Why won’t anyone buy an American car?

Ford and GM, the two remaining US-headquartered automakers, remain mired in seemingly endless losses, and point to union compensation and health care costs as the sources of their problems. Toyota and Honda are doing quite well, by contrast, and have remained as profitable as ever. Ford and GM complain about costs, but they don’t mention that their competitors manufacture their vehicles either in Japan, Germany, or right here in the US – all high wage locations. Japan and Germany generally require companies to provide more benefits to workers than the US, hardly giving their car companies a cost advantage.

Might the problem be that Americans don’t want to buy American cars? Ford and GM have been steadily losing market share for years, a trend briefly halted by the SUV craze, but which has now accelerated as consumers look to foreign makers for efficient vehicles. Outside of the truck segment, Ford and GM simply don’t seem to have any products that anyone wants.

How did that become the case? Toyota, Nissan, and other foreign automakers do a significant amount of vehicle design for the US market here in the US. Does this mean that Ford and GM are incapable of hiring good designers? Many “foreign” cars like the Toyota Camry are now made in the USA; how then can there be such a perceived reliability gap between domestic and foreign car models?

Using the same talent pool, Toyota, Honda, Nissan, and others have run circles around the Detroit club. It’s gotten so bad that the governor of Michigan is openly recruiting investment by foreign automakers. It’s not that Americans don’t buy American cars; they buy plenty of cars made in America by companies with Japanese (or German) owners. Perhaps this is just the case of two companies with terrible management, bloated bureaucracy, and glacial efforts at restructuring.

Unless you’re loyal to their brands, don’t despair over troubles that Ford and GM brought on themselves. Hey, chances are you’re driving an Accord by now anyway.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s