Obama's Edsel

Half a century ago, Ford blundered big time when it misread the market for a new brand: Edsel was a huge flop.

Now there are plenty of new brands, and less of a market—maybe none—for tired old ones. In spite of that, there’s a multi-billion-dollar effort to prop up tired old General Motors (GM).

Clearly, this effort to protect the United Auto Workers (UAW) is going to be expensive. And it’s not directed toward protecting shareholders or creditors, so the entire cost must be spread against the number of UAW “jobs to be saved.” The cost for GM alone is $40 billion plus. An optimistic estimate counts 40,000 UAW jobs surviving this mess. If we just gave each union member $1 million and let GM sink, the dollar cost would be the same. Instead, we’re trying to buoy the company that produces Chevrolet, Cadillac, Buick, Pontiac, GMC, Saab, Vauxhall, Opel, Hummer and Holden. Ten brands, only the first two of which will survive in GM ownership.

The money is being spent, GM is dying, and those guys won’t get their million apiece.

How did it get this bad? One can trace the progress of decline through three distinct periods.

The first, from about 1946 through 1956, was the offering of MGs and Jaguars to a few sporty-car consumers who were seeking variety.

Then, from about 1956 to 1967, Volkswagen opened up a new market for sturdy, high quality econo-cars.

Detroit mostly ignored these innovative newcomers and gave us more of the same old, same old.

But the third phase, starting in the late sixties, really changed things. Japanese producers Toyota, Nissan, Honda, and others started to offer style, performance, value, and dependability in new ways.

They employed American experts like J.D. Power (consumer satisfaction) and Edwards Deming (statistical control of quality manufacture). Each of these gentlemen had offered their services to the Americans, and had been spurned.

The Asians listened and delivered. For the next thirty-five years, they dominated ratings, such as Consumer Reports, while American brands often occupied the lower rankings.

Additionally, Mercedes-Benz and Jaguar started to chip away at the high-priced car business over fifty years ago. Along the way, they were joined by BMW, Audi, Porsche, Ferrari, Maserati, Acura, Lexus, and Infiniti.

Cadillac, the brand that owned the quality car business in America, lost ground. Lincoln almost died. The Chrysler Imperial brand expired.

Even San Franciscans, who strongly support our president’s policies, don’t want to buy his cars. The dealerships for GM (and Chrysler) cars in San Francisco disappeared because too few buyers wanted what they had to offer.

And on their best day, the American manufacturers are only striving for parity with their competitors. Parity won’t do it! Game over.

Quick Impressions of Some New Models

At a recent test day, I was able to do brief test drives of a tasty range of new cars. Here are some impressions:

Honda Insight (hybrid): A perfect “appliance” car; very well presented, useful, and price-worthy.

Pontiac G8 GXP: Bold brute of a Corvette-powered sedan. Fast, strong, capable, with absolutely no charm.

Ford Mustang, Shelby version: Perhaps a car for someone else; I found it bulky and unattractive, in spite of its excellent performance. For the same $50,000 or less, you could buy a refined Porsche Boxster or Cayman.

Mercedes-Benz C300 sedan:  A Mercedes entry-level car, this one reminds me of all the worthy virtues of MB cars: fine chassis, quality structure, lovely road manners.

Infiniti G37 metal-top convertible: All the excellence of the G-series—including a competitive price—now in open-air form.

Ford Fusion (hybrid): A well tailored and likable Ford sedan that will hold its own against any Toyota, Nissan, or Honda. One for the home team!

Aston Martin DB-9 convertible: An absolutely beautiful, classic design and a delight to drive. But is this V12 enough better than the charming V8 Aston Vantage to justify the price premium?

Jaguar XK-8 coupe: A smooth sophisticate for under $100,000 that makes you wonder what you could possibly buy that you’d like better.

Toyota Venza: New crossover that is typically plain-vanilla, like most Toyotas, but also competent and useful. You won’t complain.

Mitsubishi EVO, along with the Subaru STI: These phenomenal enhancements of basic models make you wonder how they squeeze so much out of a small package. For $40,000, go like a Ferrari (but still look like an econo-car).

Martin Swig is a former SF new-car dealer who now presents the California Mille< and other historic car events. As a free service to Gazette readers, he’ll offer suggestions on how to dispose of a cherished car. Call him at 415-479-9950.