Why The Auto Industry Is Failing – Part 3.

In this installment, we tackle: idiot journalists.

This is actually a merger of two multi-part posts.  This installment will also be subtitled as, Why Conservatives Claim “Media Bias”, Example #4

Exhibit “A”:

The heads of Detroit’s car companies — Ford, Chrysler, GM — bumper to bumper, are begging Congress for a bailout. Let’s start by cutting through the bull and look at how the automobile companies got into this mess.

1. Americans are finally starting to turn their backs on those 12 mile-per-gallon SUVs.

Yes, it took us long enough, but we are finally starting to get it. I know, gas prices have fallen back into the $2-per-gallon range, but we all remember what it cost to fill up last summer, when gas was $4 per gallon. And we all know those days will come again.

2. Why isn’t Detroit making what we want to buy now?

Where are the hybrids? Where are the batteries? Where are cars that get 70 miles per gallon? For years automakers fought tooth and nail against improving fuel efficiency standards. You say they’re in the pipeline? You say we’ll get 40-mile-per-gallon cars in 2020? Americans need them now.

3. Ignoring the competition.

It has seemed at times like American carmakers think car buyers are so blindly loyal that they will keep coming back — despite the sticker shock — for crummy cars that guzzle gas, fall apart too soon, and cost too much to repair. Lots of other companies have figured out how to build better quality, more fuel-efficient cars, and even do it right here in the United States.

4. Greed.

GM Chief Executive Rick Wagoner earns almost $9 million a year. Some union workers in the automotive industry earn $30 or $40 an hour plus benefits. Retirees get pensions and health benefits that would make anyone jealous. You guys spend millions of dollars a year lobbying to keep everything the same and now you’re asking us, the taxpayers, for $25 billion.

Now, I don’t know if a government bailout will rescue America’s auto industry but I do know that if there is a bailout, it better come with a big, bright stop sign and lots of strings attached.

Clearly, Campbell Brown – the person who wrote this commentary – is an idiot.  And the fact that she has a TV camera, and a national audience that watches her vomit this delusional crap, basically makes my case.  Essentially, she doesn’t know what she’s talking about, doesn’t bother to look up any of her facts, and yet allows herself to be called a “journalist.”

The fact is, she’s nothing more than a brain-dead idiot whose only credibility comes from the fact that she has a microphone, and a publicity machine behind here carefully crafted image.  If she had a full frontal lobotomy, she could rival Katie Couric.

But, let’s dismantle this crap one mindless point at a time.

1. Americans are finally starting to turn their backs on those 12 mile-per-gallon SUVs.

Yes, it took us long enough, but we are finally starting to get it. I know, gas prices have fallen back into the $2-per-gallon range, but we all remember what it cost to fill up last summer, when gas was $4 per gallon. And we all know those days will come again.

First, there is absolutely no evidence to point to Americans turning their backs on SUVs.  Yes, gas spiked, and SUV sales fell.  The same thing happened with pickups, and vans as well, and these are utilitarian vehicles.

People buy specific vehicles for specific reasons.  If you’re in the drywall business, you’re not going to be driving around with all of your equipment and supplies in a Honda Civic.  No, you’ll buy a truck or a van so that you can transport things like sheets of drywall to a work site.  Period.

Few people buy something like a Ford F-250 because they want a huge vehicle to impress their friends.  No, they buy them to haul stuff.  You can’t haul a camper with a Toyota Corolla, or a Chevy Volt, nor can you transport a ton (or more) of gravel with a Prius.  For this, you need a big engine, and a chassis to go along with it.

And make no mistake, it was these vehicles that companies like GM, Ford, and Chrysler were selling in droves up until a couple of years ago.  These also happened to be the most profitable of all their vehicles.  These facts aren’t even in dispute.

So, when the housing market declines, construction jobs dwindle.  So do landscaping jobs.  This then effects vehicle sales of big trucks and “big SUVs”.

But the fact remains that up until gas prices spiked, the Big Three were selling these vehicles hand-over-fist.  And that’s because people wanted them, for a variety of reasons.  I’ll also predict that if fuel prices remain at their present lows (I can find gasoline for about $1.59 in Michigan right now), SUV and truck sales will rebound.  That’s because Americans are a very utilitarian people.  They like large vehicles because they can do more with them.  They can take them camping, haul kids around, travel by car (and there are LOTS of places to go in the US), transport goods to and from customer sites, and so on.  They will use personal vehicles for business purposes, and vice versa.

You can’t do these things comfortably in something like a Hyundai Elantra.

Much of this utilitarian behavior, and vehicle usage patterns are based on the fact that the populations of places like the US and Canada are very far-flung; spread out over greater distances than places like England or Korea.  So, Americans will drive or commute further distances from where they work.  That’s just they way things are.

So, until that changes, along with the industrious nature of the average US citizen, their buying habits will remain fixed.

A nice article in the Detroit Free Press about the myths spread (mainly by the media) concerning US automakers helps illustrate my point:

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 six 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 about 560,000 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 or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

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 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.

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 domestic companies’ lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have all 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.

While SUVs do consume more gas than your average automobiles, it’s clear that the US automakers produce higher-efficiency trucks and SUVs than their Japanese competitors.  And as the article points out:

The domestic companies’ lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have all 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.

Now there’s another thing that the ever-so-wise (read: dingbat) Campbell Brown overlooks, but I’ll save that for later.  Suffice to say, she’s just plain wrong.

2. Why isn’t Detroit making what we want to buy now?

Where are the hybrids? Where are the batteries? Where are cars that get 70 miles per gallon? For years automakers fought tooth and nail against improving fuel efficiency standards. You say they’re in the pipeline? You say we’ll get 40-mile-per-gallon cars in 2020? Americans need them now.

This is perhaps the most idiotic and ill-informed statement yet.  Please, someone point to me the 70 MPG car that Toyota makes?  Or the one that Honda makes?

Don’t bother – they don’t exist.  Yet, if the Big Three doesn’t make these vehicles, then they’re not “building cars that Americans want to buy.”  What a load of complete crap.

Right now, Ford has a vehicle on the roads of Europe that gets 50 MPG, and has a high performance profile.  Why doesn’t Ford bring that car over here, and sell it?  The first reason: it’s a turbo-charged diesel.  US automakers, as well as the Japanese, tried selling turbo-charged engines in America back in the 1980s and 1990s – hardly anyone bought them.  That’s because turbo-chargers tend to be high-maintenance, and prone to breakdowns.  So, with such a high emphasis on making quality vehicles, turbo-chargers got scrapped.

One need go no further than looking at the price of diesel fuel in the US – on average about $1.00 per gallon more than the cost of standard gasoline – and you’ll see the other reason why Ford doesn’t try to sell that car here.  The cost of filling up the car on a regular basis would negate the perceived savings of increased fuel efficiency.  This is the same reason why hybrids – despite the hype – weren’t selling like hotcakes even as fuel prices were skyrocketing.  The higher sticker price for a Prius cancelled out what the average driver would save in fuel efficiency.

The third reason why places like Ford and VW haven’t moved these high-efficiency cars to US markets is probably the most comical: emissions standards.  Emissions standards for vehicles in the US are higher than those of Europe.  All of these turbo-charged diesel vehicles in Europe pump out more greenhouse gasses than vehicles here in the US.  So, when Campbell Brown decries the fact that the US automakers were fighting Congress on things like fuel standards and emissions standards, it is because those standards – essentially made by a bunch of people who know nothing about the auto business or how to develop cars – prohibit innovation in one form or another.

As for the comment, “where are the hybrids?”  Ford, at present, has two hybrids on the market today: the Escape, and the Mariner, and next year they’ll have five.  GM has six: the Chevy Malibu, Saturn Aura, Cadillac Escalade, Chevy Tahoe, GMC Yukon, and Saturn Vue.  Toyota has three: Camry, Highlander, and Prius.  Honda has two: The Accord and the Civic, and next year they will add a third to their line-up.

All in all, US automakers offer as many (or more) hybrids as their main Japanese competitors.

Instead of asking “where are the hybrids”, maybe Campbell Brown should be asking, “where’s my brain?”  I’d like to think it’s lodged in a place in her body where the sun don’t shine.

In short, once more a liberal media-type blathers on, spouting outright falsehoods as if they are fact.  And people who aren’t paying attention real close assume that this stuff is factually correct (when it obviously isn’t).

3. Ignoring the competition.

It has seemed at times like American carmakers think car buyers are so blindly loyal that they will keep coming back — despite the sticker shock — for crummy cars that guzzle gas, fall apart too soon, and cost too much to repair. Lots of other companies have figured out how to build better quality, more fuel-efficient cars, and even do it right here in the United States.

This comment really sticks in my craw, because I’m partially involved in helping companies like GM and Ford develop better quality vehicles.  The fact is that there has been a steady increase in vehicle quality from the Big Three since the 1970s.  Right now, Ford’s line-up of vehicles rival those of Volvo in safety standards (Volvo being the recognized world leader when it comes to vehicle safety).  Furthermore, Ford also rivals Toyota in the overall quality of their vehicles as of 2007 – these facts aren’t even disputed.  Ford, GM, and even Chrysler have made MASSIVE strides in providing quality vehicles at reasonable prices (when compared to other vehicles on the market).  And when compared to European vehicles sold in this country, US automakers literally crush these companies when it comes to quality.  Yet,l I don’t see the media types harping about how BMW or VW vehicles outright suck when it comes to their US or Japanese competitors.  Nope.  Because the media trend is to crap all over US companies, and to ignore all of the achievements made by US automakers since the 1970s.

As the aforementioned Detroit Free Press article points out:

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 or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

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.

Which brings me to my next point – the one where I called Ms. Brown a “dingbat”.  Has anyone ever stopped to consider that because of the better quality of vehicles that GM and Ford has produced over the last decade, that perhaps this is contributing to the decline in auto sales?  That maybe because the vehicles are lasting longer, maybe people are driving them longer?  And if they drive them longer, they purchase and/or lease fewer of these vehicles over the course of a decade?

Remember Toyota has seen a decline in auto sales as well (something in the 10-20% range).  Maybe it’s because they’re making “junk cars” that no one wants to buy anymore?  I dunno.

4. Greed.

GM Chief Executive Rick Wagoner earns almost $9 million a year. Some union workers in the automotive industry earn $30 or $40 an hour plus benefits. Retirees get pensions and health benefits that would make anyone jealous. You guys spend millions of dollars a year lobbying to keep everything the same and now you’re asking us, the taxpayers, for $25 billion.

Greed?

Hummmm…this might be a hard nut to crack here, but let me make a fairly profound comparison.

Rick Wagoner is the CEO of a multi-national corporation that has huge divisions in Europe, Asia, South America, and Australia, and has revenues in the billions.  Those overseas divisions are actually profitable, and it is only the North American market that’s in trouble.  Up until a few years ago, GM was making money…lots of money.

Campbell Brown is a media-babe at CNN who produces nothing, does no real investigative journalism of her own, and who can’t even get her facts straight.  She makes well into the 6-digits (maybe even 7-digits) when it comes to salary.

Which one of these people seems greedy to you?

 

 

 

 

 

 

What’s more ironic is that this comes from Campbell Brown’s show on CNN called: Campbell Brown: No Bias, No Bull.  Personally, I think that smacks of false advertising…

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2 Responses to Why The Auto Industry Is Failing – Part 3.

  1. Where did you get your blog layout from? I’d like to get one like it for my blog.

  2. unknownconservative says:

    Bruce,

    This format is called “Contempt” (fitting name, I think, for my blog), and it is a WordPress design style. If you are a WordPress blog, you can select it from the available styles.

    The bitmap in the banner was made by yours truely by merging part of a free bitmap, and a sketch of a man in a suit with a bag over his head.

    And thank you for your comments.

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