOT to comment on this one...

My VW Jetta is not rated very high on reliability, I have to admit. I've had very little trouble with it though (relatively speaking for a 10-year old car with 125K miles.) BUT! That is NOT a German automobile... it was designed in Germany, sure, but built in Mexico! VW's manufacturing plants in Mexico have a reputation for being less than reliable...

And Mazda... well I had a 1994 Mazda 626. Japanese designed automobile... built in Michigan! (I actually thought it was Tennesee) Came off the same line as the Ford Probe and Mazda MX-6. Engine (Japanese) was bullet-proof, the rest of the care around that SUCKED.

My point is, we can't just look at the nationality of the company that designed the car, we also have to investigate where the car was actually built! And of course this is just two specific examples...

Bob 1:10 PM  

My VW Jetta is not rated very high on reliability, I have to admit. I've had very little trouble with it though...

This actually says alot. VW has poor ratings, but lets not forget that the worst cars of today are better than the best cars of 5 or 10 years ago.

Mr Furious 1:51 PM  

No inherent bias against the Big Three from me either despite the critique I leveled at them last week.

I am pro-bailout and supportive of the industry as a whole. If given the opportunity to choose between equal-quality and caliber cars, I would choose American. But that's not always the case.

I have only bought one new car in my life—our 2003 Honda Odyssey. We drove the Chrysler T&C and the Windstar (and I had rented countless Windstars), but in many ways both obvious and intangible, the difference between the vehicles was stark.

Most of those differences were in areas of aesthetics and features, and not a question of quality or lack thereof.

That car has 60,000+ miles on it, and I now have to replace the original tires—that is the first time having to open the checkbook.

--

American cars I like?

Chevy Equinox Extremely nice little truck. Fantastic ride, great interior. My wife's grandmother has one and I just drove it all around SE MI over Thanksgiving. If they made a hybrid of that thing, it might replace our Honda.

Pontiac G6 Rented one twice. Also very nice car. Great looking, and fantastic interior.

Previous generation Ford Focus Almost bought one of these instead of my used Volvo.

Cars I haven't driven but look nice?
Malibu, Aura, Astra, Charger, 300, Fusion

Smitty 2:05 PM  

If they made a hybrid of that thing [Equinox]

They do.

Mr Furious 2:20 PM  

The best (favorite) car I ever owned? 1986 Saab 900S. That car ate brakes, and repairs, when necessary were expensive, but that thing had 260,000 miles on it (190K mine) when I got rid of it.

And it still ran like a champ, my wife wanted the van with the arrival of Kid #1.

Mr Furious 2:21 PM  

No (unless it's just out), there's a hybrid of the Saturn Vue (same car) but I like the looks of the Chevy or now-defunct Pontiac better.

Mr Furious 2:29 PM  

Just double-checked. The Equinox doesn't have a hybrid, Pontiac still makes the Torrent (best-looking version IMO), and the Vue is 7000% better looking than it was before, but the interior—particularly cargo area—looks smaller/less versatile than the Equinox.

Come on GM!

Smitty 2:29 PM  

No (unless it's just out)

My neighbor, who works for a local GM/Chevy dealer, tells me it will be out early next year.

Mr Furious 2:30 PM  

Smitty. Get your ass over to my site pronto and enter my sweepstakes! That applies to the rest of you bums too.

Mr Furious 2:31 PM  

That makes sense. They should have done it sooner.

All of that said, I don't know how the GM hybrids have fared (my MiL has a Civic with over 100K on it already) and we are no longer in a financial position to make the vehicle change (our cars are both paid for right now).

Rickey Henderson 9:03 AM  

Rickey thinks that be three do realize what they've done wrong. The understand that there's been a paradigm shift in how the industry fuctions. That they should've have abandoned projects like the electric car. It's becoming more than a little annoying to watch bloviating politicians try to drag them over the coals like its the Watergate hearings or something...

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