Jun 28
Automobile Industry
Take a look at the following chart from this NYTimes article. This compares the top three models in each class by initial quality. All of the finishers scored higher than the average of all the vehicles in that class. Classes with only two had only two that scored above average. Note that this doesn’t compare models across classes by the best initial quality.

It doesn’t break it down by manufacturer:
- Toyota (Scion, Lexus): 14
- Hyundai: 2
- Honda (Acura): 6
- VW: 1
- Nissan (Infiniti): 4
- Mercedes-Benz: 3
- Ford (Mercury): 5
- Chrysler: 1
- GM (GMC, Chevrolet, Cadillac, Pontiac): 10
- Mitsubishi: 1
Foreign-owned companies (many of whom manufacture in the US): 7
US-owned companies: 3 (two of which the US government has bailed out)
Is it any wonder that they needed to be bailed out? The question has been, for almost a decade, why would anyone buy a vehicle made by a US company. GM has 10 above average vehicles, but what are the sales volumes on those? What are the sales volumes if you remove fleet sales as all the US car companies have stakes in rental agencies to place more used vehicles on lots? The most common cars people buy are dominated by foreign-owned manufacturers. Many of them build their most popular models in the US – why didn’t they need bailouts?
The US auto industry is almost dead. If they can’t turn around in 2009-2010, they will not survive. Based on the numbers in the chart, I’m positive we shouldn’t care. Capitalism works via competition and the big 3 haven’t been competitive for a long time. The UAW union lets retirees have equal votes to current employees and with many more retirees than employees of course their benefits kept increasing.
Would it suck for those benefits to be cut? Yes, for those people and for the additional unemployment claims, etc. they’d place on the economy as a whole. But they never should have been given them the power to increase their benefits after they stopped contributing and started receiving checks.