American Perception of American Cars vs. Japanese

[hot rod truck]

I received this in an e-mail but I was not able to verify its authenticity, other than this is how I feel about the USA vs them debate. I know some of the article is correct from other articles I have read. Good read. I know we have some members who work in the automotive industry in manufacturing or R&D. Maybe they can verify or debunk what the author has written

 

 

December 1, 2006

 

American Perception Problems of the American Auto Industry

 

 

Ford and General Motors have taken turns besting the Toyota Camry in

quality surveys for the past two years, but if you talk to many

Americans - especially the ones who would never consider supporting home-based auto

companies - you'd never know it.

 

 

Last year, the Chevrolet Impala beat the Toyota Camry in initial quality

according to J.D. Power & Associates, and Consumer Reports just

announced that both the Ford Fusion and Mercury Milan scored higher than both the

Toyota Camry and the Honda Accord this year.

 

 

After the announcement, Ford's Director of Global Quality Debbe Yeager

commented "It's a perception gap," referring to the struggle American

companies have had overcoming the perceived and seemingly untarnishable

reputation of their foreign rivals.

 

 

Even as GM and Ford have accumulated award after award on vehicle

quality you'd almost never know about such quality gains made by American

companies - or quality declines of foreign companies - by listening to the media.

 

Did you hear about it when the National Highway Traffic Safety

Administration announced that Toyota recalled more vehicles than it sold in the U.S.

last year? Probably not. Did you hear about Toyota making an "elaborate

apology"for their "worrisome series of recalls" that has "tarnished its

reputation for quality?" Probably not. Did you hear about the Toyota senior manager

quote that stated "We used to do quiet recalls called 'service campaigns'

to deal with defects but we're not going to hide anything anymore?"

 

Such a statement suggests Toyota's past recall numbers were probably much

higher than we were led to believe, and they profited handsomely by having a

perception of higher quality than they deserved.

In Japan, prosecutors are looking into possible negligence on the part of Toyota for shirking

recalls for the last eight years. How ironic. You probably didn't hear about

that one either because the American media doesn't like to bash foreign auto

companies ? only American ones.

 

Then there's the mythical perception that foreign automakers produce the

most fuel efficient cars and that Detroit only makes gas-guzzlers when

the truth is that all automakers - including Toyota, Honda and Hyundai-Kia

alike, have allowed fuel economy to slide in the past 20 years since

they all now sell bigger trucks and more SUVs. One of Toyota's senior

executives was even quoted in the Wall St. Journal September 28 saying that both

the Toyota Sequoia and Tundra "are big gas-guzzling vehicles" and expressed

"concern about the longer-term prospects." These longer-term prospects

about their admitted gas-guzzlers are questioned because they know that

Ford's F-150 and Chevy's Silverado have led the pack in sales year after

year.

 

 

Yes, gasoline has been getting more expensive, at least until recently,

but the fact that Americans continue to buy it in greater quantities

qualifies us as hypocrites for suggesting GM and Ford stop building so

many big trucks and SUVs.

After all, GM and Ford are only responding to demand

as any company would and should if they want to remain profitable in a

cut-throat competitive market. According to a Business Week survey, we

Americans bought 10% more gasoline in the first six months of 2006

compared to the first six months of 2000 even though gas prices rose 75% in that

period. Maybe here I could also mention that the Chevy Tahoe beat the

gas-guzzling Toyota Sequoia in quality surveys and gets better gas mileage

to boot.

 

 

But what has happened since gas prices have been on the decline in

recent months? The Wall Street Journal reported a "slight" increase in truck

sales by American companies, as Ford Expedition sales were up 41% and Lincoln

Navigator sales were up 44%. The American media even tries to restrain

its applause for home-based auto companies by referring to gains of over 40%

as "slight!"

 

Perhaps the biggest perception problem is that American automobile

companies GM and Ford (Chrysler is now German-owned) squander all their

money on plants overseas and foreign automakers build their factories in

the U.S. Foreign car lovers will surely point to Kia's plans to build

its first-ever U.S. plant in Georgia, but they probably won't mention that

they received $400 million in tax giveaways to do it, which translates into

$160,000 per job. Among the many benefits for the foreign-owned company,

your tax dollars are going to be used for road improvements surrounding

the complex, complete with flower beds and other beautification features.

 

Hey,as long as we're going to allow states to bid for private jobs with our

public tax dollars, we might as well make it look good, right?

 

 

And the foreign car lovers will probably also not tell you (or maybe

they just don't know or don't want you to know) that GM and Ford pour more

money into existing American facilities than foreign automakers spend on new

plants, usually with little or no tax breaks. GM has already spent over

$500 million upgrading two transmission plants this year, and has spent

nearly a billion dollars over the last decade, for example, for facility

upgrades in Texas. And what do GM and Ford get for making their existing

plants more efficient? It isn't tax breaks. Instead, they get

accusations of not being "competitive" enough!

 

Maybe here I should also mention that the average domestic parts content for Kia is 3%, while the average domestic parts content of Ford and GM is 78% and 74% respectively. This

means that buying a U.S.-assembled (or even foreign-assembled, for that

matter) GM or Ford supports more American jobs than a U.S.-assembled car

or truck with a foreign nameplate.

 

 

Fortunately for our benefit, the U.S. remains the overall global leader

in research and development, and a big reason for that is that American

automakers ? according to the Level Field Institute ? invest $16 billion

in R&D (Research & Development) annually, which outpaces any other industry

one could name. Admittedly, the Level Field Institute counts German-owned

DaimlerChrysler as an American automaker, so Ford and GM's combined R&D

contribution to America is closer to around $12 billion. But who's

counting, right? Certainly not the American auto-bashing media.

 

 

Japanese companies do employ 3,600 American workers in R&D, but that

still leaves the foreign competition behind in the dust staring at American

rear bumpers. 3,600 sounds like a big number until you realize that 65,000

Americans work in R&D facilities in the state of Michigan alone. In

fact, two of the top four R&D spending companies in America as reported by the

Wall Street Journal are, you guessed it, Ford and General Motors. The

other two are also American companies: Pfizer and Microsoft.

 

Ford has recently made headlines as the American automaker with the most

challenges to its future, but these challenges certainly are not because

they "aren't making cars people want to buy." Toyota did outsell Ford in

July, but since then, Ford has reclaimed the No. 2 spot and has held it

ever since. GM has the highest market share, increasing over 2

percentage points from a year ago. So apparently they can't be accused of not

making cars people want to buy either. Ford sales are also up in Europe, and

Ford doubled their sales in China, where GM has the highest market share of

any automaker.

 

 

General Motors also reported a 3.9% rise in August vehicle sales despite

high gas prices and a supposedly slowing economy. And even though Toyota

reported record sales that month, they couldn't match the non-record

setting sales volume of Ford. GM's sales rose 17% in October from the

same month in 2005 and Ford sales rose 8% in the same period. Ford also sits

on $23 billion in cash, so they have plenty of money to focus on and fix

any problems.

 

 

And for all the talk about the lack of fuel efficiency of American

automakers, it seems three-fourths of all automakers failed to meet

Europe's improved fuel-efficiency standards intended to cut

carbon-dioxide emissions. Japanese and German automakers topped the list of the study's

worst performers, but according to an environmental group's study, GM's

Opel division and Ford both "come out well."

 

 

In closing, I'll leave some encouraging numbers for those of us who

actually like to root for and support the home team. The J.D. Power 2006

Vehicle Dependability Survey reports that Mercury, Buick and Cadillac

(in that order) grabbed the number 2, 3 and 4 spots to beat Toyota, Honda,

Nissan, BMW and everyone else (except Lexus) in having the least number

of problems per 100 vehicles.

 

 

Perhaps someday the American media will give GM and Ford the credit they

deserve. And once they do, perception among the majority of the American

public will rightfully change. GM and Ford aren't only doing what they

should to make gains in the American market to deserve American consumer

loyalty; they're also doing what they should to make gains in the

markets of China, Europe and across most of the rest of the globe.

 

 

Tony Fransetta

 

Tony Fransetta, President

Florida Alliance for Retired Americans

[perk03z06]

Awesome article. I firmly believe in supporting our economy, and buying US built.

 

I'll probably wear the bowtie until I die ...

[Bowtie70SS]

So true...How often do you hear the arguement that "They're built here" and if this letter is correct then only 8% of the parts are produced here? Wow reading this letter I can't help but think of liberals for some reason. Maybe due to the fact that they will do retarded things like spend $160,000 per job in tax benefits. I have always been brand loyal to Chevrolet and have only owned 1 non GM a Ford Escort that came with my wife 2 head gaskets later I sold the POS. Later

 

Dave

[Rays B4U]

The General has always served me well. I have never had the need or desire to buy a foreign car.

[allballz57]

All GM all the time

[Forever a Fan]

All GM all the time

[Fireman31]

Great artcile, support the US and the economy.....

[nixsupersport]

long and interesting read. GM all the way