6 myths about the Detroit 3

[Korndogg]

http://freep.com/article/20081117/COL14/811170379


The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are six myths about the companies and their vehicles, and the reality in each case.

Myth No. 1

Nobody buys their vehicles.

Reality

General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of about 560,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota.

Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.

Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

Myth No. 2

They build unreliable junk.

Reality

The creaky, leaky vehicles of the 1980s and '90s are long gone. Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers." The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo.

Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.

Myth No. 3

They build gas-guzzlers.

Reality

All of the Detroit Three build midsize sedans the Environmental Protection Agency rates at 29-33 miles per gallon on the highway. The most fuel-efficient Chevrolet Malibu gets 33 m.p.g. on the highway, 2 m.p.g. better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient non-hybrid Honda Civic. A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate.

Myth No. 4

They already got a $25-billion bailout.

Reality

None of that money has been lent out and may not be for more than a year. In addition, it can, by law, be used only to invest in future vehicles and technology, so it has no effect on the shortage of operating cash the companies face because of the economic slowdown that's killing them now.

Myth No. 5

GM, Ford and Chrysler are idiots for investing in pickups and SUVs.

Reality

The domestic companies' lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have all spent billions of dollars on pickups and SUVs because trucks are a large and historically profitable part of the auto industry. The most fuel-efficient full-size pickups from GM, Ford and Chrysler all have higher EPA fuel economy ratings than Toyota and Nissan's full-size pickups.

Myth No. 6

They don't build hybrids.

Reality

The Detroit Three got into the hybrid business late, but Ford and GM each now offers more hybrid models than Honda or Nissan, with several more due to hit the road in early 2009.

[07ROUSHSTG3]

good post.

[Prince Valiant]

With regards to "Myth" #4 and the 25 billion dollar "bailout", the money has been allocated and can be made available immediately.

More importantly, Republican lawmakers & the whitehouse BOTH endorse changing the requirement that only allows investment in fuel efficiency enhancement and thus make it general "bailout" money.


But here's the fact of the matter...Take Chrysler for example:

When Diamler-benz bought chryco, it was valued ~ 45 billion dollars. When Cerebus bought them, the value had dwindled all the way to 5 billion.

A HUGE, and VERY wealthy Cerebus got this way by being VERY smart with money, right?

Don't you think that if they felt that if they invested ~6 billion into chrysler, and it "saved" them, thus restoring it's value back up to the 45 billion range, they'd do it, right? I mean, 11 billion investment into a 45 billion return is pretty good by anyones book.

But Cerebus doesn't allocate the cash...they figure that'd be a losing investment.

And of course, 6 billion would be the take of a 25 billion dollar bailout from the gov't.

The fact is, the current business model...be it the size of their white-collar workforce, deals with vendors/dealers, contracts and compensation agreements with UAW...just their whole business model won't lend itself to success.

The article, despite the wrong #4, SHOULD be titled "6 Myths about the Big 3"

But Myth number 6 should be:

"If the US automakers don't get the bailout, they'll surely fail"

Of course, the above is a myth because they've ALREADY failed...and it's been a LONG time coming. This didn't happen overnight. This didn't happen over a few months or even a few years...this has been building for a LONG, LONG time.

Let them do like many of the airlines did...file for bankruptcy, and hopefully they can then go forward with meeting not only MOST, if not ALL their former obligations, but do so with the freedom to re-structure deals and shed dead-weight divisions that'll allow them to be FAR more prosperous, and thus allow for real investment in future products so we can get back to what we USED to do best.

[Rocket Power]

Yeah GM & Ford definitely make Hybrids. Seen & driven some. On the Hybrid Tahoe it's impossible to look at it with out seeing a Hybrid sticker or badge in at least 2 places:rolf

[Waver]

I think wraith needs to see this

[Adam Brooks]

What's unfortunate is that if the big 3 actually ran businesses intelligently, we wouldn't need posts to dispel "myths". Clearly there is an opportunity for improvement here.

oh and the article came from Detroit? That's like JSOnline talking shit about the packers.

[Todd Z]

The problem is they lose money on every new car they sell!!!! Ford = $1,000.00 loss for every new car. You have to sell alot of t-shirts and other crap to make up the differance.

[wrath]

The Detroit Free Press is a scab newspaper. So if you think they're supporting UAW you're more than likely wrong.

[CobraSnake]

With regards to "Myth" #4 and the 25 billion dollar "bailout", the money has been allocated and can be made available immediately.

More importantly, Republican lawmakers & the whitehouse BOTH endorse changing the requirement that only allows investment in fuel efficiency enhancement and thus make it general "bailout" money.


But here's the fact of the matter...Take Chrysler for example:

When Diamler-benz bought chryco, it was valued ~ 45 billion dollars. When Cerebus bought them, the value had dwindled all the way to 5 billion.

A HUGE, and VERY wealthy Cerebus got this way by being VERY smart with money, right?

Don't you think that if they felt that if they invested ~6 billion into chrysler, and it "saved" them, thus restoring it's value back up to the 45 billion range, they'd do it, right? I mean, 11 billion investment into a 45 billion return is pretty good by anyones book.

But Cerebus doesn't allocate the cash...they figure that'd be a losing investment.

And of course, 6 billion would be the take of a 25 billion dollar bailout from the gov't.

The fact is, the current business model...be it the size of their white-collar workforce, deals with vendors/dealers, contracts and compensation agreements with UAW...just their whole business model won't lend itself to success.

The article, despite the wrong #4, SHOULD be titled "6 Myths about the Big 3"

But Myth number 6 should be:

"If the US automakers don't get the bailout, they'll surely fail"

Of course, the above is a myth because they've ALREADY failed...and it's been a LONG time coming. This didn't happen overnight. This didn't happen over a few months or even a few years...this has been building for a LONG, LONG time.

Let them do like many of the airlines did...file for bankruptcy, and hopefully they can then go forward with meeting not only MOST, if not ALL their former obligations, but do so with the freedom to re-structure deals and shed dead-weight divisions that'll allow them to be FAR more prosperous, and thus allow for real investment in future products so we can get back to what we USED to do best.

seriously slim these responses down or i'm not reading them anymore!!!