7 myths about Detroit automakers

pauldun170 · 12-08-2008, 03:03 PM

7 myths about Detroit automakers

BY MARK PHELAN
FREE PRESS COLUMNIST

This column by Free Press auto critic Mark Phelan originally was published on Nov. 17 and has been updated.

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.

Contact MARK PHELAN at 313-222-6731 or phelan@freepress.com.

fatbuckRTO · 12-08-2008, 03:10 PM

If even most of that were true something tells me they wouldn't be asking Congress for billions of dollars.

pauldun170 · 12-08-2008, 03:24 PM

Quote:

Originally Posted by fatbuckRTO

If even most of that were true something tells me they wouldn't be asking Congress for billions of dollars.

At the very least it looks like Ford is in an ok position. Setting up a line of credit is ok with me for Ford. Looks like they are taking some good steps....they just need hold it all together while they shake uglies out of their lineup.

Chrysler - not so much.

GM - Difficult to say but I think they should have federal support a little capital to offset immediate restructuring cost.

The issue is that for the big three to get there crap together, plants have to close and the workforce needs to shrink. The BS coming from congress ("why haven't you made magical hybrids that will sell by the billions and save the world") annoys the fuck out of me.

They know what needs to be done but the political backlash of loaning money just to result in job losses clouds the process.

Dodd needs to be sent on his way and replaced by someone with knowledge of the business and the market they operate in. Tired of hearing him

CrazyKell · 12-08-2008, 03:50 PM

Why don't we see any other makers (Honda, Nissan, Toyota, etc.) asking for bailouts?

speedylocksmith · 12-08-2008, 03:52 PM

Quote:

Originally Posted by CrazyKell

Why don't we see any other makers (Honda, Nissan, Toyota, etc.) asking for bailouts?

It will happen. Mercedes plants are giving employees extra time off during the holidays because of the slowdown in sales to try and save a few $$

unknownroad · 12-08-2008, 05:09 PM

Quote:

Originally Posted by CrazyKell

Why don't we see any other makers (Honda, Nissan, Toyota, etc.) asking for bailouts?

They're not saddled by the kind of retiree benefits load that has been dragging down the Detroit automakers, and they haven't suffered as much mis-management.

BobTheBiker · 12-08-2008, 05:22 PM

The simple of it is, the asians have an efficient, and actually successful management plan in effect that keeps employees making fair wages but happy at the same time, unlike the US companies that are paying retarded amounts for menial tasks.

And the american made cars really arent as good as the japanese ones honestly. I'll keep my jap built Honda for as long as I live, or until it burns to the ground.

Homeslice · 12-08-2008, 07:19 PM

Quote:

Originally Posted by pauldun170

Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota.

That actually speaks pretty sadly for GM, given how many different brands GM has compared to Toyota. Also, are they counting commercial vehicles too?

Quote:

Originally Posted by pauldun170

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.

Reliability <> desireable. There are plenty of reliable vehicles that consumers still don't want, because they are boring to look at or boring to drive. Which incidentally is why the vast majority of rental cars are American. Had those cars been more desireable, they could have been sold to regular consumers instead, for a higher profit.

shmike · 12-08-2008, 07:36 PM

Quote:

Originally Posted by Homeslice

That actually speaks pretty sadly for GM, given how many different brands GM has compared to Toyota. Also, are they counting commercial vehicles too?

How is your Buick stock doing? Or Chevrolet? Or Hummer?

Probably counting commercial vehicles, why wouldn't they?

Mr Lefty · 12-08-2008, 08:19 PM

intresting... so they're saying that the non reliable stuff from 80-90's is gone... now it's on par... so they're basing this off the last 9 years... now they're on par? granted that's a good start... but please 9 years of decent reliablity after how many of shit?

and sorry but take the worst built toyota or honda and even the best built domestic and I'd still take the toyota or honda to put my money on for reliability.

Domestic's idea of reliability is a warrenty covering everything that will go wrong.

imports idea is building so shit won't go wrong.

12-08-2008, 03:03 PM	#1
pauldun170 Serious Business Join Date: Nov 2008 Location: New York Moto: 1993 ZX-11 2008 CBR1000rr Posts: 9,723	7 myths about Detroit automakers 7 myths about Detroit automakers BY MARK PHELAN FREE PRESS COLUMNIST This column by Free Press auto critic Mark Phelan originally was published on Nov. 17 and has been updated. 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. Contact MARK PHELAN at 313-222-6731 or phelan@freepress.com.

12-08-2008, 03:10 PM	#2
fatbuckRTO This is not the sig line. Join Date: Dec 2008 Moto: Be prepared. What? Oh, moto... Posts: 1,279	If even most of that were true something tells me they wouldn't be asking Congress for billions of dollars. __________________ This was no time for half measures. He was a captain, godsdammit. An officer. Things like this didn't present a problem for an officer. Officers had a tried and tested way of solving problems like this. It was called a sergeant. -Terry Pratchett, Guards! Guards!

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12-08-2008, 03:50 PM	#4
CrazyKell Vrooom Join Date: Nov 2008 Moto: 06 ZX6R Posts: 4,427	Why don't we see any other makers (Honda, Nissan, Toyota, etc.) asking for bailouts?

12-08-2008, 05:22 PM	#7
BobTheBiker too much time on my hands Join Date: Jul 2008 Location: the northern district of god damn Moto: 01 ZX6R, looking for more now. Posts: 1,802	The simple of it is, the asians have an efficient, and actually successful management plan in effect that keeps employees making fair wages but happy at the same time, unlike the US companies that are paying retarded amounts for menial tasks. And the american made cars really arent as good as the japanese ones honestly. I'll keep my jap built Honda for as long as I live, or until it burns to the ground.

12-08-2008, 08:19 PM	#10
Mr Lefty TWFix Legend Join Date: Feb 2008 Location: Denver CO Moto: 01 BMW F650GS Dakar Posts: 15,677	intresting... so they're saying that the non reliable stuff from 80-90's is gone... now it's on par... so they're basing this off the last 9 years... now they're on par? granted that's a good start... but please 9 years of decent reliablity after how many of shit? and sorry but take the worst built toyota or honda and even the best built domestic and I'd still take the toyota or honda to put my money on for reliability. Domestic's idea of reliability is a warrenty covering everything that will go wrong. imports idea is building so shit won't go wrong.