Why We Love Our Newest Subaru, Or, Dr. Z, Are You Listening?
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For those of you not paying attention, the days of the American automotive industry driving the US economy seem to be visible only in the rear view mirror.
The fortunes projected for the industry for 2007 are an improvement over the previous year, but only because 2006 (and 2005, for that matter) were, to put it bluntly, brutal beyond belief.
How brutal?
GM lost at least $16 billion during those two years, and soon expects to lose at least $6 billion more to close out the relationship with its former Delphi division.
Ford lost $7.2 billion in just the first 9 months of ’06. They expect to require an additional $17 billion in cash for the next 24 months, and have borrowed over $23 billion to cover anticipated losses through 2009.
Remember the old Ford mantra “Quality is Job One”? For some consumers, that’s apparently changed to: “My engine just spit plug number one”
Things are going so badly for Daimler/Chrysler that stockholders and analysts are now wondering whether there should even be a Daimler/Chrysler.
On the other hand, Japanese and German manufacturers (including, ironically, Mercedes) did pretty well in 2006-particularly Toyota, who this year anticipates wresting the title of world’s largest automaker from GM.
If you take a look at the sources I’ve referenced above, (and this one here) the problem for the three “US” automakers appears to be an over reliance on the profits from sales of large pickup trucks and SUV’s.
The automakers’ response is to cut the number of current employees and plants, seek to cut the pay of future employees, and, presumably, cut retiree benefits. (To be fair, a labor cost differential exists between “the Big Three” and automakers that have moved in from overseas and opened primarily non-union plants.)
As of this date, the effort by these three companies to develop profitable smaller cars has not been successful.
Which brings me to our dead Subaru.
The Subaru Forester we bought new in 2001 finally went down with 259, 000 miles, more or less, on its odometer, in December 2006. Options included replacing the dead engine with a $5000 rebuild, or buying a new car.
Exactly how we bought the car is a story for another day (and a hilarious one to boot!), except to say the entire process of acknowledging the death of the old car, evaluating the alternatives, and the purchase of the new one took almost two weeks and required the rental of another car in the interim.
Which brings us to Dr. Z.
The fine folks at Enterprise (“We pick you up!”) rented us a PT Cruiser, and to put it nicely we’ll say the two weeks with the car were educational.
The Chrysler PT Cruiser Touring 4-Door Wagon (its official name) that we drove can be purchased for about $18,000 before sales tax, license, and all the rest. (Cruise control and automatic transmission appeared to be the added options over the base trim.)
It is reported that the ‘Cruiser was built on a Neon platform, but Wikipedia disputes this; the next generation PT evidently will be built on a larger frame.
Despite this, when asked what I think of the PT Cruiser, here’s my by now well-worn response:
“All the style and class of a Neon-without the performance…”
It has been a particularly wild weather year along the West Coast, and as I look out the window the entire world is covered in snow and ice. Of course, when it warms up, then we get the huge winds and more rain than most folks can stand.
From the time we hit medium bad weather (tons of rain and lots of water in the “road ruts”) on the freeway, the PT began to feel squirrelly, and it was genuinely nerve-wracking driving. Compact ice and snow: frightening indeed.
The girlfriend drove the car that evening to her job, and the next morning had to be pulled up the hill by helpful neighbors when she couldn’t negotiate the ice/slush mix in the car she now refers to as a “PT Loser”.
Those of you who have experienced a hailstorm while standing under a beer can will know exactly the sound of hail on the PT Cruiser’s roof.
Even though about two-thirds of the car’s miles were driven on freeways, its handy average MPG tracker never reported the car above 21 MPG.
It is unfair to say we disliked everything about the car.The stereo, the really cool shelf system in the back, and the wiper controls are rather nice, and I recommend those parts of the car’s design.
Putting the power window controls in the middle of the dashboard, however, is highly counterintuitive, indeed.
That having been said, I cannot tell you how much nicer it is to drive the Forester.
If you have not driven a car with All-Wheel Drive, I strongly encourage you to try one. It’s useful not only in the snow, but when the road gets wet, as well.
It’s much faster when you push the gas…the back end never, ever “breaks loose”…and if you’re sitting at a light, uphill, on the wettest of days, the wheels will not spin when you take off.
It just goes.
Happily.
Maybe even, dare I say, enthusiastically.
The new car loves to take a corner…I mean it really loves to take a corner.
To the point that is surprises the bejeesus out of the teenage Honda drivers trying to keep up on our windy, windy road up from the freeway.
Oh, yeah-it crashes better, too (Forester, PT Cruiser).
Much better, in fact.
Now let’s talk price.
We were able to talk a Subaru dealer down to $21,350 out the door (that’s right, after tax and license), which means that the Forester, with standard ABS, standard AWD, tons more power, and which is just plain more fun to drive (oh, and it gets 25 MPG, too…), only cost us about $1000 more than Enterprise paid for that PT Loser (with no AWD, and, even in this day and age, ABS optional.)
So all that having been said, let’s get to the moral of the story; which is my message to the American auto industry from an ex-American auto buyer:
Dr. Z (and Rick Wagoner, and Alan Mulally, for that matter), you can close all the plants you want, and you can lay off all the workers you want, and you can restructure the operating groups all you want; but until Ford, GM, and Chrysler can build cars we like better than our Forester, there’s not much point in your staying in the car business.
Cadillac. Had every conceivable bell and whistle and "it is just SOOOOOOOOOOOOOOOOOOOO pretty". Every 3,000 miles it was in the dealer for realignment. Fan belt seized, blew the AC unit and the water pump. Front end needed to be replaced. Suspension needed to be replaced. Oh, did I mention that she owned the car for exactly 24 months and 33,000 miles?
I will drive a GM car to the polls to vote for John McCain.
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If "pro" is the opposite of "con", what is the opposite of "progress"...
Senior Writer
just saw today on CNBC, Cadillac is now second in lack of defects, after Lexus and ahead of Toyota and Honda, I was surprised. It seems the US auto makers have come to realize they have to turn things around or it is over. They are still sucky businesses because all the profits go to unions and retirees. Yet, it seems they are vastly improving quality.
I have '99 300M and my wife an '01 Sebring Coupe and both have been excellent cars. The Sebring has never required unscheduled maintenance even though she has foolishly allowed both boys to drive it a good bit, and they can both bend a crowbar in a sandbox. The only unscheduled maintenance the 300M has required has been a couple of front disk replacements; one just the product of my driving it hard and hot brakes on cold, wet roads is a tough combination, the second because, I suspect, the oldest kid bought beer with the money I gave him to pay for having the lug nuts hand tightened with a torque wrench rather than just spun on with the air wrench when he took it in to put the winter wheels on it, so the very rigid, unevenly torqued aftermarket wheels warped the discs.
The PT is really only a "boutique" body style aimed at the youth market and based on the platform of the cheapest American car you can buy, the Neon. In the PT, you're paying mostly for the style and marketing on a mechanical system aimed at entry-level car buyers and kids. We had a Neon, or at least the youngest boy did, and, yeah, it was a s**tbox, but it was cheap. So, you're really not comparing equivalent cars.
Suburu has done what all the oriental imports have done; cherry-picked a particular market niche and making only cars aimed at that niche, and some of them are astoundingly expensive. There's one of the cafe rally cars at the dealer here right now for around $40K - more than a new Chrysler 300 unless you go for the 400 hp RT-8.
I'm not defending the American industry and I don't think I'll buy another Chrysler since the Daimler hostile takeover; though God knows the dealer here wants me to buy a 300 RT-8 to replace my now aging 300M. (That's what you really need in a town with only 38 miles of "open" road; 400 hp and 150 mph.)
Unless and until the American makers control their legacy costs, they will not be able to make a competitive product. If you buy Big 3, you're paying for the labor that built the cars of twenty and thiry years ago and for the labor that went into building the car you're buying; they can't compete doing that with companies that have little or no legacy cost. I think I'll just keep driving my M, since I don't see anything out there at any reasonable price that I find attractive.
In Vino Veritas
is not always the most American thing to do, if the American-made product is the inferior entry in the free market.
everything from Toyota Corollas to a 450 SEL and a Porsche 911. I'd prefer to buy American though, and will if it is at all competitive. When I bought the 300M, it was one of Car and Driver's 10 Best Cars in the World and very attractively priced. As I said, I don't see anything out there I want, at least not that I want to pay for.
In Vino Veritas
Three reasons that American automakers are not competitive:
1) Labor Costs
2) Labor Costs
3) Labor Costs
People like to pin it on lots of things, but it comes down to this: GM's labor costs, factoring in benefits and their legacy costs are almost $100 an hour. Toyota's labor costs are around $37 an hour. Now tell me how it is possible for those two companies to compete, given how much of a cost of producing a car is tied to labor? The only way they can do it is by building expensive vehicles that Toyota doesn't choose to seriously compete against. That was SUVs and trucks. With SUVs and trucks falling out of favor with consumers (as they were due to after so many years of being popular), they are in serious trouble.
It isn't a quality issue any more. That's come a *very* long way since the depths of the 1980s. It's not a styling issue any more. The imports often offer a lot less on that front than domestics. It's a labor costs issue.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
The three reasons are:
1. Incompetent management.
2. Stupid management.
3. Incompetent, stupid management.
The Union (who I deplore) has simply taken advantage of a group of people who are dumb as a box of rock. (Singular on purpose, 2 rocks are smarter than all of the US auto managers put together.)
US Auto Management has, for 50+ years ignored the consumer, thought they lived in their own little world, assumed that whatever bad things might happen to them they would be bailed out by the feds, and generally feathered their own nests.
If they can't compete, oh well. Let 'em sink.
___________________
If "pro" is the opposite of "con", what is the opposite of "progress"...
Senior Writer
and by "that" I mean...
assumed that whatever bad things might happen to them they would be bailed out by the feds
we can thank...
none other than Ronald Wilson Reagan.
The biggest mistake The Man ever made as President, and he didn't make many to my mind, was bailing out his buddy Iacocca (sorry Patrick J - you're just flat-out wrong).
If they cannot compete, the answer is simple - Let. Them. Die.
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"I don't know." -- Helen Thomas, in response to the question, "Are we at war, Helen?" - posed by then-White House spokesman Scott McClellan.
In retrospect the contracts they signed were a mistake, but that fact was probably not obvious at the time. The US automakers were signing bad contracts before there even was such a thing as a Japanese automaker (much less a Korean one).
In any case, their lack of performance now is not simply a case of bad management. Now you have a case of a massive fundamental competitive disadvantage that is hardwired into the company. You could put the best manager in the world in charge of GM and I'm not sure what he could do to fix the problem, short of going BK. I think they would've been better off doing that a long time ago.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
Management CHOSE to ignore labor cost in all contracts, and they chose to ignore the idea that they might not have a 90+% market share in the US forever.
In other words, they abdicated or ignored their responsibilities to their shareholders. While you are right about bad contracts (thank you pattern bargaining) the Japanese have been around in force since the early '70's and the Germans were here in the early '60's. Bottom line, no excuse.
Their lack of performance is, in fact, a case of bad management. GM hasn't had a good management team for 50 years. What can they do? They can experience a reality check. They've got some limited choices, they can act like they want to survive and take some radical measures or they can roll over and die.
In order to survive, they are going to have to go nose-to-nose with the UAW on wages and benefits or their members will have neither. They are going to have to confront their retirees with the fact that they are going to experience a modification of some sort in their benefits or they won't have any benefits. And they are going to have to take an axe to their management and professional staff.
You might want to buy a GM car and warehouse it. It may be collectible some day.
___________________
If "pro" is the opposite of "con", what is the opposite of "progress"...
Senior Writer
But I think it is a little much to lay the blame all on the management. The government shares in the responsibility by giving unions far too much power. It's not like the automotive industry is the only one being killed by unions. The only real strategy for dealing with it is to set up a revolving door into Chapter 11, airline style, so you can have a judge force concessions on your unions and cut loose pension obligations until your cost structure works.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
as is the case in other oligopolistic industries, e.g., aerospace and defense. They didn't/don't care what the labor cost is so long as nobody has a cost advantage. The imports have a huge cost advantage now in not having the legacy costs.
As to union power, I submit that is a myth as a collective bargaining issue. Reasonable people can disagree on the fact of collective bargaining as a policy question, but the law is pretty even handed; the unions complain bitterly that it favors the employer, and the odds are somewhat advantageous to a big, wealthy employer that can tie up the process in litigation.
I bargained for many years under a public bargaining law that is essentially the pre-Taft-Hartley National Labor Relations Act, that is; without the employer protections of Taft-Hartley on bargaining duty and union ULPs, etc. I rarely if ever faced a situation in which I could not figure out how to prevail more or less within the law - figuring out that more or less part is what makes you good at this business. My problem always was not what I could do, but what I would be allowed to do due to political considerations.
The same is true with these big companies, especially if they also do business with the government. People don't seem to remember that Chrysler wasn't bailed out because of its car manufacturing; the M-1 Abrams tank started life as a Chrysler product, so the Government had a real interest in Chrysler.
A big company gets cross threaded with a big union and all of a sudden the company president is getting phone calls from Senators and even the President; the permit they need is on the block, the IRS can be their friend or not, the contract that their defense subsidiary wants or has in in play.
A two term Democrat President can make the National Labor Relations Board pretty hostile, and their were some very "union friendly" decisions late in Clinton. Likewise, the USDOL may or may not enforce the Labor Management Reporting and Disclosure Act, and certainly didn't during Clinton; most unions didn't even bother to file their LM-2s (salary and expense reports, most eligible for the Pulitizer Prize for fiction). Bush tried to ramp up enforcement and put LM-2s on line. When the Ds had the Senate, they put budget language in prohibiting him from doing it. Qui Bono?
Fundamentally, unions are dead in the private sector except where the government is in play, e.g., regulated utilities, health care, aerospace and defense, transportation. Also, anything that requires controversial permitting, e.g., mines, refineries, etc. requires some accommodation to the unions. They make it simple: give us a project labor agreement and some nice wage level, usually a percent of Davis-Bacon, and we and ours, the Ds, will support your project; don't and we will kill it. Today, less than 8% of the private sector workforce works under a union contract; that's less than in 1932 before passage of the NLRA.
Now the public sector is another story and for another thread.
In Vino Veritas
Pre-tax, off-check benefits such as HI and Retirement were a way around wage and price controls during WWII and the immediate post-war.
In Vino Veritas
Also, I would point out that Chrysler is no longer an American company, and they haven't been since the Daimler takeover. There's no Big 3 any more. We are down to the Big 2.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
with a Chevrolet Impala, though I'd never have thought of buying domestic without a discount from my old company. (It used to belong to GM in the past, and somehow kept the employee discount as an HR benefit.)
It drove very well, and when I looked at repair histories, I was surprised to see lower total costs than Japanese cars. The line may have needed repairs a little more often, but domestic parts are far cheaper to replace.
When that car died to a major accident, though, I was unemployed and sought a smaller car. The Chevrolet Malibu was hopelessly uncompetitive. It cost about as much as a Nissan Altima, yet had a terribly uncomfortable cabin. Adding that to its history of brake problems, I didn't even bother with a test drive.
Domestic companies just can't do small cars well, it seems. And with their horrific pension plans to fund, I don't see how they're going to get the development money to reverse that.
with the Ford Focus. It was given Car Of The Year honors by some auto mag a few years back and is still rated highly by Consumer Reports and others.
IMO, the typical American car buyer is not buying a car, but an image. They don't know or care much about the quality of what they buy. blackhedd was commenting on another thread about the low reliability of Mercedes, and the same is true for BMW. But that does not seem to affect their sales figures.
I've also read accounts of consumers being given blind tests of new cars, where they are kept in the dark as to who the manufacturer is of the vechicle they are test driving. They rated American cars much higher in this scenario than they did if told they were driving American. Thats why I expect Ford to switch over to selling more and more cars under the Mazda and Volvo nameplates. And GM whipped up the Saturn brand at great expense for the same reason.
Ever since CBS did it's best to destroy Audi during the mid-1980's with their bogus "unintended accelleration" reporting, my family has benefited from the depressed resale value of Audis from that time period onward, as Audi worked tooth-and-nail to stay in the United States and rebuild its brand here.
The car I drive daily is a 1987 Audi 5000 CS Turbo Quattro. I purchased it from the owner (who was a University of Chicago professor who drove it thrice a week back and forth to work) with less than 55,000 dealer-maintained miles on the odometer for $1,500. In 1987, this was Audi's top-of-the-line car, fully loaded with everything you could get, and sold for more than $40,000 new. With the help of my internet friends and loyal Audi fanatics at http://www.audifans.com I have maintained this car myself for relatively low cost. My total investment so far is less than $3,000.
For that, I have a full-sized, four-door sedan with a luxurious interior, full-time all-wheel drive (the Quattro system, 1st generation with lockable center and rear differentials) and a 162hp turbocharged inline-5 engine that I have boosted to about 215 horsepower with a simple, safe and reliable modification. It's a five-speed (as all of them were at the time.)
At 70MPH on the Massachusetts turnpike, my onboard computer reports that I get 38 miles per gallon in cruise. With the chip modification I can also go from zero-60 in about 7 seconds and the top end is over 140MPH -- fast enough for me. And it is one of the most sure-footed and comfortable vehicles I've ever driven in bad weather.
Audi's new cars are a quantum leap ahead of this one, and they hold their value. The fact that mine is running so well after 20 years should tell you something about the bad reputation this brand got slimed with. With a little luck in a year or so I might be in the position to by a new one. My choice is the S6.
I also like Subarus, BTW, but if anyone would like to discuss Audis (especially older ones and their pluses and minuses) I heartily recommend a visit to Audifans and you can also feel free to drop me a line. I've never regretted buying these cars. They're just wonderful, and the AWD has taken me places driving an Audi that even sport-utility vehicles couldn't traverse. Lower CG and all that.
If you do buy an older Audi, take your time and find a good one. They still exist, and the reputable people who still own the cars of this vintage have done the maintenance right. I got lucky, obviously, with my purchase, but there are still some of them out there.
Of Ford paying out because some city employee (some kind of cop I believe) stomped on the gas pedal of a parked van while putting it into gear running over somebody in front of the van.
It was Ford's fault, you see, even though they put this shift interlock in the vehicle so you couldn't do that. Some 3rd party came along and disabled it while modifying the van with an after market package, then some idiot came along and stomped on the gas while putting the vehicle in gear. How could it not be Ford's fault? I wonder how much that kind of goofiness adds to the price of a vehicle.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
how much that sort of stupidity adds to the cost of everythign we buy. Seen an American made private airplane lately?
In Vino Veritas
That bad reputation that Audi got nearly kept my wife and I from buying an A6 last year (used '02), but no other AWD wagon even compares to it on the road. As much as we loved our old Impreza, we don't miss it!
Chevy - don't think there is a car they make that I would buy (including the 'vette, although if they want to remake a 1969 ragtop, I'll be open to it), but I do like their SUVs.
Ford - Within the last year, they started making 2 cars that I would actually consider buying. First, the Fusion - it has AWD (standard IIRC) and has a decent look to it, I was surprised when I saw one around town. Second, the Edge - cool looking x-over. The Wife™ likes the Rav4 but would consider an Edge for her next vehicle.
Since their reliability has improved, I would actually think about buying and American car (the Fusion more than likely), but we have at least another 100-150k miles to go on The Wife™'s car.
Two thirds of the world is covered by water, the other third is covered by Champ Bailey
Period. I consider it part of walking the talk actually and not in a lind faith way. I am not a union supporter and have commented previously that I consider the continued existance of American auto manufacturers something akin to either brilliance at some level or sheer determination due to legacy costs.
I love my Impala, decent power, very low maintaince costs, 22 mpg around town and upper 30's hwy. Having five children I've also had my share of minivans as well. Four Chryslers of various models have all served admirably.
Even in business it's the same, if I can find an American supplier, or better a local supplier of American goods, I'm there.
It's a good excercise to look for that American label, maybe it's corny but I put my money where my mouth is.
Well done is better than well said. —Benjamin Franklin
and all my cars/trucks are Ford. But you do have to be careful if you are trying to make a point. First of all, some Ford parts are made abroad, and many foreign cars are made hear. And the foreign companies are much less likely to be union shops.
I remember a blow up in Michigan a year or two back. The Marine Reserves were parking in union United Auto Workers lot. The American, UAW workers objected to the Bush stickers on the Marine's vehicles. They revoked the right for the Marine's to park there on their drill weekend because of the Bush stickers. The Marines were so angry that the ones with American trucks actually painted Toyota on the back other their vehicles.
I am not telling anyone what to do or think. I am relaying something that actually happened that should if nothing else make us realize things are often shades of grey, not black and white. And I will tell you this, you would much rather have owned Toyota or Honda stock over the last few years than Ford or GM.
The Marines were so angry that the ones with American trucks actually painted Toyota on the back other their vehicles.
I remember that... I believe it was a Silverado the owner rebadged as a Toyota. It was very funny.
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Underlying most arguments against the free market is a lack of belief in freedom itself. - Milton Friedman
Smoot and Hawley can save General Motors! Just ask Senator Sherrod Brown. We don't need those furrinurs and their cars that actually run. We're an over-weight nation and should really start walking to work more often.
Harry Reid is to ethics reform what HIV was to free love!