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GM's bumpy road to better quality
By Danny Hakim and Fara Warner
NEW YORK TIMES
DETROIT - General Motors called it the Road to Redemption campaign: After years of problems with quality, the company started proclaiming in an unusual series of newspaper and magazine advertisements beginning last year that it had rededicated itself to fixing its past problems.
"Humbling lessons" had been learned over the last decade, the advertisements said. Leaves had been turned over. And after a "long journey back," GM was "building the best cars and trucks in our history."
But playing the redemption card has its risks. What happens if you fall off the wagon?
By many measures, GM is still 12-stepping its way back to quality sobriety. In one of the more influential annual studies -- the initial quality survey conducted by J.D. Power & Associates, asking new car owners whether any one of 135 potential problems emerge in the first three months after purchase -- GM has overtaken Ford and the Chrysler unit of DaimlerChrysler in the rankings in recent years, and the Big Three as a group has begun to close the gap separating it from the Japanese leaders, Toyota and Honda.
But judging by recalls, one of the most tangible yardsticks of quality, 2004 is not shaping up as a banner year for GM In less than four months, the company has recalled over 7.5 million vehicles, more than in all of 2003. Among them are some of GM's staple products, like the Chevrolet Silverado large pickup, as well as showcased new vehicles like the Cadillac SRX, a blend of station wagon and SUV.
"We're not happy at all with the level of recalls," said John M. Devine, GM's chief financial officer, during the company's quarterly earnings conference call last week. "We think it doesn't reflect the current levels of quality we have on our products, but we're addressing them as quickly as we see them."
As initial quality improves, the domestic automakers are increasingly focused on longer-term quality, where they still lag far behind the Japanese. The recalls hang over that pursuit like a question mark.
"To GM's credit, they've learned how to handle them," said Maryann Keller, a veteran auto analyst and former executive who ran Priceline.com's automotive division.
Besides the high cost -- $200 million more than anticipated on recalls in the first quarter -- Keller said, "The other question is why this is happening in the first place." She added, "You don't want to give somebody an excuse not to buy your car next time."
GM executives say the recent recalls do not reflect quality problems with their products so much as a more aggressive approach to potential problems. GM's executive director for product development quality, Robert Ottolini, even contends that the company now sees recalls as an opportunity to make a good impression.
"We have to self-initiate," he said, noting that 84 percent of GM's recalls last year were voluntary. "I think our feeling now is that we have to do the best by the customer, and if that means more recalls, then so be it."
People who think about quality for a living say that acting early is far better than the alternative.
Full Article Here
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By Danny Hakim and Fara Warner
NEW YORK TIMES
DETROIT - General Motors called it the Road to Redemption campaign: After years of problems with quality, the company started proclaiming in an unusual series of newspaper and magazine advertisements beginning last year that it had rededicated itself to fixing its past problems.
"Humbling lessons" had been learned over the last decade, the advertisements said. Leaves had been turned over. And after a "long journey back," GM was "building the best cars and trucks in our history."
But playing the redemption card has its risks. What happens if you fall off the wagon?
By many measures, GM is still 12-stepping its way back to quality sobriety. In one of the more influential annual studies -- the initial quality survey conducted by J.D. Power & Associates, asking new car owners whether any one of 135 potential problems emerge in the first three months after purchase -- GM has overtaken Ford and the Chrysler unit of DaimlerChrysler in the rankings in recent years, and the Big Three as a group has begun to close the gap separating it from the Japanese leaders, Toyota and Honda.
But judging by recalls, one of the most tangible yardsticks of quality, 2004 is not shaping up as a banner year for GM In less than four months, the company has recalled over 7.5 million vehicles, more than in all of 2003. Among them are some of GM's staple products, like the Chevrolet Silverado large pickup, as well as showcased new vehicles like the Cadillac SRX, a blend of station wagon and SUV.
"We're not happy at all with the level of recalls," said John M. Devine, GM's chief financial officer, during the company's quarterly earnings conference call last week. "We think it doesn't reflect the current levels of quality we have on our products, but we're addressing them as quickly as we see them."
As initial quality improves, the domestic automakers are increasingly focused on longer-term quality, where they still lag far behind the Japanese. The recalls hang over that pursuit like a question mark.
"To GM's credit, they've learned how to handle them," said Maryann Keller, a veteran auto analyst and former executive who ran Priceline.com's automotive division.
Besides the high cost -- $200 million more than anticipated on recalls in the first quarter -- Keller said, "The other question is why this is happening in the first place." She added, "You don't want to give somebody an excuse not to buy your car next time."
GM executives say the recent recalls do not reflect quality problems with their products so much as a more aggressive approach to potential problems. GM's executive director for product development quality, Robert Ottolini, even contends that the company now sees recalls as an opportunity to make a good impression.
"We have to self-initiate," he said, noting that 84 percent of GM's recalls last year were voluntary. "I think our feeling now is that we have to do the best by the customer, and if that means more recalls, then so be it."
People who think about quality for a living say that acting early is far better than the alternative.
Full Article Here
