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Great Article
From the Pittsburgh Post Gazette........
By Roger Simmermaker (Commentary)
Dec. 19, 2006
Ford and General Motors have taken turns besting the Toyota Camry in quality surveys for the past two years, but if you talk to many Americans – especially the ones who would never consider supporting home-based auto companies – you'd never know it.
Last year, the Chevrolet Impala beat the Camry in initial quality, according to J.D. Power & Associates. And Consumer Reports just announced that both the Ford Fusion and Mercury Milan scored higher than both the Camry and the Honda Accord this year.
Even as GM and Ford have accumulated award after award on vehicle quality, you'd almost never know about such quality gains made by American companies.
There's also the mythical perception that foreign automakers produce the most fuel efficient cars and that Detroit only makes gas-guzzlers when the truth is that all automakers – including Toyota, Honda and Hyundai-Kia alike – have allowed fuel economy to slide in the past 20 years since they all now sell bigger trucks and more SUVs.
Perhaps the biggest perception problem is that American automobile companies GM and Ford – Chrysler is now German-owned – squander all their money on plants overseas and foreign automakers build their factories in the United States. Foreign car lovers will surely point to Kia's plans to build its first-ever U.S. plant in Georgia, but they probably won't mention that they received $400 million in tax giveaways to do it, which translates into $160,000 per job.
Among the many benefits for the foreign-owned company, your tax dollars are going to be used for road improvements surrounding the complex, complete with flower beds and other beautification features. Hey, as long as we're going to allow states to bid for private jobs with our public tax dollars, we might as well make it look good, right?
And the foreign car lovers will probably also not tell you (or maybe they just don't know or don't want you to know) that GM and Ford pour more money into existing American facilities than foreign automakers spend on new plants, usually with little or no tax breaks. GM has already spent more than $500 million upgrading two transmission plants this year, and has spent nearly a billion dollars over the last decade, for example, for facility upgrades in Texas.
And what do GM and Ford get for making their existing plants more efficient? It isn't tax breaks. Instead, they get accusations of not being "competitive" enough! Maybe here I should also mention that the average domestic parts content for Kia is 3 percent, while the average domestic parts content of Ford and GM is 78 percent and 74 percent, respectively. This means that buying a U.S.-assembled (or even foreign-assembled, for that matter) GM or Ford supports more American jobs than a U.S.-assembled car or truck with a foreign nameplate.
Fortunately for our benefit, the United States remains the overall global leader in research and development, and a big reason for that is that American automakers. According to the Level Field Institute, U.S. car companies invest $16 billion in research and development annually, outpacing any other industry one could name.
Admittedly, the Level Field Institute counts German-owned DaimlerChrysler as an American automaker, so Ford and GM's combined R&D contribution to America is closer to around $12 billion. But who's counting, right? Certainly not the American auto-bashing media.
Japanese companies do employ 3,600 American workers in R&D, but that still leaves the foreign competition behind in the dust staring at American rear bumpers – 3,600 sounds like a big number until you realize that 65,000 Americans work in R&D facilities in the state of Michigan alone. In fact, two of the top four R&D spending companies in America as reported by the Wall Street Journal are – you guessed it – Ford and GM. The other two are also American companies: Pfizer and Microsoft.
Ford has recently made headlines as the American automaker with the most challenges to its future, but these challenges certainly are not because they "aren't making cars people want to buy." Toyota did outsell Ford in July, but since then, Ford has reclaimed the No. 2 spot.
GM has the highest market share, increasing over 2 percentage points from a year ago, so it apparently can't be accused of not making cars people want to buy either. Ford sales also are up in Europe, and Ford doubled its sales in China, where GM has the highest market share of any automaker.
GM also reported a 3.9 percent rise in August vehicle sales despite high gas prices and a supposedly slowing economy. And even though Toyota reported record sales that month, it couldn't match the non-record setting sales volume of Ford. GM's sales rose 17 percent in October from the year-ago month and Ford sales rose 8 percent the same period.
And for all the talk about the lack of fuel efficiency of American automakers, it seems three-fourths of all automakers failed to meet Europe's improved fuel-efficiency standards intended to cut carbon-dioxide emissions. Japanese and German automakers topped the list of the study's worst performers, but according to an environmental group's study, GM's Opel division and Ford both "come out well."
In closing, I'll leave some encouraging numbers for those of us who actually like to root for and support the home team. The J.D. Power 2006 Vehicle Dependability Survey reports that Mercury, Buick and Cadillac (in that order) grabbed the No. 2, 3 and 4 spots to beat Toyota, Honda, Nissan, BMW and everyone else (except Lexus) in having the least number of problems per 100 vehicles.
Perhaps someday the American media will give GM and Ford the credit they deserve. And once they do, perception among the majority of the American public will rightfully change. GM and Ford aren't only doing what they should to make gains in the American market to deserve American consumer loyalty; they're also doing what they should to make gains in the markets of China, Europe and across most of the rest of the globe.
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