Monday, May 04, 2009

For Them, Quality Is Not Just A Slogan. It's Their Motto!

Charles Hugh Smith:

3. The durability of Big Three-manufactured cars was simply not competitive. The Big Three chose to tout the J.D. Powers reports on the number of defects found per new vehicle as the proper metric for their improved quality; as a low-income marginalized consumer my metric was more demanding: can this car run for 12+ years with almost no maintenance or repair bills?

Unfortunately, I do not personally know of any Big Three-manufactured vehicle which lasted past five or six years without incurring major maintenance or repair bills--often in the thousands of dollars. The Big Three trucks have a pretty good record of lasting 10+ years with low costs of ownership, but the rest of the fleets have poor records of long-term durability and ownership costs.

This lack of durability of the Big Three vehicles receives almost no visibility. The fact that a car made by American workers with largely American-made parts in Tennesee lasts a decade or more with virtually no repairs or maintenance required while the 10-year old Big Three vehicle is either junked or a problem-riddled "beater" is the 800-pound gorilla in the room few have cared to discuss.

My Dad surrendered his devotion to Ford's Lincoln Continental only after the company broke his decades-long loyalty by refusing to repair a transmission which failed a few months after the warranty expired. How can a transmission in the company's luxury car fail? How could the company not see the wisdom of repairing their topline vehicle for a customer who bought and owned their cars for decades?

In my view, this incident sums up why the Big Three are collapsing: poor quality, poor customer service, and a high cost of ownership. It's simply too expensive to buy and own a Big Three car unless you sell it at a hugely depreciated price within the warranty period-- at which point you've already lost thousands of dollars.

So the last car my Dad bought (new) was a Chrysler 300, that company's topline vehicle. Now six years later it is riddled with electrical problems which have cost thousands of dollars to fix. This is also not unusual.

Meanwhile, the car I bought used that was made by American workers with mostly American parts (a 1998 Honda Civic) is in its 11th year of service with virtually no repairs except a faulty sensor we replaced in a few minutes with a tool borrowed from a Kragen Auto Supply.

My experience of European-made cars is also poor when measured in durability and the cost of ownership over 12 years (10,000 miles a year for 12 years, as any modern vehicle should be able to last 120,000 miles without costly repairs.) My Dad's one foray into the Mercedes line ended like all other Mercedes I know of personally: with a $4,000 repair bill around year 8-10.

If you walk around any large parking lot in California and tally up the brands of the vehicles, you would find the vast majority are Japanese brands made in the U.S. American trucks are in evidence but there are very few Big Three sedans or even minivans. The reason is not disloyalty, it's simple economics: the depreciation of value and long-term ownership costs of Big Three and European brand vehicles are so much higher than the Japanese-brand vehicles that few can afford the Big Three or European brands.

The transmission in my brother's topline Alfa Romeo just failed after four years, requiring $6,000 in repair bills. Atypical? Let's put it this way: how many times have you personally known a transmission in a U.S.-made Toyota or Honda to fail, ever? I drove my 1985 Honda Accord to the wrecking yard after 20 years of service because it no longer passed California's strict smog tests. Someone could have pulled the tranny and probably gotten another 20 years out of it. That trannies in Lincolns and Alfas fail after a few years is incomprehensible. And don't even ask about electrical systems.

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