Should the government bail-out include domestic automakers?

[Len_A]

7 myths about Detroit automakers

BY MARK PHELAN
FREE PRESS COLUMNIST

This column by Free Press auto critic Mark Phelan originally was published on Nov. 17 and has been updated.

The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are seven myths about the companies and their vehicles, and the reality in each case.

Myth No. 1: Nobody buys their vehicles

Reality: General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of nearly 700,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota.

Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.

Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

Myth No. 2: They build unreliable junk

Reality: The creaky, leaky vehicles of the 1980s and '90s are long gone. Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers."

The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high as or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

J.D. Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.

Myth No. 3: They build gas-guzzlers

Reality: All of the Detroit Three build midsize sedans that the Environmental Protection Agency rates at 29-33 miles per gallon on the highway.

The most fuel-efficient Chevrolet Malibu gets 33 m.p.g. on the highway, 2 m.p.g. better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient non-hybrid Honda Civic.

A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate. (personal note - I kind of dispute this being in here, as the Aveo is a Korean built import)

Myth No. 4: They already got a $25-billion bailout

Reality: None of that money has been lent out and may not be for more than a year. In addition, it can, by law, be used only to invest in future vehicles and technology, so it has no effect on the shortage of operating cash the companies face because of the economic slowdown that's killing them now.

Myth No. 5: GM, Ford and Chrysler are idiots for investing in pickups and SUVs

Reality: The domestics' lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have spent billions of dollars on pickups and SUVs because trucks are a large and historically profitable part of the auto industry.

The most fuel-efficient full-size pickups from GM, Ford and Chrysler all have higher EPA fuel-economy ratings than Toyota and Nissan's full-size pickups.

Myth No. 6: They don't build hybrids

Reality: The Detroit Three got into the hybrid business late, but Ford and GM each now offers more hybrid models than Honda or Nissan, with several more due to hit the road in early 2009.

Myth No. 7: Their union workers are lazy and overpaid

Reality: Chrysler tied Toyota as the most productive automaker in North America this year, according to the Harbour Report on manufacturing, which measures the amount of work done per employee. Eight of the 10 most productive vehicle assembly plants in North America belong to Chrysler, Ford or GM.

The oft-cited $70-an-hour wage and benefit figure for UAW workers inaccurately adds benefits that millions of retirees get to the pay of current workers, but divides the total only by current employees. That's like assuming you get your parents' retirement and Social Security benefits in addition to your own income.

Hourly pay for assembly line workers tops out around $28; benefits add about $14. New hires at the Detroit Three get $14 an hour. There's no pension or health care when they retire, but benefits raise their total hourly compensation to $29 while they're working. UAW wages are now comparable with Toyota workers, according to a Free Press analysis.

[kpounds]

It affects 10% of all jobs in the USA. MUST DO IT. Why the hassle over $25 Billion when HUGE banks got over $750B with 90% public disapproval.

[Len_A]

Originally Posted by kpounds

It affects 10% of all jobs in the USA. MUST DO IT. Why the hassle over $25 Billion when HUGE banks got over $750B with 90% public disapproval.

Because there is a good portion of the public that has something against manufacturing.

Here's a good opinion piece on it: Who killed the auto industry?

[Inzane]

Originally Posted by Len_A

Here's a good opinion piece on it: Who killed the auto industry?

"as the Japanese did to our TV industry by dumping Sonys here until they killed it."

Blaming the Japanese for the fact that American-made TVs SUCK?

I'd no sooner put an RCA TV in my living room than a GM car in my driveway.

[Len_A]

Originally Posted by Inzane

Blaming the Japanese for the fact that American-made TVs SUCK?

I'd no sooner put an RCA TV in my living room than a GM car in my driveway.

Typical automotive/anti-manufacturing snobbery.

[Yal]

The public is against giving anybody money. It has nothing to do with the public hating Detroit or manufacturing. As was mentioned above 90% of the public didn't want to give money to the financial sector either. The public isn't in control of who gets what money even if we voice or protest against it. Don't worry you'll get your 25 billion or what ever it is now! Its quite obvious that the public doesn't hold the purse strings to their own money. Maybe Detroit should take a page from the Christian Right play book and really get into politics, grease some palms, because those are the guys/gals doling out the cash. Things might move faster.

All the average Joe wants is a descent TV that doesn't crap out after a year and a descent car that doesn't do the same after a 5-10 years. That's it. Perception of quality is like your GPA in College. You can get straight A's, but get a couple off D's and C's and you'll be fighting the rest of the way to keep your GPA respectable. Getting good grades doesn't push you up as much as getting bad grades pushes you down. I think Detroit gives the public very little credit when it comes to perceiving quality in cars. They seem to think the public is making it up or is somehow being manipulated by some entity like the media. I mean, do you seriously think an average person can't tell the difference between an IRC and a solid rear on a daily driver? Or that he gets treated better when he takes his wife's Honda in to service than when he takes his Chevy? Etc Etc?

When Hyundai first came out my god!! They were awful!! Remember the Hyundai Excel? They lost money, a lot of money, but they stuck with it. There are still people today completely traumatized by the Hyundai Excel. Now we are less than two decades later and there are people now who wouldn't give up their Hyundai unless you pryed it away from their cold dead hands. Given what I said above about quality how did that happen?? A turn around like that can't be due to just having favorable economic conditions and taxes to the Big 3.

With the Big 3 its always we are getting better just wait until... The next big milestone apparently is now 2010. Well we'll see. You'll get your money.

Hello, spoke too soon, CNN: "House Democratic leaders, White House negotiators have reached agreement on $15 billion auto bailout, congressional Democrats say". There you go Probably more to come, judging from recent history these bailouts seem to go in stages of incrementing values. Now the wait until the 2010 turn around begins! Woohoo!

[Setec Astronomy]

Originally Posted by kpounds

It affects 10% of all jobs in the USA. MUST DO IT. Why the hassle over $25 Billion when HUGE banks got over $750B with 90% public disapproval.

I was just reading an article about Fuld and Lehman Brothers and I had to stop I got so depressed. Just further convinced me that the runup of the Dow to 14,000 was all based on BS, not on any kind of stock or company value, and that the "financial sector" is nothing more than a con game, with these CEO's just the "financial sector" version of Ken Lay and Bernie Ebbers.

The $64 question (er...make that the $640 billion question) is where did all that money go (the lost value of stock between 14,000 and 8,000...or 3,000)? It didn't just evaporate, it went somewhere; is it in the pockets of all those CEO's and upper management? Foreign investors? As they said in the Watergate investigation, follow the money...

[Inzane]

Originally Posted by Len_A

Typical automotive/anti-manufacturing snobbery.

Hah. Call it whatever you want. But generally speaking Sony, Toshiba, Panasonic etc. TVs ARE better than RCAs.

Just like Honda, Toyota, Nissan and Mazda small and mid-size cars ARE better than most GM equivalents.

Yeah, GM might finally have a decent, competitive product NOW (eg. new Malibu), but one or even a small few very recent much-improved products doesn't overnight make up for the last ~15 years of shoddiness.

Snobbery? I'm objective. I know what looks better, feels better, drives better, sounds better, etc. It's no more complicated than that.

[jfelbab]

The $64 question (er...make that the $640 billion question) is where did all that money go (the lost value of stock between 14,000 and 8,000...or 3,000)? It didn't just evaporate, it went somewhere; is it in the pockets of all those CEO's and upper management? Foreign investors? As they said in the Watergate investigation, follow the money...

Much of it did, in fact, just evaporate. The market represents in a large part, public confidence. People buy and sell based on their comfort level and assumed risk. When stockholders think bad things are about to happen they sell, often for what ever they can get. That's evaporation IMO.

[Len_A]

Originally Posted by Yal

The public is against giving anybody money. It has nothing to do with the public hating Detroit or manufacturing. As was mentioned above 90% of the public didn't want to give money to the financial sector either. The public isn't in control of who gets what money even if we voice or protest against it. Don't worry you'll get your 25 billion or what ever it is now! Its quite obvious that the public doesn't hold the purse strings to their own money. Maybe Detroit should take a page from the Christian Right play book and really get into politics, grease some palms, because those are the guys/gals doling out the cash. Things might move faster.

All the average Joe wants is a descent TV that doesn't crap out after a year and a descent car that doesn't do the same after a 5-10 years. That's it. Perception of quality is like your GPA in College. You can get straight A's, but get a couple off D's and C's and you'll be fighting the rest of the way to keep your GPA respectable. Getting good grades doesn't push you up as much as getting bad grades pushes you down. I think Detroit gives the public very little credit when it comes to perceiving quality in cars. They seem to think the public is making it up or is somehow being manipulated by some entity like the media. I mean, do you seriously think an average person can't tell the difference between an IRC and a solid rear on a daily driver? Or that he gets treated better when he takes his wife's Honda in to service than when he takes his Chevy? Etc Etc?

When Hyundai first came out my god!! They were awful!! Remember the Hyundai Excel? They lost money, a lot of money, but they stuck with it. There are still people today completely traumatized by the Hyundai Excel. Now we are less than two decades later and there are people now who wouldn't give up their Hyundai unless you pryed it away from their cold dead hands. Given what I said above about quality how did that happen?? A turn around like that can't be due to just having favorable economic conditions and taxes to the Big 3.

With the Big 3 its always we are getting better just wait until... The next big milestone apparently is now 2010. Well we'll see. You'll get your money.

Hello, spoke too soon, CNN: "House Democratic leaders, White House negotiators have reached agreement on $15 billion auto bailout, congressional Democrats say". There you go Probably more to come, judging from recent history these bailouts seem to go in stages of incrementing values. Now the wait until the 2010 turn around begins! Woohoo!

Latest NBC/Wall Street Journal Poll says 46% approve verses 42% that don't approve. See NBC/WSJ poll shows split on bailout - First Read - msnbc.com

[Inzane]

Originally Posted by Len_A

See NBC/WSJ poll shows split on bailout - First Read - msnbc.com

I enjoyed the comments section.

[Len_A]

Originally Posted by Inzane

Hah. Call it whatever you want. But generally speaking Sony, Toshiba, Panasonic etc. TVs ARE better than RCAs.

Just like Honda, Toyota, Nissan and Mazda small and mid-size cars ARE better than most GM equivalents.

Yeah, GM might finally have a decent, competitive product NOW (eg. new Malibu), but one or even a small few very recent much-improved products doesn't overnight make up for the last ~15 years of shoddiness.

Snobbery? I'm objective. I know what looks better, feels better, drives better, sounds better, etc. It's no more complicated than that.

Honda, Toyota, Nissan and Mazda small and mid-size cars are better than most GM equivalents?

You mean like Honda Accord's 67 separate NHTSA investigations? 2003 Accord's premature transmission failures? Or the five separate recalls for the 2006 Accord for various headlight and turn signal failures? Ten separate recalls for the 2005 Accord, seven for Exterior lighting including at least two for defective headlamps, one for defective fuses and circuit breakers, one for fuel pump and fuel system, one for defective air bag crash sensors, one for defective air bags.

Toyota Camry? Engines replaced or repaired due to engine oil sludge damage - 1999 through 2005. 2007 Camry and Avalon transmission shift problems.

Consumer Reports gave the the 2007 Toyota Camry V6 a "below average" rating on reliability.

Toyota President Admits Quality Was a Casualty During Rapid Growth - AutoSpies Auto News


Do you even know what the hell you're talking about?