GM Gets Some Good News, Chrysler - Not So Much

At General Motors (GM) headquarters in Detroit, there's finally a bit of vindication.

For several years, GM has been insisting that its cars and trucks are much better than the slapdash cookie-cutters that helped trash the automaker's reputation in the '80s and '90s. Executives frequently complain about a "perception gap" between the poor vehicle quality Americans expect, and GM cars that are supposedly as good as the competition.

Now we don't just have to take GM's word for it. In the latest J.D.Power dependability study, GM's Buick division tied with Jaguar for the top spot, beating out Lexus and Toyota (TM). That's a startling coup for GM, since Lexus, Toyota's luxury division, has long been considered a standard-setter that no competitor could catch. And it couldn't come at a more crucial time for GM, which is desperately trying to prove its mettle as it pleads for Phase II of a federal bailout that could ultimately cost taxpayers $40 billion.

There were other bright spots for GM in the J.D. Power study, which measures problems reported by owners during the first three years of ownership. GM's Cadillac division, for instance, tied with Honda (HMC) and scored higher than Audi, BMW, and Mercedes. In 8 of 11 car segments, a GM model came in as one of the top three vehicles. That's important because GM neglected its passenger cars for 20 years while focusing on SUVs, and only recently realized it needs to revamp its lineup of family sedans and economy cars if it hopes to become competitive again.

The J.D.Power ratings also reveal GM's weak spots. The four divisions GM has said it plans to wind down or sell - Saab, Hummer, Pontiac and Saturn - all scored below the industry average for dependability. That sure won't help unload them. And GM failed to place a vehicle in the top three in important segments like compact and premium crossovers.

For Chrysler, which is also pleading for bailout money and may be in even worse shape than GM, there was a lot less to cheer. The lone bright spot was its Dodge Caravan, the top-rated minivan. Other than that, not a single Chrysler, Dodge, or Jeep vehicle made it into the top three, out of 19 total categories. That reflects the general weakness of Chrysler's entire product line, one reason many auto analysts think Chrysler's days as a standalone automaker are ticking to a close.

The Chrysler nameplate scored just above average for dependability, but Dodge and Jeep were both below average. That represents yet another hole the No. 3. U.S. automaker needs to climb out of.

Toyota didn't dominate the rankings as it has in the past, but don’t shed any tears for the world’s biggest automaker. Between its Toyota, Lexus and Scion nameplates, the Japanese company earned top car in 10 of 19 categories. GM still has a long way to go if it hopes to match that.

Disclosure: no positions

Comments

[Paul Killinger:]

Finally, I believe the Japanese's upsizing of their small trucks was, in retrospect, a major mistake. I've owned several of them. They handle like cars, get great gas mileage at highway (75) speeds, haul respectable loads, require minimum upkeep, and virtually never break. In light of the new CAFE requirements, are they planning to sell them again in the U.S.?

Mar 22 10:46 AM

[reality chk:]

Maybe you should give GM another look. The data shows that They are building great cars and trucks again.


On Mar 22 10:11 AM The Mad Hedge Fund Trader wrote:

> Too bad they are 30 years too late. I’ll tell you what GM’s problem
> is. My dad was a religious lifetime GM customer, buying a new Oldsmobile
> every five years. Once he even flew to Detroit for a factory tour
> and drove his new prize home. Thirty years ago I told him he was
> doing GM no favors by buying their cars, and the only way to force
> them to improve a deteriorating product was to buy better made German
> and Japanese vehicles. This was right after the State of California
> had forced auto makers to install seatbelts on new cars. Airbags
> and ABS brake systems were still years away. His response, “I didn’t
> fight the Japs for four years so I could buy their cars.” (He was
> a Marine). GM’s problem is that my Dad passed away seven years ago.
> Of the original 17 million WWII veterans, 1,500 a day are dying,
> and there are only 1.5 million left. All of them loved Detroit because
> it built great Jeeps, Sherman tanks, and half tracks. Their kids
> prefer German, Japanese, Italian, Korean, and soon, Chinese, and
> Indian vehicles. It is no coincidence that GM’s problems really accelerated
> with the passing of the “greatest generation.”
>

Mar 22 11:05 AM

[babyray:]

Here I sit in total disbelief. Someone actually reporting something positive about GM. Next your going to tell me we have an African American president or something like that. Be American!! Buy American

Mar 22 11:35 AM

[reality chk:]

I have been driving GM vehicles since 1977. I have never had a failure of any kind. With schedulled routine maintenance I and my family have kept GM cars on the road for
311,000 miles for a 96 Chevy Berreta,
288,000 on a 92 GMC S-15 truck,
226,000 on a 84 Chevy c-1500,
216,000 on a 97 Chevy Venture van,
156,000 on a 01 Cevy Suburban
147,000 on a 98 Buick Lasabre
119,000 on a 02 GMC Sierra
and several others with over 100,000 miles.
I can argue that GM quality and reliability is the best I have seen in my 53 years. and I can tell you of horror stories from friends and relatives with foreign cars. like Toyotas, Hondas, Acura, Mazdas,
From my experience the foreign makes breakdown just like anything else, Have you seen a foreign car dealership withou a service dept. NO. they do service because their vehicles breakdown just like everyone else. To their credit the foreing car dealerships do a much beter job with customer care and public relations to make your breakdown and service experience a pleasent one. I have heard of Lexus and Acura dealers sending flowers and candy to customers who's car broke down and it was in for service. I also heard of a Lexus dealer giving away NBA tickets to customers with repeat problems just to say thanks.
By the way have you seen howmany Bulletins, Service Advisory Notices, and Recalls (including voluntary) foreing manufacturers have had in the last 3 or 4 years?
The Bottom line is GM is as good if not better then anyone.
Quality is no longer an issue. neither is reliability.
Next years JD Powers survey will have even more GM vehicles winning their segment, and the overall.

Mar 22 11:42 AM

[Mister Jimmy:]

Mad Hedge Fund Trader, you've posted that very same message before, but now I must ask you, why are they 30 years too late? An American firm is meeting and beating the competition head-on. In the 1950's and 1960's Japanese cars were poor-quality jokes. Their government and their people stuck with them and made them a winner. They knew that a viable automotive industry was vital to their economic future, so I'm certain they were excited as the products improved. Now that American products are improving. why not demonstrate the same intelligence and wisdom they did?

Mar 22 02:08 PM

[Dubious Bro...:]

How many companies can survive by offering up crap to their customers for 30 years - and then expect them to still be their or come back to them after they have seen the light.

They have the perfect partner now - the US Congress - still surving up the same old crap and we still send the same ones back.

Mar 22 02:13 PM

[User 380853:]

Someone must be drinking at JD Powers. GM has a long way to go to build quality vehicles. In the last 3 year I have had 2 new GM vehicle's a 2006 Malibu and currently have a 2008 Equinox. Both are junk if you ask me. GM will pull out of the hole but they are not out yet!

Mar 22 04:37 PM

[elcopone:]

JD Power is about as unbiased as Rush Limbaugh. Do you know how much consulting work GM throws to JD Power each year? Huge money.

If you want an unbiased look at reliability, try Consumer Reports study which was released last month. Consumer Reports is unbiased in that all their revenue comes from customer subscriptions, not from consulting work from GM.

Of course in the Consumer Reports study, the Asians dominated GM. So how could two studies have such different conclusions? Follow the money!

Mar 23 08:50 AM

[Cobra 1:]

I read the same reports from JD and CR. I had the exact same thought! JD power is always opposite most the car mags as well as CR. JD has given CHRYS the highest ratings for the last three years, OK:)! Enough said on that one!




On Mar 23 08:50 AM elcopone wrote:

> JD Power is about as unbiased as Rush Limbaugh. Do you know how
> much consulting work GM throws to JD Power each year? Huge money.
>
>
> If you want an unbiased look at reliability, try Consumer Reports
> study which was released last month. Consumer Reports is unbiased
> in that all their revenue comes from customer subscriptions, not
> from consulting work from GM.
>
> Of course in the Consumer Reports study, the Asians dominated GM.
> So how could two studies have such different conclusions? Follow
> the money!

Mar 23 09:05 AM

[Thadeus Tho...:]

It is amazing that the same people who tout the positive ratings of the JD Power reports for a foreign brand car, will find a way to poke holes when a American BRAND car makess the grade. How do these people explain the ratings that Toyota or Lexus had in the past? Did they give JD Power large consulting fees also? This reasoning is circular and a bit moronic.
Besides that, GM and Ford has had vehicles in the top ten of JD Power for several years and it was ignored by this type of naysayer. Now when it's difficult to argue away a number on win position, they want to deride and down play that. Looks to me as though it's a pretty level playing field. I've owned both foreign make ( Toyota, Nissan, Renault, etc ) as well as GM and Chrysler vehicles over that past 35 years [ some 38 vehicles ]. I have found no significant difference in vehicle quality in buying a foreign brand except usually higher cost and parts bills if they did need some repairs.

Mar 23 10:29 AM

[Jeff B.:]

Congrats to GM on this achievement! However, it is important to remember that simply building cars that don't breakdown a lot is not enough. They must also build cars people really want to buy, and they must do more to improve resale value. Many people who buy cars don't consdier resale value when they evaluate the "deal" they are getting up front. This is especially true for Chrysler vehicles. Despite the attractive big discounts up front, their cars & trucks take a nosedive a year or two on. Many people find themselves owing far more on their loan than their car is worth.

Mar 23 10:48 AM

[Cobra 1:]

I hate to keep pressing Ford as the example, but, Ford stopped selling to rental car companies 2 years ago as this is one of the biggest areas that cars depreciate. The rental car companies put 40K on in 10 to 12 months and then sell them cheap and flood the market. Ford said enough of that! GM made a huge press release throwing Ford under a bus as a failing company that could not compete at the time. Guess we know who has the last laugh!

As for the JD power and your comment Thad, I own nothing but American made cars, I would not buy a foreign made car (well maybe a little Italian something unless I hit the LOTTO!) for any reason. I have no desire, they make nothing I want. Hell I would consider buying one product from GM, the new Corvette ZR1, that is 1 hell of a car! But they make nothing else that interests me whatsoever!

That's my two cents!


On Mar 23 10:48 AM Jeff B. wrote:

> Congrats to GM on this achievement! However, it is important to remember
> that simply building cars that don't breakdown a lot is not enough.
> They must also build cars people really want to buy, and they must
> do more to improve resale value. Many people who buy cars don't consdier
> resale value when they evaluate the "deal" they are getting up front.
> This is especially true for Chrysler vehicles. Despite the attractive
> big discounts up front, their cars & trucks take a nosedive a
> year or two on. Many people find themselves owing far more on their
> loan than their car is worth.

Mar 23 11:36 AM

[Phil Hartz:]

While many agree with the history, perhaps it is time to move to the present reality and recognize the outstanding progress these companies have made. To dwell on the past, long past mistakes is unfairly clouding today's reality of great quality, design and reliability.

How long do we need to keep beating this drum? In my view, it no longer serves a useful purpose. They screwed up, ok, but really, how long do we need to keep them in detention?


On Mar 22 10:11 AM The Mad Hedge Fund Trader wrote:

> Too bad they are 30 years too late. I’ll tell you what GM’s problem
> is. My dad was a religious lifetime GM customer, buying a new Oldsmobile
> every five years. Once he even flew to Detroit for a factory tour
> and drove his new prize home. Thirty years ago I told him he was
> doing GM no favors by buying their cars, and the only way to force
> them to improve a deteriorating product was to buy better made German
> and Japanese vehicles. This was right after the State of California
> had forced auto makers to install seatbelts on new cars. Airbags
> and ABS brake systems were still years away. His response, “I didn’t
> fight the Japs for four years so I could buy their cars.” (He was
> a Marine). GM’s problem is that my Dad passed away seven years ago.
> Of the original 17 million WWII veterans, 1,500 a day are dying,
> and there are only 1.5 million left. All of them loved Detroit because
> it built great Jeeps, Sherman tanks, and half tracks. Their kids
> prefer German, Japanese, Italian, Korean, and soon, Chinese, and
> Indian vehicles. It is no coincidence that GM’s problems really accelerated
> with the passing of the “greatest generation.”
>

Mar 23 02:21 PM

[31October:]

Mad,
HOW MANY TIMES ARE YOU GOING TO PASTE THE SAME INANE COMMENT? 30 TIMES??? YOU DID NOT EVEN READ THE ARTICLES YOU SPAMMED.
GM's problem is not that their octogenarian Oldsmobile customers died - It is that GM screwed their octogenarian customers with bad drum brakes, ancient OHV engines, loose & vague steering, and floppy handling. Perhaps your late Marine father could explain to my late Army father why the door panels and the ENTIRE DASHBOARD fell off.

In the 21st century, however, (it's 2009, Mad) I had 6 cars of six makes, and 5 were of equal quality, whether domestic or import.

[The satanic Dodge warranted a drive to a Michigan factory to kick somebody's... but it couldn't get there, and I digress.]

GM has better product in the pipeline than anybody on the planet [I neither drive nor work for GM], and they have massively improved quality. If GM would succeed for more than ONE QUARTER at a time, it could slap Toyota back to the 50's.

Please stick to cash flow and operating models and stop copy-pasting somebody else's non-sequitars on every GM article.


On Mar 22 10:11 AM The Mad Hedge Fund Trader wrote:> Too bad they are 30 years too late. I’ll tell you what GM’s problem
> is. My dad was a religious lifetime GM customer, buying a new Oldsmobile
> every five years. Once he even flew to Detroit for a factory tour
> and drove his new prize home. Thirty years ago I told him he was
> doing GM no favors by buying their cars, and the only way to force
> them to improve a deteriorating product was to buy better made German
> and Japanese vehicles. This was right after the State of California
> had forced auto makers to install seatbelts on new cars. Airbags
> and ABS brake systems were still years away. His response, “I didn’t
> fight the Japs for four years so I could buy their cars.” (He was
> a Marine). GM’s problem is that my Dad passed away seven years ago.
> Of the original 17 million WWII veterans, 1,500 a day are dying,
> and there are only 1.5 million left. All of them loved Detroit because
> it built great Jeeps, Sherman tanks, and half tracks. Their kids
> prefer German, Japanese, Italian, Korean, and soon, Chinese, and
> Indian vehicles. It is no coincidence that GM’s problems really accelerated
> with the passing of the “greatest generation.”
>

Mar 23 04:13 PM

[31October:]

Chryler had no intention of selling those cars. They were models with no project outline, no PMO overseeing development, and no supplier input. My neighbor was part of the show, which is a bill of goods meant to lure an unsuspecting buyer.
My neighbor claims to have quit, but I suspect he was laid off with the rest: Chrysler needs no engineers, because Chrysler is developing no REAL product.
At least we will still have GM & Ford... I hope...

On Mar 22 09:23 AM a. palmer jr. wrote:
> Too bad, Chrysler, in my opinion, have some really cool electric
> cars getting ready to come to market. I saw some pictures yesterday
> on the internet of them and just like GM, their scheduled date for
> production is way down the road. Our carmakers wasted too much time
> trying to convince us that those bloated suvs were the way to go,
> while Toyota and the Chinese stole their lunch.

Mar 23 04:27 PM

[billddrummer:]

I too read the Consumer Reports rankings, and true, GM moved up in most areas. If I remember right, the Chevy Avalanche was on the Recommended list by Consumer Reports.

Seems simple to me: Find out what makes Avalanches such good trucks, and duplicate it across the products.

Chrysler, on the other hand, got no love. Let's shoot the horse and move on. Face it--if Cerberus doesn't want to back its investment, why should American taxpayers bail it out of a bad deal? When you invest, you take risks that your investment will fail. But I guess if you invest in the US auto industry (or megabanking, or Wall Street, or wild-eyed CDO and CDS writers), you can't fail, because the government will step in and keep you on life support forever.

Mar 23 04:56 PM

[303820:]

380853...If your Malibu was a junk why did you buy an equinox?
Are you making-up stories like those Toyota republicans?

Mar 23 05:18 PM

[The Betsy:]

Like father like son. You already told us this story. That's OK. I like hearing it. However it will come about, we will become our parents' "greatest generation" again. We will do whatever it takes. "No pain, no gain." -- Is this really true? I just sure hope it doesn't hurt too much. We've all gotten so soft, fat and comfortable. There's still time to give up foreign goods for Lent.


On Mar 22 10:11 AM The Mad Hedge Fund Trader wrote:

> Too bad they are 30 years too late. I’ll tell you what GM’s problem
> is. My dad was a religious lifetime GM customer, buying a new Oldsmobile
> every five years. Once he even flew to Detroit for a factory tour
> and drove his new prize home. Thirty years ago I told him he was
> doing GM no favors by buying their cars, and the only way to force
> them to improve a deteriorating product was to buy better made German
> and Japanese vehicles. This was right after the State of California
> had forced auto makers to install seatbelts on new cars. Airbags
> and ABS brake systems were still years away. His response, “I didn’t
> fight the Japs for four years so I could buy their cars.” (He was
> a Marine). GM’s problem is that my Dad passed away seven years ago.
> Of the original 17 million WWII veterans, 1,500 a day are dying,
> and there are only 1.5 million left. All of them loved Detroit because
> it built great Jeeps, Sherman tanks, and half tracks. Their kids
> prefer German, Japanese, Italian, Korean, and soon, Chinese, and
> Indian vehicles. It is no coincidence that GM’s problems really accelerated
> with the passing of the “greatest generation.”
>

Mar 23 06:01 PM

[billddrummer:]

If you give up foreign goods for Lent, these are just a few of them you'll have to live without:

Gasoline
Foreign badged autos
Domestic badged autos imported from other countries
Computers
Clothing
Dishes
Kitchen Utensils
Kitchen Appliances
Furniture
Television
Newsprint
Shoes
Steel
Land Line Telephones
Cell Phones
iPods
Home sound systems
Cameras

If you let me think about it awhile, I can probably come up with more things. In short, your life would change radically if you didn't use foreign made goods. Even if only for 40 days.

So before deciding that it's feasible to unplug from the global distribution network, consider the impact on your own life.

Mar 25 12:19 PM

[reality chk:]

BINGO!! one or two generations ago all these items were made here in the US by US workers. Now the US workers are out of a Job but they still buy these things. Where is the logic??? As employees they are a liability, as consumers they are the customers you need them to buy your imported goods . Where is the balance? Thie country can not survive without manufacturing. It is only a matter of time before the scale tips the wrong direction.


On Mar 25 12:19 PM billddrummer wrote:

> If you give up foreign goods for Lent, these are just a few of them
> you'll have to live without:
>
> Gasoline
> Foreign badged autos
> Domestic badged autos imported from other countries
> Computers
> Clothing
> Dishes
> Kitchen Utensils
> Kitchen Appliances
> Furniture
> Television
> Newsprint
> Shoes
> Steel
> Land Line Telephones
> Cell Phones
> iPods
> Home sound systems
> Cameras
>
> If you let me think about it awhile, I can probably come up with
> more things. In short, your life would change radically if you didn't
> use foreign made goods. Even if only for 40 days.
>
> So before deciding that it's feasible to unplug from the global distribution
> network, consider the impact on your own life.

Mar 26 07:35 AM