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Posts Tagged ‘American Automotive Industry

What’s wrong with American Cars?

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If you talk to Daniel Snow, you will find that there is nothing wrong with them. Snow is an Assistant Professor of Business Administration at Harvard Business School and has experience working for one of the Big 3 Companies (as stated in his article). He believes that American cars “are among the best in the world” and plans to buy a Chevy Cobalt SS when he is in the market for his next car.

I came across his article through this post. I was looking for some reading material while I ate my breakfast, and considering the amount of talk that is going on this topic, I decided to look into it. Besides, I have been paying attention to these events over the past few weeks. Most of the stuff I read is rarely sympathetic to the Big 3. I personally love Japanese cars, I always have. The reliability and fuel economy is amazing. They are just made to last. Since I was already biased, I thought an article “in defense of American Cars” would help me get a balanced perspective. So I decided to read on.

However, I soon realized that the arguments put forth were rather weak. In his article, Snow talks about how “GM, for instance, offers 20 models that get 30 miles per gallon–a statistic that puts them in good company with the likes of Toyota and Honda.” At first, that looks great. And don’t get me wrong, GM is definitely headed in the right direction with a statistic like that. However, without telling us how many total models GM manufactures out of which 20 are hybrid, the number in itself does not hold much value. I think it would be better if snow were to give us a percentage so we can better understand the impact of GM’s efforts.

Snow further adds that GM offers “nine hybrid models, more than any other company.” The problem here is the same. Without putting the number 9 in context of the total number of models, this statistic does not add value to the argument.

To illustrate how the Big 3 is learning from its past mistakes, Snow informs us that “a person who replaces her big Chevrolet Tahoe SUV with a Tahoe Hybrid saves more gasoline than one who trades in a Toyota Corolla for a Prius.” That’s great for those people but the bump in fuel economy is something that will obviously favor a brand that was not known for its fuel economy. Corollas have always been fuel efficient cars. They are definitely more fuel efficient now than they used to be but they were never horrible in terms of fuel economy. Tahoes on the other hand were huge gas guzzlers that was initially designed and manufactured with power in mind. So it is obvious that by introducing hybrid models, the fuel economy will increase dramatically. Again, I would like to re-iterate that Chevy deserves the props to be headed in the right direction. But the fact that the presentation of these arguments attempts to hint that the cars manufactured by American manufacturers are better than the foreign vehicles is where the problem lies.

In my personal opinion, not all American cars are bad. There are brands that are manufactured by the Big 3 that are profitable and, dare I say, somewhat reliable. The problem is that they have too many brands floating around. GM is the one with the most brands. Do we really need all these brands? Wouldn’t it be much better to focus on the brands that are profitable and then get rid of brands that are not doing so well. Once these manufacturers go lean, they can really work on competing with the foreign counterparts at every level from safety, fuel economy to great designs and reliability. They also need to figure out how to cut production costs and figure out a better deal with the members of UAW.

If the Big 3 decide to continue with their modus operandi, it is clear that they cannot survive the competition. I hope that the people with the power to make decisions realize what is needed of them. If that happens, I would not be surprised that more and more people will buy American cars not because they are patriotic but because they are in the market for reliable and well-designed vehicles.

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Written by tundal45

December 16, 2008 at 2:56 am

Posted in 2cents

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