Car Guy
New Year New Car Resolutions
Are there any the flabby, saggy auto industry can stick with?
Making New Year’s resolutions is easy; keeping them not so much — as anyone who has sworn to drop 20 pounds and start hitting the gym come Jan. 2 will tell you. But the idea of at least trying to make a positive change is sound nonetheless.
So how about the flabby, saggy car industry? What resolutions might be worth making — and at least trying to stick with?
* Pay back the government, get the government out of the boardroom.
This resolution is mainly for GM and Chrysler — who made a deal with the devil by accepting enormous government subsidies to stave off the total reorganization that would otherwise have occurred last year. The catch that came with the cash was that Uncle Sam now has a big say in how GM and Chrysler will do business — including what kinds of cars they’ll make. This is worse than having Don Corleone as your silent partner. The Don, at least, would probably stay out of day-to-day operations so long as you make your payment. But the Doers of Big Things in Washington won’t be able to resist the temptation to have Detroit build their proverbial dream car — which will end up just like that episode of “The Simpsons” when Homer was allowed to do the same thing.
So, for your own well-being, resolve to send as much money back to D.C. as quickly as possible — and divest yourselves of a partner who will never remain silent.
* Resolve to de-content new cars to make them more affordable.
One reason new cars are so expensive (a typical mid-sized family sedan has a transaction price around $25,000) is that they’re fitted with so many standard amenities such as power windows, door locks and AC that used to be optional extras. “Standard equipment” just means you’re forced to buy what used to be optional (if you want to buy the car). There’s nothing wrong with power gadgets, if you want to buy them — and more to the point, if you can afford to buy them. The problem is that the average American’s income/buying power has flatlined since the collapse of the real estate/credit bubble — while the cost of new cars continues to trend upward as though nothing had changed. It’s economically delusional to keep on building “economy” cars with all the bells and whistles and expecting buyers to pony up when so many are no longer in a position to do so. Thousands could be shaved off the MSRP of the typical car by making power windows and locks, AC, fancy alloy rims and high-priced tires etc. optional extras that people could skip on if they so chose — or buy à la carte, as individual options rather than being forced to buy a “package” to get the one thing they do want. This might lower the profit per car but if more cars are sold as a result, the net profit overall will be higher — and the industry that much healthier.
* Resolve to at least provide an “off” switch for annoying buzzers.
You can make a reasonable argument that a commercial garbage truck or similarly super-sized vehicle with limited rearward visibility needs to have a loud buzzer that comes on whenever the thing’s put into reverse — so as to warn anyone who might be back there to get out of the way, pronto. But are buzzers really necessary in a compact-sized passenger car? Toyota is most guilty here but not the only one doing it. Ditto seat belt “reminders” that virtually every new car now comes with. Yes, it’s important to buckle up for safety but these buzzers can create enough annoyance and distraction to negate the benefits of buckling up. A person ought to be able to drive his car down his driveway, to the mailbox, without being mercilessly assaulted by the buzzer for not buckling up. Sometimes, even being buckled-up won’t save you from the buzzer — if you have a package on the passenger’s seat. Sensors in the seat aren’t smart enough to distinguish between a human and a bag of groceries. An “off” switch for these well-intended but often-infuriating buzzing, beeping hellhounds would be welcome.
* Resolve to cut the fat.
Like America, new cars have put on a few pounds — about 500 pounds, on average. Heavier cars need bigger/stronger engines to perform adequately — which is why the economy cars of 2010 are actually less fuel-efficient than the economy cars of the late 1980s, despite the huge strides that have been made in engineering and technology. A quarter-century ago, 40 mpg compacts were commonplace. Today, they are virtually nonexistent. And the only reason why is their weight. If the typical fuel-injected, variable valve/cam-timing equipped modern economy car weighed closer to 2,000 lbs. than 3,000 lbs., 50 mpg would be no problem — and hybrids (and diesel-powered) compacts could probably hit 60 or even 70 mpg.
* Resolve to build more cars in the United States.
Henry Ford was a pretty smart guy. He knew that he could sell cars only if his potential buyers were financially able to purchase them. He thus paid his workers a higher-than-average wage, which he repeatedly increased as the profitability of Ford Motor Co. increased. Modern CEOs and corporate boards have upended this winning formula. They are interested in maximizing “shareholder value” — the payout to stockholders and holders of high management positions — by paying workers less and less while demanding ever-higher productivity. If next quarter’s earnings can be increased a few cents per share by closing a factory in Detroit and moving the line to Mexico, it will be done — even though the long-term result of such practices is that average workers can no longer afford to buy new cars. Which of course eventually kills “shareholder value,” too.
The problem is that today’s corporate boards are often extremely short-sighted. They care about next quarter’s earning — but the company’s health five years down the road is something many don’t think much about.
If the car industry wants to sell new cars, it needs potential buyers who can afford them. Outsourcing their jobs to Mexico and China so that management and shareholders can make a fast buck off the backs of low-wage stoop labor may be profitable for them right now — but it’s a disaster for America in the long run.
About the Author
Eric Peters is an automotive columnist and author of Automotive Atrocities: The Cars You Love to Hate (Motor Books International) and a new book, Road Hogs.
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Nutwister| 12.30.09 @ 6:21AM
So how do the auto manufacturers cut weight? The Fed makes them add all sorts of safety and pollution hardware that adds that 500 lb. to a plastic and aluminium filled box on wheels.
Pingback| 12.30.09 @ 8:18AM
Twitter Trackbacks for The American Spectator : New Year New Car Resolutions [specta links to this page. Here’s an excerpt:
Tony in Central PA| 12.30.09 @ 8:30AM
Dave Barry wrote earlier this month about a new sedan for 2010 from Detroit, the Dodge Despair.
JimBeam| 12.30.09 @ 8:53AM
Nutwister is right, the econoboxes of late 1980s were tin cans on wheels. Would anybody want to be in an accident in a late 1980s Civic CRX? A Chevy Spectrum? A Ford Festiva?
Second, the EPA has changed how they calculate gas mileage, so even those 1980s era compacts wouldn't get the same mileage under the new standards.
The Big E| 12.30.09 @ 8:59AM
Wouldn't it also be nice if the the "Big 3" could come up with a reasonably priced, reasonably good performing car that doesn't have styling that's been copied from something 4o years old. Those old Mustangs, Camaros and Challengers are classics, but they became great by breaking new ground - not by simply updating the style of the 1929 model.
Tim| 12.30.09 @ 9:20AM
Another thing about taking out the power locks, windows etc: the fooking car will have less problems, less warranty work and be easier and cheaper to fix when it does break.
Howard| 12.30.09 @ 9:57AM
The reason Detroit moved plants out of the US to Mexico was not "fair" labor prices, but exorbitant labor and benefits. The US worker is more productive than the Mexican, but not twenty times more productive. Now that labor costs are becoming more realistic, I expect fewer transplant cars coming in from Mexico.
PolishKnight| 12.30.09 @ 10:22AM
One way to get a good argument started is to talk politics, religion, and cars because everyone knows something about their own personal preference and thinks theirs is right.
And of course, here's my 2 cents:
It's my understanding that a lot of the cost and weight of new cars in the states is due to safety standards. Dual front and side airbags probably add about a grand or so or more. Plus there's the weight of all the reinforcement around the doors. Quite frankly, I paid probably about 3 grand more for a used car for my wife than for a sub-compact without such features but sleep better at night but of course that should be someone's choice. It's worth asking though if human life, and medical costs, are worth 3 grand worth of metal insurance.
I love power windows and doors. They are the cat's pajamas. One thing that would help maybe would be to do something that my nemesis, the windows PC industry has done: standardize. When you replace a power cord on a PC, you don't get one for your Dell that's custom made. They are all the same. There should be a standard for power doors, windows, etc. to make it cost trivial to upgrade or replace parts in all models. Heck, the same should go for auto lamps. The auto industry likes making even different years of cars different sizes precisely to jack up the parts prices.
In theory, when a car has A/C, power doors, etc. standard then the price for these accessories comes down a bit. It's the same reason why building a PC yourself may cost more than just buying a prebuilt one.
Finally, it's already been covered in AmSpec that much of the reason why the US auto industry is dying or outsourcing is due to unions which is tied into why it's hard for them to repay the government: Because unions pensions and pay are strangling the industry. I would rather buy a Korean made car and get more car for my money than keep a Democrat fatcat union member who worked for 20 years or so on a lifetime pension.
Frankie| 12.30.09 @ 2:23PM
For many vehicles, you CAN turn off the seat belt chime, though the light stays on. People are nervous about giving details, since it is most always a bad idea, but like the article says, there are circumstances where it makes perfect sense. Moving the vehicle often, at slow speeds in non-travelled areas, is such an example.
With freedom in mind I offer the following advice: do an internet search; if you find your, or a similar, vehicle, try the sequence offered.
I use my seat belt always on the road. But my chime has been off through several years and vehicles, and it is something I check out before buying.
Jim O'Brien| 12.30.09 @ 3:40PM
NEW YORK (CNNMoney.com) -- GMAC Financial Services is close to receiving a third round of bailout funds from the U.S. Treasury Department, according to a published report Wednesday.
The announcement for the troubled auto and mortgage lender to collect $3.5 billion of additional aid on top of the $13.5 billion already received since December 2008 is expected within days, the Wall Street Journal reported, citing people familiar with the matter.
The fresh lifeline is intended to return Detroit-based GMAC to profitability in the first quarter of 2010, according to the report, and will likely allow GMAC to avoid placing its home lending unit, Residential Capital, into bankruptcy.
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As Archie Bunker would say, this is throwing more money down the terlit. Tax money and increased national debt being used to buy the workers' votes.
Pat| 12.30.09 @ 4:11PM
Once upon a time there was a beautiful kingdom called Detroit and it was ruled over by benevolent dukes such as Duke Ford, Duke Chrysler, Duke Studebaker, Duke Hudson, Duke Packard, Duke Nash, as well as the valiant warlord, General Motors. The peasants were a happy, industrious lot, toiling each day within their factories. They were well fed, well housed and content to buy the factory outputs of the good Dukes.
But the evil rulers of the faraway kingdoms of Japan and Germany noticed that the peasants could only buy horseless carriages from the kindly Dukes of Detroit, they knew of no other Dukes and they and their many descendents were immensely loyal to their overlords. So, the evil kings called upon the witch Freida Trade and the witch created sparkling showrooms overnight among the environs of Old Detroit which sold strange new horseless carriages called VW’s, Datsuns, Hondas, Toyotas and the opulent Mercedes.
At first, the peasants didn’t know what to make of these strange horseless carriages and, being loyal subjects, many refused to buy them. But, as the years went by, Freida Trade’s spell possessed them and worked on their minds with a secret incantation called “quality for price”. Now the peasants forgot the duty they owed their kindly dukes and visited the showrooms often coming away with the well-made, reasonably priced products of the evil kings. The Dukes of Detroit continued to pay them well hoping they would remember their past loyalties and the kindness they were shown – but, alas, Freida’s evil had invaded their minds and stolen their souls.
And the peasants, with their modest wealth, began to buy all manner of things from the sly rulers of Japan and Germany. They bought radios, televisions, cameras, lawn mowers – endless doodads and appliances. Detroit’s Duke Kresge hoping to regain their loyalty opened a store called K-Mart where many items could be purchased for only a handful of copper and the peasants learned to love the magic word “Mart” to such an extent that Wal-Mart and its many imitators captured the peasants’ loyalty forever.
Then it came to pass the beautiful kingdom of Detroit fell on hard times, bread was scarce and no one had the copper to buy their cherished doodads and appliances. A great cry arose from the peasants blaming the few surviving Dukes and demanding the King bring them low and cast them out of the kingdom. The foolish King complied with their wishes and now Detroit is a hollow land, desolate and dark. The peasants spend their days in despair pining for the old days, but doomed to live out their miserable lives as the oppressed minions of the foreign Kings.
Curtis| 12.30.09 @ 7:40PM
Nixing the safety alarms and gadgets is going to get you crucified by the NHTSA and the soccer mom demographic.
Nixing the high end features isn't going to work in my opinion, due to standardization. The power window option costs just as much as the nonpower window. Buying two sets of parts, hiring two different installers on the line, and selling one of those lines at a discount is a bad idea.
Consumers and can talk about wanting to pay less all they want to, but almost all customers will almost always spring for a few extra options, given the choice. An option has to have a really ugly side (annoyance, subscription fee, or unsuitability) for a customer to insist on it's deletion, or refuse to buy the car.
Almost all consumers has a small list of must-have features (Cruise control, preferred trans, ) they accept additional features to get the musthaves, they will not sacrifice a must have unless the extra features get extremely rediculous. Even then, they'll just use the unneeded options to argue for a lower price with the dealer. ("I'm not paying for stuff I won't use, drop your price or I walk") Most times the dealer will adjust enough to make the customer feel vindicated.
c| 12.30.09 @ 11:03PM
those extras are where the profit lies. The barebones car is a bait and switch for a fully loaded vehicle.
Wankel| 12.30.09 @ 10:22PM
Nahh...they can't do it.
Case in point - look at the Chrysler 300 commercial with Euro-dudes Mohammed Yunus, Mikhail Gorbachev, and Lech Valesa.
As these washed-up lefties are seen exiting Chrysler 300's (with Euro plates to boot), nothing is said about why the consumer should buy a Chrysler product so far as quality or features.
Besides, Yunus, Gorbachev, Walesa are all smiling. Maybe it's because after dealing with the likes of a Tata, Zaporozhets, or Trabant, a state produced too-big-to-fail Chrysler 300 Gangstamobile really is a good thing.
After the Chrysler drives through a brick wall, the commercial ends with the announcer stating that "This film" is dedicated to Myanmar's Aung San Suu Kyi. Film? WHAT film?
As an extension of the American political machine, Detroit knows what we really want even if we think we really don't want it. Look at the resurrected Dodge Charger. I fully expect to see neo Super Bees in lime green and Vega II's with rally stripes and hood latch pins.
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Sure, here we are, te new one and the old one, for sure...
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