Thursday, April 5, 2007

Whither Chrysler...and Ford and GM?

With regard to the domestic auto industry, I'd very much like to see it succeed, because as someone once said, "competition improves the breed." The more competition in auto choices we have, the better ALL cars will be.

Detroit became fat and lazy in the past because there was too little competition, once Studebaker, Hudson, Kaiser, et al folded. Oh, we could buy those "foreign cars" from Europe, but most were too small, weird, or expensive for American tastes. Only Volkswagen, with its Beetle and to a lesser extent its Microbus, achieved a modicum of success. It wasn't until the Asian cars began their "invasion" in earnest after Detroit was caught napping after the first oil shock that the imports really took off. Toyota passed VW as the largest importer in 1975 and never looked back.

I remember Chrysler’s Lee Iacocca bleating over and over again in the early 1980s about "leveling the playing field" by demanding that the Asians build their products here. Well, be careful of what you wish for!

Now it looks like General Motors, Ford, and Chrysler are in as much trouble as the hapless "independents" in the 50s and early 60s. Hopefully, the situation can be turned around, but Chrysler’s fortunes appear especially bleak now that DaimlerChrysler is trying to sell off the Chrysler portion. If a private equity firm gets the winning bid, I can’t see how the company won’t be broken up and only the best parts, such as the Jeep brand, remain in production.

Since the 70s, a lot of people were "converted" to the imports, and many won't be coming back. Worse for the domestics, the children of the converts heard lots of stories about the "bad old days," so they in turn don't want domestic products either.

Don't take my word for it -- look what Joe Sherlock said in his blog, “The View through the Windshield." His dad worked for the Pennsylvania Railroad, once one of America's mightiest corporations, now gone. Joe is a consummate car guy and grew up loving domestic cars. He even has a classic (though modded) '39 Plymouth. Now as you know, I don’t agree with his politics, but his views on cars are usually right on the money. Read his take on where Detroit went wrong here. And his update here.

Then contrast that with his personal experience with a 2005 Toyota Avalon:

My wife's Toyota Avalon is now two years old. We have not had a single problem with it - no rattles, squeaks, electrical gremlins or mechanical issues. The Avalon has great fit-and-finish and is dead-bang reliable. It is also a pleasant car to drive. It is not a driver's car like my Jaguar sedan - the handling is not as crisp and/or sporty and, on long trips, the seats are not as comfortable. The exterior styling is unexceptional, although the interior is very nice. But the Toyota is a fine car nonetheless and we are very satisfied. We average 23-25 mpg in mixed driving and close to 30 mpg on the highway - all on regular gas.

No comments: