truth about domestics

American 3 Financial Support

I am outraged that the financial loan bill was shot down in the Senate! It is clear that many of our Senators do not care about this country or it’s citizens, but only care about their best interests. Senators like Richard Shelby, who is probably one of the most hypocritical politicians out there, has provided huge subsidies and financial support through tax breaks to foreign competitors, and yet he opposes support for our own industry (more on him to come).

I hope that President Bush and Henry Paulson step up, with an understanding that the failure of one or more of the automakers will be devastating!

-Alex

2008 Chevrolet Cobalt XFE

Sure, cars built by the Detroit 3 were terribly inefficient back in the 70′s, 80′s and even somewhat in the 90′s. That is no longer the case when you actually take the time to look at the D3′s products.  This is probably the subject that upsets me the most when people give their reason for buying a foreign competitor’s product.  It shows that they were lazy and didn’t do their own research, instead relying on their perceived notion of which cars are fuel efficient and which are not.  Just because a brand sells a hybrid doesn’t mean the rest of their cars are fuel efficient.  The Big 3 have been accused of building only gas guzzlers to make huge profits.  As you will see, they were not alone in this.  Toyota and Nissan have released their biggest trucks and SUV’s to date in the past 4 years, as gas prices climbed and sales dropped.  Let’s break it down into segments to show examples of how the D3 compete today.

Lets start small and work our way up, beginning with C class cars.  All cars are 2009 models unless otherwise mentioned.  Most of the numbers given below are from www.fueleconomy.gov and also the manufacturer’s own website.  They are all based on the EPA’s testing.  The Chevrolet Cobalt XFE is rated at an estimated 25 mpg / 37 mpg (city / highway), while the Ford Focus is rated at 24 / 35.  The Honda Civic stickers at 26 / 34 while the Toyota Corolla is rated at 26 / 35.  All of these numbers are fairly close, but what stands out is that the MOST fuel efficient car in the class is from one of the American 3.

Take a look at midsize sedans and you may be shocked to learn that the story is very similar here.  When equipped with 4 cylinder engines, the Americans take the lead.  The Chevrolet Malibu is rated at 22 / 33, the Ford Fusion is rated at 20 / 29, while the Dodge Avenger is rated at 21 / 30.  All very close, and very good numbers for cars of their size.  The 2010 Ford Fusion is estimated to return 33 mpg on the highway, tying it for first with the Malibu.  The Toyota Camry is rated at 21 / 31, while the Honda Accord is estimated at 22 / 31.  The Nissan Altima is rated up to 23 / 32.  Again, the D3 pulls out again in fuel economy.  That’s 2 thus far Shooter…

Say you would like your midsize sedan with more guts for merging on the freeway.  When equipped with a V6, the Ford Fusion offers 20 / 29, the Chevrolet Malibu 18 / 29, Toyota Camry 19 / 28, and Honda Accord at 19 / 29.  No clear winner, but the American offerings are very competitive.

In the small crossover arena, when equipped with 4 cylinder engines, the Ford Escape is rated at 22 / 28, while the Saturn VUE is rated at 19 / 26.  The Toyota RAV4 provides 22 / 28, and the Honda CR-V is rated at 20 / 27.  Say you need more power, and opt for the V6.  The numbers are still very close, with the Ford Escape rated at 19 / 25, Saturn VUE at 16 / 23, Toyota RAV4 at 19 / 26, and Honda CR-V with 20 / 26.

On the larger crossover side, Ford and Chevrolet tie for first with Toyota.  The Chevrolet Traverse is rated at 17 / 24, while the Ford Flex receives identical numbers.  The Dodge Journey is rated at 16 / 23.  The Toyota Highlander is rated at 18 / 24, and the Honda Pilot at 17 / 23.

The D3 continue to lead the pack in full size trucks with their new offerings in 2008 and 2009.  The 2009 Chevrolet Silverado XFE 2WD is rated at 15 / 21, identical to the all new 2009 Ford F-150 SFE at 15 / 21.  The new Dodge Ram is close behind at 14 / 20.  All three of the American models listed are equipped with V8 powertrains.  They are still fully capable of towing and hauling, as trucks are meant to do.  The Toyota Tundra rates at 15 / 19…when equipped with a V6.  Bumping up to the V8 means taking a slight hit in economy, dropping to 14 / 17 with the 4.7L engine, or 14 / 18 with the 5.7L.  The Nissan Titan, Nissan’s first full size truck, is rated at 13 / 18 with it’s only available V8 engine.

A segment where the D3 show their leadership is in large SUV’s.  The Chevrolet Tahoe SFE 2WD is rated at 15 / 21.  The Ford Expedition 2WD posts an impressive 14 / 20.  Based on the new Tundra is the Toyota Sequoia, rated at 14 / 19.  The Sequoia’s up-market brother, the Land Cruiser, comes in at 13 / 18 (only 4WD is available.)  The Nissan Armada 2WD is rated at just 12 mpg in the city, and 18 mpg on the highway.

How about alternative fuels / powertrains?  You say the D3 has fallen behind.  They may have been behind, but they have caught up rapidly and are about to pass the competition.  GM is the only auto maker to put out a full size truck and SUV hybrid in an attempt to help improve the fuel mileage on the worst offenders.  The 2010 Ford Fusion hybrid is expected to earn an EPA rating of 39 mpg in the city…6 mpg MORE than the Toyota Camry hybrid rating of 33 mpg.  It’s highway number of 37 mpg is 3 more than the Toyota Camry hybrid’s rating of 34 mpg on the highway.  In a recent media drive of the Fusion hybrid, the writers (from www.autobloggreen.com) on hand averaged 43.1 mpg in mixed driving.  That’s nearing the EPA numbers for a Prius dedicated hybrid model (48 / 45).  Since 2004, Ford has offered the most fuel efficient SUV on the planet with the Escape hybrid, rated at 34 mpg city, 31 mpg highway.

As you can clearly see, the Detroit automakers produce cars that are competitive in their segments, being as efficient or more efficient than their foreign competition.  Please, help pass this message on!  Stop listening to the people who say that Detroit doesn’t build fuel efficient vehicles.  The Japanese manufacturers are not the only option out there.  It’s not 1972 anymore, it’s 2008, there is a new D3.

Ford's 2008 Quality Improvement

Let me begin my first official post by saying that I own an American SUV.  There, now that it’s out in the open, I can’t wait to hear all of the comments from people who say I am biased.  Those who do say that are totally correct, I am biased…towards the truth!  According to a recent JD Power survey, in overall quality, Mercury scored a “Better than Average” rating…the same rating that Toyota received.  Ford, Cadillac, Chevrolet, Pontiac, Buick, GMC and Lincoln received an “Above Average” rating…putting them in a tie with Honda.  In 2008, Ford Motor Company improved it’s TGW (Things Gone Wrong) number by 11% over 2007…nearly 6 times the industry average!

Maybe you’ll say now that the survey’s are biased…well how about some awards based on the number of repairs that cars see.  JD Power awarded the 2008 Chevrolet Malibu as being the “Highest Ranked Midsize Car in Initial Quality.”  The 2008 Chevy Silverado LD was given the “Highest Ranked Large Pickup in Initial Quality” award.  What??  Two American vehicles won quality awards?  What gives?  I guess they must be…as good or better than their foreign competition!

Say you’re still not convinced, and you think that the D3 are still lacking.  If that were true, how could GM, Ford or Chrysler afford to offer warranties that offer the same or BETTER coverage for their vehicles than Toyota or Honda?  If they were having as many quality issues as everyone believes that they are, they would be bankrupt simply due to repair costs.  In fact, GM offers a 5 year, 100,000 mile powertrain warranty, greater than Toyota or Honda’s 5 year, 60,000 mile warranty.  Chrysler now offers an un-heard of “unlimited” warranty, where the powertrain is covered no matter how many years the original owner has the vehicle, or how many miles they drive it.  If Honda, Toyota, Nissan or Kia have such great quality, then they should be able to offer warranties at levels of the domestic manufacturers without a hit in warranty costs.  Or maybe they can talk the talk, but can’t walk the walk?

So here goes…one of my first serious posts on truths about domestics.

I was driving into work today and listening to the 89X radio station, as I usually do in the morning. During my commute, the main topic of conversation was yesterday’s 237-170 House approval of the $14B financial support package for the D3 and a South Carolina dealership’s controversial and racially charged advertisement campaign. As I was listening, a number of callers called into the radio station to give their perspective on the D3 situation.

I have a lot of respect for Dave, Chuck, and Lisa (the three hosts of the radio station), but I noticed that a lot of the callers still had the wrong perception of the D3. They were clearly misrepresenting the industry, Detroit, and the United States as a whole. So, for my first real blog entry, I’d like to make some comments to some of the radio station listeners:

Call 1: The first caller I heard mentioned that Honda builds cars here in the US. In fact, he says, Honda builds over 80% of the cars sold in the US, in the US. Plus this caller says the resale value of Hondas is very high, which also helps stimulate the economy.

I’ll begin by stating that even though Honda has plants here in the US, and it may build a significant portion of the cars sold here in the plants here, it is not 80%. Honda still sold fewer cars than Chrysler this year, and GM sold more cars than Toyota. All in all the D3 still make ~50% of the cars sold in the US.

And what about the number of assembly plants Honda has in the US? Well, Honda only has three (3) assembly plants in the US, one in Alabama and two in Ohio. Just look at how many assembly plants GM has in Michigan (http://gmdynamic.com/company/gmability/environment/plants/facility_db/index.php?submitForm=true&mode=state&state_id=22); hint, it’s more than three. Granted Honda has other facilities, that build engines, parts, stampings, etc., but so do the D3. And this doesn’t take into account the actual development resources… All in all, the rule of thumb is that less than 1/3 of the revenue of foreign auto manufacturers, for the cars sold in the US, stays in the US, the rest goes back to the auto maker’s home country. Most of D3′s revenue stays in the US…

Finally, what does the high resale value of a Honda have anything to do with stimulating the economy? The perception that Hondas are better than anything else out there is actually wrong, and so are their high resale values…

Call 2: Another person called in explaining how disillusioned she was by people who blame foreign car owners for the current situation. She mentioned that she drives a Honda and has had it for seven years and hasn’t had one issue with it. In comparison, the previous GMC that she had was taken in for six recalls. She also claims that the pro-domestic consumers who blame foreign car owners are hypocrites and that they should look at the tags on their cloths.

I’ll begin with this: she has had the Honda for seven years, and assuming that she drove the GMC for at least five years, that would make her last domestic purchase 12 years ago! Most will agree that auto quality has increased tremendously in the past 15, 10, and even 5 years! Even for Honda and Toyota. Just because she had a bad experience with a domestic car 12 years ago, it doesn’t mean that they are all junk now; think about it. Check the major publications, quality of GM, Ford, and Chrysler vehicles are on par with their foreign counterparts. And in some cases, even better. So if this caller feels that there is no need to shop around at the domestic auto dealerships, well then, she is only hurting herself.

And the hypocrite comment: you made a very good point, but it seems like you drew the conclusion that we might as well give up on all industry here in the US, since everything is made somewhere else. This is the whole point of helping the domestic automakers: we need to help them to keep the industry in the United States, it is just that important!

Call 3: Another person called in, and he clearly did not have an understanding of Econ-101. He questioned the possibility of how it is possible that more money stays in the US from the D3 when they do not even post a profit.

Was he serious? It’s not about the profit; it’s about the revenue that the company brings in from selling vehicles: paying their employees for developing the vehicle, manufacturing the vehicles, and selling the vehicles. Since the D3 clearly do more of that here, more of the money stays here.

Call 4: One listener sent in an email, and Dave read it on the radio. This person was frustrated by a dealership ad which advertised a Malibu, which this person really wanted, and when he tried to purchase it, the car ended up costing more than he/she though it would. Plus, this person was mad that the car is fuel inefficient. So this person settled on a small Kia (I don’t remember the exact model), that is cheaper and more fuel efficient.

I am not even sure what to make of this. The person first needs to realize that most dealers own both domestic car dealerships and foreign car dealerships. Claiming that a domestic’s auto dealership is evil because of its bad advertising and a foreign car dealership is great because this person seemingly got a good deal from it is just wrong. This person went from purchasing a mid-size sedan that by all accounts is as good in quality, efficiency, and cost as its major competitors and purchased a smaller vehicle that is cheaper and more fuel efficient. I hope the smaller vehicle was cheaper and more fuel efficient; that just seems to make too much sense…

Those are all of the calls I remember from the show… Again, my initiative (and the goal of truth about domestics) is too set the record straight on the domestic automakers, and clearly, these callers were misrepresenting the truth.

-Alex

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Please spread the word about our site to everyone you know.  The truth needs to get out there so that people can stop making uninformed decisions and comments about the American auto industry!

This is the first post on truth about domestics, and we are still working on all of the content. As you will see in a short time, the goal of this website is to debunk the myths of yesteryear about the Detroit automakers. Stay tuned for more…

Meanwhile, visit our about page to learn more about our initiative.

Alex