Letters to the Editor
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Cars versus trains
Considering our country long ago decided to support highways and cars and let trains and light rail basically fend for themselves (something Asian and European countries have never done), the car companies crying poor now is doubly infuriating. I weep for all the laid-off workers and what this does to our economy, but our priorities are crazy.
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Detroit
The Detroit executives have never been able to look past the next quarter and that has been their demise. Wall Street analysts who have MBAs but no experience actually making or doing anything, carry some responsibility for this mindset.
That's why Ford and GM are still using what are essentialy 50-year-old engine designs some of their cars and trucks. It's why neither company has a competitive minivan. Ford, at least, occaisionally shows signs of innovation - their Escape hybrid may use a Toyota powertrain but that's really because they their own design ended up infringing on Toyota's technology. GM, on the other hand, is still trying to put lipstick on pigs, calling cars that do no more then shut off at stoplights "hybrids" and producing bland new models that look like what other companies were introducing 7 years ago.
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Detroit plays the blame game
Two stories illustrate the problems that Detroit has. Years ago there was an article in the New Yorker about Detroit blaming its workers for poor quality. The author visited a Chrysler plant and saw workers grinding crankshafts. The crankshaft grinder had worn leadscrews (the author did not know this, but it was easy to surmise from his description), and the workers had devised a method of making an acceptable crankshaft despite the limitations of the grinder. It wasted time, but it worked. The ridiculous aspect is that worn leadscrews are an easy and cheap fix, but management had no knowledge of the nitty gritty aspects of their company, so they didn't spend the trivial amounts required for the fix. The other story is that GM decided to make automatic transmissions in Japan. The Japanese transmissions were made to the same blueprints as the US ones, but their warranty costs were a small fraction of the US transmissions. It turned out that the tolerances on the blueprints were set by the limitations of worn out machines in the US, but since the Japeanese won't tolerate worn out machines they tightened the tolerances to what was required for reliablity. These stories illustrate an attitude that is taking decades to change. Toyota and other Japanese companies prove that attention to detail pays off. Now it appears that Hyundai has quickly come to the same conclusion. The American Big 3 (not so big anymore) should offer 10 year warranties. That would prove that their money is where their mouths are, and they could probably raise their prices and increase sales. And the bean counters that still bedevil their companies would demand better reliability.
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Detroit and Trains
Rob has it wrong, newly designed OHV engines (vs OHC) are not throwbacks to old technology. Although OHC are more powerful per liter, OHV engines are lighter and smaller for the same output. Drivers don't care about power or economy per liter, only about power and economy. The real worry is whether Detroit will make them smooth and reliable, or will they revert to their normal corner-cutting ways.
Elmore also has it wrong. Computer controlled cars and highways are in the immediate future. Cars, not under the drivers control, will travel 80 mph a few feet apart. Road capacity will increase by many factors, with accidents almost eliminated. This will yield all the advantages of light rail at a small fraction of the cost of light rail, and without the unsolvable problems of interface connections. Also without the constant threats of strikes by transit workers. Light rail is not more fuel efficient than ordinary mid-size cars, even with only one to two people in the car.
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No Sympathy
From a consumer's point of view I have no sympathy for Ford or GM (or Chrysler, which is in an equal state, but hey let the Germans worry about that).
For years and years and years people have been crying for better quality cars from Detroit, and instead they get sheet metal slapped on the same old problems. Buy a car from GM or Ford you'll get five years out of it. Buy a car from Toyota you are pretty much garanteed something that will run until the engine falls out of it twenty years later.
Not to mention Detroit total inability to listen to the needs of the consumer. When gas prices started their creep towards $2.00 a gallon you would think GM would start to shift their focus from SUVs and Trucks to small cars? NOPE! Hey, the good times never end. SUVs for everyone!
Meanwhile Toyota and Honda (along with the smaller Japanese and Korea automakers) have been giving consumers what they want and have actually taken the time to think more than one year ahead. When the PRIUS came out it was sort of a cute novelity, now its The Car to have.
Ford and GM are great American Dinosaurs that should promptly be put out of their misery.
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American Car Companies Traditional Short Term Strategy
The basic problem with Detroit car companies is that they have traditionally followed business strategies that make them more vulnerable to swings in the market than Asian companies do. This is not something that only happens in the automotive industry. American companies in general are structured to take advantage of increased demand by adding productive capacity (i.e. more employees) and to respond to downswings by downsizing.
"Toyota can't make Priuses fast enough"- the author�s statement is technically true but there is an underlying reason for that: Toyota responds to excess demand by increasing prices and putting customers on waiting lists, not by building new factories that they know they wont be able to afford after the demand inevitably declines again. In a sense you can say that Toyota plans for the long term future, while GM and Ford plan for the immediate term, knowing that they can offload their excess capacity when they need to.
Again, this mindset isn't limited to auto manufacturers- how many dotcom start ups didn't really fail so much as they were simply designed to provide their developers with the maximum sell-off price? No long-term future was ever contemplated for a large number of those firms, thus their employees had been truly doomed from the get-go.
Of course a "Bull and Bear" strategy is a higher risk strategy- when it works we beat the pants off foreign firms, when it doesn't American firms go out of business and American employees lose their jobs. GM and Ford took a higher risk by putting so much productive capacity into SUV's, now they are experiencing the consequences of that decision.