Germans & Big 3 go the same route

[osv_alero]

This is part of an email I sent a friend that I thought would create great discussion here.

What have the Germans done different than the American makes in the past 25 years?
1. Both pushed for SUVs (so did the Japanese due to high profits)
2. Most German vehicles get worst gas mileage than the equivalent American or Asian vehicle
3. German vehicles have moved to the bottom of the quality ranking when they used to be at the top (though they have improved in the past 2 years, so has everyone else)
4. Can you name a hybrid German vehicle like the Prius?
5. Though they pushed for diesels, they have not given the US the # of vehicles that have been asked for.

The big differences;
1. As the German companies have gotten in to trouble, their government has financially helped them out. The Japanese government has assisted toyota/honda/nissan all along. GM, Ford and Chrysler get kicked to the curb.
2. American's love to bash on stuff they make and have a love affair with everything German. It doesn't matter if the American product is better, people will put it down.
3. German and Asian automakers are not saddled with health care and retirement costs. This is the number one reason the Big 3 have no money left. Maybe socialized medicine would be cheaper than corporate bailouts.
4. 1 positive to the public difference; German CEOs don't make the amount that US CEOs do which make the big 3 CEOs look like Jack__s.

Do the CEOs at the Big 3 have issues - YES
Should they be replaced - If that is what it takes
Did they do anything different than the rest of the industry - Not really

[baloo]

Your first mistake is that you're only looking at the US market. The German manufacturers do much more business on the other side of the pond. They've also been selling 40+ mpg cars for over 15 years outside the US. Yes, they sell SUV's too, but they don't depend on them because their cars are profitable and because the product portfolio does not revolve around SUV's.

Government assistance has been rather limited (in fact I don't recall any big subsidies paid to the German manufacturers) and they pay for the healthcare of their workers, too. One difference is that they're not using a ponzi scheme like GM where 150k workers have to support 400k retirees, but that was GM's own decision.

The main difference between domestics and their business model is that the German manufacturers have carved out a viable niche for themselves: premium vehicles which command higher prices. They're not trying to outcamry Toyota like GM does and manufacture low-end products in a high wage country.

[Bravada]

As the German companies have gotten in to trouble, their government has financially helped them out.

Any specific example?

What have the Germans done different than the American makes in the past 25 years?
1. Both pushed for SUVs (so did the Japanese due to high profits)

The German makes, save for Opel and the Mercedes (or actually Steyr-Daimler-Puch) Gelandewagen, have not been actively marketing SUVs until a decade or so ago.

5. Though they pushed for diesels, they have not given the US the # of vehicles that have been asked for.

Care to elaborate?

[Ssom]

The Germans don't need Hybrids. A Passat Bluemotion is faster, more frugal and less polluting than a Prius. Ditto the Audi A3 1.9 TDie, ditto the VW Polo, Jetta and Golf Bluemotion, ditto the BMW 118d, Ditto the MINI Cooper D, ditt..... Need I go on?

The only German gas guzzlers are Porsche and V8 Petrol BMW's/Merc's/Audi's and even the R8 gets impressive milage for a supercar of its' performance. These vehicles only really sell in any real numbers in the US and the Middle East.

BMW has never really dipped in reliability surveys, nor has Porsche that much. It's Audi, VW and Mercedes Benz that did. The difference is that they remedied these problems within 5 years, rather than let it go on for 30, unlike the big 3.

[Htay7500]

Originally Posted by Ssom

The Germans don't need Hybrids. A Passat Bluemotion is faster, more frugal and less polluting than a Prius. Ditto the Audi A3 1.9 TDie, ditto the VW Polo, Jetta and Golf Bluemotion, ditto the BMW 118d, Ditto the MINI Cooper D, ditt..... Need I go on?
The only German gas guzzlers are Porsche and V8 Petrol BMW's/Merc's/Audi's and even the R8 gets impressive milage for a supercar of its' performance. These vehicles only really sell in any real numbers in the US and the Middle East.

BMW has never really dipped in reliability surveys, nor has Porsche that much. It's Audi, VW and Mercedes Benz that did. The difference is that they remedied these problems within 5 years, rather than let it go on for 30, unlike the big 3.

We deserve those cars, not just the jetta.

[paul8488]

It isn't just the Germans... I'm not sure why people can't see the big difference between the American manufacturers and the rest.

GM, Ford and Chrysler built SUVs and trucks.
The imports built SUVs and trucks.

We all know that. Public perception might not accept that, but informed people know that it's true. The difference?

GM, Ford and Chrysler kept on building SUVs and trucks.
The imports kept on building trucks and SUVs... AND invested in cars.

THAT is the difference. GM, Ford and Chrysler let Toyota and Honda eat their compact and midsize car breakfast. The imports did a much better job of balancing SUVs and trucks against their car lineups, and are much healthier today for having done it.

GM has never had a competitive minivan (aside from the original truckish Safari / Astro). With the Malibu GM has their first competitive midsize sedan since... well... I don't know when. The Cavalier sold like crazy but wasn't truly competitive and apparently lost GM money. All the while GM had some of the best SUVs and trucks. And it was smart to exploit those markets and make big bucks. But no one forced them to ignore their cars. It was their own short-sightedness that left them at the beginning of the 90's with cars like the Malibu and Grand Am and L-Series that couldn't compete with the imports.

THAT is where the domestics failed where the imports succeeded.

[Bravada]

GM has never had a competitive minivan (aside from the original truckish Safari / Astro).

I beg to differ - the dustbusters were really good!

But no one forced them to ignore their cars.

The sad thing is that GM actually had pretty good and competitive cars all along in their European offerings, just failed to bring them to the US customers. Once Ford got their stuff together for once and co-developed the Focus in nearly the same form for all worldwide markets, it became a runaway hit everywhere. It seems the Fiesta will follow.

[mgescuro]

Originally Posted by osv_alero

This is part of an email I sent a friend that I thought would create great discussion here.

What have the Germans done different than the American makes in the past 25 years?
1. Both pushed for SUVs (so did the Japanese due to high profits)
2. Most German vehicles get worst gas mileage than the equivalent American or Asian vehicle
3. German vehicles have moved to the bottom of the quality ranking when they used to be at the top (though they have improved in the past 2 years, so has everyone else)
4. Can you name a hybrid German vehicle like the Prius?
5. Though they pushed for diesels, they have not given the US the # of vehicles that have been asked for.

You're only taking into account local markets and not paying attention to the overall global market. Germany isn't even the largest market for their own cars. The US is. Who buys the most S-classes and 7-series? The US. 2nd most?? The Asian markets.
Also, Germans are socialized. Americans are not. Does it give Americans a disadvantage?
I don't think so. Because no matter what, the one fact about the Americans always circles back -- they made crappy cars for 3 decades. The Germans did not.

Originally Posted by osv_alero

The big differences;
1. As the German companies have gotten in to trouble, their government has financially helped them out. The Japanese government has assisted toyota/honda/nissan all along. GM, Ford and Chrysler get kicked to the curb.

What you're asking for is a semi-nationalized/socialized American auto industry?? What happened to all those anti-socialize arguments here?

Originally Posted by osv_alero

2. American's love to bash on stuff they make and have a love affair with everything German. It doesn't matter if the American product is better, people will put it down.

3 decades of crappy cars has an effect on an entire generation of Americans.
Americans aren't affected by the same degree of nationalism that the Germans are. Americans have a full open market, free to experience and try out the newest and latest products. The Germans do not.
When an American product is judged superior than an import, then it will do quite well because we Americans determine it ourselves that it is superior: iPods, Kitchenaid mixers, black and decker tools, etc. We're not told by some overarching desire to buy domestic, even if it is inferior.

Originally Posted by osv_alero

3. German and Asian automakers are not saddled with health care and retirement costs. This is the number one reason the Big 3 have no money left. Maybe socialized medicine would be cheaper than corporate bailouts.

Socialize medicine would increase your taxes. It would also, depending on how it was implemented, decrease the efficacy of the medical system.

Originally Posted by osv_alero

4. 1 positive to the public difference; German CEOs don't make the amount that US CEOs do which make the big 3 CEOs look like Jack__s.

http://people.forbes.com/profile/dieter-zetsche/25039
Dieter Zetsche made ~$10M. Though $1.9M base + bonus.

http://finance.yahoo.com/q/pr?s=GM
Wagoner made $3.36M base. No bonus.

[Bravada]

Wendelin Wiedeking (Porsche CEO) made EUR 70M last year, if it's of any relevance...

[supermoto]

If Toyota did such a good job of investing in cars, then why was the last update of the Camry so mediocre? A new V6 and 6 speed auto when economy was the thing to look at. Most of their sales are 4 cyl versions and they had no drivetrain changes. The 09 Corolla comes with the same drivetrain on the same platform, so where's the change there? Seems they spent way more on the Tundra than both Camry and Corolla.

The Japanese made crappy cars in the 70's and 80's, but no one seemed to notice. All they got was praise while making rust buckets and having substandard safety. A mid 80's Cressida got worse mileage than a Taurus and the same as a Caprice V6, yet they earned a reputation for being fuel efficient and the Caprice was a guzzler. I've heard of plenty of people that complain about reliability of VWs and their scores in a number of surveys are behind domestic brands, yet you think they make good cars and domestics don't.

The only difference between the Germans, Japanese and domestics is perception.

[baloo]

Originally Posted by Bravada

Wendelin Wiedeking (Porsche CEO) made EUR 70M last year, if it's of any relevance...

I think Wiedeking is considered a hedge fund manager these days.