What did we learn in 2009?

[the Teuton]

Here's a short list of things I've compiled that we've come to find as truth in the American automotive industry over the course of 2009:

Too big to fail

Apparently, when car companies are on the verge of Chapter 7, it's best to follow up by placing them into Chapter 11, dissolve their assets, screw over their creditors, and give 45 percent of the company's worthless stock to the UAW for its rainy day account. Neither GM nor Chrysler are solvent yet, but we know that when they are, the approximately $50 billion of taxpayer money they borrowed before bankruptcy won't be coming back to taxpayers.

What I'm still trying to figure out is how Cerberus was allowed to almost completely take over GMAC, getting a bailout itself, to save the two troubled companies. My source, claiming Robert Nardelli, the $120 million Home Depot man, was never an employee of Chrysler, was right. I just wonder how ol' Bob is doing atop of his new fortune of government money and why no one ever made a fuss about his fortunes in the financial meltdown.

A Different Kind of Car Company

Saturn is the model company taught at UC Berkeley and the Wharton School of Business at UPenn for building brand loyalty. Between throwing parties for its owners to SaturnFest, a once-a-year festival for owners in Spring Hill, Tenn., the company once made owners feel like part of a community rather than a name on a mailing list. And it worked. Saturn had one of the best customer retention rates and consumer quality scores of any company in the industry -- often, right up there with Lexus and Acura.

But economies of scale ruined the process. Lawrence G. Hrebiniak, a management professor at Wharton, said "Saturn started out on the right foot - as an autonomous division with market focus and an emphasis on quality. It ended up on the wrong foot - with internal squabbles, and production- and cost-driven focus."

After losing approximately $20 billion over the course of its 20-year life, possibly former CEO Roger Smith's best idea came crashing down. Now Saturn is a model for how not to run a new brand.

I wonder if he still drives a Lexus...

In 2005 when Mark Fields and Bill Ford brought Alan Mulally on board from Boeing, we were all skeptical. Four years later, after mortgaging its assets to stick $20 billion into a slush fund in a plan called The Way Forward, closing 14 plants, and bringing a global Ford one step closer in the One Ford plan, the company seems to be doing all right. On top of that, perception played out well when Ford came out as the only big american company to not take public funds, as consumers purchased the C170 Focus off dealer lots faster than Ford could make them during Cash For Clunkers.

2004 was the last year of Wolfgang Reitzle's half-hearted attempt at merging Volvo, Aston Martin, Land Rover, Jaguar, and, gasp, Lincoln together in the Premier Auto Group. And since then, only Lincoln remains with Ford, albeit without the LS that came from the Ford-Jag marriage. Shame on that one.

Otherwise, Ford has been winning award after award lately, both in quality and innovation, and its bringing cool new products to the US like the Fiesta and Transit Connect (yes, I just called a cargo van cool.

In '05 when Mulally came to Ford, he once called his LS430 the best car money could buy, almost challenging Ford to build a better car. In 2009, it just might have.

I love what you do for me?

Brake pedals that stick to the floor, brakes that don't work, frames that rust apart...Toyota is the Tiger Woods of car companies. Where once stood the company with a smiling face, a pat on the back, and a guarantee of an honest-to-goodness reliable car now stands a mess of controversy shrouded in a bigger mess of secrecy.

Toyota has always been a PR powerhouse, but after ex-Toyota lawyer Dimitrios P. Biller spilled the beans on the cover ups he's had to fabricate, it almost made Tiger's alleged hookups with 30 women outside of his marriage seem modest. Fueling this has been a report that a man took his service loaner Lexus RX into the dealer to complain about a sticking gas pedal shortly before crashing and dying in a fiery blaze due to the same problem. Suddenly, it's 1983 all over again, and Toyota is playing the role of Audi this time.

The fact that no one likes to acknowledge, though, is that Audi's gas pedal incident almost destroyed the marque.

Other notables:

-Hyundai gains big in the US market
-VDub becomes the biggest auto company in the world, but at what cost?
-Cash For Clunkers generated a lot of new car sales...for the Asian companies
-China, China, China: Hummer, Volvo, and old Saab go out East
-Oh, Ram it: Ram to become its own brand
-Buying Chrysler with Fiat currency: Marchionne plays Ghosn
-"I don't know a thing about cars" -- Whitacre, 31-year-old lawyer (in Task Force), and former Microsoft CFO aim to change auto industry
-Is he retired or not? Bob Lutz back at GM...again.
-Ring around the Rosie: Porsche claims Nissan lied about GT-R 'Ring times
-Ugly is in: After witnessing ugly, ugly came back stronger. BMW has an X6 M, a 5er GT, and Honda has two uglies of its own with the ZDX and maligned Crosstour.

Summary: 2009 was possibly the biggest year for the auto industry since the Great Depression. 2010 is looking to be just as important.

[2o6]

Did you write this?

[nickdrinkwater]

I enjoyed and agreed with the first three parts...I'm not sure Toyota have fallen from grace to the extent you portray though.  Also would like you to elaborate more on your scepticism on VW becoming world #1.

[the Teuton]

Did you write this?

Is it that bad? It took me about 45 minutes to write all of it -- and yes, with the exception of the quote I got from SaturnFans, all of it is original material.

[the Teuton]

I enjoyed and agreed with the first three parts...I'm not sure Toyota have fallen from grace to the extent you portray though.  Also would like you to elaborate more on your scepticism on VW becoming world #1.

I think we're at the tip of the ice berg with Toyota.

As for VW, they don't have the presence in North America to really solidify the spot. Porsche isn't big enough the support the whole company. Also, the dollar is weak, the NMS is unproven (although it will probably be good), and they just don't have the volume players to keep up the market share. Leveraging VW to buy Porsche was a mistake, imo, and I don't think the company is really all that stable.

[2o6]

I think we're at the tip of the ice berg with Toyota.

As for VW, they don't have the presence in North America to really solidify the spot. Porsche isn't big enough the support the whole company. Also, the dollar is weak, the NMS is unproven (although it will probably be good), and they just don't have the volume players to keep up the market share. Leveraging VW to buy Porsche was a mistake, imo, and I don't think the company is really all that stable.

I think they're trying to pull a phateon; taking a nice car and charging too much than what the car is really worth.

The Jetta and Rabbit are fine economy cars. It isn't a premium car. If they were to slash the price by 10% it'd be competitive with the Civic and Corolla crowd.

The Passat is nice.....but not 30K starting price nice.

The CC is priced right. Expensive, but still a bargain for what you're getting.

The Routan is lazy, and whoever buys it needs to be beaten.

The Tiguan would be better if it was cheaper.

The Polo needs to hurry up and get here.

[MrH]

The Phaeton is totally worth what they charged.  The thing was a master piece.

Btw, since when did Saturn emphasize quality?  They always were just heaps of plastic thrown together.

[2o6]

The Phaeton is totally worth what they charged.  The thing was a master piece.

Btw, since when did Saturn emphasize quality?  They always were just heaps of plastic thrown together.

Compared to a BMW, Audi or MB?


From what I hear, it was good but not as good as the price it was charging.

[2o6]

The Phaeton is totally worth what they charged.  The thing was a master piece.

Btw, since when did Saturn emphasize quality?  They always were just heaps of plastic thrown together.

They were rather reliable cars. Probably the best GM had at the time.

[the Teuton]

The Phaeton is totally worth what they charged.  The thing was a master piece.

Btw, since when did Saturn emphasize quality?  They always were just heaps of plastic thrown together.

Compared to everything else GM offered at the time, Saturn was amazing. They just never developed their lineup properly, though.

Edit: My interior still creeks a bit in my car. The quality isn't up to par with my old Impreza. But the Saturn still far surpassed your average

in interior build and quality.

[Payman]

Compared to a BMW, Audi or MB?


From what I hear, it was good but not as good as the price it was charging.

What? It was essentially an A8 and Bentley Continental with a better interior and a VW badge, so yeah, it was better than those for the price.

[ifcar]

What? It was essentially an A8 and Bentley Continental with a better interior and a VW badge, so yeah, it was better than those for the price.

It was essentially those except many hundreds of pounds heavier, and it was apparently not set up properly to handle the extra mass. Everything I've read said the interior is the main thing the car has going for it -- it's otherwise not competitive.

[Payman]

It was essentially those except many hundreds of pounds heavier, and it was apparently not set up properly to handle the extra mass. Everything I've read said the interior is the main thing the car has going for it -- it's otherwise not competitive.

Not sure I agree. It wasn't competitive because the automotive media couldn't get over the reality of a $90,000 VW. The buying public was thusly influenced, and it unfairly tanked.

[GoCougs]

Random comments:

Ford doesn't build anything remotely good as the LS430(460) and it still is loosing massive amounts of money from operations.

Toyota is still the world's best automaker, with much of the "controversy" is being manufactured by detractors and otherwise garnering undue attention after becoming the largest automaker in the world.

[ifcar]

Not sure I agree. It wasn't competitive because the automotive media couldn't get over the reality of a $90,000 VW. The buying public was thusly influenced, and it unfairly tanked.

I disagree. The media loves an underdog. The badge didn't hurt, for example, a luxury Hyundai in the eyes of critics -- if anything, it helped it, it made it a novelty. Had the Phaeton been properly executed, it would have gotten lots of reviews saying "whoda thunk the same company makes this and the New Beetle! Forget about the VW badge; this is the real deal."

[the Teuton]

Random comments:

Ford doesn't build anything remotely good as the LS430(460) and it still is loosing massive amounts of money from operations.

Toyota is still the world's best automaker, with much of the "controversy" is being manufactured by detractors and otherwise garnering undue attention after becoming the largest automaker in the world.

Manufactured by detractors?

Every bleeding heart liberal journalist in the US drives a Honda, Toyota, or Volvo.

If the problems weren't there, no one would be reporting them.

[MrH]

I disagree. The media loves an underdog. The badge didn't hurt, for example, a luxury Hyundai in the eyes of critics -- if anything, it helped it, it made it a novelty. Had the Phaeton been properly executed, it would have gotten lots of reviews saying "whoda thunk the same company makes this and the New Beetle! Forget about the VW badge; this is the real deal."

The genesis was half the price of the Phaeton.  Apples and oranges man.  At the Phaeton price point, badge is much more important.

[MrH]

Compared to everything else GM offered at the time, Saturn was amazing. They just never developed their lineup properly, though.

Edit: My interior still creeks a bit in my car. The quality isn't up to par with my old Impreza. But the Saturn still far surpassed your average

in interior build and quality.

Too bad a car doesn't just compete against GM cars.  If that were the case, everything would look great!

Saturn might have been the best GM had at that price point, but in no way screamed "quality" when compared to the competition.

[hotrodalex]

Too bad a car doesn't just compete against GM cars.  If that were the case, everything would look great!

Saturn might have been the best GM had at that price point, but in no way screamed "quality" when compared to the competition.

My mom's/brother's Saturn is pretty good.

[ifcar]

Manufactured by detractors?

Every bleeding heart liberal journalist in the US drives a Honda, Toyota, or Volvo.

If the problems weren't there, no one would be reporting them.

The Toyota issues represent textbook media-created controversy: one big news item (floormat recall) sends everyone looking for follow-up stories that wouldn't have otherwise seen any attention, like "government considers opening investigation on Prius brakes," tying everything together into "evidence" that Toyota has major problems. The best historical example is the NYC crime wave that was perceived in the 1800s when the tabloids happened to start reporting more crime news.

There has been almost no coverage to draw comparisons that say "Toyota is doing x worse than others." When things are reported in a vacuum, of course they can always look bad. Every automaker is making various screwups that could be formed together into a trend that open with "Automaker X recalled twelve cars today for incorrectly installed airbag warning labels, another in a series of embarrassing incidents that include..."

[the Teuton]

Really, MrH, I don't think you give the Saturn enough credit. My 1995 is the first year of a brand new interior. Of course, it would rattle a bit more than the later models.

I would have to say it's close to the Impreza in quality and about on par with the 1991 4th gen Civic we had.

[ifcar]

The genesis was half the price of the Phaeton.  Apples and oranges man.  At the Phaeton price point, badge is much more important.

Okay. We can just see how the automotive press treats the Equus, which goes on sale next year in the $50ks.

[the Teuton]

The Toyota issues represent textbook media-created controversy: one big news item (floormat recall) sends everyone looking for follow-up stories that wouldn't have otherwise seen any attention, like "government considers opening investigation on Prius brakes," tying everything together into "evidence" that Toyota has major problems. The best historical example is the NYC crime wave that was perceived in the 1800s when the tabloids happened to start reporting more crime news.

There has been almost no coverage to draw comparisons that say "Toyota is doing x worse than others." When things are reported in a vacuum, of course they can always look bad. Every automaker is making various screwups that could be formed together into a trend that open with "Automaker X recalled twelve cars today for incorrectly installed airbag warning labels, another in a series of embarrassing incidents that include..."

The media picks its darlings and its villains. Right now, Toyota is a really good villain because it is on top.

I still don't think Toyota's troubles are close to over yet.

[MrH]

Really, MrH, I don't think you give the Saturn enough credit. My 1995 is the first year of a brand new interior. Of course, it would rattle a bit more than the later models.

I would have to say it's close to the Impreza in quality and about on par with the 1991 4th gen Civic we had.

So Saturn came out with a new interior in '95, that you thought matched a 4 year old economy car from Honda?

I'm tired of the apologetic attitude we treat every GM product with.  "Oh, I mean, they kind of matched the last generation of the competition!  That's really good for GM!"

[MrH]

Okay. We can just see how the automotive press treats the Equus, which goes on sale next year in the $50ks.

Still significantly cheaper...

[ifcar]

The media picks its darlings and its villains. Right now, Toyota is a really good villain because it is on top.

I still don't think Toyota's troubles are close to over yet.

I don't disagree with either statement. Bad publicity can do some damage. However, I've yet to be convinced that there is an actual problem.

[2o6]

Too bad a car doesn't just compete against GM cars.  If that were the case, everything would look great!

Saturn might have been the best GM had at that price point, but in no way screamed "quality" when compared to the competition.

It wasn't the best, but it was competitive.

So Saturn came out with a new interior in '95, that you thought matched a 4 year old economy car from Honda?

I'm tired of the apologetic attitude we treat every GM product with.  "Oh, I mean, they kind of matched the last generation of the competition!  That's really good for GM!"

Saturns had a lot going for them:


- An EXCELLENT dealer experience

- Frugal Cars

- Well built and reliable.......quite competitive with Honda and Toyota.

- Unique plastic body panels that intrigued the customer

Still significantly cheaper...

The Phateon wasn't that expensive. V8 versions were 65K. Yes, the W12 got to 95K, but who'd want one?

[ifcar]

Still significantly cheaper...

Phaeton started at $64,600. The Equus is projected to start within $10k of that. I don't think you could say that's a huge difference between two luxury cars, especially for the purposes of theory.

[the Teuton]

So Saturn came out with a new interior in '95, that you thought matched a 4 year old economy car from Honda?

I'm tired of the apologetic attitude we treat every GM product with.  "Oh, I mean, they kind of matched the last generation of the competition!  That's really good for GM!"

GM sucked in the 1990s. The fact that an autonomous brand with a relatively tiny budget was able to make something competitive is still pretty impressive. I live with an early model. Believe me, I don't apologize for the rattling around the center console and squeaking hard plastics. I have to listen to that crap.

I'm saying that the brand was able to a) gain people's trust, b) build a quality product at a competitive price away from any of GM's pre-existing engineering, and c) make something leaps and bounds better than any economy car GM had ever made at that point.

It had an independent rear suspension -- something the Cavalier, Ion, and Cobalt have never had. It had a relatively sophisticated DOHC engine well before Ecotec ever came about. It had a space frame design so the plastic panels didn't have to bear any structural force.

The car was genius, a great idea. It was just marketed poorly and drained of all life once GM Corporate got its hands on it.

Edit: My brother's 1999 with the same interior panels on the dash doesn't have any of the rattling problems mine has.

[MrH]

GM sucked in the 1990s. The fact that an autonomous brand with a relatively tiny budget was able to make something competitive is still pretty impressive. I live with an early model. Believe me, I don't apologize for the rattling around the center console and squeaking hard plastics. I have to listen to that crap.

I'm saying that the brand was able to a) gain people's trust, b) build a quality product at a competitive price away from any of GM's pre-existing engineering, and c) make something leaps and bounds better than any economy car GM had ever made at that point.

It had an independent rear suspension -- something the Cavalier, Ion, and Cobalt have never had. It had a relatively sophisticated DOHC engine well before Ecotec ever came about. It had a space frame design so the plastic panels didn't have to bear any structural force.

The car was genius, a great idea. It was just marketed poorly and drained of all life once GM Corporate got its hands on it.

Edit: My brother's 1999 with the same interior panels on the dash doesn't have any of the rattling problems mine has.

I don't care about the circumstances.  They could be given $3 and a pile of shit to work with.  If it's not a great car, then I'm not impressed.