Friday, February 27, 2009

On driving a bad bargain.

Reading Consumer Reports' list of the Ten Best Cars for 2009 got me thinking back to the time, a few years ago, when I was lucky enough to land a one-on-one visit with David Champion, who runs CR's test track up in East Haddam, Connecticut. (And is there a better name than David Champion for a man whose job it is to push cars to the limit? He insists it's his real name, too.) I'd missed the usual Media Day, when hordes of giddy journalists descend on the pastoral town to watch Champion and his staff put the hot cars through their paces, so he was nice enough to offer a personal tour of the facility. And what a tour it was. What I most recall is sitting shotgun as Champion showed off the capabilities of a fiery red Audi (much like the model above) and asking himfoolishlywhether it was possible to roll a car with such impeccable road manners. He got this maniacal gleam in his eye, and I actually think he proceeded to try; it sure felt like it, anyway, from where I was squirming.

Another vivid memory from that day was Champion's unapologetically patronizing, almost snide attitude towards American cars*. And when you're a Brit, which he is, and you're snide, it sounds that much...snider. At one point he brought me inside to where they disassemble some of the cars to check for manufacturing gaffes
, structural integrity and such; he opened the rear hatch of a shiny new Buick SUV, pulled out an ill-fitting bolster, then reached in and grabbed a handful of thin, poorly installed sound-deadening material. "Here," he said, holding it forth for my inspection as if it were a decomposing mouse. "Look at this shit."

And on that note, we return to this year's list, which features only one domestic vehicle. In all these years of trying, why can't we build cars that compete with the very best
from overseas? People who reply, "Oh, foreign cars have a certain mystique just because they're foreign, that's all it is," forget (or are too young to remember?) the way Toyotas were perceived when the company brought its first-generation boxmobiles to our shores. People made fun of them; it was automatically assumed that if you drove a Toyota Corona**, it was only because you couldn't afford anything better (or maybe you were one of those nut-cases who worried about gas one day being in short supply). The first Toyotas, aside from being inexpensive, were also tinny and suspect in their road manners. Indeed, as recently as 1990, when Toyota rolled out its entry into the luxe-car marketand is there a better name for a status car than Lexus?people would say, "You're seriously going to pay $40,000 for a Toyota?"

Nobody says th
at anymore. From day one, Lexus blew people away. Today, the big Lexie in particular, the 400-series, is widely regarded as the best overall car on the road, certainly dollar-for-dollar and possibly at any price. The Toyota marque as a whole has become synonymous with reliability, economy and quality fit-and-finish.

You've come a long way, akago. (Why haven't we?)

Meanwhile, we all know about the German cars. Yeah, Beemers, Benzes and Porsches can be touchy about things like maintenance; if you don't keep them up to snuff, they'll begin sulking. But when they run, man oh man do they run! Hell, even when you're done driving and you get out of the car and shut the door, you're rewarded with that nice, solid, reassuring thwump that tells you you're in possession of a serious, well-honed piece of machinery.***

I'm thinking it can't be an engineering thing, because America has always been able to engineer; in fact, the usual progression in almost all technological settings is that we invent, then others (notably the Japanese) clone/copy. It can't be a brain-drain thing, either, because some of the top minds in global automotives continue to work in Detroit and its environs. Processes? Who invented the assembly line in the first place?

So what's the problem? In particular, why is it that for so many years, America has specialized in turning out cars with an appalling number of initial defects and/or long-term gremlins? When you get a chance, pick up a copy of CR's Used Car Buying Guide and take a look at the entries on American "status cars" from, say, the 1990s. Look especially at the frequency-of-repair records. Why should Cadillac engines blow up after 75,000 miles (if that)? These are Cadillacs, after all, not Ford Pintos.

Yeah, I know, we're "getting better." I'm sick of hearing that. We've been getting better for decades now. We should be best.

I'd really like to know what's going on. And it's not like this is unrelated to our economic woes. One of the major problems we have is that we've migrated from a manufacturing economy to a service economy. America simply doesn't make enough things anymore. So at least it would be nice if the things we made were worth buying.

* These days, the label refers more to philosophical ancestry than to place of manufacture, since a number of popular foreign models, notably including many Hondas, are actually assembled in the U.S. Still, much of the money goes back to places like Nagoya or Minato
** The model doesn't exist anymore, at least in the U.S.
*** There are exceptions to the foreign-is-better rule. Yugo comes first to mind, but the notable one is the Jaguar, which, when the Brits were still making it, could never be induced to run for long. The joke about Jags was that they "looked great on the lift..." To his credit, Champion would be the first to admit that the vehicular offerings from his home nation, excluding the elite brands (but even including some of them as well), have never been very durable performers.


Cal said...

I assume that when you are basically running a health care company with a side business of manufacturing cars, you have to try to pinch pennies on the production side. This leads to a reduction in product quality. So I guess this is what they ended up doing.

And this is coming from a person who thinks unions have done a lot for the rank-and-file worker. But some of the deals that Detroit agreed to in the past seem to assume that there was no such thing as the specter of increasing globalization.

But I do agree that something should be done to arrest the secular decline in manufacturing in this country. Although I'm not a fan of this positive thinking stuff, it does give a community something to show off and be proud of. When our country over the last two decades (or slightly more) is only known for speculating on financial instruments and real estate, what is there to show when bubbles burst? Only overcapacity in both areas and, potentially, social unrest.

Steve Salerno said...

A very insightful comment, Cal, and nicely put, too. Your opening line is classic.

Speaking of having a product to show off, some years back when I closed a nice book deal (this was during my pre-SHAM period), I went out and bought a Corvette. Since its inception, the Vette has generally been regarded as the showpiece of the entire GM line. And while I certainly couldn't find any fault with the acceleration and handling, I was very disappointed in the fit-and-finish; a section of the dashboard had rough, unaligned edges, and from just behind me, where the removable roof met the chassis, there was an intermittent "peeping" sound that would make one think I were carrying a crate full of finches or some such. And even then, of course, the Vette was not a cheap car. At least not in price.

When I mentioned this to an older business acquaintance who'd already developed a taste for foreign cars, he shrugged and said, "My friend... it's still a Chevy."

roger o'keefe said...

Steve, while I guess I buy your general premise about domestic vs. foreign, it's a mistake to assume the difference is simply cultural right down the line. Mazda and Isuzu are also Japanese cars, and they've have their share of reliability problems through the years. Isuzu engines especially were known to give out long before the 75,000 miles you quote for the Caddys. Hyundai is a Korean brand and took a while to get the hang of the quality thing, and still lags behind in performance except for the new Genesis, which costs a pretty penny. Toyota and Honda are the standouts, but even the Nissans, of which I believe you own a couple, never quite measured up. Meanwhile in recent years a number of American cars have finished quite high in the JD Power rankings for initial delivered quality.

Steve Salerno said...

Roger, I can't really argue the points you make. I'm just going mostly on the basis of the rankings from the real insiders: CR, the major enthusiast magazines, etc. And let's not forget the ultimate critics here: American consumers, who spent the past two decades fleeing domestic showrooms in droves.

Cal said...

To be honest, I heard my opening line (or a variation of) somewhere. It probably was from watching CNN or CNBC. I just did a Google search and one of the hits is from --LOL

But I just thought it totally made sense when I see the agreements between Detroit and the unions over the years.

In fact, I believe the U.S. auto companies were the first to offer health care benefits in the 1950's. And some historians believe, of course with hindsight, it was a colossal mistake that has led them, and our country, down a fiscal black hole.

Stever Robbins said...

I think the American auto industry (the whole industry, not just the unions) developed a sense of entitlement back in the monopoly days that they still haven't emerged from. The dominant way of thinking is simply, "we deserve to make sales," not, "we have to produce great products."

We've stopped believing, culturally, in doing a good job, working hard, and taking responsibility for what we create. I've been in many business conversations where the CEO was asking, "what's the minimum you think we can get away with," not, "how can we deliver a great product for our customers?"

If you think about it, the entire field of corporate strategy is really just trying to find ways to avoid having to deliver the best product at the lowest cost. (Why do you need to lock up distribution channels? Because a real competitor would kill you in a heartbeat!) Thirty years of thinking "strategy" instead of "let's do a kick-ass job" takes its toll.

Look at how hard they fought the 38Mpg-by-2020 regulations. For goodness' sake, Honda Civics got 50+ MPG 30 years ago. They were made of aluminum foil, but they got the mileage.

Regarding the whole "service economy" theory thing, I don't understand the logic behind saying we have a "service economy." Which services? Fast food and financial planning? I'm not impressed. I think one problem with the service economy rhetoric is that it's given us a rationalization to avoid confronting the idea that we're falling behind. At the end of the day, people want products, not services. As far as I can tell, the primary driver of services is just to deal with the complexity of the world we've created. I don't know about you, but there are very few "fundamental" services I purchase. (Fundamental meaning that they aren't related to managing the fact that I don't have enough time to do those tasks myself.)

Noadi said...

My dad doesn't read blogs but I'm emailing him this post because he's a car mechanic and will appreciate this post.

I think a good bit of it is complacency, over the years domestic manufacturers have had a strong customer base of people who won't buy foreign cars. So where's the incentive to meticulously bug check the cars? Their customers would put up with it out of loyalty. Of course we now see that loyalty disappearing, it started before the economy started slipping and between that and the other problems the auto makers have they're in serious trouble now.

Steve Salerno said...

Noadi: What kinds of cars does your dad prefer/work on? (I'm trying to figure out how angry he's going to be.)

RevRon's Rants said...

If the automotive industry would allow actual engineers more voice in setting design parameters, we might actually see some good products. As it is, the engineers try to develop products according to criteria established by marketing, legal, and accounting execs. It's similar to our current health care system, where accountants make medical decisions, and people suffer as a result.

When I was a teenager, I bought a Chevy Corvair for a song, and decided to try and improve upon it. I blueprinted & balanced the engine, which had been assembled so far outside even nominal tolerances that I'm surprised it hadn't cratered in the 20,000 miles the previous owner had it. When I put it back together, it was remarkably strong, and didn't leak any oil or exhaust gas - quite atypical for a Corvair.

When I started redoing the suspension, I discovered the truth about the "defects" that helped Nader rise from obscurity. The car's suspension had been designed to make the little car ride like the larger Impala, and as a result, it handled about as well as... well, a Jeep Wrangler of today.

Once I'd redesigned the suspension & put the thing back together, it was a wonderful car. I could even beat my girlfriend's '63 'Vette through a particularly twisty patch of East Texas farm road.

When you have accountants and attorneys whose sole function is to decide whether the potential for liability incurred due to a defect warrants correcting that defect, it's no wonder we turn out substandard products. The widespread "entitlement" attitude Stever mentioned is, I think, the core of the problem, and the other symptoms of shoddy business practices arise from that attitude.

Bottom line is that until we stop listening to the industry apologists and start actually improving what we do & how we do it, we'll continue to suck hind tit in the world market - as well as the market here at home.

renee said...

Steve! Finally - someone I can pose this question (and a hypothetical) to:

1. Do the drivers and others who test and rate the cars at CR know the manufacturer of the car they're testing?

If that answer to that question is yes, I ask you this:

2. Given the attitude you saw displayed by Mr. Champion, do you think it would make a difference in the results if ALL references to make or manufacturer were obscured or otherwise removed? I mean every single one.

I have to imagine that someone climbing behind the wheel of a Honda has a certain sense of "this will be great!" as opposed to what goes through someone's mind as he or she settles in behind the wheel of a Pontiac.

What do you think?

Steve Salerno said...

Dammit, Renee, you're too perceptive! In fact, that's one of the things I mused about in the piece itself, which was the role of "confirmation bias" in the appraisal process. Yes, I am quite sure that no matter how much people like Dave Champion try to filter it out, when they climb into a Honda, the mentality is along the lines of, "Let's see how they made a great machine even better!", and when they climb into a Chevy, it's probably more like, "Well, here I am in the latest piece of crap from GM."

Again, though, I do think they work hard to filter that out; and remember that they also incorporate a ton of objective metrics into the process: 0-60 times, 60-0 times, lateral acceleration and slalom times (which = handling to us), drag coefficient, MPG, interior noise levels, head/leg room, etc., etc. Plus all the historical data on how long the major power-train components typically last, whether the electrical system likes to start fires just for kicks, etc. I suppose there's some subjectivity that creeps back into the assessment of fit-and-finish and delivery defects, but really, it's not hard to miss the kinds of annoying eyesores I saw on the dash of my Corvette--which set me back $27,000 in 1987 funds.

sassy sasha said...

my first car was a ford escort & it was garbage. i then got a very used honda accord that i still drive with almost 200,000 miles! maybe i'm just one person but i think you'll hear my same story from college students everywhere, which is, buy foreign!! you'll be happier and safer

Anonymous said...

With regard to the bias becoming a self fulfilling prophecy I think that driving cars back to back over a few hundred miles is the most fool proof way to rate them. There is simply no way to objectively rate something as complex as an automobile (although CR tested them the same way they did blenders many years ago.) So you have to accept the subjective nature of rating automobiles. Unless there's some vast conspiracy by the automotive press American cars simply do not stack up to their foreign competitors. Those of us who get to sample rental car fleets can confirm this. Which isn't to say there aren't good American cars or bad foreign ones.

Anonymous said...

What upsets me is that the foreign cars aren't that much better than our cars, if really at all, and I do think a lot of comes down to image. We think they're "classier." I truly believe that if cars are at all similar in quality and when you consider the basic function of a car to get you from point a to point b, you owe it to yourself to buy American. I know that's what I do, and my cars are good enough for me. Also a lot cheaper to fix!

RevRon's Rants said...

Anon 8:42 - While it might be satisfying to dismiss any differences in quality to "image," the reality is that American cars - no matter how improved they have become in recent years - simply exhibit more problems than do many imports, especially the Japanese.

I drive a Honda Odyssey mini-van, which now has 107,000 miles on the clock with no sign of slowing down. The only repair I've had to have done is to have the air conditioner repaired. It is typical for Hondas & Toyotas to go 200,000 miles with minimal maintenance.

My best friend, on the other hand, is on his second Pontiac Vibe's last legs, the first one having been worn out in 80,000 miles (and he is a very conservative driver). He's lucky to get 23mpg on the highway, while my much larger minivan typically gets 27~29mpg on the highway (and I tend to have a heavy foot on the road.

These differences aren't anomalies; they're actually pretty typical. And IMO, it isn't patriotic to accept a second-rate product, just because it claims to be made in America, especially when many of the Japanese cars are now being put together here.

Hell, we taught the Japanese how to manufacture. If our own automobile companies would follow some of the practices that Deming taught the Japanese - such as developing strategic plans into the next decade, rather than just into the next model year - and end the widespread attitude of entitlement, we might actually regain our once-justified reputation for building the best cars in the world. Mere excuses won't get us there.

Steve Salerno said...

Agree totally, Rev. The personal case histories we recount are in fact anecdotes, and thus their value as proof could be impugned as "anecdotal"--and yet there are just so many of these anecdotes, which, together with the formal industry reviews, take on the weight of an overwhelming argument. My older Nissan Maxima has accrued more than 170,000 miles, but you will never see so much as the tiniest puff of blue smoke emerge from its tailpipe. It shifts and runs (knock on faux wood) as it did the day I drove it away from the showroom, there is not a millimeter of extra play in the steering, and the only meaningful repair, if you can call it that, was a starter at 165,000 miles--by which time most Detroit iron probably would've gone through two or three of 'em. Just an amazing machine.

I've also got a 1990 Acura Integra sitting out front that starts and drives flawlessly every day despite the fact that it was basically garaged--without any of the preparatory steps that they always suggest when storing cars--for over two years. When it was time to put it into service again I simply charged the battery, fixed a fan-belt that had worn out, turned the key, and off I went.

RevRon's Rants said...

As a lifelong motorcycle rider, I've seen graphic evidence of the way American industries have attempted to offset poor engineering and execution with patriotic spin. Harley Davidson would have gone under over 20 years ago, had they not prevailed upon the government to penalize via stiff tariffs Japanese brands who encroached on the big-bike market - a market for which Harley felt they deserved ownership.

Never mind that Harley stubbornly adhered to an archaic and inherently unreliable engine design, coupled with poor handling characteristics. They propped up their sales with "image," while allowing utility to suffer. Furthermore, they created a massive cottage industry for expensive aftermarket equipment that either marginally improves their bikes' function or enhances the bike's (and the owner's) image as an "individual." Look at the wantads at all the bikes being sold. Most are Harleys, most claim thousands of dollars invested in aftermarket stuff, and all are for sale at less than the amount "invested." I guess I just have a different idea as to what an "investment" should do.

I've ridden Moto Guzzis exclusively for many years, not because of some mystique or image, but rather due to the fact that they typically go 150,000+ miles without major repairs, handle very well, and are comfortable (at least, for the rider - passengers' opinions might not be quite so positive!). And when a dedicated Harley rider makes the "I buy American" comment, I remind them that the Honda GoldWing is made in this country, and will outrun, outlast, and outhandle a Harley, and costs less to boot.

When I spend my money, I demand that my purchase be functional. I can't justify spending thousands of extra dollars for something that doesn't work well, simply to make a statement. While I'd rather buy domestic cars and bikes, until they actually meet my requirements (and fleshing out an obscure "image" isn't one of them), I can't justify doing so.

Anonymous said...

Since graduating from a school that is known for engineering, I have kept up with many of my peers. Simple observation reveals that the engineers hired by Toyota and Honda are smarter and harder workers than those hired by Detroit. Not to say the those hired by Detroit are not smart or work hard, but engineer to engineer the foreign automakers consistantly win.

Mike Cane said...

>>>I'd really like to know what's going on.

Go read The Reckoning, by David Halberstam.

And also, really, we should have had a national policy in the 1970s to phase out humans and go all-robot for car manufacturing domestically.