Key to the Highway

Observations about cars and the auto industry

That Cold Wind in Detroit Is Nothing New

As cab rides go, the one I took the other day wasn’t all that interesting despite the pastoral scenery of rural eastern Pennsylvania. What really caught my attention was the blast of cold air coming through the door handle of the previous generation Chevrolet Malibu. The last time I felt a draft like that was in a 1946 MG TC, a car that didn’t have roll-up windows. The MG had side curtains, which only approximate a seal against the weather.

While I could take the easy-cheesy way out and turn that drafty Chevy into another trite weather analogy for what ails Detroit, I won’t. A far more direct point needs to be made:

The dysfunctional business model of quantity over quality spelled doom a long time ago.

Detroit has suffered under its own stubborn corporate structures for decades. One in which bean-counters override engineering decisions to the detriment of quality. With an eye only on being price competitive instead of quality competitive, the Big Three continued to be big in all the wrong ways: too much production, too many employees, too many models, too many brands.

Instead of the kind of deep reorganization that was needed in the late 1980s, GM and Ford decided that the way to be more competitive globally was to get bigger—a lot bigger.

The resulting problem is a dilution of brands that relied on the kind of individualism that GM and Ford are not known for. Saab, Jaguar and Volvo became victims of homogenization. Not quite the badge engineering that barely distinguishes a Mercury from a Ford, but bits and pieces shared with cheaper brands and models showed up on cars costing a lot more. A Jaguar XK should not have the switches from a Ford Contour. To its credit, Ford has improved the switch gear in recently introduced models, but the Jag XF has the same issues of switch placement and illogical operation as the Focus. The Volvo acquisition has been beneficial on the technology front and less corrosive to the brand. Yet Ford is looking to sell the one acquisition that has really worked.

GM’s Hummer would still be viable if not for recent gasoline price shocks. Despite a drop in pump price, the volatility of gasoline most feared by consumers has nothing to do with its flash point.  GM’s stake in Subaru’s domestic existence produced platform sharing with post-takeover Saabs, and was never aimed at bringing a Corolla-Civic fighter to market. At least it was mostly benign to Subaru.

In short, the Big Three should have gradually turned themselves into the Medium Three years ago.

The other major failure has been the inability of all but Ford—thanks to Mazda—to make and sustain a model of small car with any longevity in the North American market. GM has never accomplished this short of re-badging a Toyota Corolla as a Geo/Chevy Prizm. The General also tried several shortcuts in order to market a decent small car through buying into Suzuki and Daewoo. That was only successful if you think raising a white flag over GM’s headquarters is a sign of victory. The latest offering—the Aveo—is a re-badged Daewoo, a company whose manufacturing standards were too low for Suzuki. Every model other than the re-badged Corolla, regardless of who made it, was awful and therefore uncompetitive.

Chrysler did pretty well with the Neon, once the 33 percent warranty claim rate was tamed after the first year of production. Unfortunately the Neon was last seen wearing only an SRT/4 badge and blasting into the sunset three years ago. Chrysler’s other folly was agreeing to be taken over by Mercedes-Benz, but blame for that failure spans the Atlantic.

Returning to the drafty Chevy, the car didn’t exhibit the usual creaks and squeaks of most cabs. So why was the right-hand rear passenger door a funnel for cold outside air? There are possibilities outside of how that car left the factory, but still this is a defect that shouldn’t be possible; the car had no visible damage and was only a few years old. No way should outside air at 50 mph be able to pressurize inside the door and blast through the trim panel.

That cold draft isn’t some convenient analogy for Detroit’s woes. Far worse, it’s the crux of what has been wrong with the Too Big Three’s approach to longevity. The “perfect storm” excuse for the current calamity ignores years of not taking a long, hard look at where these companies would best fit in the market.

The result of the always-bigger attitude is the Detroiters are now drowning in their oversized market-share model.

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