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The Current State of the US Auto Market
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Comments
I'm really starting to feel sorry for Mary Barra...
Having to sit there in front of a bunch of grandstanding politicos to defend company actions and decisions in which she had no role in making.
Its bad enough to have to sit there and take it when its a result of your own misjudgment, but to get hammered on repeatedly by folks that have no real grasp of the situation has to be incredibly frustrating.
I know, she's getting the big bucks to take the heat, but it must take great self control to keep from launching into a shouting session at these characters...
She certainly seems to be capable of the position...
Acura really does need some compelling actual cars. The current lineup...isn't so much.
I wonder where BMW is getting the volume - I've seen hangtags on new base 320is at the local dealer that were cheaper than the lowest CLA stickers I have seen - maybe this is it, and gains from the new X5. It'll be interesting to see how BMW/Audi/Lexus answer to the new S.
I think the last redesign of the 7-series was in 2009, so that would put the current model 7-series well into its last stages of the current design, assuming BMW stays with its typical 7 year model cycle...
I think newer models from the competition are probably taking many of those sales away, but that's only a guess...
I was driving by my Chevy dealer today, so I swung in to look at the SS in their showroom; first I'd seen. I like the suede (or pseudo-suede) on the dash and parts of the seats, but I sure didn't like $47K and 7% NA parts content (although I'm surprised it's that much, being built in Australia).
The two Service Writers, whom I know, looked beat up. They have been getting a ton of calls, of course.
Something I wasn't aware of, is that both of our Cobalts had the lock tumbler replaced, not the switch. The one writer told me mine would probably not be among the cars recalled because the defective switch was prior to '08 models and only '08 and later that had had the switch replaced for whatever other reason, would be part of the recall. We'll see if he's right or not.
I'm rooting for Mary Barra. My gut reaction, and only that, is that the other recalls done this month was her pushing them forward and up--to knock them out of the way. Who knows, of course.
Agreed. Congress is a joke and I doubt the problems she is being grilled on are her fault.
She's the only adult in the room.
2014 Malibu 2LT, 2015 Cruze 2LT,
Agreed, imidazol.
That is too funny!
On the nightly news, they showed some senator holding up a document copy that some currently employed GM engineer signed years ago that is a supposedly "smoking gun", asking Mary Barra about it.
I always was taught to go to the best source of knowledge in cases such as this, which would be the dude that signed the document.
They know exactly where to find him, and Congress has subpoena powers, so my question is..."Why not interrogate him?"
Nothing but grandstanding, with politicians using the misfortune of others for cheap self-promotion...
Nothing but grandstanding, with politicians using the misfortune of others for cheap self-promotion...
Bingo! I think politicians tend to have two driver's (and their district voters aren't one of them). First, take car of themselves and second, their party. Most of them are actually pretty smart and I think fully understand what is going on. But wait and see, if anything backfires they'll feign ignorance of the topic or facts, or cop the ever popular "I was misled"!
I am rooting for Mary as well. Best thing GM did in decades was making her the CEO.
She mirrors my feelings about the internal dysfuntion in GM and it sounds genuine that she will work to change a lot of those issues.
BMW Sales March 2014 YTD
3er and 4er sales = 24,405 (up 18% over '13 YTD)
Total BMW = 72,377 (up 11.5% over '13 YTD)
So, 34% from the King.
I'm glad to see that there is some concensus here among some of us that this is overdone politically, but not overdone as to the seriousness of the probable injuries and deaths.
Do others get the same read from Mary Barra as I get that she's truthful and intends to do exactly what should be done?
Hiring the guy who put together financial packaging for other tragedies says a lot to me but her body language and voice inflection says a lot of good things to me. Hope the GM board is backing her.
2014 Malibu 2LT, 2015 Cruze 2LT,
I think it's great GM hired a female CEO. Considering what's going on with GM right now, they couldn't picked a better time to hire her. I think she has the potential to help GM through these tough times and possibly make them a better company. But GM is a big organization to change. It will take time. I wish her the best.
http://www.forbes.com/sites/michelinemaynard/2014/04/02/is-gm-ceo-mary-barra-being-thrown-under-the-bus/
2014 Malibu 2LT, 2015 Cruze 2LT,
True, Silverado/Sierra handily outsell the Ram together, but the fact remains the Ram is gaining market share and they probably aren't taking much from Ford. It's likely coming from GM.
What's impressive with Ford, is the F150 is the oldest truck and entering its last year before a redesign and it's selling better than ever. I think it outsold the Silvy/Sierra combined by nearly 10k in March.
Ditto.
@circlew, Carly Fiorina did a lousy job at HP (and Meg Whitman isn't exactly helping them kill Lenovo), but maybe the corporate structure got so screwed up, nobody could have helped.
So even a CEO with good chops, superwoman or not, may be facing a ingrained corporate structure so dysfunctional, even a bankruptcy reorganization didn't significantly change the culture of decisions by multiple committees.
No doubt, as my local dealer still has 2013 model 7ers on the lot. Going to be rough next year for that category. I wonder how BMW will react to this new S.
I've seen quite a few 4ers on the road, that might be a big part of it too.
I don't know much she can change GM. She's not an outsider as she's been with GM for 30 years. I think she has the opportunity to have a positive image with the public more than changing GM's culture in any meaningful way.
Interesting that GM didn't change the part number of the redesigned plunger in the ignition switch.
I've worked in a marine parts/service department and while that's not automotive, many marine engines are automotive based. Anyway, anytime a part was updated/upgraded the part number would always change.
Not saying a part could have changed without the number (how would anyone know), but most of the time, if you looked up something, like a water pump impeller on a 2000 model engine, it wouldn't be unusual to see 5 updated part numbers from the original to the latest updated part.
What if the original plunger were to be recalled entirely, how would a parts department/warehouse decipher the new from the old. You'd have to manually search through the entire inventory (not that a dealer would have many on hand prior to the recall).
What's not surprising to me is Delphi's claim that GM knowingly accepted a part that didn't meet spec. That explains a lot of my GM woes;)
In my former government work, I used to see situations where if something didn't meet original specs, it was often accepted but then a lower price was paid than what was originally quoted.
Defending his agency against criticism for not reacting to early warnings about switch problem, he again said that had GM provided the data it had regarding ignition switches and air bag deployments the agency might have moved sooner.
Friedman said he was most concerned that GM had changed the part in 2006 without the part number having changed, saying "very clearly, it was a defect." Had that defect been detected as a result of the number being changed, it could have led to regulatory action.
Friedman also said GM appeared to have information that an algorithm used to help air bag sensors deploy in crashes could have been compromised by ignition switches inadvertently moving from "run" to "accessory" position.
"If we find that they did violate their responsibilities to act quickly we will hold them accountable," Friedman said.
GM is required to furnish, by Thursday, answers to 107 questions from NHTSA that Friedman hopes will shed more light on how the airbags operate.
In the businesses I've worked in, revision numbers were often used in conjunction with the original model number. That of course requires an extra step for anyone taking the part off the shelf to ensure they were using latest rev.
We ll, you have described the current situation GM is facing perfectly.
Keeping identical part numbers for modified/improved units without any modification of the part number (.002 suffex added, or similar notation) is a poor way of doing inventory control for any manufacturer, large or small.
Who wants to bet this way of thinking gets changed at GM (at least, the written policy) after this episode concludes?
I wouldn't take that bet. My opinion is that the individual and perhaps admirable behavior of individuals within the corporation have little bearing on what the corporation decides as an entity in a mass-meeting in the board room.
During a deposition last year related to a suit against GM, DeGiorgio, the lead switch engineer on the Cobalt, said he could not explain why the part was changed and that he had not approved it. However, an internal document showed DeGiorgio had signed off on the change, McCaskill said during the subcommittee hearing.
Several lawmakers, including Ayotte, questioned why GM's general counsel didn't immediately alert the CEO about problems with the same part number after the deposition. Lawmakers also questioned why Barra, who has been with the company for 33 years, didn't learn about the faulty ignition switch sooner and was unable to answer more of their questions.
"Something is very strange, that such a top employee would know nothing," said Senator Barbara Boxer of California.
We're apparently getting the entire deposition here.
Oh this is just going to turn into one of those BIG conspiracy theories type of thing. No one can ever admit that sometimes crap just happens. I call it "Tabloid America" !
That's it, Berri. Everyone thinks that because the Board sit at a huge walnut table and wear expensive suits and snap their fingers to summon their staff that they know what they are doing. Sometimes they don't. Sometimes they are clueless.
Sometimes they are clueless.
Particularly, considering GM's history, more times than not!
For years prior to GM's 2009 bankruptcy, our columnist Holman Jenkins and various Journal contributors warned that Detroit's business of making small cars wasn't sustainable given the high costs of union labor, pension and medical benefits plus fuel-economy standards mandated by the government. GM, Chrysler and Ford could make money selling trucks and SUVs because Americans wanted them (and because light trucks enjoy tariff protection). But the Big Three struggled to stay profitable making the low-emission small cars desired by politicians.
Toyota maintained a labor cost advantage (including health care) of roughly $2,000 per vehicle over Detroit. If the Big Three got creative they could find a way to offset this advantage when selling a $30,000 truck but not a small car in the $10,000-$20,000 range.
Federal regulations essentially prevented Detroit from building the small cars more cheaply offshore. That's because the auto makers still had to meet stringent fuel-efficiency averages for all the cars they produced domestically. So in order to keep building the big vehicles they could make profitably, they had to churn out lots of fuel-efficient vehicles and somehow make them cheap enough to compete with cars produced by non-union workers.
One of the reasons it's good to let companies fail is that consumers benefit as well-run companies replace poorly run firms. Consumers do not benefit when companies are kept alive to serve political goals.
Let's hope that the "new GM" that Ms. Barra likes to describe can develop a culture of serving drivers and passengers rather than Senators.
That argument makes little sense to me. Let's think about it. The first premise is that selling fuel efficient cars overseas isn't profitable, which is highly questionable, given the cost of fuel overseas, and the second premise is that healthcare and wages costs Detroit $2000 more per car than Toyota---I'd really like to see how that calculation was arrived at.
A better argument would be that Detroit's small cars aren't profitable because the Big Suits in Detroit haven't figured out how to manufacture them as efficiently (or as well) as the Japanese.
Oh, and their marketing for small cars is awful, let's throw that in.
There likely was some truth to the cost disadvantage GM had compared to asian brands 10 years ago or so.
Plus back then domestic small cars were lousy in general. Uplander can be satisfied about what a great deal he got on Cobalts and Cavaliers, but that is part of the problem. Discounting them was the only way they could sell them. While Honda didn't have to sell a Civic with heavy discounts because in general it was a more desirable car.
I think a lot of that has changed since then. A Cruze and Focus etc, is generally a desirable compact with lots of features people are willing to pay for. Then add the cleaning up of GM's balance sheet and off loading a lot of their legacy costs and those cost differences aren't as much of a problem.
Great deals, and they were durable cars, all built down the road from me. I know that's 'meh' to most people, but if I like the car AND can buy local, it's all good. For driving experience, I had my old cars, which I know is not typical out there.
I've got a kid in college and one that'll start in a little more than a year. I haven't had a car payment since around 2004, and no college loans of any kind after paying for two full years. And I've bought three new vehicles and two used ones since 2004...and that's the way I like it. "Great deals" is important to me...as well as trustworthy service. I like that the Service Manager and even a couple of the technicians call me by my first name...and don't try to BS-sell me on stuff I don't need.
With today's complicated vehicles, I think a good dealer relationship is important. If you've got a good dealer with product you like, sticking with them is probably wise.
Uplander, I'm not saying what you're doing and/or what you like is wrong. My point is cars like the Cavalier and Cobalt (to a lesser extent) weren't held in very high regard by the buying public for a variety of reasons. That doesn't mean nobody like them or that they can't be a great value.
GM likely didn't make any money on them and most likely lost millions.
I don't have much of an opinion on the Cobalt other than they look awfully bland to my eyes. I've never even sat in one, so it would be wrong for me to say much more. The Cavalier OTOH, I've been in several and have driven a few and I have nothing good to say. Put it this way, if I had to drive a Cavalier to be able to pay for my daughter's to go to college, they'd be going to beauty school;)
OK, even I find that funny. LOL
That was the joke I told my oldest when we bought a new boat a few years ago. I said the good news is we have a nice new boat to use in the summer. The bad is I paid for it with your college fund and that beauty school is still an option.
She just doesn't understand my humor;)
Similarly, we've teased our kids about the dinky school that very loosely calls itself a 'college', one town over. They have the same size mailbox out at the street we do.
Both my kids have gotten mailings from the small, 150-year-old Lutheran college that's in my dear old hometown. They'll rip them up immediately. They're like, "Dad, even you didn't want to go there". Hard to argue with that!
Via greater incentives, Toyota USA was forced to cut the price of the current Camry in order to line it up with the marketplace's current level of acceptance. This is not unusual. More difficult to comprehend is the way in which Americans aren't as accepting of the new Honda Accord as they were of the old Honda Accord.
The Camry, Accord, Altima accounted for 14.3% of the new cars sold in the first quarter of 2014, down slightly from 14.3% in the larger passenger car market of 2013's first quarter. The Camry brings in 21.4% of Toyota brand volume this year, down from 22.1% in early 2013.
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Ms. Claybrook, the former N.H.T.S.A. chief, said in an interview: “General Motors made the part, they designed the part, they sold the part that was defective and they knew about the problem fairly early on. And I believe that General Motors has the greatest culpability.”
“But,” she added, “there is a really important story about N.H.T.S.A.’s failure to handle this properly.”
http://www.nytimes.com/2014/04/06/business/minding-the-minders-of-gm.html?_r=0
He doesn't look like he's having a good time.
I can't figure the current Accord out. I think it has a definite improvement in looks over it's predecessor, but I haven't driven it. Might be that Honda isn't offering as good of a deal out there on it. As for Camry, I much preferred the prior look. The current one it too boxy for me and has those weird tail lights. I think people buy the Camry for it's smooth GM like ride, so I hope the '15 update doesn't make the same mistake as the revised Avalon making the suspension too stiff. I don't see the Camry as being an aspirational product for young buyers, but too sporty and stiff of a ride will turn off it's current consumer and they tend to have a lot more discretionary cash to buy loaded ones. If Camry wants to move to the youth market they probably need to bring out a coupe and/or convertible version to get their attention - but past history shows that hasn't been too successful for Toyota.
Wonder what those GM execs are really thinking while sitting there?
Not sure where you are getting the idea that the new Accord isn't successful. It sold more than 360,000 of them in 2013 and surpassed the Camry in individual sales. That was up 11% over 2012.
http://www.autonews.com/article/20140221/RETAIL01/140229981/hondas-accord-beat-camry-as-top-u.s.-car-in-individual-sales
'17 Chevy Volt Premiere
Regarding Camry, even to non-enthusiast younger people, they say "mom" or "grandma". It's a 1993 Buick Century for 2014.
I couldn't even bring myself to test drive one. Every time I walked up to the rear, I wanted to upchuck--bad taillight design, and I had liked it when I first saw them on the truck. But the toyota ES model has the right design for the taillights. They skimped too much on the trunk. And I'm the older group that should like them.
2014 Malibu 2LT, 2015 Cruze 2LT,
CR says Malibu and Camry are "most comfortable ride" in that class. I pooh-pooh their owner surveys, but it does make one scratch their head when one sees 2013 Accord V6 sedan as 'worse than average', 4-cyl. as 'average' (same as 2013 Malibu) and all Accord coupes with "much worse than average" reliability for 2013 per CR. Not exactly the mainstream wisdom out there. I do wonder why a coupe would be so much worse than a sedan.
I'd agree with the Malibu/Camry conclusion.
They both are cars my dad would have said offered comfortable rides.
Of course, he liked Buick 225's and such, which even back then (1980's) were land yachts...Definite Interstate highway cruisers due to their size...
At least the Camry and Malibu are far easier to park nowadays...
Parking the last "Deuce and a quarter" he owned was all but impossible at times. It only had a 2" clearance in his garage when the door was down, so he used to literally ease into a foam pad he had mounted at bumper level height when parking it at home so he could close the garage door...