American Auto Company Perception Problem

[Woodbutcher]

A friend sent this to me and I found it an interesting read. Seems to go along with several of the recent threads we have here. Maybe some of you will find it interesting as well. If so go out and get yourself a new Ford or GM tow vehicle!





American Perception Problems of the American Auto Industry
howtobuyamerican.com ^ | November 29, 2006 | Roger Simmermaker

Ford and General Motors have taken turns besting the Toyota Camry in quality surveys for the past two years, but if you talk to many Americans - especially the ones who would never consider supporting home-based auto companies - you’d never know it.



Last year, the Chevrolet Impala beat the Toyota Camry in initial quality according to J.D. Power & Associates, and Consumer Reports just announced that both the Ford Fusion and Mercury Milan scored higher than both the Toyota Camry and the Honda Accord this year.



After the announcement, Ford’s Director of Global Quality Debbe Yeager commented "It’s a perception gap," referring to the struggle American companies have had overcoming the perceived and seemingly untarnishable reputation of their foreign rivals.



Even as GM and Ford have accumulated award after award on vehicle quality, you’d almost never know about such quality gains made by American companies - or quality declines of foreign companies - by listening to the media. Did you hear about it when the National Highway Traffic Safety Administration announced that Toyota recalled more vehicles than it sold in the U.S. last year? Probably not. Did you hear about Toyota making an "elaborate apology" for their "worrisome series of recalls" that has "tarnished its reputation for quality?" Probably not. Did you hear about the Toyota senior manager quote that stated "We used to do quiet recalls called ‘service campaigns’ to deal with defects but we’re not going to hide anything anymore?" Such a statement suggests Toyota’s past recall numbers were probably much higher than we were led to believe, and they profited handsomely by having a perception of higher quality than they deserved. In Japan, prosecutors are looking into possible negligence on the part of Toyota for shirking recalls for the last eight years. How ironic. You probably didn’t hear about that one either because the American media doesn’t like to bash foreign auto companies - only American ones.



Then there’s the mythical perception that foreign automakers produce the most fuel efficient cars and that Detroit only makes gas-guzzlers when the truth is that all automakers - including Toyota, Honda and Hyundai-Kia alike - have allowed fuel economy to slide in the past 20 years since they all now sell bigger trucks and more SUVs. One of Toyota’s senior executives was even quoted in the Wall St. Journal September 28 saying that both the Toyota Sequoia and Tundra "are big gas-guzzling vehicles" and expressed "concern about the longer-term prospects." These longer-term prospects about their admitted gas-guzzlers are questioned because they know that Ford’s F-150 and Chevy’s Silverado have led the pack in sales year after year.



Yes, gasoline has been getting more expensive - at least until recently - but the fact that Americans continue to buy it in greater quantities qualifies us as hypocrites for suggesting GM and Ford stop building so many big trucks and SUVs. After all, GM and Ford are only responding to demand as any company would and should if they want to remain profitable in a cut-throat competitive market. According to a Business Week survey, we Americans bought 10% more gasoline in the first six months of 2006 compared to the first six months of 2000 even though gas prices rose 75% in that period. Maybe here I could also mention that the Chevy Tahoe beat the gas-guzzling Toyota Sequoia in quality surveys and gets better gas mileage to boot.



But what has happened since gas prices have been on the decline in recent months? The Wall Street Journal reported a "slight" increase in truck sales by American companies, as Ford Expedition sales were up 41% and Lincoln Navigator sales were up 44%. The American media even tries to restrain its applause for home-based auto companies by referring to gains of over 40% as "slight!"



Perhaps the biggest perception problem is that American automobile companies GM and Ford (Chrysler is now German-owned) squander all their money on plants overseas and foreign automakers build their factories in the U.S. Foreign car lovers will surely point to Kia’s plans to build its first-ever U.S. plant in Georgia, but they probably won’t mention that they received $400 million in tax giveaways to do it, which translates into $160,000 per job. Among the many benefits for the foreign-owned company, your tax dollars are going to be used for road improvements surrounding the complex, complete with flower beds and other beautification features. Hey, as long as we’re going to allow states to bid for private jobs with our public tax dollars, we might as well make it look good, right?



And the foreign car lovers will probably also not tell you (or maybe they just don’t know or don’t want you to know) that GM and Ford pour more money into existing American facilities than foreign automakers spend on new plants, usually with little or no tax breaks. GM has already spent over $500 million upgrading two transmission plants this year, and has spent nearly a billion dollars over the last decade, for example, for facility upgrades in Texas. And what do GM and Ford get for making their existing plants more efficient? It isn’t tax breaks. Instead, they get accusations of not being "competitive" enough! Maybe here I should also mention that the average domestic parts content for Kia is 3%, while the average domestic parts content of Ford and GM is 78% and 74% respectively. This means that buying a U.S.-assembled (or even foreign-assembled, for that matter) GM or Ford supports more American jobs than a U.S.-assembled car or truck with a foreign nameplate.



Fortunately for our benefit, the U.S. remains the overall global leader in research and development, and a big reason for that is that American automakers - according to the Level Field Institute - invest $16 billion in R&D (Research & Development) annually, which outpaces any other industry one could name. Admittedly, the Level Field Institute counts German-owned DaimlerChrysler as an American automaker, so Ford and GM’s combined R&D contribution to America is closer to around $12 billion. But who’s counting, right? Certainly not the American auto-bashing media.



Japanese companies do employ 3,600 American workers in R&D, but that still leaves the foreign competition behind in the dust staring at American rear bumpers. 3,600 sounds like a big number until you realize that 65,000 Americans work in R&D facilities in the state of Michigan alone. In fact, two of the top four R&D spending companies in America as reported by the Wall Street Journal are - you guessed it - Ford and General Motors. The other two are also American companies: Pfizer and Microsoft.



Ford has recently made headlines as the American automaker with the most challenges to its future, but these challenges certainly are not because they "aren’t making cars people want to buy." Toyota did outsell Ford in July, but since then, Ford has reclaimed the No. 2 spot and has held it ever since. GM has the highest market share, increasing over 2 percentage points from a year ago. So apparently they can’t be accused of not making cars people want to buy either. Ford sales are also up in Europe, and Ford doubled their sales in China, where GM has the highest market share of any automaker.



General Motors also reported a 3.9% rise in August vehicle sales despite high gas prices and a supposedly slowing economy. And even though Toyota reported record sales that month, they couldn’t match the non-record setting sales volume of Ford. GM’s sales rose 17% in October from the same month in 2005 and Ford sales rose 8% in the same period. Ford also sits on $23 billion in cash, so they have plenty of money to focus on and fix any problems.



And for all the talk about the lack of fuel efficiency of American automakers, it seems three-fourths of all automakers failed to meet Europe’s improved fuel-efficiency standards intended to cut carbon-dioxide emissions. Japanese and German automakers topped the list of the study’s worst performers, but according to an environmental group’s study, GM’s Opel division and Ford both "come out well."



In closing, I’ll leave some encouraging numbers for those of us who actually like to root for and support the home team. The J.D. Power 2006 Vehicle Dependability Survey reports that Mercury, Buick and Cadillac (in that order) grabbed the number 2, 3 and 4 spots to beat Toyota, Honda, Nissan, BMW and everyone else (except Lexus) in having the least number of problems per 100 vehicles.



Perhaps someday the American media will give GM and Ford the credit they deserve. And once they do, perception among the majority of the American public will rightfully change. GM and Ford aren’t only doing what they should to make gains in the American market to deserve American consumer loyalty; they’re also doing what they should to make gains in the markets of China, Europe and across most of the rest of the globe.



Roger Simmermaker is the author of "How Americans Can Buy American: The Power of Consumer Patriotism." He also writes "Buy American Mention of the Week" articles for his website www.howtobuyamerican.com and is a member of the Machinists Union and National Writers Union. Roger has been a frequent guest on the Fox News Channel, CNN and MSNBC and has been quoted in the USA Today, Wall Street Journal and US News & World Report among many other publications.

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Did you hear about it when the National Highway Traffic Safety Administration announced that Toyota recalled more vehicles than it sold in the U.S. last year? Probably not. Did you hear about Toyota making an "elaborate apology" for their "worrisome series of recalls" that has "tarnished its reputation for quality?" Probably not. Did you hear about the Toyota senior manager quote that stated "We used to do quiet recalls called ‘service campaigns’ to deal with defects but we’re not going to hide anything anymore?" Such a statement suggests Toyota’s past recall numbers were probably much higher than we were led to believe, and they profited handsomely by having a perception of higher quality than they deserved. In Japan, prosecutors are looking into possible negligence on the part of Toyota for shirking recalls for the last eight years. How ironic. You probably didn’t hear about that one either because the American media doesn’t like to bash foreign auto companies - only American ones.

[SteveH]

Interesting, Woodbutcher. It also does not surprize me. It's very obvious to me the younger American generation is biased against the American automobile manufacturers and display an unwavering , and I believe unrealistic loyalty to the Japanese brands.

I have recently been comparing all of the intermediate sized pickups on the internet, and as stated in the article, the American trucks make just as good of gas mileage as the imports.

It will also be interesting to see how many comments this thread gets.

[anonymous2]

JD Power and others like it are crap. They and the manufacturers all send their surveys in the first 2 months of ownership. Few cars have problems in that time. Then they base their opinions of quality on that period. I get them every time I get a new car. I send it back with a note stating the same,and that they are to send me one after 3 years ,never get one after 3 years,wonder why. It's a hype for dealers if their cars are trouble free in a short time,leading you to believe that is the life of the car. Google reliability of cars,and lots of websites pop up with long term results on quaility & relibility. Popular Mechanics does long term test cars,with some surprising results in the first year,and not all as good,as JD reports. Owners make the best word of mouth ,and if they hate it,they influence many others. I haven't bought an American car in 22 years. It's my hard earned money,and I buy reliability,and quality. And if you all think you are buying an American car, a fair precentage of the internal parts are foriegn made: Ford/Mazda, GM/Suzuki/Toyota/Saab, Chrysler/DaimlarBenz/Mitsubshi . Rail on me all you want,but when I hear a GM/Ford/Chrysler owner come to me and tell me after 10 years it the best dam car they ever owned them maybe I will look at American cars again.

pateardropper

[Sam I am]

I have always done well with American cars. I have owned many, including some with poor reputations (Chevy Vega, Plymouth Volare in the 1970's) and have had very few problems with any of them, even with more than 100k miles on their odometers. The only semi-major repairs I have had in the last five years was a new clutch and starter in my Ford Ranger pickup at 113k and 117k miles respectively.
I think that most foreign cars are a bit overrated and overpriced. I think that too many Americans have been duped by the bashing techniques mentioned above, and they need to take a serious look at buying American vehicles.

Sam

[Woodbutcher]

Well you had me there for a little while. But then you said you haven't owned an American car for 22 years and you lost me. If you have not owned one, you really can't comment on how reliable they are. Like the article says, your perception is that foreign car companies make a better product with out owning anything American. I know that most American cars have partsmade elsewear. I also know they some are assembled elsewear. But I know when I write out my check to buy one it goes into an American bank. I drive a 1998 Ford e-350 van. Bought it in 98 with 16K on it. Now it has 179K and still going strong. Never had any repairs done to it except for tires,brakes ect. Couldn't ask for a more reliable vehicle. It seems funny that in some of the other threads we have people complaining about a 99.00 TV/DVD. It's made in China and being sold by Walmart. Might be nice if that same concern about buying Chinese stuff was redirected to buying American cars/goods as well. A lot more people in the USA would benifit from it.

[Podunkfla]

JD Power and others like it are crap. They and the manufacturers all send their surveys in the first 2 months of ownership. Few cars have problems in that time. Then they base their opinions of quality on that period. I get them every time I get a new car. I send it back with a note stating the same,and that they are to send me one after 3 years ,never get one after 3 years,wonder why. It's a hype for dealers if their cars are trouble free in a short time,leading you to believe that is the life of the car. Google reliability of cars,and lots of websites pop up with long term results on quaility & relibility. Popular Mechanics does long term test cars,with some surprising results in the first year,and not all as good,as JD reports. Owners make the best word of mouth ,and if they hate it,they influence many others. I haven't bought an American car in 22 years. It's my hard earned money,and I buy reliability,and quality. And if you all think you are buying an American car, a fair precentage of the internal parts are foriegn made: Ford/Mazda, GM/Suzuki/Toyota/Saab, Chrysler/DaimlarBenz/Mitsubshi . Rail on me all you want,but when I hear a GM/Ford/Chrysler owner come to me and tell me after 10 years it the best dam car they ever owned them maybe I will look at American cars again.

I'm with you pateardropper... JD Power is mostly an industry advertising gimick. I'm a die-hard 'ol Chevy & Pontiac fan... But I drive a Nissan PU and have had a couple Honda and Toyota cars. They will all outlast any American car hands down. My girlfriends Toyota Camery she gave to her son for college now has over 450,000 miles on it and still runs good and doesn't smoke! The only things ever replaced have been the windshield wiper delay switch, an alternator, the timing belt and last year the radiator... That's it! I have yet to see any American car that can come close to that. Let's face it, Honda, Toyota & Nissan just make better cars than we do... What's weird is most of them are built right here with American labor too? I think peoples perceptions are based on the real world experiences most people have had; and it will be a long haul for Detroit to change their image. Sadly, it's real likely, the big three will all be owned by foreigners before too long anyway.

PS: We don't want to even get into Honda motorcycles... My VTX is twice the bike at half the price of a Harley! ...and they DO hold their value.

[Woodbutcher]

My Jeep won the war...your Honda mows my grass.


Not trying to start trouble! Just think about it.

[SkipperSue]

I'll have to say that I've always had American cars up until last year. I got rid of my 1991 Ford Ranger for a 2004 one. The mileage was just terrible! I looked long and hard and found a 2003 Volkswagon Jetta TDI diesel. I'll have to say this is the best automobile that I have ever owned. I'm getting right at 50 mpg with everyday driving. I look at the forums at TDIclub.com and they have an 800 mile club, not many have made it but I might with this tank full. I've been driving very conservative but I think I'm gonna make it this time. The fit and finish is just as good as any BMW or Mercedes, handling is on par as well. I have a few stickers on my rear bumper, one says "Got 50 MPH?"
Another one says "Farfrumpumpen".

[Ma3tt]

I went to the L.A. Auto show this past weekend and yeah the American trucks were spot on better than the others. but the American companies are missing the big market.... the smaller stuff. the largest import is our midsize. Our stuff is huge and stupid. VW etc all had reasonable size SUV and the US is still pumpin escalades etc Yeah they had a Hybrid Yukon and the salesbabe said it gets 25% better mileage. I used my incredible math skill and figured well 25% of 10 is 2.5 so it gets 13! This did not make blondie happy.

This is the vw nice functional right size suv


this is Chryslers pride the hood on this beast was 4feet of ugly

not to mention the challenger etc.. dont get me started on gm and ford

Not all the imports are doing well Suzuki had this thing that had a hatch on the side with pull out drawers in back and if you look close a molded hatchet and saw on the rear driver side thus arming any local or cop that came up on you....


However I do believe the Bugatti would make an excellent tow vehicle. if you want to go over 100 mph you must unbolt part of the undersheet metal thats why I didn't buy it

[halfdome, Danny]

My Jeep won the war...your Honda mows my grass.


Not trying to start trouble! Just think about it.

I love it. My parents were living & stationed at Pearl Harbor, Dec 07, 1941 Danny

[Ma3tt]

Jeep won the war and they still are great vehicles for their market but maybe Ford and Chevy should diversify a little, maybe make a few lawnmowers, make some smaller cars, make a great hybrid like the prius, get on top of the market rather than following it. The imports are going to keep kicking our butts until we lead instead of follow.

[Podunkfla]

My Jeep won the war...your Honda mows my grass.

Not trying to start trouble! Just think about it.

I love it. My parents were living & stationed at Pearl Harbor, Dec 07, 1941 Danny

Well... The truth is, I didn't start buying Japaneese cars until they started building them here with our labor. I'd still much prefer buying American... But I'm a realist... There ain't much American stuff left.

Even my Delta planer and table saw is Chinese.

I hate it... but what can we peons do?

[dwgriff1]

My last three cars/pickups have been American and have been solid with minimal problems.

My '03 Dodge pickup is 89% American (Canada, US, Mexico) the label said. Wonder where the other 11% came from?

dave

[elmo]

Podunkfla

I'm with you pateardropper... JD Power is mostly an industry advertising gimick. I'm a die-hard 'ol Chevy & Pontiac fan... But I drive a Nissan PU and have had a couple Honda and Toyota cars. They will all outlast any American car hands down. My girlfriends Toyota Camery she gave to her son for college now has over 450,000 miles on it and still runs good and doesn't smoke! The only things ever replaced have been the windshield wiper delay switch, an alternator, the timing belt and last year the radiator... That's it! I have yet to see any American car that can come close to that. Let's face it, Honda, Toyota & Nissan just make better cars than we do... What's weird is most of them are built right here with American labor too? I think peoples perceptions are based on the real world experiences most people have had; and it will be a long haul for Detroit to change their image. Sadly, it's real likely, the big three will all be owned by foreigners before too long anyway.

PS: We don't want to even get into Honda motorcycles... My VTX is twice the bike at half the price of a Harley! ...and they DO hold their value.

Your right you don't want to bring up the Harley thing. Explain how you have twice the bike (twice the bike would be a car because it would have 4 wheels) and in 5 years you are going to tell me you VTX will be worth what you paid. I have never lost a dime on a Harley and I currently have 2, but I also have 2 Honda and one Kawasaki all 2003 and newer, but I know I wouldn't even come close to the original buying price.

By the way I am not one of those people that worship Harleys...if I had to have only one bike it would be a Harley, but I respect anyone on 2 wheels and love all makes. I try to keep a open mind. Will Harley always keep the resale? I personally think there will be a down fall soon, but until then I like the investment.

By the way I have alot of miles and a Harley hasn't left me stranded...the Honda has, but I still won't bad mouth it.

Happy Holidays!

Elmer

[Podunkfla]

Elmo... I am not really knocking Harleys... I rode them for years and I still like them. My best riding buddy just got a 2007 Road King 96 incher... Very nice bike indeed. Pretty much 20 grand too. We were both a bit shocked when my 80 inch VTX would out run his 96 inch bike? When I say twice the bike... It's just a comment about overall reliability. I just traded off a 1983 750 Shadow that NOTHING has ever failed on in 24 years? That's almost spooky how good it was built. By the way, I just traided it for a nicely restored 84 Mazda RX7 plus an extra rebuilt motor, tranny & a garage full of other parts... enough to build another car. So... maybe it's not really "twice the bike", but it's darn good.

For many years I was a bonafied Harley snob... Wouldn't ride anything else and did my share of putting down "Jap Junk". These days Hondas are at least as American as Harley... There made right up there in Marysville OH... by Americans. Harley, like most US manufacturers, is buying a lot of parts offshore. What they do excell at is marketing and maitaining the Harley mistique... Nobody does it better than 'ol Willie!