As I began thinking about my OPED piece, I did so acknowledging my limitation of the understanding of the inner workings of the industry itself. In addition, unlike most self proclaimed experts, I fully understand that my observations may be inaccurate and therefore my conclusions wrong. While I do not work in the auto industry, some of the problems seemed obvious to me as an outside observer. While much of the focus has been on mismanagement and union labor costs, I have concluded that other factors may have been overlooked. So let me share some of my observations from my point of view, based on my past experiences and research.
The lists of horror stories concerning financing rip offs, service department problems and lies would break your heart. At one time the car companies would police their own dealerships. Dealers would not want to lose the privilege of selling automobiles for a major automobile manufacturer. But today buying a car from a dealership can be a torturous experience. If a dealer, which represents the car company, is unscrupulous the consumer can expect no help from the Big Three. When a dealership lies, cheats or steals from a consumer, the brand will be associated with the story as long as the person lives.
More complex cars that are not better cars
There are between 1,700 and 2,200 parts in an average car not including preassemblies such as engines or transmissions. Talk to your neighborhood mechanic and he will tell you that you cannot work on a car without a diagnostic machine. Most cars can be rendered inoperable by any one of a large number of parts. People get stranded on trips and are at the mercy of unscrupulous mechanics, the availability of hundreds of parts, or the complexity of the diagnostic system where the failure can be hidden until other parts are replaced. People who build engines will tell you that most of the parts outside the engine itself are unnecessary. The days of working on your own car are over and all the unnecessary parts only add to the price of the car itself (The higher the cost of the car the higher the profit from financing). I have heard of cars ceasing to run due to a fifteen cent part made of plastic, with the towing and labor costing over three hundred dollars to the owner.
With cars costing so much, seven to ten year financing, is not unheard of. More and more people find themselves upside down on a car and end up financing an inexpensive model with the leftover balance attached. At some point the buyers cannot afford to buy a new car because of a short sighted industry. Long term financing is necessary because the cars are priced too high for the average consumer to buy without long term help. And the complex cars often don't last till the end of the financing term.
The cost of a car
The auto industry has added to the cost of transportation by selling the consumer on unnecessary new technology. Must have add-ons, computer components that do not significantly improve the cars performance and engine choking emission control systems all add to the cost of a car. My contention is that equipping cars with a cold air kit, high performance sparkplugs and larger exhaust systems could do the same thing. Lee Iacocca saved save Chrysler but putting out a basic car the average person living in hard times could afford.
Make memorable cars
When you look at cars today do you see any classic cars that really turn you on? Do you see any cars that you would restore in twenty years? Do young people have posters of any Big Tree manufacturers on the walls of their rooms? Most of the classic muscle cars of the past were simple high performance cars that were affordable.
Washington has a role to play in forcing the car companies to control emissions. But excessive regulations can also restrict innovation and stifle creativity. Instead of spending so much time telling engineers how to build a car, try spending more time protecting the consumer from shady business practices.
Car companies must look under the hood with same cost saving eye as they look at labor costs. Unnecessary components should be purges from cars with the ultimate goal of simplifying the car. Look at performance enhancing after market components, and incorporate those technologies into the car off the line. Sell the consumer on the idea of basic, affordable and reliable cars that are a good value. Finally just have a passion for making great cars.