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Why the Big Three are failing: A GM Tale

We recently received this letter at Car Talk, and thought folks at the Car Talk Community might be interested to read this well-written saga, which provides some perspective on GM’s abilities… and lack thereof.



Any response, GM?



Doug Mayer

Senior Web Lackey

Car Talk





Dear Tom and Ray,



I was interested to read that Rick Wagoner will be driving a Malibu Hybrid to Washington, DC, this week when he and the other automaker CEOs present their plan to Congress. I would like to share some of my thoughts about this with you, because I am a big fan of your show and because I own a Malibu Hybrid.



First, a little background. I currently serve as the Manager of the West Philly Hybrid X Team, a team of high school students who have built and competed with alternative fuel and hybrid vehicles for the last 10 years. (www.evxteam.org) Prior to my volunteering with the West Philly kids, I was a full-time union rep in the public sector where we developed an internship and apprenticeship program to move high school students into full time city jobs maintaining the city?s fleet of police cars, fire engines, trash trucks, etc. I also built the first passive solar house in the city of Philadelphia in 1980.



Knowing of my interest in hybrid vehicles and environmental issues, a number of my self-righteous friends expressed their dismay at my refusal to by a Toyota Prius. I committed to all of them that I would buy the first American union made hybrid car. When the Escape hit the market, they nagged me again. However, I did not want an SUV. I

wanted a car.



Along came the Malibu Hybrid and Consumer Reports telling me how much I could save by buying it. So, I went car shopping BEFORE the financial crisis escalated, but at the time the American carmakers were looking like they were on the ropes. I went to a Chevy dealer who had a (as in one) hybrid on the lot. The salespeople knew nothing about the car. They knew nothing about rebates for buying the car. And, they wouldn?t make any deals. I thought I was at

Saturn.



I went onto the GM website, which promised that 3 dealers would call me. NONE called. Finally someone from GM called and asked had the dealers been helpful. Haha. The good news was that they told me that my long time Chrysler Dealer now had a Chevy franchise. Icalled them up and they prepped their Hybrid for a test drive. I was greeted

by the salesperson and the VP from the Chrysler agency. They readily confessed their ignorance about the car but were very

helpful. I bought the car even though:



1. When were on the lot looking at the other Malibus we determined that a non-hybrid 4 cylinder non-hybrid with a 6 speed

transmission gets almost the identical mileage as does my hybrid



2. Even though my Hybrid comes with a can of Fix-a-Flat instead of a spare tire.



3. Even though my Hybrid is not blue-tooth enabled while regular Malibus are.



4. Even though you can get leather heated seats in regular Malibus but not hybrids.



Since I don?t think Rick Wagoner will take my call, I thought you might be able to call him for me prior to his trip. Please tell him to get a Bluetooth headset so he doesn?t get arrested on his journey. Suggest that he take a spare can of Fix-a-Flat. And, could you please ask him why they didn?t put the 6 speed transmission in the Hybrid?



I think that I am the target market for this very attractive and

comfortable vehicle. (I?m a 56 year old woman.) Could you indicate to him that my target market ? those concerned with the environment are most likely concerned with safety and comfort. Can you ask him why Bluetooth and heated seats aren?t options? Finally, can you ask him if he plans to educate any of his dealers and salespeople about the car?



Thank you for your indulgence.



Sincerely,



Ann Cohen



I was expecting something significant. SHe’s complaining about uninformed salesmen (present at EVERY dealership, save, maybe, the luxury brands); she’s complaining about no spare (Honda does that, too, does that make them bad?); she’s complaining about no 6-speed (a recent change for the 4cyl non-hybrid, it takes time and (scarce) money to do that for the super-low-volume hybrid); she’s complaining about the mpgs (she should have known that going in). Nothing of substance…

The slight mpg increase the Hybrid offers over the non-hybrid has been well reported by the automotive press many months ago.

But that’s the total of your complaints,not so great mileage,no spare,no leather,no 6-speed and the unforgivable no bluetooth?

He is a SHE that wrote the letter!

zzzzzzzzzzz

Dear Ann,
Go buy the car you want. Don’t force yourself to buy a car you don’t like and then write a letter to whine about it. Your Malibu hybrid isn’t going to save the planet, save you money or make you happy it seems.

Also Ann, it is very narrow to suggest that GM is having trouble because they don’t build enough hybrids. GM’s problems come from a wide variety of factors that have been compounding for decades. Your precious union is one of those factors by the way.

[i]Ann Cohen Is “Shot By Her Own Gun!” She Wants To, “Have Her Cake And Eat It, Too!”[/i]

With this evironmental influence on our cars, come trade-offs. Anybody who has studied environmental science knows this. Should a person want to “leave a smaller carbon footprint” or “hug a tree” or “go green”, there will be sacrifices. Get used to it. You haven’t seen anything, yet! We read on this site all the time that many hybrids’ tires wear out quickly. That’s a trade-off for higher mpg. The Fix-A-Flat is probably in there because the spare tire space was “traded” for batteries. I imagine that on a hybrid, one does not try and see how much extra electricity one can draw from the cars batteries. Trade-off the heated seats for that “save the planet” warmth you get. Quite a few hybrids trade safety for mpg, too, in my opinion.

I would actually be interested in purchasing a pure electric vehicle. I have written on this site asking about how pure electric cars are going to handle heat and defrost in my climate. I have yet to recieve an answer. Our temperatures have reached to -40F (once) and will probably reach new lows now that the earth is cooling. That is one trade-off I am not willing to make, trading my gasoline powered car for one with no heater and no defroster.

Personally I’m looking for a highly fuel efficient, highly reliable, highly economical, exceptionally comfortable car that will do 0-60 in under 4 seconds, maintain a top speed of over 200 mph, and handle the curves at 1G lateral without undue effort. And I want it for under $20,000. Without Bluetooth.

Dear Ann:

If you are really concerned with the environment, a Malibu Hybrid is NOT A GOOD CHOICE. It is much too heavy to get reasonable miles per gallon, and the hybriud part of it is second rate compared to a Prius. If you really care about the environment, a stick shift basic Toyota Corolla has the best fuel mileage for its size. The Hyundai Accent, Toyota Yaris, and Honda Fit all get excellent mileage, and cost much less to buy; less materials, better for the environment.

As to GM’s problems, the most important causes are; 1) incompetent and short-sighted mangement, 2) arrogant and greedy unions, and 3)poor product quality and callous customer relations have have permanently turned off a whole generation of buyers!

Pure electric vehicles will use the same type of heating and cooling that aircraft have. A reversible heat pump, electrically driven will supply heat in the winter and cooling in the summer. I would not hold my breath for a practical pure lectric vehicle as a daily driver; battery technology has a long way to go yet.

Amen.

Lithium ion cells generate a lot of heat in use. A matrix of thousands of these (see the Tesla website) requires a rather potent cooling system to dissipate the heat. Perhaps that heat can be used for the heating system.

Yes,that could supplement the heating system, since the heat pump to cool the car only needs to be much smaller than one that has to do both.

  Why The Big 3 Can Never Compete Without a Complete Makeover

It?s really quite simple. We Americans don?t want the Big 3?s cars because we get more for our money with Honda and Toyota: better quality, innovation, drivability, interior ergonomics and resale value. Honda and Toyota can provide more for the money because their costs are less: Beside the costs we frequently hear about: the legacy costs of their retirees, the wonderful health benefits, the 95% of wages paid while on layoff, the silly work rules that require a maintenance man to get a ladder for an electrician to change a light bulb. These could all be corrected with agreement between the unions and management. However, a makeover including a complete change of philosophy is necessary to save the companies.

The Big 3 have all had production joint ventures with Toyota, Mitsubishi, Mazda and Suzuki; yet have not learned anything about production engineering. It still takes them about 110 days of downtime to reconfigure their plants at new model changeover. Honda, Toyota and their suppliers ramp down the old models while ramping up the new, with no downtime for changeover.

Their more frequent repair of defects speaks to the quality of the Big 3?s cars, and their higher warranty costs. Their quality systems are outdated: long production runs, then selecting a relatively few parts for quality check. Replacing long production runs takes time, preventing true just-in-time (JIT) delivery, adding to express delivery and warehouse costs. Costs will actually be lower with shorter production runs and automatic quality checks on all machines so rework is less and delivery is still on time.

When Honda and Toyota came to the US to avoid possible import tariffs, they chose to set up shop far from Detroit, as they were afraid of UAW work stoppages. They also solved the costly problem of absenteeism by paying a monthly bonus to workers who are not late or absent, no excuses.

The Big 3?s Boards of Directors are a waste of money. They add little to the production process. Their costs are high and by serving on each other?s boards determine each others? compensation. These mostly outside directors should be dismissed and replaced by the senior managers on the factory floors where they actually deal with the daily problems and come up with innovative solutions. This is where the teamwork of management and workers pays the greatest dividend. Short term ?enhancement of shareholder value? is another burden of the Big 3.

I have been one of the few non-Japanese CEO?s in the Japanese auto industry, making critical OEM bolts for Honda, Mitsubishi, Subaru, Suzuki, Ford and their suppliers, and have been in many Japanese and American plants. The difference is readily observed. I have also taught American suppliers what changes are necessary to sell their parts to the Japanese assemblers. The Big 3 don?t understand that they need a complete makeover to compete and survive.

“When were on the lot looking at the other Malibus we determined that a non-hybrid 4 cylinder non-hybrid with a 6 speed transmission gets almost the identical mileage as does my hybrid”

On the highway the Malibu Hybrid and Maliby 4-cy; mileages are almost the same. The city mileage is about 20% better in the hybrid. As you may (not) know, hybrid cars excel in city mileage, not highway mileage. If Toyota put the anemic Prius gasoline engine in a car without the regenerative braking system, it would be too slow for most people. Chevy uses a mild hybrid system so that they will not infringe on patents that they do not own.

Compare that to Toyota, who is paying huge sums to the real inventor of the high voltage hybrid system. Not because they are good corporate citizens, but because they were caught with their hands in the cookie jar. They stole the idea and the US court system is forcing them to pay for it. But they only had your best interest at heart, didn’t they?

The lesson is…don’t depend upon a car dealer to educate you about a purchase. It’s the second biggest purchase you every make. I would make sure I did my homework and know MORE than the salesman…

Why would you ever trust a salesman on a question you didn’t already know the answer to on a $30K purchase ?

I only talk to salesmen about price…informed buyers have already decided what models they are going to consider and are willing to purchase before the shop for the best deal.

Well said; this is the basic truth many are not willing to face. When Porsche nearly went under, it was saved by 2 retired Toyota production engineers who completely overhauled the logistic and production system!

It’s remarkable that many members of congress (even democrats)now understand what the problems really are (and why BMW, Toyota, Nissan, M<azda, Hyundai, and Mercedes don’t have their hand out), and are reluctant to provide any nmore than emergency finacing at this time, relying on Obama to crack the whip over the industry next year and get them in shape before further funds are allocated.

The US steel industry went through this some yaers back, and emerged much leaner.

add to that: “and why BMW, Toyota, Nissan, Hyundai, Mazda and Mercedes don’t have their hand out”

Bad press doesn’t help either:
http://firstread.msnbc.msn.com/archive/2008/12/04/1698838.aspx

the gist of the article is "lol they spent too much money driving there instead of flying, but we don’t have pricing info on what a flight would cost."
It really makes you think that even if they walked and/or hitchhiked cross country they’d still have done something wrong

“Compare that to Toyota, who is paying huge sums to the real inventor of the high voltage hybrid system. Not because they are good corporate citizens, but because they were caught with their hands in the cookie jar. They stole the idea and the US court system is forcing them to pay for it. But they only had your best interest at heart, didn’t they?”

Spoken like a true fellow cynic. Welcome to the club. Hybrid tech. was a business decision by TOYOTA in reply to the initial research of GM/Ford. The didn’t stay with it…Toyota did. They make very little if any money on the Prius as will any manufacturer of such as these and EVs. The public doesn’t get that it’s a loose/loose for car companies to develop them and expect a profit over time w/o big time govt. assistance.