Why can't America build a great car?

Porsche_ford Since I was very young, I have loved cars. I drive a Porsche in the summer and a four wheel drive Audi in the slick New England winters. I love these two cars -- they make my commuting hours bearable and sometimes fun. I often ponder the question -- If you ripped the Porsche shield off my 911 or the four Audi rings off my A8 and replaced them with a Ford oval, would I still drive the cars? You bet I would. The quality, design, history, feel, and experience would keep me happily in those cars, even if you put a Nash Rambler logo on their front hoods. Which roughly proves a point -- it's not the branding that's the problem with American cars, its the cars. Consumer Reports' research verifies this -- in the organization's five categories of 2008 cars and SUVs, none of the top five vehicles come from a domestic producer.

Why can't American companies build a great car? They are designing and manufacturing day in and day out, so what is preventing them from making something great?

I've heard many theories. From a high-level U.S. auto executive: "It's the unions." From a manufacturing consultant: "It's the short-sighted management in the car companies -- they refuse to see the future." From an investor: "U.S. car companies are run by accountants and other assorted bean counters -- they don't love or know cars." Here's my thesis -- America has had too few car makers over the last 70 years. Alfred Sloan did a great disservice to the country when he rolled up Buick, Pontiac, et.al., eliminating vital competition and distributed ideas. The Big Three, all based in Detroit, engaged in massive group think for so long, they lost their creativity, their difference, and their innovation. Thinking of Sloan reminds me of a favorite quote: "The biggest enemy of capitalism is a successful capitalist."

Help me with this big question. I'd love to get your thoughts and theories.

Comments

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Its a nice piece of thought you shared with Us...Thank you very much for this post.

Why can't America build a great car?

There is many reason if we see Italy and Germany they are on the top but we cant see any us great cars

I wonder about that myself,

I wonder about that myself, but there is no denying that America can boast topnotch transportation services. Most limo services in the country is synonymous to limos in Mississauga

re: Why can't America build a great car?

Wow Steve -- great post at your blog re: American Cars. I reduced the problem to lack of (domestic) competition -- but your nuance adds a lot to this discussion.

re: Why can't America build a great car?

American car manufacturers face a myriad of issues relating to why they can not build a great car.1) I would argue that they can build a great car, I am currently building one; http://bit.ly/18400s Not only is it arguably one of the most gorgeous cars ever designed (in perspective VS your Porsche and Audi), but it outperforms those cars (as well as Ferrari's,Bugatti's and Lamborghini's'. It is built entirely from GM parts, using an American frame/chassis design and costs less then those cars.2) Regarding "Mass market" automobiles - One issue is that they have a history with the majority of the US population (Gen X'rs) of building horrible (quality) cars. People do not easily forget, and many times you only get one shot. Look at the number #1 selling car in China ...It's a Buick (who knew?)!!3) People purchase cars not only for utility, but more often as an off-shoot of their personalities. For whatever reason, American built cars for the most part often look like they were designed (aesthetically) with a chisel.4) It often takes 5-10 years and billions of dollars to get a car to market. Combine this with the recent mentality of profits first, and you get car companies that chase trends, instead of leading them (witness how today it is all about the electric car and fuel economy).

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Whoa, as an employee of GM, I'm a little miffed by your post here! Have you seen some of the stuff coming out of GM lately?Chevy MalibuBuick EnclaveCadillac CTSSaturn AuraThese are just a few cars that are great rave reviews from a variety of media. Check these cars out, and let me know what you think.Adam DenisonGM Social Media Communications

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Adam:Yes, GM is making good progress -- the Malibu would definitely qualify as a potential rennaisance in the making -- and hopefully it will crack the top five in Consumer Reports. As a guy from a big three automaker, what is your opinion on why it has been so tough for the American companies to build a great car? I'd love to get your thoughts.

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I think one of the greatest challenges to the auto industry is represented in this small sample of comments: everyone wants something different in a car. For an auto manufacturer to make a good quality car at a reasonable price (something Henry Ford aspired to when he released his Model T - he cut the price in half after he first started making them), it can't be all things to all people. At Ford, Alan Mulally realized this and reined in the amount of vehicle customization - for example, until recently, the Lincoln Navigator had 128 different options on the console alone.It's a precarious position to be in. On the one hand, if you tell customers what they want ("any color, so long as it's black"), you stand the risk of alienating many because you're missing current trends and opinions. On the other hand, if you allow customers to design their own cars, not only does it result in higher manufacturing costs, but in the end, you might end up with something like Powell Motors did when they turned the car design over to Homer Simpson (see http://en.wikipedia.org/wiki/Image:The_Homer_by_Carlos_Bisquertt.jpg)That being said, we're making great strides at Ford. The Flex is one of the most talked-about Ford designs in recent history. There is definitely a love-it-or-hate-it divide that we're seeing in reactions - always a good sign in design. It doesn't have to appeal to everyone, but it does have to evoke an emotional response.In addition, we're advancing in areas of quality, safety and technology. The 2009 Ford Escape and Mercury Mariner hybrid models were selected as 'Top Safety Picks' by the Insurance Institute for Highway Safety; Ford has more NHTSA 5-star-rated vehicles than any automaker and more IIHS Top Safety Picks than any other brand. Advances in quality are beginning to take root, as a recent J.D. Power & Associates study showed Ford's initial quality equal to that of Toyota's and Honda's. And our groundbreaking partnership with Microsoft to power the Sync system for phones & mp3 players, as well as the new Sirius Travel Link technology demonstrates Ford's commitment to producing smart cars.While the styling and design may not be the same as the models you name above, I suggest you take some time to actually get into some of Ford's vehicles. I suffered the same myopic vision of American auto manufacturers before I came to Ford - thinking only of my experience in old rental cars and from what I saw on the street. I was pleasantly surprised and impressed when I test drove the fleet. It's been a refreshing change from staring at that "check engine" light that used to plague my Audi A6.

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P.S. I should have mentioned, I'm head of social media for Ford.Scott MontyGlobal Digital Communications

re: Why can't America build a great car?

Several great points here. I think the question has been answered, so I will try and provide a different perspective/solution. Local Motors is designing and building cars for car enthusiasts in specific regions around the U.S. Every month we hold car design competitions, four so far, and the community chooses the winner with us. This direct connection to our community, to drivers and designers, is largely what sets us apart. Our local manufacturing method and aim toward sustainability are also differentiating factors.We are developing our first Local Motors Design Concept in plain view. The LM Rally Fighter can be viewed here: http://www.local-motors.com/buildProcess.php. Comment on the design; provide feedback directly to the designers and engineers. Local Motors is the first car company (that I know of) to facilitate a completely open design and build process, and to ask for feedback when it counts; prior to prototyping.Bare in mind, the Rally Fighter and all Local Motors vehicles are not vanilla and they are not aimed to please the masses. Each design is meant to wholly satisfy local groups of car enthusiasts. Hence, slick New Yorkers with tight parking restrictions may not gravitate toward the LM RF’s huge proportions and jump ability. Enthusiasts in Texas, North Carolina and Southern California (and maybe the Pacific Northwest, Robert!) do and have. We have not yet announced the location of our first facility, but when we do we will further iterate the Local Motors Rally Fighter to reflect Local heritage and needs.Local Motors cars will be built in Local facilities. This decentralized strategy is sustainable, allows for more rapid iteration in design, allows adaption to new technology as it emerges, and allows a closer physical connection with customers.Combine this customer inclusive design and build process with a company goal to be most fuel efficient per class, and (we are hoping) you will find a local American car company you can be proud of, and a car you will love.Steve, interesting blogpost; love the quote “it takes outside thinking to change the inside direction”. You will surely see exciting and efficient Local Motors cars. The first prototype will be viewable in the next 18 months. Full disclosure, I am Community Evangelist for Local Motors – and I hope you will all join the Community and help design a car for your Local area at www.local-motors.com.

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This conversation points out just how difficult the 'foreign' vs. 'domestic' distinctions really are. Just to point out a few things discussed above (just interesting, imo):- #1 selling Buick in China (the Excelle) is actually a Pinninfarina styled Daewoo, which is owned by GM. I wouldn't say that a South Korean car with Italian styling and an American badge sold only in China is a 'domestic' ;) Plus, the last i checked it had been passed by 2 VWs and a Hyundai as the top selling car in China.- The Saturn Aura AND the Chevy Malibu are both built on the Epsilon platform, a platform which GM Europe (based at Opel's HQ in Germany) controls. Yes, they're both built in Kansas, but the Euro stylings are more than just coincidence.- While the CTS is a fantastic car, it's interesting to note that it was designed to replace the Cadillac Catera, which was basically a rebadged Opel Omega. It goes the other way too: in Europe, the Cadillac BLS is basically a Saab 9-3.- The Escape and Mariner Hybrids: Don't forget they have a triplet, the Mazda Tribute Hybrid. And that the battery is built by Sanyo, which is designed in conjunction with Honda.- The Ford Flex is built in Ontario (with the Edge and Lincoln MKX.I could go on and on and on.....the Ford Mustang has a lower domestic parts content than Toyota Sienna (which just happens to be built in the US)....GM owns Saab which rebadged the Subaru Impreza and called it the Saab 9-2.....My point is, maybe the 'domestics' are having trouble succeeding because there simply is no such as a true domestic anymore. Is there?

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What about the Possible factor that Huge Fuel Corporations will never allow something like this to happen. There will be no profit for the Oil Producing Organizations. And Apparently That's Not Possible in America!!!! Who Will pay for Politics and their campaigns????

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George,Your question is a tricky one, because by answering it sounds like I'm acknowledging that we haven't built great cars. :) But I'll take a stab at it anyway!I've only been with GM for a little over a year, so it's hard for me to speak much on the cars prior to my coming here. But here goes.First off, to say Americans can't build a great car is a pretty blanket statement. By car are you referring to sedans only, or does that include sports cars, trucks and SUVs too? In my personal opinion, it seems that we spent a great deal of our time and effort building some of the best trucks and SUVs in the business. We were very successful at this and I think we still continue to build the best trucks and SUVs out there.With the insane price of gas now, we've shifted our focus more to cars. As I mentioned before, you're seeing the fruits of this in our recent models. They really are proof of what we are capable of.Again, this is all just my opinion, so take it for what's it's worth.

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Are the roads too dull? Wide and no fast corners?Did the auto box kill driving pleasure?Certainly to me cars in the US are more seen as utilitarian, people look more at styling and gizmos than cornering abilities. But aren't we all going there?

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Why bother building great cars or even mediocre cars? You spend some money on lobbists, so you never have to build the 40 mpg car Congress mandated back during Carter. And, now, when your market disappears, you run to Congress and ask for a handout.To get better cars, let car companies die. The foreign cars are being designed by American designers, so its not the designers. European car manufacturers have unions and goverment regulations that are far stricter than ours. What those things are here in America are excuses, excuses you learn when you get your MBA, excuses you use throughout your career, so you never have to say, hey, it's me, I'm the problem.

re: Why can't America build a great car?

Here's an excellent analysis (even though it's from a quasi-Forrester competitor) on how GM might get back into the fight via electric cars -- worth reading:http://www.amrresearch.com/Content/View.asp?pmillid=21800&pubid=3792&custid=9927

re: Why can't America build a great car?

George,An interesting observation.http://www.nytimes.com/2008/09/12/opinion/12fri4.html?ex=1378958400&en=9d257ba2cdb16faf&ei=5124&partner=permalink&exprod=permalink

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When a 20-40 year old thinks about their ultimate car purchase Audi, BMW and Mercedes-Benz are typically the top three choices. This is because these brands make stylish cars. The last time I thought abouut style, I wasn't taking cues from Detroit. This is the obvious problem with American auto. Hello???? It's a no brainer.

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Simple - no style. Which is strange given the likes of Apple

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Unlike you, I don't like cars. When I was young I did not want a hot-rod. I don't like to discuss displacement, car design, mileage, etc. In my 20s I could live downtown (Toronto) and my bike and public transit were my vehicles. I now live on an island outside of Vancouver, BC, and I like to hike and backcountry ski in the amazing and rugged wilderness that begins within the city limits and continues as far as my muscles and my imagination can take me.So, to be able to travel to town to do business, and to reach the high mountain trailheads, a car is almost necessary.So, tell me what I can buy that is small, fuel efficient, and can crawl up the steep backcountry logging roads, and make it over the water bars (ditches dug across most logging roads that are cheaper to maintain than culverts)? All of us Canadians need some extra traction during the cold months of the year, so AWD is a real safety requirement. For my purposes I want the oomph that comes with a low-range 4x4. I don't want bling, and I don't want speed – just enough to be capable on the highway and for trips to town. I don't even care much about styling. It'd be nice if the exterior would not be easily scratched by branches that have overgrown the road as I push by.There are many thousands of people like me in what you'd probably call the Pacific Northwest.My point is that I suspect that folks like me could be a real niche market. We care about the environment, and we spend our time and our money on the means to experience it. The best that Detroit has to offer us are big, fuel inefficient SUVs. My impression is that the manufacturers are so busy looking at what the competition is doing, that they are not looking at the lifestyles of the potential clients.What other niches are also not being served?

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Hey, I too like cars AND I care about the environment. Fortunately we all have different tastes otherwise we would all chase the same one kind of women! Seeing cars purely as an environmental issue is wrong. If that was the case then we need to get rid of them - and of everything else like airplanes, domestic heating and cooling, and so on and on. Let's face it there isn't any solid scientific proof that global warming is caused by emissions. It could be a natural cycle after all. I still have bought less and less fuel consuming sports cars AND FWDs over the years. I live in Switzerland so lots of snow is normal.Why does America not manage to build great cars? It is a combination of unions, bureaucrats, political game plays and a lack of hiring great designers. BMW had the same problem for a while. Plus you need to be courageous to be stylish, just like Apple is and that is the doing of its CEO. So most of all American car makers are missing the creative head who leads them. You can learn bureaucracy with an MBA, but not how to be an innovative leader. Look at Microsoft as another example.

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You touched on the core reason in your post: it's the groupthink. This extends to unions, executives, Wall Street's risk-averse view of the Big Three, regulators, etc.This groupthink has been enabled for decades by the enormous size of the Detroit automakers. They never perceived the *need* to shake things up because they could always point to a temporary special condition in the market (the "accident" of the Oil Embargo, etc.) instead of the pervasive underlying reality that their products simply weren't as good as the cars coming out of Europe and Japan.Finally - *finally* - this is starting to change, but it's taken repeated hard knocks, plus an infusion of new thinking from non-Big-Three-veteran executives, above all Mulally at Ford.Sometimes you have to undergo humiliation before you accept the need for drastic change. I think that's where Detroit is now.

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America not able to build great cars? You're joking right? Are we forgetting the Mercury Cyclone, Dodge Superbird, '63 Vette? 2008 Vette? Late 50's Cadillac's? Crown Victoria's? New Buicks? Think of what competition in the same price range who's workers make a comparable wage. I get irked when people compare a Passat to a Cavalier, or a Firefly to a BMW 118 and deride the quality of the plastics on cars 1/2 the price.Yes most Domestic cars are crap, but then most European cars in Europe are crap and Asian cars in Asia are crap. Try putting it another way, how many people are willing to pay a 30% - 130% premium for a car that might not even comply with CAFE ratings (such as Porsche).Want desirable US cars? Eliminate CAFE on domestic cars, get rid of the UAW/CAW & tie the CEO/Shareholder's pay/dividends to the end quality of the product. As it stands if you're the CEO making tens of millions, or the employee who get's paid a pile regardless of how poor a job you do why would you bother to change?The US Auto Industry, Too big to fail. Just like Bear Sterns...

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Groupthink is one reason and distance from their customers is another. A variety of real drivers who are passionate about stuff other than cupholders for crying out loud. I am an over 50 female, highly educated and I drive a BMW for hours of commuting and a 1940 Ford hot rod for fun.

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A great question George, I've pretty much only owned Japanese cars.There is one hope, the buzz of Silicon Valley is the much anticipated Tesla electric sports carhttp://www.teslamotors.com/The only drawback is it's not accessible to the average consumer with a price point over 100k

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George,Your questions of how to "fix" the current state of the American car manufacturer has been recently addressed in a great book you should read.http://www.bordersstores.com/features/feature.jsp?file=wherehavealltheleadersgoneWhere Have All the Leaders Gone?By Lee IacoccaMr. Iacocca takes a hard, first hand look at the current state of the american car industry and maps out a straight forward, pragmatic approach to fixing it. A good, easy read on your next flight......

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Tesla isn't available to the masses *yet*. They're reinvesting all of their R&D money into making a $45K midsize fully electric sedan, followed by a $20K entry level car.What's the lesson for domestics here? It's about thinking longterm and not short term. If they had invested their billions in SUV profits into efficient cars and hybrid tech, they'd be years ahead right now...instead, they're years behind. With competitive line-ups, they really could have taken advantage of the falling dollar too.GM has the best chance of turning things around (innovative products, taking a chance with the electric Volt, rebadging some great foreign market cars like the Opel/Saturn Astra and Holden Commodore/Pontiac G8) but they really need to divest some brands (Saab, Hummer, Daewoo, Buick). Ford is in a tough spot but i still don't understand why the Escape Hybrid drivetrain isn't in the Flex, and for Chrysler, it's never a good sign when the company that holding company that buys you (Cerberus) is named for the last creature you see before you plunge past the gates of hell....i wouldn't be shocked if it's "the big 2" in 3 years.

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to stephen above: how would eliminating CAFE standards help the situation? is the domestic industry going to be saved by less fuel efficient cars? sorry if i'm not following the logic?

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Maybe it's not all their fault. You sparked a lot of thought, so much so I blogged about it. You can read it here.http://expedientmeans.wordpress.com/2008/09/01/asleep-at-the-wheel-why-consumers-forgot-about-gm/