Automakers cope with market trends
Fallout from the changes in the auto industry is visible in market-share numbers, in productivity and in quality surveys. Behind the upheaval:
General Motors. News is so good at GM that CEO Richard Wagoner warned employees not to let it go to their heads or to use it as an excuse to relax.
GM has been working since the mid-1990s on design and manufacturing changes to cut costs, improve quality and boost productivity. At first, the automaker veered too far toward cost-cutting, angering suppliers and saddling GM with cheap, often inferior parts. And production bosses balked at cost increases when product planners and designers wanted to update vehicles. But the formula is balanced now.
GM's genius is most evident in trucks. The Chevrolet Avalanche is a big truck that converts from pickup to SUV to roadster and 85 percent of it is straight from the Chevy Suburban, keeping costs low. Saturn's Vue SUV, coming late this year, will offer dent-resistant bumpers, among other features.
Pontiac has a youth-oriented truck called Vibe, coming early next year. GM, and Detroit in general, has lost the interest of young buyers. GM's trying to get them back with jazzy models.
Chevy's SSR is a sports-car pickup with convertible top, V-8 engine and the look of a customized 1930s or '40s truck.
Further out, the V-8 engines in GM's 2004 big pickups will use only four of their cylinders when the load's light to boost fuel economy 15 percent. GM's mid-decade, midsize vehicles will offer optional gasoline-electric hybrid powertrains.
Five of GM's eight brands Saab, Buick, Cadillac, Saturn and Chevrolet had above-average new-vehicle quality, according to the latest J.D. Power initial-quality survey (IQS).
The Harbour Report, an annual evaluation of automakers' efficiency and productivity, shows that GM while still lagging others "showed the most progress of any company."
Ford. The No. 2 automaker was awash in cash from selling Explorers, Expeditions and Navigators. It acquired prestigious brands Volvo in 1999 and Land Rover last year. It set up the Premium Automotive Group at a California campus to put its Lincoln, Jaguar, Volvo, Land Rover and Aston Martin brands in the heart of hip. It brought out the biggest SUV, Excursion, with an optional V-10 engine.
Like the Titanic, Ford was under full steam and seemed unsinkable when it plowed into an iceberg called Firestone. Last July, Ford analyzed Bridgestone/Firestone data and found huge numbers of potentially lethal failures among the Firestone tires that Ford used as original equipment on Explorer, the most popular SUV in the world and the source of about one-third of Ford's earnings.
Ford arm-twisted Bridgestone/Firestone into recalling 14.4 million tires Aug. 9. Then, Ford's own continuing tire investigation showed potential problems in other Firestones, prompting Ford to announce in the spring that it would replace an additional 13 million tires on an array of its vehicles.
Timing couldn't have been worse. Ford was just launching a redesigned Explorer. Then it had to recall the new Explorer because the rear window might fall out. Shortly after that, it had to recall the truck again because it hadn't made the assembly line wide enough in one factory, resulting in some slashed tires.
Ford had the poorest overall quality score of the seven automakers that dominate the U.S. market Detroit's Big Three, Japan's Big Three and Volkswagen in a J.D. Power quality survey this year.
Ford responded with training in six sigma shorthand for a quality standard that permits no more than 3.4 defects per million. Intensely trained "blackbelts" have scattered throughout Ford to eradicate problems, discovering they needed to work on basics such as cupholders and hood latches. Ford sees the program as dedication to quality.
Toyota. Its new Indiana factory is cranking out Tundras and Sequoias. The next-generation Sienna minivan will be bigger, similar to U.S.-size vans. A new version of the RX 300 SUV, sold by Toyota's Lexus luxury brand, is scheduled for this year.
Toyota has eight light-truck models, and those are 45 percent of its sales. Lexus has two trucks, but those are 39 percent of its total sales this year.
Amid all that, its cars remain strong. A redesigned 2002 Camry comes out this fall, and "the new Camry is really, really, really good. Great good," says analyst Hall, who has had a preview.
Honda. The company is finishing a factory in Alabama that begins pilot production of Odyssey this month and should be running full-steam in November, says Dick Colliver, American Honda's vice president in charge of sales and marketing. That'll double the supply of the popular minivan and free space to build more SUVs at Honda's Canadian plant.
Honda's redone Accord is expected to hit showrooms late next year and should continue the automaker's car success.
Nissan. With its near-bankruptcy apparently behind it, the company is erecting a factory in Mississippi to make big pickups, big SUVs and minivans. Nissan also has expanded its Tennessee plant to build more Xterras and Frontier pickups. Nissan's '02 Altima sedan roomy, stylish and powerful goes on sale this fall.
Each of the new Japanese cars will be "very much American cars with Japanese quality," Casesa says.
Says GM spokesman Brian Akre: "The fact is, we're all facing tremendous competition from overseas. The bar keeps getting higher and higher."