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January 18, 2007
What's wrong with American cars?
Mickey Kauss -- nobody's conservative -- covers politics at Slate, with occasional forays into automotive-industry coverage.
I mention his politics because, in a discussion about why Detroit's best efforts are still so crap-tastic when compared to the Japanese, he finds an interesting cause that will give libtards fits: the UAW.
Of course those who will rise to the defense of the autoworker unions are the same libtards who wouldn't be caught dead in anything so un-hip, so un-cool as an American car.
But I digress.
The shift lever falls readily to hand for one R. Kuttner, who road tests the Pontiac G6. He doesn't like the door-lock releases. Or the steering. Kuttner concludes the problem with GM isn't its workers--or unions--it's GM's incompetent designers and executives:
You might blame GM's woes on poor American workmanship or the cost of American labor. But Japanese total labor costs are comparable, even with Detroit's higher health insurance costs. Increasingly, Japanese cars are being assembled in the USA, and the quality holds up just fine.
So what's wrong with GM? The cars. GM is famous for being run by bean counters and ad men. Toyota is run by engineers.'This is a common viewpoint, I've found, among my Democratic friends ... who would never actually buy a Detroit product but who want to believe the UAW can't be blamed. The argument seems to be roughly this: a) American cars are now reliable enough, having closed the gap with the Japanese brands, so b) the workers are doing their job; therefore c) if Detroit cars like the G6 are still obviously inferior--tacky and cheap, with mediocre handling--it must be because they're designed badly by white collar professionals, not because they're built badly by blue collar union members.
The trouble with this comforting liberal argument is labor costs.
When Kuttner says "Japanese total labor costs are comparable, even with Detroit's higher health insurance costs," he is--as is so often the case--talking through his hat. Look at this chart.
GM pays $31.35 an hour. Toyota pays $27 an hour. Not such a big difference. But--thanks in part to union work rules that prevent the thousands of little changes that boost productivity--it takes GM, on average, 34.3 hours to build a car, while it takes Toyota only 27.9 hours ... GM spends 43% more on labor per car. And that's before health care costs (where GM has a $1,300/vehicle disadvantage).
If you're GM or Ford, how do you make up for a 43% disadvantage? Well, you concentrate on vehicle types where you don't have competition from Toyota--e.g. big SUVs in the 1980s and 1990s. Or you build cars that strike an iconic, patriotic chord--like pickup trucks, or the Mustang and Camaro.
Or--and this is the most common technique--you skimp on the quality and expense of materials. Indeed, you have special teams that go over a design to "sweat" out the cost. Unfortunately, these cost-cutting measures (needed to make up for the UAW disadvantage) are all too apparent to buyers.
Cost-cutting can even affect handling--does GM spend the extra money for this or that steel support to stabilize the steering, etc. As Robert Cumberford of Automobile magazine has noted, Detroit designers design great cars--but those aren't what gets built, after the cost-cutters are through with them.
Look at the big Ford Five Hundred -- a beautiful car on the outside, based on the equally attractive Volvo S80. But thanks to Ford's cost-cutters it debuted with a tinny, depressing interior that would lose a comparison with a subcompact Toyota Scion. Ford wants $30,000 for the Five Hundred. Forget it!
Is it really an accident that all the UAW-organized auto companies are in deep trouble while all the non-union Japanese "transplants" building cars in America are doing fine?
Detroit's designs are inferior for a reason, even when they're well built. And that reason probably as more to do with the impediments to productivity imposed by the UAW--or, rather, by legalistic, Wagner-Act unionism--than with slick and unhip Detroit corporate "culture."
As great as the American auto design studios have been -- crafting show cars that are often stunningly beautiful, the bean-counters nickle and dime them mercilessly, until what rolls into the showroom is an awful, distorted, dumbed-down, cheaped-out ugly bastard step-child.
And it's the bean-counters who are responsible. Except that they're only doing what management tells them to do. The same management that signs these exorbitant labor agreements with the UAW, with terms that apparently make it impossible to build a car that feels reassuringly solid and luxe.
It reminds me of a story from David Halberstam's book about the decline of the American auto industry -- and the rise of the Japanese -- The Reckoning.
Halberstam tells of the problem Ford was having with one of its giant cars of the late '50s or early '60s. Customers were complaining of lousy paint and rust. The engineers investigated and found that the paint booths at the Ford factory were too small for the behemoth cars, making it impossible for the cars' paint to cure properly.
The solution? Build bigger paint booths for the assembly line.
But Robert McNamara, the whiz kid economist and uber bean-counter (who would soon do for the Department of Defense what he was about to do to for Ford) balked at the cost.
Why spend all that money when there was an obvious and cheaper solution? McNamara peered across the conference table and asked his engineers why they couldn't cut each car in half, paint the halves separately, then weld them back together.
One can only imagine the silence, as the dumbstruck car guys peered at the slack-jawed jackass who was running their company.
McNamara's spirit still lives in Detroit, where the Big Three's leaders can't figure out how to control costs without turning their cars into the automotive equivalent of a one-night stand.
Yeah, they look good during the fevered romance on the showroom floor, but in the cold, harsh light of morning, you'd chew your hand off to avoid sticking your key in the ignition of the pig sleeping in your driveway.
It's that failure of leadership that ensures that American drivers will continue to glance admiringly -- for a moment, from a distance -- at the latest American car, before happily driving off in their HondaToyotaNissan.
Posted by Mike Lief at January 18, 2007 07:48 PM
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