Foreign vs. Domestic cars....you reap what you sow...

Lately, I've been thinking about that whole "you reap what you sow" cliche....

Seems in the auto industry it's starting to come to fruition.

I've been a car nut most of my life, but particularly an import car nut for Honda & Toyota.

During my years in college, over and over several of the successful case studies were based on Toyota and how they had set up a TQM (Total Quality Management) system to ensure their products were built right. The system is so good that at any moment anyone on the production line could pull a lever or push a switch & stop the whole line if they saw something wrong. They were that passionate about quality....and it's been paying off nicely!

Honda, to a lesser extent, has also been riding the same TQM wave. Ever since they got started, they've focused on building well built cars that'll last and run for what feels like practically forever.

American Made cars? Well, let's just say they just never seemed to catch on. Ford played the "let's see how cheap we can build a car for" and luckily it's paid off for them but not for long...people are tiring of their Taurus's & F-150's falling apart within a few short years of ownership.

GM is all but done for unless by some miracle they can pull a profit out of their hat. Chrysler is also on a downward spiral. And all because they failed to innovate and deliver the products that the market wanted. You know, good, solid, reliable transportation that didn't eat them alive at the gas pump and actually would hold value for a few years.

I must have caught on to this issue a while back because I've only once owned an American made car.....a 1979 AMC Condord Sedan. Well, ok, I also "technically" owned a Dodge Colt, but that was a Mitsubishi Mirage in Dodge clothing; so it sort of doesn't count (great car by the way).

A few examples:
In 1998 I bought a 1993 Honda Accord Sedan EX with about 70K miles on it for $10,000.00 Yep! That was a lot! And it was one heck of a nice car too!

This is what it looked like in about 2000


Last year I finally sold the car. It wasn't because I'd worn it out or it was getting old or it was falling apart. It was because I hadn't driven it in over 2 months. And that's only because I don't drive much anymore.

Here's what it looked like last summer when I sold it.



What's interesting to point out is that it pretty much looks like it did when I bought it. The paint was still in excellent condition, the body looked great, it wasn't a rust bucket, it still drove incredible (I always did like the way that thing drove!), and everything worked on it! All the power windows, all the accessories, all the bells & whistles, all of it...except the power antennae that I'd disconnected, but that was more my fault. Anyway, the point was that in 2008, a 1993 Honda Accord still can look good.

Now the rest of the story.
It had 225,000 miles on it! The engine ran like a top! It STILL got 29-30 MPG. When I listed it on KSL Classifieds, it was sold in under 48 hours (It would've sold faster but I wouldn't let anyone come & look at it on a Sunday as I'd posted it on a Saturday). My phone rang off the hook for this thing!

So, you're thinking I probably gave it away, right? Nope! I sold it for pretty darn close to full NADA Retail at the time; $2850.00.

So I got 10 years of use out of it, drove the crap out of it, it still looked good, still ran great, and people were calling like crazy to get it. It was 15 years old and they STILL were flocking to get it! Let's see a Chevy, Ford, or Dodge pull that trick!

But wait...the story continues.
About 2 years earlier we sold my wife's car (good riddens!). A 1991 Chevy Corsica (which I DID NOT BUY...I married into!) with a little over 175K miles on it. The car looked good, ran well, and for the most part was probably in better shape than most Chevy Corsica's out there, but we were only able to muster a meager $1400 out of the thing. It even had a nice set of alloy wheels and an upgraded set of seats we'd taken out of a neighbors junked LTZ Corsica.




So, why such a big difference? Well, perception and value.
Honda's have a much better perceived value. People perceive them to be better vehicles; and they are! If you ever take a look at Consumer Reports & compare a Chevy Corsica to a Honda Accord, the difference is a mile wide. The Honda comes out with top scores while the Corsica is near the bottom. Resale value? Same issue...The Honda pretty much retains some of the best resale values in the industry. The Corsica? $1400 measly dollars! And it had less miles, a V6, and better tread on the tires than the Honda!

So was the Honda that much better of a car?
You better believe it! The tranny in the Corsica had the overdrive disabled because if you re-enabled it, it'd stall (faulty electronics). The radiator was leaking. The gas gauge once it got to about a half a tank would start to flop between empty and a half tank. Did I mention that we had to replace the seats? The power windows worked...when they felt like it...and on and on and on.

The car was well taken care of too, yet with less miles it still wore out much faster than the Accord. The Accord still worked great!

So now lets talk about this whole GM Fiasco & what I think of it.
I think GM should be put out to pasture & let die. I think Chrysler should too.

In November, GM came crawling to the Feds, hat in hand, asking for "a meager $18 billion". Last Tuesday, they returned.....the new amount? $30 billion!!! And they say they'll probably need even more! And why is this? Because they're LOSING MONEY!!!!

And why are they losing money? Because no one wants to buy their cars....hmmmm....people are now on a budget; money is tight, and they're choosing to spend more wisely when they buy cars.....hmmmm...let's see, buy the car that'll devalue itself faster than a tire going flat and you'd be lucky to make it to 100K without something falling apart or get a Toyota or Honda & not have to worry about it.

You can see what the public has done. They've finally woken up & realized that GM makes really crappy cars! And now GM is crying to the federal government to bail them out of their loss crying that people will lose jobs and claiming that they're too big to let fail.

Sorry, but the one thing I learned in Business school is that if you run a business in America, it's "survival of the fittest" and I got news for GM...ya ain't all that fit anymore. It's time to die.

Unfortunately, I think the new administration will probably end up forking over some funds to help GM out & try to bail them out because of the democratic party's "pro-union" stance, and that's really sad.

Why? Because while it means it will keep people employed....it will also mean that the Federal Government is subsidizing a losing enterprise that doesn't seem to have any hope of ever turning around. In other words, because GM failed to innovate, they are now going to receive money from the Feds to keep their doors open and guess what? They're going to lose even MORE money! And whose money is that they're now losing? Why it's mine and yours! In the form of our tax dollars! Being pissed away on building cars by a company that can't seem to understand that if you build a crappy car people won't want to buy it given alternatives.

I'm really saddened by the prospect that GM and Chrysler will be "bailed out" by our government. It sends a pretty clear message to other "failing enterprises". Screw up big enough (I guess you have to REALLY screw up too and be REALLY big) and the Feds will step in and give you money that they really never intend to get back.

You know, I really hope they don't give them the money. I really hope they just let the dinosaur die. If GM goes into bankruptcy it would be the best thing in the world for them. It would mean they could restructure, lose the unions, maybe redesign how they do things and actually start building decent cars again that people may actually want to drive.

Until they get it figured out, I won't be visiting their dealership showrooms. Instead, I've chosen to show my patronage to a car company that actually seems to have figured out how to build a decent car. That'd be Toyota.

Now, before you go calling me terrible for buying a "foreign made" vehicle, remember, Toyota now has plants in the US that employ US citizens and they source many of their supplies for these cars from US suppliers. Sorry, I don't buy that line.

Sitting in my driveway right now are two Toyota's. That's all we own now.

A 2004 Toyota Sienna Minivan and a 2005 Toyota Tundra.



I love both of these cars! The Sienna drives like a dream and the Tundra drives even nicer! The engineering that's gone into these cars is just flat out amazing. Everything is put in the right place. The engines run smooth, they both drive extremely comfortably, and their resale value is just amazing!

Maybe down the road GM, Ford, & Chrysler (well, maybe only Ford seeing as GM & Chrysler could soon be a thing of the past) might actually figure it out...but until then, my hard earned money is going to be spent on things that actually will still be working 10-20 years down the road.

I have a feeling a lot more people feel the same way I do. The Toyota Camry has been the best selling car in America now for something like 10 years straight. Their minivans repeatedly take top reviews, and the Tundra is a thing of beauty in Consumer Reports eye (although I'm not enamored by the new Tundra's).

I really do hope that the domestics do get it figured out. It'd be really nice to see that happen, but after going through the 80's where the Japanese auto makers pretty much spanked them hard, then through the 90's where we saw a LITTLE comeback, but nothing strong, and now in the 2000's where they're just about ready to all close up, I just don't think it's getting through their thick skulls.

So, if anyone at GM, Ford, or Chrysler is listening, here's my tip. Build me a car that'll actually last 100,000 miles without it falling apart. Build it out of sheet metal that actually looks nice & that I'd be willing to buy (the Ford Taurus wins the prize for the ugliest car out there--same for the Chrysler Concord thingy, or whatever they call it). GM actually designs pretty nice cars, but I'm still not sold on their quality.

So what started this rant? Well, tonight I climbed into the Tundra & drove over to the local gas station and loved the trip! Everything about that truck rocks! The ride, the sound, the feel, the comfort...all of it. While driving that short trip I got to thinking about the latest headlines on GM & thought, "Yep! Ya really do reap what you sow"....unfortunately GM is trying to get you & I to foot the bill for their irresponsible management. I really hope it doesn't happen.

Graydon
Avid Toyota fan