Debunking Myths About Detroit

Wards Autoworld ^ | 12/11/08 | John McElroy

[Liberty1970]

Debunking Myths About Detroit

By John McElroy

WardsAuto.com, Dec 11, 2008 9:53 AM

CommentaryThe debate about bailing out Detroit’s auto makers has hit a fever pitch. Everybody wants to weigh in with their opinion.

The louder they rant, and the crazier their claims, the more coverage they get.

Strangely, the media are devoting far more attention to the $34 billion bridge loan auto makers are requesting than the $700 billion bailout of the financial industry. How does that make us a better informed citizenry?

There always are two sides to every argument, but this discussion shows how much misinformation, misperception and wrong-headed “facts” are being bandied about. Let me debunk the five most popular myths I keep hearing.

“The Big Three build cars nobody wants.” Oh really? Somehow last year they managed to find more than 8 million customers to buy those cars nobody wants. And a good many are not just satisfied with their purchase, they are passionately devoted to them. The Corvette, Mustang and Viper enjoy cult followings. Ford F-150, Chevy Silverado and Dodge Ram owners are the most loyal truck buyers in the business.

“The Big Three build crappy quality.” Says who? According to J.D. Power’s Vehicle Dependability Survey, Mercury and Cadillac brands are rated ahead of Toyota. Buick and Lincoln are ahead of Honda. Ford is ahead of Infiniti. Chrysler and Dodge are ahead of Mini, Scion and Volvo. In fact, of the 10 brands at the bottom of the list, eight are imports. J.D. Power data show the Big Three have closed the quality gap.

“The Big Three cars don’t get good fuel economy.” Do apples-to-apples comparison of vehicles with the same-size footprint and powertrain, and you’ll see the Detroit Three match or, in some cases, beat their foreign competitors. When it comes to hybrid-electric-vehicle technology, General Motors, Ford and Chrysler have HEVs in showrooms right now. Only two of the eight Japanese auto makers make HEVs (Nissan buys its hybrid technology from Toyota). Not one Korean or European auto maker has an HEV on the road yet.

“UAW plants are not competitive with the transplants.” Only if you ignore the facts. The 2008 Harbour Report shows Chrysler tied with Toyota and ahead of Honda in manufacturing productivity. GM is ahead of Nissan. Ford is ahead of Hyundai. But this is a “How many angels can dance on the head of a pin?” argument. All of them are within one labor hour or so of each other. In other words, they all are extremely competitive.

“Those greedy UAW workers make $75 an hour.” Wrong. This figure includes total labor costs, which dumps the cost for all retirees into the equation. The average worker on the line actually earns $55,000 a year, which comes to about $28 an hour. With benefits, those numbers have been a lot higher in the past. But after last year’s historic UAW contract, those benefits get whacked down to levels neaerly equivalent to the transplants.

The Big Three have been going through a painful, gut-wrenching restructuring for several years. That process will continue. I’m amazed they don’t get credit for the significant progress they’ve made. And I’m puzzled why these myths persist in the face of the facts.

[Liberty1970]

Ironically, my worst vehicle was a Toyota (the thing rusted out and the body basically collapsed one day as I was driving it home.) My best has been my Hyundai Sonata in terms of reliability, although it was badly lacking in features/refinement. (It was a 2001, and when I drove a 2008 as a rental I was _very_ impressed).

Our Dodge Grand Caravan has also been reliable, apart from the 5' section of front end trim I found hanging off it the other day. But that was probably from my wife running over a dead deer a few weeks ago. :-)

And my Ford Taurus held up superbly for 10 years, including 6 after I rolled it on a icy highway at 75 MPH. I just had the worst dents banged out and replaced the shattered windshield and both side mirrors (never did find them in the snow), and it ran like new. I did get used to overhearing comments like "That thing looks like it's been through a war" though... ;-)

[grellis]

If you would like to be added or dropped from the Michigan ping list, please freepmail me.

[grellis]

I’m certain the UAW gave this a big old gold star. I disagree with nearly everything in the article.

[grellis]

Unless forced by the government...

If it came to that I would bike. Never again will I buy a union-made car.

[70th Division]

Not strange at all. The big 3 have the cost of retirees and health benefits. A Toyota plant is new so no legacy costs. Plus they get hunderds of millions in tax breaks to locate there. And their profit goes WHERE? Japan of course

[Loyal Buckeye]

The Dems' solution to the Big Three is as follows:

Off load retiree and employee health care expenses onto the taxpayers through a national health care plan;

Off load retiree pension costs onto the PBGC (i.e., taxpayers); and

Continue to make loans as long as necessary.

Could be wrong, but that's my take on it.

[bronxboy]

Lord-thank God you were not injured...and not driving a Yugo!