Tuesday, June 16, 2009

The Bottom Line: Value

I was on my way to a friend's house for a graduation party this past Saturday, and, because it helps me not to become a raving lunatic in Chicago traffic (2 hours to go 40 miles), I was listening to a bit of talk radio. Specifically, the show was Moneytalk with Bob Brinker, and the topic of discussion was the current, woeful state of affairs with General Motors and Chrysler, and their inability to have recently kept up with the times in terms of building good cars. The discussion ranged through various topics, one of which focused on the fact that as GM and Chrysler had found that they were able to make good money producing their trucks and SUV's, they had all but abandoned the market for cars in terms on remaining on the leading edge of design and quality, as compared to the likes of Toyota, Honda and Nissan.

I was intrigued by this thought, and found myself even more intrigued when a caller, an obvious fan of American made vehicles, brought up what he felt was an extremely valid point, in response to the question of whether or not anyone thought that the current car-buying generation would be able or willing to forgive GM and Chrysler for their gross mishandling of the industry and themselves. This caller was outraged that people "just aren't giving American cars a chance." He expounded on how it's not the 90's anymore, that the days of poorly constructed interiors and cheap looking cars have passed. He finished his point by discussing the fact that when you compare American cars to their foreign counterparts, there really is no difference in quality, and he expressed anger at the fact that, given this, many Americans are still unwilling to even look at American cars.

I waited for what I felt to be the obvious response to this line of thought: "Yeah, but look at the pricetag!" It never came. This was somewhat shocking to me.

I have owned five cars in my so far short lifetime, the first three of which were used American cars. My first was a 1990 Dodge Shadow, handed down to me from my mom, which I drove until the engine finally gave out somwhere around 120,000 miles, 60,000 of which were driven on a cracked block. My next car was a 1989 Pontiac Grand Prix that lasted me six months until I got T-boned by a Buick. Next, I picked up a 1990 Cadillac Coupe De Ville that gave me nothing but problems with the electrical systems and dumping gas into the exhaust. That was my last used car.

After the Cadillac debacle, I went looking for a new car and, being a recent graduate of college, there were financing deals aplenty. I looked at VW first and couldn't quite afford their entry-level Golf at the time, or didn't quite want to afford what the payments were going to be. I loved my Pontiac, and had always loved Pontiacs, so I went to look at them. The Sunfire was their entry level car at the time and was an obvious chick car, and just felt cheap to drive. I put it in the maybe column and went to Mitsubishi, where I took the Lancer OZ Rally for a spin. The manual transmission shifted like butter, the radio sounded great, the car looked like a small racer, and it purported to get good mileage. At about $11,500 at the time it was also cheaper than any of the cars I had already looked at. I liked it a lot, but I knew a guy who got a lemon from Mitsubishi once upon a time, so I was still skeptical. I went next door to check out the Dodge Neon at about $12,000 as well. Every foot of road I drove that car, it felt like it was going to fall apart, and the engine was too loud to boot.

I wound up throwing in a 10-year 100,000 mile extended warranty and an alarm system and buying the Lancer for $12,500, finishing up with monthly payments that were $50 less than my tight budget at the time. I put 80,000 miles on that car in a little over three years, never doing anything but routine oil changes, new air filters, new brakes and rotating the tires, and routinely broke the 30 mpg barrier even in the city. The point is that the price was right for the quality of the vehicle that I found to be acceptable to my tastes. That is the measure of value in any product, and most especially a vehicle.

When the time came that my Lancer's blue book value was higher than what I still owed on it, I began looking at trading in and trading up. Once again I made several value comparisons. Unfortunately I was unhappy with the newer model designs offered by Mitsubishi, and looked elsewhere. I again yearned for a Pontiac, but nothing but the so-so G6 caught my eye even briefly. The same was true of basically every car offered by GM and Chrysler, with some of Chrysler's offerings (I'm looking at you, Crossfire) were flat-out comical. I was now in the low $20,000 range as far as affordability so I checked out some Fords as well, particularly the Mustang, and was just left flat by its interior. I strolled into a VW dealership on something of a whim one day and took the 2007 Jetta Wolfsburg for a spin. The car drives like a dream, has a fantastically designed interior (love the heated seats in the winter), gets mid-to-high 20's for gas mileage, and just looks cool. Overall another winner when comparing what I was getting for the money.

What the caller despairing over the lack of faith Americans have in American-made cars failed to recognize, was simply a microcosm of what GM and Chrylser themselves have failed to recognize about the American public. When faced with a choice regarding our money, we are shoppers. We all want the best value for our dollar, and more often than not we are going to set emotion over brand name aside when we find the best value. General Motors forgot this. Chrysler forgot this. With these companies now beholden to the government, I fear there will never be a mind working in them that comprehends this fact again.


  1. Paul,
    Couldn't agree with you more. I do drive Fords, but that's because I am more of a truck guy than a car guy... I can't say that there's anything exciting in the Ford car line-up either. But I've also got to disagree with Bob Brinker's caller on yet another point. If he thinks that "the days of poorly constructed interiors and cheap looking cars have passed" then he's looking at different cars than I am. All car manufacturers lately - but GM more than any of them - have really gone in for hugely bulky and chunky looking body paneling that makes the overall demensions of the vehicle larger without actually making the usable space that much better. I've also got to say that even when there is some additional "space", it isn't always useful space. It's just there.
    But mostly, I think they've gone off the deep-end with ugly. Like you said, some of the stuff is downright comical, but even the mainstream vehicles have taken design clues frome the very worst of the bunch (like the Aztec and the Avalanche. I mean, really? More grey plastic, and upside down bug eyes?). Then they design a way cool looking Chevy Volt, but don't have the balls to produce it looking cool. Instead it's a corsica with batteries. I think there's just a point where a corporation loses it's will to live, and GM is there. Ford isn't yet, and hopefully won't be soon. Keeping the original family involved has probably helped. I guess we'll see!

  2. P-used from high school on, I shared a 56 Push Button Automatic Desoto with a brother.A Pontiac that the P fell off so we called it the Ontiac. A Dodge Corola, Corona,Dart,Aspen, 2.2 Charger,One Chevy Nova mistake,and leased a VW, and a Mazda once.My current Mitsubishi is a four door Lancer that is a stick and runs 34 miles to the gallon.The assembly plant for this is Bloomington Normal so jobs are where we live. The 2009 on this car is very cool, but I showed that Crossfire to my Dad a while ago, noting it was a Chystler. He said "Finally, huh?"