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Fraud and deception at Consumer Reports-an historical basis

1070 Views 5 Replies 5 Participants Last post by  PMC the 1st
In March of 1990, Consumer Reports rated the Honda Accord LX with 5-speed transmission against the Toyota Camry Deluxe, Nissan Stanza and Subaru Legacy. This is what they said:
“The Accord’s ride was reasonably comfortable on most roads. Even back roads, the suspension did its job well. A full load… had little effect on ride… but there was more bouncing and tossing on bumpy back roads. It was quiet inside: the radio never had to compete with road or engine noise. The contoured front seats provided support in all the right places. Our drivers appreciated the panoramic view out and the generous leg room. The tilt steering column can be adjusted to a comfortable position. The rear seats offered ample room for two tall riders and reasonable comfort for three average-sized men. one-legged riders may find the seat short on thigh support.
Less than two years later, they test the same Accord, only this time their critique of the Accord – the same basic vehicle -- is different. They compare the Accord against the Toyota Camry, Chrysler LeBaron and Ford Taurus. Here is what they reported:
“Lightly loaded, the [Accord] rode nervously and stiffly. It pitched, kicked and jiggled. A full load of passengers smoothed the ride. Road noise was rather high. The driver’s seat in the [Accord] EX incorporates an adjustment for lower back support. The seat is low, and lacks a height adjustment. Fortunately, the instrument panel and windowsills are also low, affording the driver excellent visibility. Six-footers found the leg room a tad tight. The low seats and roof make access a bit awkward. You can tilt the steering column up or down, but it doesn’t pop up and out of the way…[ii]
Their harsh critique could not have been from a different group of cars from which they measured, because their critique of the Camry, a car that was also common to both comarisons, was just as glowing on the second test. They said of the Camry in the same comparison:
“[The Cary] looks, feels and performs like the Lexus ES300.”
In June of 1990 Consumer Reports compared three imported and one domestic luxury car:
“Measurements on our digital tape recorder indicated that the Lincoln was the quietest car in this group. [but] the Lexus and Infiniti seemed quieter.[iii]
This comment, and the entire comparison test, was several pages after an advertisement of the organization that proudly claimed their testers and their testing methods are unbiased.
The following article was printed in Consumer Reports, October 1992, and shows with disturbing clarity exactly how they were attempting to harm the US automaker:
If the US makers have their way, imported minivans will soon be priced out of reach of most consumers… Last year, the three automakers went to the US Commerce department to accuse Toyota and Mazda of selling their vans here for less than the cost of production plus profit. Such “dumping” is illegal if it harms domestic manufacturers. Although ford and GM practically own the 9B a year minivan market, collectively controlling 90% of domestic sales, that’s apparently not enough. (PMC’s note: Re-read that last sentence. Why should domestic manufacturer’s success in that market be an excuse for the imports to violate international trade laws?) The [Commerce department] concluded, in effect, that if Toyota and Mazda made vans the way US makers do, then sought a higher profit, the two companies couldn’t sell them for the prices they were asking, so the minivans had been dumped. But in June, a little known government agency, the US International Trade Commission, refused to go along. The commission ruled that even if the Japanese had dumped minivans here, the Detroit automakers hadn’t suffered significant harm.
Unfortunately for US consumers, the story isn’t over. The US automakers are lobbying Congress to have foreign minivans reclassified as trucks… If the US automakers prevail, the price of the Toyota Previa we tested would go up by about $6,600 to a princely $36,000. That would make the Toyota van $11,155 more expensive than the Dodge Grand Caravan we tested.
That the US automakers should moan about foreign competition is curious (PMC’s note: Are the domestic manufacturers “moaning”? Or, do they just want fair international trade and the enforcement of trade laws?). First, the imported minivans are, on average, already more expensive
than their domestic counterparts… Second, the industry isn’t losing money on its minivan sales. Far from it. …As long as us automakers insist on fighting the competitive battle with lobbyists rather than engineers (PMC: “rather than engineers?”), consumers end up the losers.”[iv]
Notes: Toyota and Mazda were ultimately found guilty in 1993 just as the domestic manufacturers alleged, to the dismay of Consumer Reports. The Commerce Department concludes, “Today's decision found that all other Japanese mini-vans were selling at 9.88 percent below fair value on average; the preliminary decision had said that they were selling at an average of 4.23 percent below fair value.”
Toyota admits to the crime, saying, “James Olson, Vice President of external affairs for Toyota Motor Sales U.S.A., said the decision "may be politically correct, but it's factual fantasy." He added, "The Big Three's reaction to our modest success" in the mini-van market "is like a herd of elephants being stampeded by two mice." But the US automakers weren’t concerned about the then current modest sales; they were concerned about future sales, stating, “"[Minivans were] invented in the U.S. When the American companies saw the rapidity with which the Japanese were penetrating the market, it was alarming. The question is, do you stand back until the segment is decimated by the Japanese or do you ask for an investigation? I think it was a wise thing to do."
Consumer Reports compares the import Toyota Camry against the domestic Ford Taurus. Consumer Reports identifies the parent car company (“Toyota Camry”) with the daughter car company (Lexus ES300”) even though the daughter car company is derived from the parent car company. We may infer that this deceptive practice was an attempt to cast the import car in the more favorable light against the domestic, since the car itself could not do it:
“We ranked the Toyota Camry first by a slender margin. It shares the engine, drivetrain and chassis with the much costlier Lexus ES300, and it has much of Lexus refinement.”
And in another test between both the Ford Taurus and Toyota Camry:
“[The Toyota Camry] looks, feels and performs like the Lexus ES300.”[v]

The Ralph Nader/Consumer Reports connection – how Ralph Nader shaped Consumer Reports’ anti-domestic bias
Ralph Nader was extended an offer to run Consumer Report’s parent company as the Chairman of the Board. In 1967, he accepted the offer and ran the company until 1975.
In 1983, Consumer Reports implemented a phone-in service for consumers to check automobile prices and the cost of repairs. Since then, the organization under the earlier influence of Ralph Nader, continued to develop its methods for testing and rating automobiles.[vi]
While Ralph Nader was in charge of Consumer’s Union (and hence, Consumer Reports), he and consumers union co-founded a company called Center for Auto Safety (“CAS”) in 1971. CAS is run by Clarence Ditlow, a long-time CU board member.
The CAS website ridicules a domestic automobile manufacturer for no purpose other than malice and libel. From the website, “With less than half what
General Motors spends on a single Super Bowl commercial, CAS has taken
on the auto giants and won for consumers.”
[vii] Consumer Reports, “Five Compact Sedans” p. 193, Mar 1990 Vol. 55, No. 3

[ii] Consumer Reports, p. 194, Mar 1992, Vol. 57, No. 3

[iii]Consumer Reports, “New Auto Benchmarks” p. 419, June 1990, Vol. 55, No. 6

[iv]Consumer Reports, P. 635, Oct 1992, Volume 57, No. 10

[v] Consumer Reports, P192, Mar 1992, Vol. 57, No. 3



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