GM: Won't let "green car stuff" get out of hand

[orange4boy]

Frank,

Perhaps I'm not being clear.

I said that American consumers are influenced by misleading advertising. That GM attempts to mislead them. But some things wake them up like high gas prices or bad experiences with quality and then they question the reliability of the advertising and make different choices, like more fuel efficient cars as an example. Some are mislead, possibly most, but not all.

Bob lutz said that there was no profit in "green cars", I am refuting this by showing that in spite of all the advertising for huge cars people have historically embraced smaller, more efficient vehicles. Those cars were profitable here and in Europe and Asia.

My point is that if you align customer needs with the marketing then more people would buy according to their own interests. GM is in the business of creating gasoline consuming machines. History shows this, they have just gone bankrupt doing this. Now they are going to do it again on your coin.

The American consumer really is a gullible stupid slob isn't she?

People as a group have no foresight whatsoever.

You said it , not me. I said they were mislead. I think, given good information, people generally make good decisions. But we, in North America, have been fed so much crap for so long it's going to take a lot to wake people up to reality.

By the way, I hope more cars are made domestically. I think that's good for our economy and saves transportation energy. I also think we can make excellent vehicles here but GM has mostly not done so in recent history.

Yes, Buick is in there and so is Mercury but those are exceptions, but again, I said the big three are the pits.

American consumers have ALWAYS gravitated towards the biggest vehicles they could afford to run.

That statement flies in the face of history. It's like saying the Volkswagen beetle didn't exist, or the golf, or the 911, or the Fiero. or the Metro. Plenty of people who could afford bigger cars bought these. Some gravitated to the biggest, yes, but not all and not always.

[evolutionmovement]

Large cars have always been preferable to the majority—they innately appeal to the fear and or lack of control people feel over their lives. Pushed around throughout school, stuck in a pointless job with an a-hole boss? Buy a macho truck with a Hemi and intimidate other road users. Afraid of texting drivers (which is only OK if someone does it themselves—it's the other idiots out there who can't drive and text properly) blowing through intersections and killing your precious children? Buy this land ironclad and resist the forces of the evil public that's out to get you! These aren't marketing messages, they're a little more colorful version of what goes through many consumer's minds, albeit probably unconsciously. Even in Europe, small SUVs are being bought in larger numbers. Only gas prices, taxes, and space premiums have made Europeans traditionally favor small cars. MArketing just gives it a little push.

And JD Power and Consumer Reports are garbage. I'll generalize my criticisms to both of them, but they don't take into account REAL long term reliability, cost of labor and parts when repairs are necessary, are dependent on the prejudices and varying tolerances of the public (perception of quality allows them to make excuses for a car and vice versa and a car they're in love with, ahem, MINI, will also catch an unfair break on problems), and apply equal weight to pointless customer "problems" and actual major failures. Famously, a few years back, JDP (or was it CR? I can't even keep them straight) was listing issues of too few or small cupholders on one vehicle and blown transmissions (Land Rover, incidentally—always at the bottom and NOT GM) on another as just being reported problems—they had the same weight since they weren't differentiated. Absurd. I also know the dimwits ranked my old Subarus to be less than great when all 3 of them were cheap, repairable by a monkey on rare occasion they went bad, and tough as nails to a far-better extent than their contemporaries. There's also that boring cars like Camrys discourage abusive driving and appeal to people who drive sedately, artificially pumping up their reliability ratings. My cars were variously jumped, used as battering rams, pegged their speedometers, performed stunt maneuvers, and run at redline in top for 15 hours overloaded with luggage with over 100k miles on it. Never a complaint. Rust killed the first two, but I'll be damned if I let the last one go!

I don't get all the GM bashing. Toyota makes more tanks than they do (the Japanese Hummer, the FJ, never gets criticism), has had more than a few big problems with their cars lately, and they seem to do no wrong. I realize, GM's no saint and Toyota's made more an attempt, but they're also not saddled with all the costs and are in a much stronger financial position where they can take risks like the Prius (which are now sitting on lots). Given the traditionally fickle American customer, they devote their scarce resources on the more sure bet—big cars.

Worst is VW/Audi, yet where's the outrage? I'd drive a Chevette before anything from them (OK, I'd take an R8). Worked on too many, known too many people who've owned them. In fact, though I've known many people with reliable (if not exactly appealing) American cars, far more than those with problems, yet only one that has had a good experience with a VW product built in the last 20 years and even he complains about the retarded part cost. You want to know what's reliable, talk to a mechanic, not a mag that specializes in toaster comparisons.

How did the Japanese steal market share? Americans moved to small cars. Let's look at why. Prior to the first gas crisis, the domestic makers owned the market. The Beetle, while popular was bought only by individualists (to keep it simple). When the first gas crisis hit, the Big 3, raking in the money they made on big cars most Americans loved, were taken as by surprise as the customers. Now people had to wait in long lines and get gas only on certain days and the panic had them looking for alternatives—30 mpg would get them through a couple of ration days, but 10 either made them walk or put them in long lines frequently. It was out of necessity, not choice that Americans bought what was available for small cars—foreign makes being the only ones selling them (for various domestic reasons). Around the same time, substantial safety and emissions standards came into play, castrating the giant engines of the Big 3 and taking away some of the incentive to own them. Not everyone jumped back into an American car with its capped horsepower (insurance companies also played a part) and ugly safety bumpers (though everyone had those). Meantime, what did the Japanese do with their new profits? Invested in product, something the Big 3 had been neglecting to do because it hadn't been necessary (typical American short-sighted business model). The Japanese cars made huge strides in quality and reliability with every generation (a model the Koreans have adopted to great affect as the Japanese are starting to rest on their laurels a little. History repeats), keeping early adopters and gaining new converts as the Big 3 fought to catch up with government regulation, neglecting quality in the interest of cost savings and speed to market. From there, the situation snowballed and combine bad union deals and what the Big 3 are really guilty of more than anything is short-sightedness, a problem endemic to American business, yet GM gets all the bad press. The banks were far worse and required far more money to bail out, but people took GM personally. People get emotional about cars and GM's long descent from greatness hurt and ashamed them. GM and the flag went together—their collapse and disgrace reflects America and themselves. I think the real thing of it is that people are angry at what they allowed to happen to this country in the latter half of the 20th century and in the wake of winning the cold war—where is the promise of peace? A lie. But how could it be anything but when it's human nature to be weak, giving in to base impulses like greed and violence. Perhaps it's a bit of self-loathing, then. Or maybe I'm thinking too much into this and that fly on my wall is simply a fly (though I do believe I detect a robotic eye). I tend do to that sometimes.

[cfg83]

evolutionmovement -

I'd agree with 95% of your post. I think the stock market based quarterly earnings model is a big reason for our short-sightedness. This fellow was largely ignored in the 1950's by the Big-3, and welcomed in Japan :

W. Edwards Deming - Wikipedia, the free encyclopedia

Dr. Deming's teachings and philosophy can be seen through the results they produced when they were adopted by Japanese industry, as the following example shows: Ford Motor Company was simultaneously manufacturing a car model with transmissions made in Japan and the United States. Soon after the car model was on the market, Ford customers were requesting the model with Japanese transmission over the USA-made transmission, and they were willing to wait for the Japanese model. As both transmissions were made to the same specifications, Ford engineers could not understand the customer preference for the model with Japanese transmission. Finally, Ford engineers decided to take apart the two different transmissions. The American-made car parts were all within specified tolerance levels. On the other hand, the Japanese car parts had much closer tolerances than the USA-made parts - e.g. if a part was supposed to be one foot long, plus or minus 1/8 of an inch - then the Japanese parts were within 1/16 of an inch. This made the Japanese cars run more smoothly and customers experienced fewer problems.
...
JUSE members had studied Shewhart's techniques, and as part of Japan's reconstruction efforts, they sought an expert to teach statistical control. During June–August 1950, Deming trained hundreds of engineers, managers, and scholars in statistical process control (SPC) and concepts of quality. He also conducted at least one session for top management. Deming's message to Japan's chief executives: improving quality will reduce expenses while increasing productivity and market share. Perhaps the best known of these management lectures was delivered at the Mt. Hakone Conference Center in August 1950.

A number of Japanese manufacturers applied his techniques widely and experienced theretofore unheard of levels of quality and productivity. The improved quality combined with the lowered cost created new international demand for Japanese products.

CarloSW2

[Frank Lee]

Good post E.M. and I mostly agree...

How did the Japanese steal market share? Americans moved to small cars.

I want to point out that the Big 3 DID have small cars prior to the oil crisis in '73... but some of them weren't very good (ex: Vega- initially). Most customers aspired to own the big models. That the domestic manufacturer's marketing departments largely viewed the small models as an entry-level necessary evil, and not much more than a stepping stone to bigger and better things didn't help much.

Sometime in the '70's (and really picking up steam in the early '80's) after the oil crisis thing settled down somewhat, pickups started gaining in popularity as they weren't subject to the downsizing and converting to fwd that many long-popular car models were. Then SUV popularity picked up too. The American customer did not want to give up their big RWD V8s without a fight and in pickups and SUVs they found an out. This trend caused the consumer and the companies to feed upon each other- the companies noticed the demand and started fitting the formerly utilitarian and sparse pickup truck with all the amenities of a luxury sedan.

It's funny, there is a humongous old car boneyard near here and I noticed when going through it that many, many of the vehicles there (more than half?) have '74 license plates! Yes, a mass dumping of big cruisers in '74 but then as now (as in, last year) it didn't last long and the "gravitational pull" is towards the big stuff.

And that is why Lutz is right.

He is not turning his back on little cars and/or hybrids. He's saying, realistically, that they only represent a portion of the market, not the whole thing. To devote the entire company to them before the customers want them (and before Peak Oil forces it) would spell doom to the company, as other companies would step in to fill the void. Totally un-proactive, yes, I agree. What is needed to turn this stupidity around is an educated consumer base.

[chuckm]

I guess my opinions fall somewhere between Frank and Orange4boy. Marketing does influence people and what they buy, do, and think. If it didn't, companies would not spend the money. I think both Orange4boy and Frank both overstate each side. Individuals tend to be rational in their decision-making process, even if that process is based on cultural and social factors, not just raw facts. Groups (read cultural and social factors) tend to be irrational. Thus we have people buying cars that are designed to impress the neighbors AND meet their actual transportation needs.

The irony is that this forum is populated with people that do care about energy and fuel economy. But many of us, myself included, are honestly motivated by a desire to save money as well. How many of us will buy a new car rather than a used car? Why should the car companies listen to us? We're not giving them any money! So many people that do buy new cars are buying ones that will help them keep up with the Joneses.

[Frank Lee]

Chuck you are right, the car cos have no reason whatsoever to listen to the likes of me, they do not even know I exist, because not only do I never buy new (well- once, 15 years ago), I never buy dealer service, I never buy dealer parts, I never buy anything... they hardly get a freekin' dime of mine.

Hell I was never in the market for a new Metro, even though I really like them.

[jamesqf]

Originally Posted by Frank Lee

What does GM's market share have to do with it? Nowadays we have Honda, Toyota, everybody with full size offerings, even 4x4s.

How did GM lose that market share in the first place? Wasn't from the Germans & Japanese bringing in "full size" offerings, now was it? They brought in the smaller cars, which a lot of Americans bought BECAUSE THEY WANTED SMALL CARS. The perception of better quality came later. Then later still, when the Japanese owned the small car segment and had developed their reputation for quality, they could take still more market share by adding "full size" models to their lineup.

Part 2: must have had more to do with the perception of quality than size or fuel economy.

Hardly. If it was just because of the perception of quality, the Japanese &c would have switched entirely to building "full size" models. But they haven't: they still build and sell a lot of small cars, because that's what a lot of Americans (though of course not everyone) actually want to buy.

how many full-sized "imports" are used for solo commuting?

I've no idea. But those "full size" models are what percentage of the import market? (And aren't even the "full size" imports generally smaller than their US counterparts?)

How many 4x4 "imports" go off-road?

Again, no idea. Probably a greater percentage than US-made. At least around here the 80s to mid-90s Toyota 4WD pickup is probably the most common sight on dirt roads (I don't do off-road myself) and construction sites.

Do the imports have an edge in fe?

Yes. See here: Corporate Average Fuel Economy: How Automakers Rank - Cars.com and note that the CAFE rankings are somewhat biased in favor of Detroit because of things like credits for E85 capability.

Are high fe cars selling well?

Are ANY cars selling well these days? Maybe the Tesla :-) But the higher FE models seem to be doing better than the guzzlers...

[Frank Lee]

See above.

P.S. I looked at your CAFE link... I don't think it's enough of a black and white issue, at least with what they presented, to draw a conclusion from it so I won't at this time.

[jamesqf]

Originally Posted by evolutionmovement

Large cars have always been preferable to the majority—they innately appeal to the fear and or lack of control people feel over their lives.

Since I've always owned small cars (and I mean really small, like the Austin-Healey Sprite), it's very tempting to believe that, but I don't quite. It's part of the story, but not all of it. There's been a lot of creative marketing, selling not just the size but false suggestions of safety and adventure, like your nine-to-five sitting in the cubicle cowboys.

The Beetle, while popular was bought only by individualists...

But there were a lot of individualists back in the '60s and early '70s :-) There were other small cars being imported, plus the whole set of British/Italian sports cars that got killed off by the big bumper laws. Toyota had been selling its Stout pickups on the west coast (years later, I had a '68 that I revived from an employer's junkyard) and had introduced its "Sport Truck" before the oil embargo hit. So it wasn't just that the Japanese &c jumped into a market created by the embargo: they were here before, and poised to take advantage of the opportunity...

[The Atomic Ass]

Originally Posted by Frank Lee

What came first, the chicken or the egg?

If customers buy more large vehicles than small ones, what's a manufacturer to do? Even Honda has bent to the customer's will.

If a model is offered with a base engine and an optional H.O. engine and 95% of the customers order the H.O., it doesn't matter what's on your resume. The customers have a lot of say in what gets built.

That said, I do wish all the manufacturers would be more proactive in educating the consumer about energy use.

Frank, your sudden philosophizing is giving me a headache.

And I meant the existing line-up would be converted straight-away to full hybrid, with electric-only options. No hybrid ICE's with over 35 peak HP output, lots of diesel options, and not one thing under 30mpg city or highway EPA.

And of course, since I already had an axe to grind with Detroit over the performance of their recent vehicles, nothing with less than the equivalent of 10lbs per HP. 3,000+ lbs cars with 110hp engines? Bite me, Detroit.

Ok, I'm done ranting now.