Guest Editorial: Big 3 suffer from trend toward foreign autos
Conduct a windshield survey of vehicles on area streets and you'll find a significant percentage of foreign makes. The auto scene mirrors consumer preferences across the nation. More buyers have been -- and are -- purchasing cars made by foreign ...
Conduct a windshield survey of vehicles on area streets and you'll find a significant percentage of foreign makes. The auto scene mirrors consumer preferences across the nation. More buyers have been -- and are -- purchasing cars made by foreign manufacturers.
If the anecdotal evidence is not convincing, the announcement last week by Ford Motor Co. that it will restructure its business is instructive. Some 30,000 Ford employees will lose their jobs in the next few years. Ford's bombshell followed an announcement a few months ago by General Motors, the world's largest (for now) automaker. Like Ford, GM will cut loose about 30,000 workers.
What's going on? What happened to the worldwide domination of the auto industry by great American companies?
First, foreign carmakers, specifically Toyota and Honda, began making cars better by design and by quality. Once the American marketplace embraced quality and design by foreign companies, the market share of U.S. companies began to shrink. That erosion accelerated as more foreign companies discovered what American consumers wanted and produced vehicles accordingly.
Meanwhile, Ford and GM chugged along under the old model that depended on brand loyalty and a take-or-leave-it sales strategy. As Ford chairman and CEO Bill Ford said when making last week's announcement, the days of "build it and they will buy it" are gone.
Those days have been gone for a long time, but it took GM and Ford a longer time to recognize how profoundly the auto market had changed.
The stigma of owning a "foreign" car faded, especially among younger buyers. Then, Japanese (and other) companies built state-of-the-art manufacturing plants in the United States. They hired American workers, paid them well, and applied Japanese quality control and manufacturing methods to their U.S. plants. When Bill Ford said Ford would be a big company that thinks like a small one in order to respond quickly to the market, he was conceding the success of the Japanese model.
Most auto retailers knew the market had changed long before U.S. automakers did. It's a rare dealership these days that doesn't sell a consumer friendly mix of domestic and foreign vehicles.
Make no mistake about it: The change in the automobile market in the United States is permanent. Indeed, it might not be long before a new Big Three includes Toyota.
It's globalization come home. It's the result of resistance to change among U.S. automakers. It's union contracts and pensions that are unsustainable in a competitive global market. It's perception -- accurate or not -- of comparative quality that is tilted toward foreign makes. It's a harsh reflection of the end of loyalty to U.S. brands that peaked in the decades after World War II and has been eroding for at least 25 years.
Don't believe it? Look at the mix in traffic and big parking lots. Listen to Bill Ford's lament. Consider your own buying preference next time you're in the market for a new car. -- Red Wing Republican Eagle