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Detroit's big three in the slow lane
Jun 18th 2004
From The Economist Global Agenda
Economist.com

Despite some promising-sounding news this week from two of America’s big three carmakers, they are still struggling to halt their steady loss of customers to foreign—especially Japanese—rivals. GM has announced a big shake-up of its European operations, to try to stem their losses

AT FIRST glance it appears to be heartening news for Motown: this week, General Motors reaffirmed its earnings targets for this year, while Ford, in the midst of a turnaround under the founder’s heir, William Clay Ford, said it expects to beat its targets.

Scratch beneath the surface, however, and the picture is murkier. In both cases, it is the firms’ financial-services divisions (which, among other things, lend customers the money to buy their cars), that are bailing out the core carmaking business. The third of Detroit’s big three—Chrysler, part of DaimlerChrysler—is being weighed down by its shareholding in Mitsubishi, the only Japanese volume carmaker that is losing money. Mitsubishi, number four among Japanese car firms, has been mired in a cover-up scandal over faulty parts. Meanwhile, Japan’s number one firm, Toyota, continues to gain on all of the Big Three, even in their home market.

The continued rise of the Japanese carmakers, especially Toyota, has been remarkable (see chart). Foreign-branded cars now account for half of all passenger cars sold in America. Detroit ceded this territory to the incomers, choosing to concentrate on more profitable niches such as sport-utility vehicles (SUVs, also known as four-by-fours), light trucks and minivans. But foreign makers are now muscling into these markets too. Toyota now offers more SUV models than Ford.

The Japanese have much lower pension and health-care costs than the Detroit big three. To counter Congress’s protectionist tendencies, they have sensibly established American manufacturing plants. And they have put them in the South, far from the citadel of union power that is Detroit.

Full Article Here

 

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I don't understand the appeal of Japanese cars. My 1997 domestic vehicle has had zero defects since it was made, has gone 74,000 miles without a hiccup, has only seen a service bay to get a 3,000 mile oil change as needed, and delivers over 35 miles to the gallon day in and day out for 7 straight years. The paint still shines like new (except for the inconsiderately induced dents from people who think my car is their door stop). The air conditioning still blows cold, the seat fabric is still the same color it was when new (not faded like Hondas and Toyotas) and has only needed front tires at 60,000 miles (back ones still have about 10,000 more miles left on them).

I'd never buy a foreign car because I know that Detroit builds great cars and in many ways superior cars to Japanese ones. I may be no fan of anything GM, but I'd buy one of them (even an older used one) before I set foot in a Toyota or Nissan or Honda dealership.

I don't buy American to be patriotic. I buy American because the alternative isn't superior.
 

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I think there are a lot of people who would have, had GM, Ford and Chrysler offered product that matched or surpassed the competition.

Problem is, Chevy Luminas and Blazers were far less attractive than what was selling on Import lots.

Now you have a bunch of people who are brand loyal to import brands, and getting them back will require SUPERIOR product, not just average "just good enough to compete" product like the CrossoverSportVans or, to be brutally honest, the Lacrosse (base).

You need to convince a potential Highlander buyer that the Equinox or Trailblazer is a better choice. With the Equinox's dated engine and the Trailblazers old-school interior, that's a hard sale to make.

GM needs more vehicles that score on every level - interior, engine, transmission, styling --- like the Envoy, CTS, and upcoming Cobalt.

Then, and only then, will Toyohondaphiles come back to American-designed product.
 

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Toyota always had one advantage. It had one then two divisions. Now three if you add Scion. GM had 6 car and two truck divisions and then add in the overseas companies. That's a lot of seperate division management, employees, factory space etc. Toyota could concentrate it's money better than GM. Mabey GM just has to many car/truck lines to compete favorably with Toyota/Honda.
 

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Maybe my recent conversations with GM customer service and their executive offices will shed some light on why GM is losing ground to the non-US manufacturers.

I purchased a new Grand Prix in late May 2004 which was manufactured in August of 2003. I then learned that I had the old back seats in the vehicle and that a nine month old recall on the rear brakes was not performed prior to my purchasing the vehicle.

Regarding the rear seats, GM indicated that the back seats were not changed in 2004 grand prix's and that even if they were they would do nothing about it. (even though had I known of the change I could have purchased a vehicle which had been manufactured after the change was made)

Regarding the recall, GM then indicated that it is unfortunate that the recall was not performed prior to my pruchase of the vehicle, and that I had to miss half a day of work bringing the car in for the recall, but that it was not their responsibility to ensure recalls were performed prior to cars being purchased.

I informed GM that this is the third new Pontiac I have purchased and will be the last GM vehicle I will purchase if this is how they deal with loyal customers. They indicated that a note indicating my disatisfaction will be placed in my file.

Service like this is why people buy foreign cars.
 

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<_< If the big three were to build a car the way I want it, I wouldn't have too drive a truck. But since all the characteristics I want are built into trucks well thats what I'm stuck with. Personlly their are alot of issues that need to be tended to........for instance packages for cars and trucks. Do you think I can buy a brand new 05 Mustang with a kick a$$ V8, 5 or 6 speed manual trans, cruise, a/c and a killer sound system and with no other options............NO !! If you want this, you need this option and so on.....I hate spec'n out new cars because you can't get what you really want but what the OEM sells.........thats bull. Has anyone really noticed when the big three phased out rear wheel drive how trucks all of a sudden started booming. GM was selling their Grand Nationals, Monte Carlo's and 442 at an alarming rate that they had to build them into the year 1988 and 1987 was the last year for rear drive, I say go with what SELLS.........and those cars sold the GM name.
 

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Originally posted by laserwizard@Jun 18 2004, 03:59 PM
I don't understand the appeal of Japanese cars.
no, sounds like you don't. but the guy that had the same experience as you with a toyota and not a ford feels just as strongly about his japanese vehicle. i've known aerostars and passats and maximas to have a/c problems. i've seen faded fabric on tempos and grand ams and corollas and mercedes. it's fantastic that you've had such favourable experience with north american vehicles (as have i), but one good or bad experience is all it takes to influence someone.

for you the american alternative is superior. that's not a forgone conclusion for everyone though. people decide for themselves, and until the domestics reach 0 defects per 100 cars, every model gets 75 mpg, and they offer the most power for the least money, there will be people who find the japanese (or korean or german or... i dunno, russian?!?) vehicle the better alternative.
 

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Originally posted by paul8488@Jun 18 2004, 04:55 PM
for you the american alternative is superior. that's not a forgone conclusion for everyone though. people decide for themselves, and until the domestics reach 0 defects per 100 cars, every model gets 75 mpg, and they offer the most power for the least money, there will be people who find the japanese (or korean or german or... i dunno, russian?!?) vehicle the better alternative.
I don't think it will ever be Russian...
 

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Originally posted by JimGuinee@Jun 18 2004, 11:26 AM
Maybe my recent conversations with GM customer service and their executive offices will shed some light on why GM is losing ground to the non-US manufacturers.

I purchased a new Grand Prix in late May 2004 which was manufactured in August of 2003. I then learned that I had the old back seats in the vehicle and that a nine month old recall on the rear brakes was not performed prior to my purchasing the vehicle.

Regarding the rear seats, GM indicated that the back seats were not changed in 2004 grand prix's and that even if they were they would do nothing about it. (even though had I known of the change I could have purchased a vehicle which had been manufactured after the change was made)

Regarding the recall, GM then indicated that it is unfortunate that the recall was not performed prior to my pruchase of the vehicle, and that I had to miss half a day of work bringing the car in for the recall, but that it was not their responsibility to ensure recalls were performed prior to cars being purchased.

I informed GM that this is the third new Pontiac I have purchased and will be the last GM vehicle I will purchase if this is how they deal with loyal customers. They indicated that a note indicating my disatisfaction will be placed in my file.

Service like this is why people buy foreign cars.
I find it somewhat hysterical that you believe that by purchasing an import vehicle you will some how receive better customer service. Recently a friend of mine purchased a Honda Pilot, I'm sure you're aware of this Odyssey twin, let me tell you about the "customer service" she experienced. 1st off because she was a female they reemed her in every possible way, charging her $2500 for a DVD player, $650 for pinstripping and scotchgaurd, and giving her %70 of what her actual trade in was worth. Being the concerned friend that I am I did get the DVD player down to a more reasonable price after the fact, but that's all I could do they were complete *******s regarding everything else and she also had to pay full MSRP.

A couple of months later she had issues with the brake rotors warping, and the interior literally coming apart. She took the vehicle up to Lute Riley, the Honda dealer she had purchased it from, and told them her vehicle with 4,000 miles was having these issues and would like to get them fixed. Assuming it would be covered under warranty she left the vehicle over night and had her husband pick it up the next day. When he went to pick it up they had slapped her with an $800 bill! The service guy said that the vehicle needing new rotors at 4,000 miles was normal wear and tear and the interior parts were not covered by the warranty. Of course her husband was Irate, and in hearing this story I was as welll, needless to say they didn't want to pay that bill. So they called Honda directly and of course were told that they needed to go ahead and pay the bill and that if Honda deemed their case should be covered under warranty they'll reimburse them. Anyway still later they got a letter from Honda basicallly stating sorry, but screw you, they will never buy another Honda......

The moral of the story is this, there are only 4 car brands that you can purchase and expect excellent customer service. Saturn, Lexus, Cadillac, and Infinti if you don't want one of those good luck to you, but don't be complaining about poor customer service if you bought a Pontiac, just get used to it.
 

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Originally posted by corey76@Jun 18 2004, 05:15 PM
The moral of the story is this, there are only 4 car brands that you can purchase and expect excellent customer service. Saturn, Lexus, Cadillac, and Infinti if you don't want one of those good luck to you, but don't be complaining about poor customer service if you bought a Pontiac, just get used to it.
get used to it? ha! nice! that's the way to build a satisfied customer base! saturn, lexus, cadillac, and infiniti might be known for their customer service, but it's absurd to expect crappy service elsewhere. we're not talking about toasters here... we're talking about vehicles costing 10's of thousands of dollars. i expect to be satisfied by kia, and chev, and toyota, and porsche... and while you're clearly not the guy in charge at any service department, i don't think ANY service department looks at it the way you do. some do fail to satisfy people, but it's not because that's their mandate.

get used to it... that's rich! people don't get used to it... they go elsewhere. and your pontiac dealer attempts to strike a happy medium between profitabiliy and customer service just like your cadillac dealer does.
 

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Originally posted by JimGuinee@Jun 18 2004, 04:26 PM
Maybe my recent conversations with GM customer service and their executive offices will shed some light on why GM is losing ground to the non-US manufacturers...
Experiential data is useful for generating hypotheses, but it's by no means conclusive. I'm sure there are foreign car owners who have experienced equal amounts of frustration with the sales and service of their cars as you unfortunately have had with your Pontiac. And that fact bears out in sales satisfaction surveys.

In the end, it's sad that you felt like you had to settle for lesser service. It seems like it was a missed opportunity on Pontiac's part!
 

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Originally posted by apro4x4@Jun 18 2004, 11:48 AM
<_< If the big three were to build a car the way I want it, I wouldn't have too drive a truck. But since all the characteristics I want are built into trucks well thats what I'm stuck with. Personlly their are alot of issues that need to be tended to........for instance packages for cars and trucks. Do you think I can buy a brand new 05 Mustang with a kick a$$ V8, 5 or 6 speed manual trans, cruise, a/c and a killer sound system and with no other options............NO !! If you want this, you need this option and so on.....I hate spec'n out new cars because you can't get what you really want but what the OEM sells.........thats bull. Has anyone really noticed when the big three phased out rear wheel drive how trucks all of a sudden started booming. GM was selling their Grand Nationals, Monte Carlo's and 442 at an alarming rate that they had to build them into the year 1988 and 1987 was the last year for rear drive, I say go with what SELLS.........and those cars sold the GM name.
Yeah, I loved those G-body cars too cause you could option em up the way you wanted and weren't herded like sheep into buying a specific option package and such. New cars are like buying toasters and microwaves. You have your choice of this model or that model and thats it. Sometimes only one model. The big three haven't really made a car that I really "got to have" in many years. The last was the Impala SS which I have always admired. Most of there current product carry so many compromises that they just don't interest me anymore. I think that is why so many people flock to trucks and foreign vehicles these days. Trucks still have rear or all wheel drive, chrome bumpers, burbling V8's and a presence. Japanese vehicles have smoother more refined drivetrains, generally better reliability records and most publications rate them higher overall. Is it really that surprising that the big 3 are losing ground? And I can't believe how they neglected there car lines for so many years and are just now waking up and smelling the roses!
 

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The unfortunate thing about poor service from dealer is that the manufacturer has limited means to do anything about it. Dealer are private businesses. They, in fact, are the car makers direct customers.

When a dealer alienates a customer, the manufacturer often takes the blame. But, unless there is a clear, obvious pattern of barely-legal dealing, I'm not sure what tools a car company -- GM or Honda -- has to make it better. Especially without getting themselves legally involved.

I guess the car company could teminate the fanchise agreement, but that's pretty involved and would require significant cause to terminate the contract. They could hold back desired cars and trucks, but it's not a good policy to not deliver a product to your customer!

In the ideal world, there would be company dealerships or the ability to buy directly from the manufacturer. But, that violates a whole bunch of anti-trust laws, so it probably is never going to happen. Porche tried to do it about 20 years ago and got sues three ways from Sunday.

But it's too bad when a car company builds a decent product and has the customer relationship poisoned by poor dealer service.
 

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Originally posted by corey76+Jun 18 2004, 05:15 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (corey76 @ Jun 18 2004, 05:15 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-JimGuinee@Jun 18 2004, 11:26 AM
Maybe my recent conversations with GM customer service and their executive offices will shed some light on why GM is losing ground to the non-US manufacturers.

I purchased a new Grand Prix in late May 2004 which was manufactured in August of 2003.  I then learned that I had the old back seats in the vehicle and that a nine month old recall on the rear brakes was not performed prior to my purchasing the vehicle.

Regarding the rear seats, GM indicated that the back seats were not changed in 2004 grand prix's and that even if they were they would do nothing about it.  (even though had I known of the change I could have purchased a vehicle which had been manufactured after the change was made)

Regarding the recall, GM then indicated that it is unfortunate that the recall was not performed prior to my pruchase of the vehicle, and that I had to miss half a day of work bringing the car in for the recall, but that it was not their responsibility to ensure recalls were performed prior to cars being purchased.

I informed GM that this is the third new Pontiac I have purchased and will be the last GM vehicle I will purchase if this is how they deal with loyal customers.  They indicated that a note indicating my disatisfaction will be placed in my file.

Service like this is why people buy foreign cars.
I find it somewhat hysterical that you believe that by purchasing an import vehicle you will some how receive better customer service. Recently a friend of mine purchased a Honda Pilot, I'm sure you're aware of this Odyssey twin, let me tell you about the "customer service" she experienced. 1st off because she was a female they reemed her in every possible way, charging her $2500 for a DVD player, $650 for pinstripping and scotchgaurd, and giving her %70 of what her actual trade in was worth. Being the concerned friend that I am I did get the DVD player down to a more reasonable price after the fact, but that's all I could do they were complete *******s regarding everything else and she also had to pay full MSRP.

A couple of months later she had issues with the brake rotors warping, and the interior literally coming apart. She took the vehicle up to Lute Riley, the Honda dealer she had purchased it from, and told them her vehicle with 4,000 miles was having these issues and would like to get them fixed. Assuming it would be covered under warranty she left the vehicle over night and had her husband pick it up the next day. When he went to pick it up they had slapped her with an $800 bill! The service guy said that the vehicle needing new rotors at 4,000 miles was normal wear and tear and the interior parts were not covered by the warranty. Of course her husband was Irate, and in hearing this story I was as welll, needless to say they didn't want to pay that bill. So they called Honda directly and of course were told that they needed to go ahead and pay the bill and that if Honda deemed their case should be covered under warranty they'll reimburse them. Anyway still later they got a letter from Honda basicallly stating sorry, but screw you, they will never buy another Honda......

The moral of the story is this, there are only 4 car brands that you can purchase and expect excellent customer service. Saturn, Lexus, Cadillac, and Infinti if you don't want one of those good luck to you, but don't be complaining about poor customer service if you bought a Pontiac, just get used to it. [/b][/quote]
i warped the rotors on my camaro when it had about 15,000 miles. I took it to the dealer, and they resurfaced the rotors for free, and said it was standard policy to do so up to 20,000 miles.
 

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Discussion Starter · #16 ·
Originally posted by yoblues@Jun 18 2004, 11:25 AM
Toyota always had one advantage. It had one then two divisions. Now three if you add Scion.  GM had 6 car and two truck divisions and then add in the overseas companies. That's a lot of seperate division management, employees, factory space etc. Toyota could concentrate it's money better than GM. Mabey GM just has to many car/truck lines to compete favorably with Toyota/Honda.
There are some simply bad choices involved, too.

The interior of the Envoy and Ascender looks modern and sleek, while the Trailblazer looks like a morph of the Blazer's dated, bulbous, rounded interior.

Both were designed at about the same time.

The front end of the Aveo looks like an attempt to copy the Taurus - when the original Daewoo Kalos hatch had clean, modern lines and almost Bonneville like integrated headlights.

GM needs to fire whoever it is that has such awful, outdated taste in their detroit design center. But that's just my 2 cents.
 

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Here in Chicago, I got my Xtreme Blazer at Z Frank Chevrolet. They are really pretty terrible. They closed the garage on saturdays, but of course they'll sell on Saturday. Now I have to miss work to get anything done? The car started in with bizarre rattles and squeaks with only 300 miles on the clock. They did solve one, which sounded like popcorn cooking under the dash. But the driver's side A pillar makes some scary creaking noises under stress of braking or acceleration. The rear interior side panel must've been broken at the factory because it moves in and out in (and makes lots of noise) in a way that the rear passenger side interior panel doesn't. I pointed out that you could move the driver's side while the other side was well affixed - wouldn't that seem to be an obvious thing to fix and obvious cause of interior rattling? Oh no, they said, that's just 'normal' variation. Sure.

Still, whatever problems inherent to this design, which probably wasn't made for such a stiff suspension, are compounded by lousy dealer service. I had to beg them to get a loaner, which I drove for a week, but then they still hadn't really fixed anything.
 

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Discussion Starter · #18 ·
Originally posted by KingElvis@Jun 18 2004, 02:45 PM
Here in Chicago, I got my Xtreme Blazer at Z Frank Chevrolet. They are really pretty terrible. They closed the garage on saturdays, but of course they'll sell on Saturday. Now I have to miss work to get anything done? The car started in with bizarre  rattles and squeaks with only 300 miles on the clock. They did solve one, which sounded like popcorn cooking under the dash. But the driver's side A pillar makes some scary creaking noises under stress of braking or acceleration. The rear interior side panel must've been broken at the factory because it moves in and out in (and makes lots of noise) in a way that the rear passenger side interior panel doesn't. I pointed out that you could move the driver's side while the other side was well affixed - wouldn't that seem to be an obvious thing to fix and obvious cause of interior rattling? Oh no, they said, that's just 'normal' variation. Sure.

Still, whatever problems inherent to this design, which probably wasn't made for such a stiff suspension, are compounded by lousy dealer service. I had to beg them to get a loaner, which I drove for a week, but then they still hadn't really fixed anything.
That's a messed up story, man.

The Blazer is a really neat vehicle for the first 100 miles, then the creaks and squeaks and rattles start.

I HIGHLY recommend DynaMat, and liberal use of generic black insulation out of view but behind panel gaps. Even behind the dash, use some sound deadening stuff. Find an upholstery shop to do it for you if you are scared to take out all of your panels. Dynamat the whole darned thing, and it will be a lot nicer to live with. Get some nice shocks too, don't skimp, and you'll notice far less rattling and squeaking. Make sure the dynamat runs right up to the edge of where the door panels, etc., end to stop them from touching metal anywhere.

I wonder what GM did to the Blazer-based Bravadas. A buddy of mine had one and it was rattle + squeak free. Must use extra sound deadening material or something. I guess that partially explains the higher price.

Chevy needs to stop selling old stuff like the Blazer that gives them a bad rep.
 

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Originally posted by JimGuinee@Jun 18 2004, 11:26 AM
Maybe my recent conversations with GM customer service and their executive offices will shed some light on why GM is losing ground to the non-US manufacturers.

I purchased a new Grand Prix in late May 2004 which was manufactured in August of 2003. I then learned that I had the old back seats in the vehicle and that a nine month old recall on the rear brakes was not performed prior to my purchasing the vehicle.

Regarding the rear seats, GM indicated that the back seats were not changed in 2004 grand prix's and that even if they were they would do nothing about it. (even though had I known of the change I could have purchased a vehicle which had been manufactured after the change was made)

Regarding the recall, GM then indicated that it is unfortunate that the recall was not performed prior to my pruchase of the vehicle, and that I had to miss half a day of work bringing the car in for the recall, but that it was not their responsibility to ensure recalls were performed prior to cars being purchased.

I informed GM that this is the third new Pontiac I have purchased and will be the last GM vehicle I will purchase if this is how they deal with loyal customers. They indicated that a note indicating my disatisfaction will be placed in my file.

Service like this is why people buy foreign cars.
It's unfortunate, but you can replace Pontiac with any other automobile manufacturer's name and Grand Prix with any other model, and the story is the same. It's not just Pontiac, it's the entire industry.
 
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