The Death of the Electric Car

[degsme]

Every marque and every model, goes through "cycles". There are points in the cycle where the manufacturer's imperative is sell the brand and points where having sold the brand, it can "rest on its laurels" and seek to wring more profit out of the brand. It behooves the auto consumer to know where the car he's considering buying, is in that cycle.

I'll suggest that the likes of GM, Chrysler, and Hyundai are in the "proving themselves cycle". Therefore, (depending on the model) their offerings may be good buys. In order to reestablish their brand, or in the case of Hyundai, to establish their brand, they need to offer somewhat more value than their competitors.

Other marques, like say...Toyota, Honda, and VW are in more of a "resting on their laurels" phase. That doesn't mean they're BAD values. It just means that they don't need to be quite the values of some of their competitors.

For a useful illustration of these cycles that most would be familiar with, we can track the up-down-up life cycle of the Ford Mustang, from 1964-1/2 to 2013.

Hyundai is in the Brand Building mode.

GM and Chrysler are in the "undo the brand damage we have done for 30 years".

 

[fairsheet]

Hyundai is in the Brand Building mode.

GM and Chrysler are in the "undo the brand damage we have done for 30 years".

But...what difference should that make to the auto consumer? IF for example, the Cruze offers good value, should I care why GM has been caused to offer it to me? For instance, by most objective accounts, the current Cruze is a better value than the Civic.

Therefore, shouldn't I snap up the Cruze?...rather than go with the Civic based what may've been going down with Honda vs. Chevy 10 years ago?

 

[degsme]

But...what difference should that make to the auto consumer? IF for example, the Cruze offers good value, should I care why GM has been caused to offer it to me?

Because the same trade rags said good things about GM's cars in the 80s. And hence folks like me, simply don't believe that the Cruze offers better value than the Civic. And this becomes somewhat self-fullilling as a prophecy. because it means that the Civic holds its value better in the 2nd hand market, which in turn makes the Civic A better value financially than the Cruze.

Unless the Cruze drops its price - which then perversely confirms to me that it isn't nearly as good a car as the Civic.

 

[fairsheet]

Because the same trade rags said good things about GM's cars in the 80s. And hence folks like me, simply don't believe that the Cruze offers better value than the Civic. And this becomes somewhat self-fullilling as a prophecy. because it means that the Civic holds its value better in the 2nd hand market, which in turn makes the Civic A better value financially than the Cruze.

Unless the Cruze drops its price - which then perversely confirms to me that it isn't nearly as good a car as the Civic.

To qualify for sure, I'm not a car salesman! But, I've assiduously followed BOTH "Consumer Reports" and the likes of "MotorTrend", "Road & Track", et al my entire life. These two genres tend to come from two rather distinct perspectives. Over the years, I've learned to put them both in their proper context and cross-reference them to suit my needs.

So sure..I can remember back in the 80's-90's when the enthusiast-type mags would rate say..some Pontiac at the top while "CR" would rate them at the bottom. But so what?.....I was able to discern "CR's" reasoning and not buy the Pontiac. Or on the flipside, we'll see "CR" rating a Honda Ridgline (based on THEIR) parameters, higher than an F-150. Well...gimme a break. When I need a truck, I don't need it to suit "CR's" sensibilities and I'm sure as HELL not buying a Honda pickup truck.

Anyway...back to cross-referencing an putting-in-context....now and again we'll find models that're the favorites of BOTH genres or panned by both. And..that's when you know you're on to something worthwile.

As to the two models in question here. Both genres are sanguine with the Cruze. And, both genres are disappointed (to put it mildly) in the Civic. Heck..."CR" rated the Civic SO low that dropped below their "acceptable" line! Shit...that's territory heretofore occupied only by Smarts and last-generation Dodges.

 

[degsme]

But again... the "odor" of GM's 30 years of crap still lingers.

 

[trapdoor]

See I would like to believe that. I really would. But I drove SOOO many sh!tbox GMs from Avis over the last 20 years, and my experieince with my '89 Suburban was so crappy (no other vehicle did what it did, but the quality SUCKED) that I just have a hard time getting over that. (See I'm not rational all the time either). My GF has a Toyota Rav4. And its the classic Toyota. A bit noisy, rattles a bit, but all sorts of things about it are nice and it JUSK FVCKING WORKS.

Basically, it's a credibility problem. Credibility, once lost, is damn hard to recover. Among the best cars I've ever owned is a GM product from the early 1990s -- a 1993 3.8 liter V-6 Oldsmobile Achieva. I put more than 120,000 miles on the car, and it had only two real flaws. It was a little over-engined and consequently it ran through the lower motor mount called a "dog bone" because of its shape, about every 30,000 miles. And after I had about had put about 115,000 miles on the car (meaning the car had seen 145,000 as it wasn't new when I bought it), the driver's side power window quit working. It was still running strong when I sold it to a teenager (I don't know if he ever fixed the window). I'd frankly love to have a new one just like it.

The flip side of that story, of course, is that I once owned a truly iconic foreign car -- a 1973 1600 cc Volkswagen Super Beetle. It was a true shitbox, and I've worked hard ever since not to judge all Volkswagen's by the one experience.

 

[degsme]

Basically, it's a credibility problem. Credibility, once lost, is damn hard to recover. Among the best cars I've ever owned is a GM product from the early 1990s -- a 1993 3.8 liter V-6 Oldsmobile Achieva.

Precisely.... you could not pay me enough to even consider owning an "Oldsmobile". The name has such lousy connotations.

Hey I STILL own a 1967 VW Convertible. Its not a modern car by any standard. But it is way more fun to drive than anything with the name "oldsmobile" on it.

You are right. It is a credibility problem.. Which BTW has nothing to do with the labor rates of the Unions, and everything to do with corporate management.

 

[fairsheet]

Basically, it's a credibility problem. Credibility, once lost, is damn hard to recover. Among the best cars I've ever owned is a GM product from the early 1990s -- a 1993 3.8 liter V-6 Oldsmobile Achieva. I put more than 120,000 miles on the car, and it had only two real flaws. It was a little over-engined and consequently it ran through the lower motor mount called a "dog bone" because of its shape, about every 30,000 miles. And after I had about had put about 115,000 miles on the car (meaning the car had seen 145,000 as it wasn't new when I bought it), the driver's side power window quit working. It was still running strong when I sold it to a teenager (I don't know if he ever fixed the window). I'd frankly love to have a new one just like it.

The flip side of that story, of course, is that I once owned a truly iconic foreign car -- a 1973 1600 cc Volkswagen Super Beetle. It was a true $#@!box, and I've worked hard ever since not to judge all Volkswagen's by the one experience.

Speaking of Olds et al, I think one big problem GM had back in the day, vis a vis the likes of say Honda, was in their repair/service model. GM, in concert and contract with their dealers, assumed too much of their bottomline to come from service/repair.

I'm not necessarily thinking in terms of their designing repair issues into their cars. It goes more towards them not thinking in terms of minimizing the customer's exposure to their dealer's service departments. As a for instance, we all remember back in the 80's, people with GM/Chryslers having to have their "computer" or "engine module" replaced. The downside was that the computer was expensive. The good side (so to speak), was that replacing the computer usually did tend to "fix" the car. People would

about the price of the computer, but they were somewhat mollified by the fact that at least their car ran fine again. But of course..when they bought their NEXT car, they'd go with another brand.

Here's where it didn't make sense though: Per the back-channel GM data, of ALL the computer/control models that were returned to the factory under warranty, fewer than 3% were ACTUALLY defective, even as they continued to compensate their dealers for replacing them.

So...why in the world would GM put up with that? And, why were they willing to leave their customers with the perception of a poor-quality product, that wasn't actually of poor quality? I'm not inclined to the various conspiracy theories that might pop into people's heads around this sort of thing. I'm MORE inclined to putting it down more broadly, to their old profit model.

 

[OldGaffer]

I had a friend that owned a wholesale tire business, sold him a new 1988 Chevy 1500 with the 4.3 V6(this was the old 350 block with the back two dropped off) He used it for 12 years and put over 800,000 miles on it, with one engine overhaul at around 500k miles. We traded back for it in 2000 and wholesaled it for 1000 bucks. Chevy is still using that engine in its half ton trucks today. You can gig GM for fit and finish all day long, but if I have a business that uses pickups, I am going with the Chevy. Incidentally, Lonnie has about 6 trucks in his fleet and he drives all of them over 500k miles before trading. Try to sell him a rice burner full size pickup, if you dare.

 

[fairsheet]

I had a friend that owned a wholesale tire business, sold him a new 1988 Chevy 1500 with the 4.3 V6(this was the old 350 block with the back two dropped off) He used it for 12 years and put over 800,000 miles on it, with one engine overhaul at around 500k miles. We traded back for it in 2000 and wholesaled it for 1000 bucks. Chevy is still using that engine in its half ton trucks today. You can gig GM for fit and finish all day long, but if I have a business that uses pickups, I am going with the Chevy. Incidentally, Lonnie has about 6 trucks in his fleet and he drives all of them over 500k miles before trading. Try to sell him a rice burner full size pickup, if you dare.

I've been a "Ford man", since I was 8-years old. But, when some kids rearended me and totalled my Ranger 7 years ago, I had the idea that I would purposefully buy not just a used truck, but a non-Ford truck. My "thinking" was that if it was other than a Ford, I wouldn't develop that "personal connection" with it. It'd be like just an object - a tool - a work truck. So...I bought a '96 GMC SL1500 (work truck) with the 5 liter V-8 and 100k on the odometer. 7 years and 30k later, the godamn thing is still working juuuusst fine. My biggest complaint, is the damn door hinges and pivot pins. Why can't GM get those right?

 

[OldGaffer]

That old 1988 truck he traded in had been driven by half a dozen different drivers o9ver the years, one guy wrecked it 3 or 4 times, every piece of sheet metal was dented, but it still started , shifted and drove , albeit not like a new truck Lonnies big complaint, it had a 5 speed manual transmission and a cotter pin that held the shift rod linkage into the transmission broke every year or two. Not fun if you are driving down the interstate.

 

[fairsheet]

That old 1988 truck he traded in had been driven by half a dozen different drivers o9ver the years, one guy wrecked it 3 or 4 times, every piece of sheet metal was dented, but it still started , shifted and drove , albeit not like a new truck Lonnies big complaint, it had a 5 speed manual transmission and a cotter pin that held the shift rod linkage into the transmission broke every year or two. Not fun if you are driving down the interstate.

Yeah...but I'll betcha he got real "pit crew" handy at replacing that cotter pin!

 

[degsme]

Speaking of Olds et al, I think one big problem GM had back in the day, vis a vis the likes of say Honda, was in their repair/service model. GM, in concert and contract with their dealers, assumed too much of their bottomline to come from service/repair.

I'm not necessarily thinking in terms of their designing repair issues into their cars. It goes more towards them not thinking in terms of minimizing the customer's exposure to their dealer's service departments.

Service departments weren't really a profit center for GM.... GMAC was.

Rather, in the old days, service departments were how you "kept loyal customers". You cut your customer "a special deal" on a "ring job" or a "valve job" figuring that would bring them in as a repeat customer. Meanwhile Honda figured - lets just build a car that doesn't NEED a ring job.

 

[OldGaffer]

A lot of the advantage the Japenese auto makers had was new, modern plants, that we rebuilt for them after the war, in the meantime we were still using old pre-war plants that all assembly work was basically by hand. I remember a Jeep plant that had a 40 yard break in the assembly between two buildings, and the chassis had to be drug by hand from one building to another, also back in those days every car could be custom ordered with dozens of individual options, cruise without tilt wheel, power windows and no power locks, etc, slowed down the line as each car had to have a custom layout of parts. Now they do it like the Japanese, cookie cutter models with very few options, and of course full robotics in almost all of the GM plants now.

 

[degsme]

A lot of the advantage the Japenese auto makers had was new, modern plants, that we rebuilt for them after the war, in the meantime we were still using old pre-war plants that all assembly work was basically by hand. I remember a Jeep plant that had a 40 yard break in the assembly between two buildings, and the chassis had to be drug by hand from one building to another, also back in those days every car could be custom ordered with dozens of individual options, cruise without tilt wheel, power windows and no power locks, etc, slowed down the line as each car had to have a custom layout of parts. Now they do it like the Japanese, cookie cutter models with very few options, and of course full robotics in almost all of the GM plants now.

Only Kinda. REmember the "K" car? They were that ugly because GM was making a move to full integrated CAD/CAM tooling where the CAD design was used to drive the CNC machine that made the molds for he parts (a can ramble about the details but wont). And that was the mid to late 70s. They were retoolng plants aggressively from that point onwards. However the PROCESS and MANAGEMENT of the systems did not chageL Desing Engineers implemented an artisti design... then had a "Stage Gate" meeting in which the designs were handed off to "manufacturability"- who had no input into the initial design but had the right to redesign parts so that they would be cheaper to build. Finally it went through stage-gate to procurement where the parts and the tooling was purchased.

This lack of interdisciplinary communication was a direct result of the management fiefdoms that senior management allowed and even encouraged.

Result? 3 decades of shit for product.

 

[trapdoor]

Precisely.... you could not pay me enough to even consider owning an "Oldsmobile". The name has such lousy connotations.

Hey I STILL own a 1967 VW Convertible. Its not a modern car by any standard. But it is way more fun to drive than anything with the name "oldsmobile" on it.

You are right. It is a credibility problem.. Which BTW has nothing to do with the labor rates of the Unions, and everything to do with corporate management.

We probably have different ideas of what constitutes driving fun. Two of the most fun cars I've ever driven were Oldsmobiles -- the afforementioned 1993, and a 1968 Delta Custom that belonged to my parents when I was in high school (the car was a 455 and would outrun low-flying aircraft).

But there is an issue with the pay scale and benefits given to union employees of the UAW versus the overseas pay scale. It's no the sole issue troubling American automakers, but it is a factor. Car companies that have to pay assembly line workers $50 to $60 dollars an hour plus benefits are going to have a hard time matching production costs with companies who pay their workers less than half that amount).

 

[trapdoor]

Service departments weren't really a profit center for GM.... GMAC was.

Rather, in the old days, service departments were how you "kept loyal customers". You cut your customer "a special deal" on a "ring job" or a "valve job" figuring that would bring them in as a repeat customer. Meanwhile Honda figured - lets just build a car that doesn't NEED a ring job.

Degs -- you know the management and manufacturing end very well, so well in fact that I'm assuming you worked in the industry as my brother did (he was a contract engineer for GM back in the late 1990s). When it comes to the service departments, however, you're just plain wrong. You can't get a special deal from a dealership's service department. They're watched too closely and the prices are set from above.

And Hondas have valves and rings just like any other car, and occassionally need to have their valves ground and their rings replaced -- and the Honda design, while it has highlights of excellence, also has major flaws. If the timing chain goes out on your 1977 Chevrolet Impala, it's no big deal, you tow it in and put on another one. If the timing belt goes out on your Civic (of any year), you just lunched an engine (the service life of the timing belt is a putative 60,000 miles, but they can let go before the end of that life). I had this happen on an 1985 Honda Civic -- I left a trail of anti-freeze four inches wide before the car came to its "never drive it again" resting place.

 

[OldGaffer]

But there is an issue with the pay scale and benefits given to union employees of the UAW versus the overseas pay scale. It's no the sole issue troubling American automakers, but it is a factor. Car companies that have to pay assembly line workers $50 to $60 dollars an hour plus benefits are going to have a hard time matching production costs with companies who pay their workers less than half that amount).

The UAW never made that kind of money per hour. Right now new hires are starting at 14 bucks an hour, is that overpaid? Guys with 20-30 years experience are topped at 28 bucks an hour, 58 grand a year. Too much?

DETROIT -- Every day at a General Motors plant near Lansing, Mich., workers drive hundreds of Buick Enclaves - many with leather seats for seven and on-board video systems - off the assembly line.

Driving one home would be tough for the plant's newest workers, whose annual pay is less than the $35,000 it costs to buy even the cheapest Enclave. Newly hired members of the United Auto Workers at GM, Ford and Chrysler earn about $14 per hour, half what veterans make under their current contract.

Read more here: http://www.myrtlebeachonline.com/2010/06/19/1541266/new-uaw-hires-find-a-lower-pay.html#storylink=cpy

 

[fairsheet]

A lot of the advantage the Japenese auto makers had was new, modern plants, that we rebuilt for them after the war, in the meantime we were still using old pre-war plants that all assembly work was basically by hand. I remember a Jeep plant that had a 40 yard break in the assembly between two buildings, and the chassis had to be drug by hand from one building to another, also back in those days every car could be custom ordered with dozens of individual options, cruise without tilt wheel, power windows and no power locks, etc, slowed down the line as each car had to have a custom layout of parts. Now they do it like the Japanese, cookie cutter models with very few options, and of course full robotics in almost all of the GM plants now.

That reminds me of a comparison I saw back around '84-'85, between a Honda Accord and a Chevy Cavalier. If you were to buy the minimum number of Accords such that each was different from the other (colors and options), you'd only have to buy 36 Accords. You would've had to buy - literally - 160,000 Cavaliers. And...if that distinction sounds a little far-fetched, we need to remind ourselves of the power of "compounding".

The problem for GM though, is they weren't realizing an actual profit from offering their customer a choice of say, 5 different radios. In fact when it was all said and done, they probably lost money when the customer ordered the upgraded radio. But..they did it anyway because that's what they'd always done and to some extent...their existing base expected it of them.

 

[OldGaffer]

That reminds me of a comparison I saw back around '84-'85, between a Honda Accord and a Chevy Cavalier. If you were to buy the minimum number of Accords such that each was different from the other (colors and options), you'd only have to buy 36 Accords. You would've had to buy - literally - 160,000 Cavaliers. And...if that distinction sounds a little far-fetched, we need to remind ourselves of the power of "compounding".

The problem for GM though, is they weren't realizing an actual profit from offering their customer a choice of say, 5 different radios. In fact when it was all said and done, they probably lost money when the customer ordered the upgraded radio. But..they did it anyway because that's what they'd always done and to some extent...their existing base expected it of them.

The whole Saturn project was supposed to show GM how to convert to more efficient systems, the GM management was just too monolithic and conservative to "see the light"