Product quality measured by how many brands are slightly above average versus slightly below average is pretty meaningless. Normalize these stats I think another story would be told. The D3 have too many brands producing too many replicated cars for the “number of brands” based stat to mean anything. I am sure there are a ton of stats on quality that can be spun to show whatever you want to show. The bottom line is what the consumers are buying, what the makers are producing, and what is the health of the company.

Shouldn’t productivity not be measured by labor hours per vehicle but by labor costs by vehicle. Or better yet, total corporate costs (fixed, variable, overhead etc.) per vehicle. The bottom line is the bottom line – right? Profit is the measure of a successful company. Everything else is fluff and spin. Obviously, profit is something the D3 have forgotten how to produce.

I agree with you on the stupidity of CAFÉ but right now, the fact that CAFÉ exists is probably why D3’s small car readiness is even near a level where they might be able to compete. The fact that CAFÉ forced the makers to smaller cars is a blessing to the D3 in this market of higher fuel prices. It is not that foreign makers were kicking our asses by producing big gas guzzlers, large trucks and monster SUVs (that is what we are really good at) while we were forced to produce hybrids and such. While I am for dismantling the CAFÉ laws, I am also for allowing companies to produce whatever the market wants.

Your other point about increasing the already insane fuel taxes is no solution and would probably have been even worse on the economy and therefore would have killed D3’s market and accelerated their demise. Raising taxes as social engineering is morally objectionable and economically foolish for the consumer and for the D3. I doubt Detroit would have been nimble enough to react to a severe hike in the fuel prices. This would have only allowed our foreign competitors to gain more of our market share.

Fair trade is a fair point. I agree there should be a level playing field. Maybe this should have been the focus of the D3 and UAW lobbies instead of allowing pay, health, benefits, and retirement costs to become the albatross around the D3’s neck.

Tax right-offs on SUVs and trucks affect both foreign and US makers so there is no disparity there. Japan has introduced large SUVs and Full-sized trucks as of recent years and they were starting to take a bite of that US dominated segment too.

One large point I don’t see addressed is the D3’s over-commitment over the years to the whims of the unions and their political power – especially within the Democratic members of congress. That is one area where there is a real disparity between the management of the D3 companies and their foreign competitors.

I think your piece is an attempt to lay blame for failure at the feet of the government in order to justify why special treatment ought to be afforded to these “special” companies. No, I am not convinced.

I say let the market decide which companies succeed and fail. Allow our already very generous corporate bankruptcy laws to take effect where needed. Some real restructuring of D3’s obligations and a general wake-up call will do more to set the D3 (can’t even say Big 3) straight than subsidizing a failed model. You just have to look to the southern-US-based foreign makers to see successful US-based manufacturing is feasible. The D3 need better leadership, better products, better marketing, and more efficiency. Failing and restructuring is a way they might just be able to rise from these ashes anew.

Overall the piece was nicely written though. Nice spin. Maybe you should be a car salesman. 

BTW – I have never owned anything but a GM vehicle (5 total)and am one of the many who are embarrassed and disappointed that the US auto industry is in such dire straits. It is almost as embarrassing as West Point football (let’s hope UofM does not follow D3’s lead). I will continue to route for our D3 to once again be the Big 3 just as I will continue to be a diehard Army football fan. I just can’t see rewarding failure by supporting the people and policies that created it with special loans. Failure is an opportunity. Preventing it artificially is unjust.

Nice job on this…I have always respected your views on the industry.

In this case, for whatever reason, we have a government that has ignored all forms of industry for the past 8 years and not just the Auto business. I suspect, for good or ill, industry will get some attention in the next administration.

I cannot fathom how all of these idiots out there can expect the USA to maintain its standing in the world and our standard of living with everyone working at Starbucks or selling Chinese goods at Walmart. Well, $10Trillion in debt later, perhaps the trade deficit and the fiscal deficit are starting to come home to roost!

Here’s hoping I don’t end up working at Starbucks next year!

Paul

I just sent an email link to my friend, Rick, who used to work for Ford. I helped him sell his 2000 Explorer XLT with 87K miles for only $2,500 this weekend. His wife and he went new car shopping all day yesterday. The wife is SO set on buying Japanese. My email to him was on a brand new 2008 Ford Edge SE ($27,240 MSRP) that is being advertised by a local Seattle dealer for $17,851 w/ competitive rebate. Almost $10K off, and he said he will have a hard time convincing his wife to even test-drive it.

What does this all mean? Regardless of all the facts, the truth is the public THINKS the Big 3 cars are shitty. My wife and I only drive American (2008 F-150, 2008 Mustang, 2008 Grand Caravan, and 2010 Camaro on order) not just because I used to work for Ford, but we know these are damn great values. But the sad truth is, we are a very tiny minority of the population. Just the way many folks in MI think Korean cars are shitty, the vast majority of the population THINK the foreign cars are better than domestic.

In my humble opinion, the only way to save the Big 3 is to re-structure all labor rates with UAW (to a comparable level to the foreign OEMs’ labor rates in their U.S. factories), then ask for $25B+ loan from the dumbass politicians so that they can get the cash out FAST.

If this doesn’t happen, I’ll have to sell some naked puts on the DIA & SPY to make some easy money (trust me, I don’t want to) for the next few months. Let’s all hope that our public servants make the right decisions and do what they are paid to do.