advice from a fake consultant

out-of-the-box thinking about economics, politics, and more... 

Monday, January 22, 2007

On Why We Love Our Newest Subaru, Or, Dr. Z, Are You Listening?

For those of you not paying attention, the days of the American automotive industry driving the US economy seem to be visible only in the rear view mirror.

The fortunes projected for the industry for 2007 are an improvement over the previous year, but only because 2006 (and 2005, for that matter) were, to put it bluntly, brutal beyond belief.

How brutal?

GM lost at least $16 billion during those two years, and soon expects to lose at least $6 billion more to close out the relationship with its former Delphi division.

Ford lost $7.2 billion in just the first 9 months of ’06. They expect to require an additional $17 billion in cash for the next 24 months, and have borrowed over $23 billion to cover anticipated losses through 2009.

Remember the old Ford mantra “Quality is Job One”? For some consumers, that’s apparently changed to: “My engine just spit plug number one

Things are going so badly for Daimler/Chrysler that stockholders and analysts are now wondering whether there should even be a Daimler/Chrysler.

On the other hand, Japanese and German manufacturers (including, ironically, Mercedes) did pretty well in 2006-particularly Toyota, who this year anticipates wresting the title of world’s largest automaker from GM.

If you take a look at the sources I’ve referenced above, (and this one here) the problem for the three “US” automakers appears to be an over reliance on the profits from sales of large pickup trucks and SUV’s.

The automakers’ response is to cut the number of current employees and plants, seek to cut the pay of future employees, and, presumably, cut retiree benefits. (To be fair, a labor cost differential exists between “the Big Three” and automakers that have moved in from overseas and opened primarily non-union plants.)

As of this date, the effort by these three companies to develop profitable smaller cars has not been successful.

Which brings me to our dead Subaru.

The Subaru Forester we bought new in 2001 finally went down with 259, 000 miles, more or less, on its odometer, in December 2006. Options included replacing the dead engine with a $5000 rebuild, or buying a new car.

Exactly how we bought the car is a story for another day (and a hilarious one to boot!), except to say the entire process of acknowledging the death of the old car, evaluating the alternatives, and the purchase of the new one took almost two weeks and required the rental of another car in the interim.

Which brings us to Dr. Z.

The fine folks at Enterprise (“We pick you up!”) rented us a PT Cruiser, and to put it nicely we’ll say the two weeks with the car were educational.

The Chrysler PT Cruiser Touring 4-Door Wagon (its official name) that we drove can be purchased for about $18,000 before sales tax, license, and all the rest. (Cruise control and automatic transmission appeared to be the added options over the base trim.)

It is reported that the ‘Cruiser was built on a Neon platform, but Wikipedia disputes this; the next generation PT evidently will be built on a larger frame.

Despite this, when asked what I think of the PT Cruiser, here’s my by now well-worn response:

“All the style and class of a Neon-without the performance…”

It has been a particularly wild weather year along the West Coast, and as I look out the window the entire world is covered in snow and ice. Of course, when it warms up, then we get the huge winds and more rain than most folks can stand.

From the time we hit medium bad weather (tons of rain and lots of water in the “road ruts”) on the freeway, the PT began to feel squirrelly, and it was genuinely nerve-wracking driving. Compact ice and snow: frightening indeed.

The girlfriend drove the car that evening to her job, and the next morning had to be pulled up the hill by helpful neighbors when she couldn’t negotiate the ice/slush mix in the car she now refers to as a “PT Loser”.

Those of you who have experienced a hailstorm while standing under a beer can will know exactly the sound of hail on the PT Cruiser’s roof.

Even though about two-thirds of the car’s miles were driven on freeways, its handy average MPG tracker never reported the car above 21 MPG.

It is unfair to say we disliked everything about the car. The stereo, the really cool shelf system in the back, and the wiper controls are rather nice, and I recommend those parts of the car’s design.

Putting the power window controls in the middle of the dashboard, however, is highly counterintuitive, indeed.

That having been said, I cannot tell you how much nicer it is to drive the Forester.

If you have not driven a car with All-Wheel Drive, I strongly encourage you to try one. It’s useful not only in the snow, but when the road gets wet, as well.

It’s much faster when you push the gas…the back end never, ever “breaks loose”…and if you’re sitting at a light, uphill, on the wettest of days, the wheels will not spin when you take off.

It just goes.


Maybe even, dare I say, enthusiastically.

The new car loves to take a corner…I mean it really loves to take a corner.
To the point that is surprises the bejeesus out of the teenage Honda drivers trying to keep up on our windy, windy road up from the freeway.

Oh, yeah-it crashes better, too (Forester, PT Cruiser).
Much better, in fact.

Now let’s talk price.

We were able to talk a Subaru dealer down to $21,350 out the door (that’s right, after tax and license), which means that the Forester, with standard ABS, standard AWD, tons more power, and which is just plain more fun to drive (oh, and it gets 25 MPG, too…), only cost us about $1000 more than Enterprise paid for that PT Loser (with no AWD, and, even in this day and age, ABS optional.)

So all that having been said, let’s get to the moral of the story; which is my message to the American auto industry from an ex-American auto buyer:

Dr. Z (and Rick Wagoner, and Alan Mulally, for that matter), you can close all the plants you want, and you can lay off all the workers you want, and you can restructure the operating groups all you want; but until Ford, GM, and Chrysler can build cars we like better than our Forester, there’s not much point in your staying in the car business.

No comments: