Detroit started going downhill about 30 years ago, which is when I started testing cars and writing about the auto industry (not that there’s any connection). Like most auto journalists, I’m often asked “what’s the best car to buy?” or how does domestic-brand X compare with import-brand Y? For a long time I tended to recommend foreign models almost exclusively, but not anymore.
American automakers may have a long, sorry record of stonewalling and broken promises, but they’re finally building some really good stuff. Appealing, no-excuses vehicles that American consumers should want to buy because they’re on par with foreign-label competitors and sometimes better. GM products like the Cadillac CTS and Chevrolet Malibu, or Ford’s Edge, Fusion or Flex. Even Chrysler gets points for its newest minivans and the Dodge Journey.
I’m not the only one who feels this way. All of us at Consumer Guide and colleagues elsewhere have noted how Detroit has basically caught up with leading import brands for quality, fuel economy, performance, even value.
Trouble is, Detroit has been screwing up long enough that two generations of buyers won’t even consider domestic-badge vehicles except maybe for big pickups. And that’s big trouble in a cratering economy where even do-no-wrong Toyota is losing money.
Worse, says industry analyst Maryann Keller in a recent New York Times column, “...a reversal in consumer attitudes isn’t going to happen overnight. Even though U.S. auto companies assemble some very good vehicles today and their competitors aren’t the environmental saints that ill-informed politicians suggest, there is no magic wand that can instantly reverse past disappointments...Simply advertising that Detroit products are as good as the Japanese or are as fuel efficient...has little impact on consumers when the messenger has no credibility.”
Keller goes on to note that “[f]oreign auto companies seem to be defined by their cars and not by their executives. So [I suggest] that no [Detroit] CEO, chairman or senior executive have access to cameras and reporters. They cannot help their cause, whether it’s selling cars or winning sympathy for [a] bailout.”
That was certainly evident in last fall’s Congressional bailout hearings, where Chrysler’s Bob Nardelli, Ford’s Alan Mulally, GM’s Rick Wagoner, and United Auto Workers chief Ron Gettelfinger got raked over the coals because they dared ask for help. I suspect the reason had to do with Congressional anger at just being bum-rushed into passing the $700 billion financial-sector giveaway, which makes the combined $17.4 billion just granted to GM and Chrysler look like chump change. Or maybe the politicians finally remembered their duty to keep tabs on how taxpayer dollars are spent.
No matter. Against all odds, the “Beg 3” are still breathing, only with better chances of stayin’ alive, thanks to a new Congress and the Obama Administration. But GM and Chrysler must still satisfy some tricky conditions lest their bridge loans be called in, and no Detroit company is likely to survive if the current recession tips into “Great Depression II.” In that regard, let’s hope the new team in Washington knows its Economics.
Meantime, I have my own suggestions for how Detroit can help itself. First, forget blue-sky concept vehicles, at least for now. They’re mostly PR exercises that deplete cash reserves and are quickly forgotten. Keep investing in new technology, by all means, but show it in vehicles people can relate to. And don’t show those until you’re ready to sell them.
Keller again: “The bailout hearing led us to believe that Detroit’s future depends upon the [plug-in hybrid Chevrolet] Volt, fuel cells, and all-electric cars. Have consumers heard of the Chevrolet Cruze, a rather neat [conventional compact] car that will deliver 40 miles per gallon? Or the Ford Fusion hybrid, which beats the Camry hybrid [in EPA-rated fuel economy]? No, all we ever hear about is technology that won’t be ready for years and has no chance of earning a dime toward the financial revival of these companies. I know that they had to promise Star Wars technology in order to get the cash because that’s what Congress wanted to hear. But I also know that isn’t a market reality.”
We should note that the gas/electric Fusion is a market reality. So is the Cruze--in Europe and China. GM delayed the U.S. launch to slow its monthly cash burn. Had Congress been in a more-receptive mood last fall, the Cruze would be on sale this year, not next.
My second tip for Detroit: Spend fewer dollars on showing people your products and more bucks on getting people into them. It shouldn’t be hard. You’ve got piles of buyer data, so invite every consumer you can to go down to the local dealer for a test drive--or two or three. Have competitive products available so prospects can see how good yours really are. Throw in a free lunch or iPod, provide a play area or video games for the kids, whatever it takes. Trust me. Your dealers are hurting and they will get onboard with this. Heck, some might even want to take your wares right to customer doorsteps. Not even Lexus does that.
Another idea: Talk like real people. (You import-brand leaders, too.) Business-babble and marketing-speak come across as evasive. When I hear a phrase like “we’re leveraging global resources to maximize our retail footprint in this sector,” I know the wool has descended. Say what you mean in understandable language: “We’re introducing this model from one of our overseas branches because we think it will sell better than the dog we’ve got now.” See how easy? I know it may take some effort, but try it. You’ll be more credible.
And since we’ve raised the subject, honesty is the best policy, even in business. To err is human. When you goof up, admit it. No excuses, no blame. Besides, we’re in the Internet age, and the whole world is watching.
Good luck, Detroit, and keep up the good work. As one Red Green says, “Remember, I’m pulling for you. We’re all in this together.”
01.22.2009
