GM Spirals the Drain (Part 2)

[rah]

While I agree in terms of reliability (not directly related) I do believe the number of manufacturing defects reported within the first year is ONE aspect of quality, and people have to admit that Detroit has made inprovements in this measurement.

[DirtyMartini]

So basically, "Ford: not a lemon right out of the gates, but we can't really vouch for the long haul."

[rah]

your so called right out of the gate is an indication of the quality of the assembly process. (granted no relationship to long term)

[Wezil]

My GM product has held up pretty good under heavy use. I've done over 200,000 kms in 4 years with only $1,500 in mechanical repairs. As that includes a brake job I think I'm doing okay...so far anyway.

Google tells me it was made in Lordstown, Ohio.

[Asher]

Originally posted by Verto
I saw a recent survey that showed Ford's quality is now approaching that of Toyota.

You're thinking of JD Powers' initial quality survey, which is pointless. When it's under warranty it doesn't matter much.

I know a few mechanical engineers who work for companies that design and make parts for the auto makers and have heard many, many things about the difference in quality demands between Toyota and Honda, and the Big Three. It's night and day.

Have you seen the new Ford F150 commercials showing the handle and foot step coming out of the back of the truck (to assist in climbing in the back)? My brother actually designed that when he worked for a company called Multimatic. Their original specs were to withstand 500 pounds of pressure reefing on the handle up at the very top (which would put the greatest amount of strain on the handle). So they did this, but Ford came back and said it was simply too expensive. They needed to reduce the unit cost by 5 dollars per unit. As a result, the entire thing had to be redesigned to the new spec of 300 pounds of pressure reefing on the handle. They dramatically reduced the quality of product to save $5 per unit cost.

The Big Three have far higher labour costs than than their Japanese competitors, and as a result of this they cut corners in quality. It's a well-known phenomenon, and it's not something that shows up in the defect rate of new cars, it's something that shows up over the lifetime of ownership of the vehicle. This is precisely why the Big Three have AWFUL resale values compared to Honda or Toyota, they're not built to last longer than the warranty period. They cut every corner they can to keep unit costs down because they have to pay it all for labour.

Another example from one of my brother's friends: they worked for a firm here in Canada that was designing the dashboard controls for both GM's new universal dash (forget its name) while also designing Toyota's new Camry dash. Each manufacturer sends as part of their specs a minimum number of times each knob/lever can be pulled or adjusted before breakage, in addition to how much force they can withstand (and this is tested using machinery). The requirements for GM were ridiculously pathetic compared to Toyota, to the tune of Toyota requiring a minimum of 1 million adjustments (which is absurdly high, basically they want to make sure they don't break at all), and GM wanted 10,000. And as usual, GM came back after the first iteration and said they needed to bring unit costs down yet again, so they went for a cheaper grade of plastic to make the cut and then just put a textured material on top of it to make it seem higher quality.

This kind of mentality is endemic to the Big Three and ultimately, the high labour costs are the main drivers for the lack of long-term quality. The Big Three cannot control their labour costs, they can only control unit costs...and as a result, with insane labour costs come low unit costs, which comes with lower quality and reliability.

[DirtyMartini]

Originally posted by rah
your so called right out of the gate is an indication of the quality of the assembly process. (granted no relationship to long term)

"Ford: we use only the highest quality assembly processes in producing our ugly, poorly-designed gas-guzzlers"

[DirtyMartini]

Originally posted by Asher

This kind of mentality is endemic to the Big Three and ultimately, the high labour costs are the main drivers for the lack of long-term quality. The Big Three cannot control their labour costs, they can only control unit costs...and as a result, with insane labour costs come low unit costs, which comes with lower quality and reliability.

I haven't read the whole thread -- is anyone seriously arguing that the albatross of the UAW contract/retirees isn't a, if not the, major factor that handcuffs the Big Three?

[Dinner]

"Big Three have AWFUL resale values compared to Honda or Toyota"

Once again Asher mouths off about things he knows nothing about.

The main reason resale values are lower for the big 3 is that they have vastly more supply. The reason for this is because they have to pay their workers no matter if they're working or not so they keep the factories churning out cars night and day. Naturally this means there are more Ford or Chevy's of each model made then Toyotas or Hondas so the price is resultingly lower. I must say the Ford I used to own was of exception quality and lasted with virtually nothing but scheduled maintained for the ten years I owned it.

[Asher]

Originally posted by Oerdin
"Big Three have AWFUL resale values compared to Honda or Toyota"

Once again Asher mouths off about things he knows nothing about.

The main reason resale values are lower for the big 3 is that they have vastly more supply.

Holy ****, are you ever stupid.

The supply of cars is the same. Toyota is the #1 seller of vehicles in North America now, is it not?

What the hell is wrong with you, dude.

I talked about RESALE values and you're talking about how much Ford and Chevy pay their employees.

It's a well known fact the Big Three are much less reliable post-warranty than Honda or Toyota. Their depreciation curve is far more pronounced than Honda and Toyota. Pretending this has nothing to do with higher maintenance costs of older Big Three vehicles and their lesser reliability is delusional at best, and Oerdin-esque at worst.

[DanS]

The Detroit 3 have awful resale values for a lot of reasons. In addition to the perceived poor long-term quality, they sell a great many cars to car rental companies. Car rental companies use the cars for a year or less and then dump them into the market at depressed prices.

[Dinner]

Originally posted by DirtyMartini


I haven't read the whole thread -- is anyone seriously arguing that the albatross of the UAW contract/retirees isn't a, if not the, major factor that handcuffs the Big Three?

I think everyone has acknowledge this. What I have said, and others, is that current agreements have lessened these costs and future changes can lessen them even more. Especially given the powers the new Car Czar will have.

Take this article from the New York Times: http://www.nytimes.com/2008/12/10/bu...1&ref=business

Virtually the entire cost difference has to do with legency costs (pension payments and retiree health care) but those costs will soon be dealt with forever and total employment costs will be with in $3 per hour of Toyota. That's impressive given that the big 3 support 1.2 million retirees and spouses currently.

[DirtyMartini]

Originally posted by Oerdin


I think everyone has acknowledge this.

That's good.

[Zkribbler]

Didn't the UAW take over the costs of health care and pensions in the last contract? I have a vague memory that his happened. Who was paying attention?

[Dinner]

They will fully take over the pension system in 2010 along with the retiree health care trust. GM (actually all three have similar deals) has made 3 of the 5 payments they promised and just need to make 2 more and then the pension and retiree health care monkey is off of their back forever.

The whole point of the deal was end the old traditional pension system and require no further payments from the companies. The costs were very steep ($30 billion from GM 3/5ths of which has been paid) but it is worth it to totally end the lengency problem.

[DanS]

The New York Times is saying the bailout is dead. It probably still has a faint pulse, though.

Auto Bailout Appears Dead in Senate as G.O.P. Resists

By DAVID M. HERSZENHORN and DAVID E. SANGER
Published: December 11, 2008

WASHINGTON — The prospects of a $14 billion government rescue of the American auto industry seemed to vaporize Thursday morning as the Senate Republican leader, Mitch McConnell of Kentucky, spoke out forcefully against the bill, effectively dooming its chances despite the urgings of the White House.

http://www.nytimes.com/2008/12/12/business/12auto.html?ref=automobiles