Barely anyone at the top ofis truly experienced in the American car business. Top people at are foreigners — again, who haven't had much experience in the American market. Decisions at are made by Germans.
I must have been out of town when Detroit decided to abandon the car market. That's what's happening. Ask yourself, where are the new car models? There's not a new 2002 car design fromthis fall, or from , and all that has is the Thunderbird, which we've been seeing for three years, plus a Focus hatchback.
Trucks Yes. Cars No.
Now half the American market, better than 8 million a year, remains cars. I believe thatand and make money on their Accords and Camrys and Passats. I believe the PT Cruiser, one of the last of the Lutzmobiles, is really a car, and it's profitable. And I say that getting $20,000 for a dressed-up Neon is smart business.
Ford and GM think the “entry luxury” car market is worthwhile — the coming Cadillac CTS is a 2003 model — but why not the other segments?
Other than the Ford Focus and the PT, if you want to call that small, not much is happening to the small stuff. And Detroit's midsize cars are languishing. Ford put the Contour/Mystique to sleep, and a new Taurus is years away. The same with GM; although I keep hearing of exotic new models, even a convertible, but always years off. Chrysler apparently will usebasics for most of its future cars, which to me is suicidal.
Alas, the other guys from Germany, Japan and even Korea don't think that way. I've just driven the lovely and new 2002 Lexus ES 300, a winner, seen the newAltima, another winner, and will have driven the new Camry by the time you read this. The new Audi A4 is winning rave reviews. Why go on? The foreign competition hasn't quit on cars.
There are no excuses for Detroit's abandoning the car market.
GM, at least, is pushing out numbers of new trucks, but even then, they have enough people and money to create cars, too. Ford is falling behind in trucks, so it's got no excuse, nor does Chrysler.
Detroit can say: “We don't make money on cars, so why spend money to bring out new ones?”
They don't make money because the designs and the engine/transmissions are old. There isn't an American car out there with variable valve breathing. We are trying to catch up with 5-speed automatics when the other guys are starting to put in 6-speeds. We talk CVTs and Audi is putting one in its new A4.
So what does Detroit have to sell in cars? Price. They don't make money because they must give rebates and discounts, 0% financing and lease subsidies that eat up the profits. But then they want to keep the factories running — over-producing — because it costs almost as much to shut them as to keep them running.
This isn't Bad Luck. It's not God's Will. It's that the leaders of the American auto industry don't know the American auto market. Barely anyone at the top of General Motors is truly experienced in the American car business. Top people at Ford are foreigners — again, who haven't had much experience in the American market. Decisions at Chrysler are made by Germans.
This isn't bigotry or even let's-riot-in-the-streets anti-globalism. It just stands to reason that an American who has lived and breathed the American car business for 25 years would know more about it than a Brit or German who just got here. I also happen to believe that a European will know more about the European markets than someone shipped over from Detroit, that a Canadian might know more about the Canadian markets than someone shipped over from Detroit, and that a Mexican might just know more about Mexican markets than someone just shipped over from Detroit.
Where are the leaders like Ed Cole, Lee Iacocca, Bob Lutz?
Oh, I forgot. They never got promoted. A brand marketer from P&G got the job instead.
And now, my favorite feature:
What Fools These Mortals Be
These comments were made to me by a Ford man:
“Unfortunately, my work-life has been completely consumed by a flood of Management School gimmicks and the hucksterism of Motivational Consultants. Right now we have ‘Six-Sigma,’ ‘Plus+3,’ ‘Big 5’ and ‘Breakthrough Sales and Leadership’ which we must focus on. Rather than actually doing our jobs and generating increased revenue for Ford, we in the field find ourselves spending most of our time doing Action Plans, Follow-up Reports, Brainstorm Sessions, Strategy Sessions, Dealer ‘DNA’ Profiles, Script-writing classes, attending ‘Rah-Rah’ seminars, etc. … Managers have come to believe that generating new Excel spreadsheets and PowerPoint presentations is productive activity.”
… “Jac Nasser was a breath of fresh air when he took charge and sought to defeat the corporate bureaucrats. He encouraged all employees to e-mail him directly (bypassing middle-management bureaucrats) with ideas to improve Ford's quality and profits. He hasn't done that in a long time, however.”
What Fools These Mortals Be.
Jerry Flint is a columnist for, and former senior editor of, Forbes magazine.
This was written before Robert Lutz became vice chairman and product czar of General Motors. And I'm sure Bob already is doing something about it.
As he once said, “the world isn't to the big but to the fast.”