The "Detroit's A Loser" Myth
This story was written by Brian Cooley, Editor at large, CNET.com
"We shouldn't bail out companies that build cars nobody wants." You hear that one a lot when it comes to floating the Detroit 3. Now that the initial $17 billion bailout is done, a lot of folks are making a face like they just ate a lemon. To them, the White House has acted as a Kremlin bailing out a Trabant. But the inconvenient truth is GM, Ford and Chrysler build a lot of really good - and often great - cars and we buy a lot of them.
The Detroit 3 sold 8.45 million consumer vehicles in North America in 2007 (the latest year we can reliably benchmark much about the U.S. economy) which is about 52 percent of the total market. Yes, those numbers will be well down in 2008 but so will Toyota's. But conventional wisdom would have you guess Detroit's market share is more like 5 percent. In fact, GM outsold Honda in cars alone almost two-to-one in 2007. Add in trucks and it's even more of a rout. Is Honda building cars nobody wants?
Around the urban United States you find hostility toward Detroit because it makes so many trucks and large SUVs - 5.35 million in 2007. But they didn't just make that many, they sold that many. We snapped them up. Should we have bought all of those? Probably not, but these are Wall Street-driven companies and the margins on trucks & SUVs were great business. For the consumer populace to wash its hands of any involvement in Detroit's product plans is disingenuous.
The "Detroit's a loser" myth is also perpetuated by a black and white presentation of ratings. Consumer Reports holds huge sway with car buyers, and their 2008 top car picks were all import models except for one pickup truck. That's the sound bite radio and TV stations go with. But look down the list and you'll find plenty of Detroit cars with the coveted "Recommended" check mark by their name.
J.D. Power 2008 Initial Quality ratings show that Mercury, Ford, Cadillac, Chevy, Pontiac, Lincoln and Buick all rank above the industry average for initial quality - Acura, Nissan, BMW, Mazda and Volvo all rank below.Click here for details of the auto bailout.
Click here to see details of General Motor's bailout terms.
At CNET.com we review over 100 cars a year with a focus on technology, the attribute everyone thinks the imports own. Yet in 2008 we came away with kudos for the Cadillac CTS, Chevy Cobalt and Corvette, Ford Mustang, Flex and Fusion, Dodge Challenger and Durango, Lincoln MKS and MKZ, Pontiac Solstice, Saturn VUE and Mercury Mariner. CNET's editors will tell you SYNC from Ford and Microsoft is a high-tech home run and that Chrysler's uConnect in-dash systems are an absolute winner.
Kicking Detroit in the ass has been fashionable since the first OAPEC oil embargo of 1973, when we discovered the economical and hardy little cars of Toyota, Datsun and Honda. They were a come down in many ways, but m.p.g. was king, and as the years passed word got out they were really well built. Meanwhile, the media was filled with stories of sparkling, precise Japanese assembly lines compared to sloppy, inefficient UAW teams turning out cars with ill-fitting parts and empty beer cans inside the doors. Uh oh, Detroit suddenly had an image problem.
The auto industry had very long lead times then, so Detroit went into an extended winter during most of the '70s and '80s, ate plenty of humble pie, sent teams to learn from the Japanese (and Germans) and generally played catch up. That's a long time to be the butt of late night TV jokes and editorial cartoons. By the time great cars started flowing Detroit again it was too late. The glue was dry on the label that read "junk." You bragged when you brought home your new import, defended yourself when you brought home a new domestic.
Americans have had this bad case of automotive self-loathing ever since. Too many of us see the struggle, too few that we are building our best cars in decades. Our cars still sell in great numbers, but the market share slip leaves us feeling like losers.
If you resent the $17 billion bailout as throwing money down a hole, the best way to counter that is to take a fresh and honest look at the cars of Detroit. It won't be charity.
By Brian Cooley