The Last Word: Reality of Auto Success
April 30, 2010
In Lewis Carroll’s “Alice’s Adventures in Wonderland,” Alice is perpetually confused by the topsy-turvy world she encounters. Rabbits wear waistcoats and carry pocket watches. Decks of cards come to life. A cat’s grin has no face. Nothing is at it seems and everything she knows to be true is questioned.
While Carroll created his world in 1865 as entertainment to pass the time on a journey, his creation is relevant in today’s world.
My March 2010 column (“Toyota Keeps Teaching Us,”) related how Toyota’s response to recalls had many lessons to teach manufacturers in general. Of course, I received a few dissenting opinions, but I stand by the points I made in that column. And no, I don’t get paid by Toyota, as one letter-writer suggested.
Evidently, much of the car-buying public believes that Toyota can continue to be trusted and that the company’s measures to address quality concerns are sufficient. Toyota had better not waste this opportunity. According to the Kiplinger Report, Toyota’s sales for March 2010 are not only up from February, but from pre-recall March 2009, as well. This news is supported by the Wall Street Journal’s Markets Data Center report on March 2010 auto sales. Three of the top six automobiles sold in the United States during March were Toyota models.
Quality also is paying off for Ford Motor Co. (No, I don’t get paid by them either.) According to the WSJ, Ford had four of the top 11 selling vehicles in the United States during March 2010, including the number one spot. The WSJ data further shows that while General Motors is up 22% in March 2010 vs. 2009 sales, Ford is up 42% for the same period, and Chrysler is down 8.3%. Year-to-date sales for January through March 2010 has GM with only a 16.8% increase from 2009 and Chrysler down 5.3%, but Ford posted a 37.7% increase 2010 year-to-date. During the last two quarters of 2009, the latest data available, Ford’s global sales yielded $66.3 billion, while GM garnered 15% less at $57.5 billion.
While the buying public may be, in part, rewarding Ford because of its refusal to take federal bailout money during 2008, the fact is that Ford has greatly improved its vehicle quality and consumers want a reliable product.
However, just as in Carroll’s novel where nothing is what is seems, not only are these positive trends not being reported (except by Quality), but there is another reality being put in its place.
An April 7 Associated Press news story reports that GM may see a chance for profitability by June. While I certainly hope that GM and Chrysler see a return to leadership positions, increased sales and profitability cannot come through the financial restructuring or through the buyer incentives alone that the company emphasizes as its strategy in the story.
If GM and Chrysler believe that financial decisions hold the key to their recovery, they would fit in well at the Mad Hatter’s tea party, an event that begins reasonably enough, but quickly devolves into chaos as the riddles and stories become more incomprehensible and unsolvable. Ironically, everyone but Alice sees the happenings of the tea party as normal.
As Alice discovers in Wonderland when confronted with unreality, the only remedy is courage and common sense. Ford and Toyota have demonstrated such strategies. One can only hope that GM and Chrysler do likewise. Those companies will only see long-term health when they return to the manufacturing practices that create the quality vehicles that consumers are purchasing from their competitors. Sound financial practices and marketing incentives will help, but those are only supportive measures.
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