Quality is Job 1 (A History Lesson)
By Jim Ziegler
It is hard to believe that the article on the front page was talking about Ford Motor Company. You see, I remember the first time I sold Fords. 1982 was an exciting time in the retail car business. We were just coming back from a long recession, but dealers were optimistic for the first time in years. Even though interest rates were still high-20% over-the-counter-and sales were still tough, there was some real magic starting to happen. A new generation of Ford products was hitting the streets...a departure from the Fairmont and the Granada, Mustang II, and the poor-quality lineup of the seventies. We had aerodynamically designed Thunderbirds and an exciting line-up of new technology cars and trucks; Ford Quality was a matter of pride-it was our strongest selling point.
Looking back over my quarter of a century in the car business, I've seen a lot of changes-few of them for the better. This article is about the way I view the last two decades.
Throughout the '80s, Chrysler had been struggling just to survive. I remember the K cars and those ugly square New Yorkers and 5th Avenues. Needless to say, Chrysler corporation quality was an industry joke in those days. General Motors was entering an era that continues to this day-an era I call "The Age of Arrogance." It was in the '80s that General Motors threw away 50% of their market share when they took their eye off of the ball and neglected product development.
GM diverted billions of dollars of research and development money from their bread-and-butter nameplates to Saturn, one of their most dismal failures and monumental embarrassments (opinion based on facts). On top of that, GM was committed to start dicking around with their dealers and tampering with the retail process.
In truth, General Motors, in their world-renowned, supreme arrogance, believed that if they built it the public would buy it, no matter how poor the quality-no matter how ugly it was or how poor the design, the technology and the fit and finish. Remember the Chevette (well, it was better than a Vega anyway)? Throughout the late seventies and all of the eighties into the nineties, General Motor's cars were, with few exceptions, generally awful.
Americans defected to the imports, Toyota and Nissan and Honda. There were a couple of European embarrassments in the market, like the Alfa Romeo and the Fiat-Jaguars were known to live in the service department-and who could forget the Renault Alliance?
At the same time, new Cadillac technology committed to front wheel drive and the public defected to the Town Car. The poor old Fleetwood Brougham held on with dated technology, five or six different bad engines and dubious quality until GM finally put it out of its misery. Remember the famous Cadillac 4-6-8 engine? Cadillac Cimmeron, does that ring a bell? (Early Opel Catera prototype?) The Aurora should have been a Cadillac.
This opened the door wide for Mercedes, Lexus and BMW to capture the luxury segment. Remember this: The imports didn't take the market, the Big Three pissed it away.
The stage was set. It wasn't difficult for Ford to capture the domestic market with great-looking cars and trucks, a strong committed dealer body, and superior quality and technology.
So it was, through the eighties and well into the nineties. General Motors became increasingly confused, believing their own mythology and repeating the mantra, "Saturn can work-if we just wait long enough and throw enough money at it-Saturn will work." They continued to interfere with the retail process until they totally took away their dealers' competitive edge. General Motors continued to build cars that didn't sell and trucks with outdated technology and bland design. In the meantime, Ford kicked their butt.
General Motors threw in the towel with Camaro, while Ford could barely keep up with demand for Mustang. GM hired mean-spirited executives who baited the Unions and threatened the dealers-as well as creating idiotic distribution systems like VOMs to assure the dealers couldn't get any product even if they could sell it.
In the meantime, Chrysler got its second wind and, all of a sudden, they started building some world-class product...new Dodge trucks, mini-vans and Jeeps and a great looking line-up of passenger cars. The "New Chrysler" could deliver product to their dealers. They could concept, design, develop and manufacture new product and get it in the showrooms in record time. Chrysler cars fired the public imagination-the cars looked good, the trucks had imagination and styling. The best thing about Chrysler was that they wasted very little energy tinkering with retail. They left the profit margins intact so their dealers could wheel and deal with the customers and the banks, while Ford and GM were sticking it to their dealers with value pricing and compressed margins.
Now comes the Alex Trotman era at Ford. Trotman's vision seemed to signal a shift in priorities. Had his eye on the Global market-South America, emerging markets. Of course, at the time, I pointed out that these were going to be "Submerging Markets."
I think ol' Alex wanted to build the "New World Car"-a legacy that our beloved Jac Nasser is even more rapidly pursuing.
It was under the Trotman regime that it first occurred to me that Ford was in decline, was starting to decay. Under his successor, Jac Nasser, it became crystal clear that Ford was positioning itself to take a hard fall. Now, I am not exactly saying those guys are flaming idiots. And I am not all that concerned that the top executives at Ford for most of the last decade are not born-and-raised Americans. I am sure that they are both very international and extremely over-educated. I doubt that either of them could relate to the average Ford buyer-or if they could even hold a conversation with their average truck customer.
In the meanwhile, along comes H. Wayne Huizenga and AutoNation with a conspicuously cockamamie business plan for his used car supercenters. Immediately, I went on record-in print in this magazine-saying that Wayne was about to get "his rear kicked" in the retail automobile business. (Which he most certainly did.)
I said the same thing about those wacky jokers at CarMax, too. Of course, if you'll remember just a couple of years back, the manufacturers were lining up to pay homage to CarMax and AutoNation. The Automotive weeklies were praising them editorially in every issue. Vice-presidents at Ford and GM were handing over the family jewels to Wayne (I am sure they weren't expecting any golden parachutes). I remember when E.T. Pappert, VP at Chrysler, said that these people at AutoNation and CarMax were the wave of the future. There I was, "out there," all alone at the time, the voice in the wilderness. Many distinguished car experts were calling me a crackpot. Those same editors are writing astute editorials today analyzing why CarMax and AutoNation are in the toilet. These editorials are almost word-for-word what I wrote three and four years ago in this magazine when they were singing another tune.
Then, in the late nineties, Chrysler was sold out to a foreign company. "Achtung!" I just heard the door slam as the last American top executive left the building. I predict a new era in the history of Daimler-Chrysler, which I shall name "The Age of Constipation."
Then came "Apocalypse Now" revisited-Ford and General Motors double-crossed their loyal dealer bodies and started buying up dealerships and operating them in direct competition with their partners, the dealers. They tried every dirty, despicable tactic-they hired lobbyists and attorneys to overturn state franchise laws. Mean-spirited marketing Czars starting running around like the Red Queen, yelling "Off With Their Heads." Here were General Motors and Ford, overtly hostile, trying to dismantle and destroy their retail dealer network, evidently planning to replace their physical dealerships with Internet sales and factory stores (or in some cases out west, "Factory Lackey Stores").
Rip Van Winkle opened his eyes-yawned and stretched...stood up and got dressed for battle. The NADA dusted off their own attorneys and went after the manufacturers when they realized that they (Ford and GM mostly) were about to bust the state franchise laws and effectively put them out of work. They appeared to win round one decisively. Even Zarella sort of said he was sorry. That battle is far from over, by the way.
Jack Smith used the Alzheimer's defense and pleaded that he had no idea what Zarella and Roy Roberts had done. Rick Wagoner, opting for the O.J. defense, said there appeared to be a real screw-up here somewhere (duh). Roy Roberts retired and they threw him a party, lots of backslapping- "Nice job Roy."
How about this guy Brian Kelley, vice-president of Ford, saying that the dealers need to "morph" into the new era (or something similar to that). But he did actually use the word "morph."
Now, I was just joking when I hung the name "Opie" on him a couple of issues ago, BUT does this guy Kelley realize he's using "Power Ranger" buzz words with grown-ups? Excuse me, I have an eleven-year-old son, and it wasn't too long ago that he was watching the Power Rangers "morph" into their secret identities. It's comforting to know that the VP of Ford uses TV cartoon lingo aimed at six-year-olds in his business plans-this guy Kelley seems like a real Gee-whizzer to me.
At Ford there were (must have been unfounded) rumors that William Clay Ford and Jac Nasser were at each other's throats. I am cracking up laughing as I try to picture Billy taking a poke at Jac or trying to choke the life out of the little bugger. If you'll recall, I wrote several months ago that I would like to see William Clay take a big testosterone injection and throw some of these scoundrels out of the sacred halls of Ford Motor Company. I never actually named Bob Rewey. Maybe Billy took my advice. I personally would like to see both of the Fords, William and Edsel, running this company. Get rid of some of these puffed-up Philistines, the White Ranger and some of those other goofy MBAs and get back to their roots-the business philosophy that put Ford on the map: great dealers and great product.
Of course, Ford and GM are still charging forward trying to defeat state franchise laws through an instrument called "The Alliance." I hope the dealers aren't thinking they won-yet.
That pretty well brings us up-to-date, doesn't it?
Well, not exactly. Here is Ford Motor Company teetering on the brink of a calamity. We're talking about a company that is recalling more cars than they are building. They are so busy acquiring foreign car companies and developing emerging markets, dicking around with the Internet and the retail process and all of that Jac Nasser international crap, that they are about to get their butt handed to them right here at home. Now Ford is recalling up to 700,000 cars and vans because of a defective motor. Offering to buy back mini vans for up to $8,375-or in some cases allowing $4,000 toward the purchase of a new Ford. Extending warranties on defective cars, after the fix, up to seven years.
All along it's been a battle of "Dumb and Dumber." If General Motors hadn't been so screwed up, they would have put Ford in the dumpster five years ago. How does Ron Zarella sleep at night with his track record knowing his title is marketing Czar? Has this man no shame? If this were the French Foreign Legion, they would have torn off his buttons and exiled him into the desert.
Well, on the other hand, maybe-just maybe-General Motors can take it all back. In the first two months of this year, General Motors trucks outsold Ford. Now that's Chevrolet and GMC combined mind you, BUT it is a 60,000-unit turnaround from just one year ago. You've got to remember that GM dealers accomplished this in spite of the handicaps posed by the VOMs system and their marketing Czar.
I believe that General Motors is coming back with some great product. Of course, I wish they would stop selling some of those rebadged, regurgitated Opels. Shake, rattle and roll.
I've owned a Thunderbird, six Town Cars, an Eddie Bauer Explorer and an Eddie Bauer Expedition and now, for the first time in twenty-five years, I have personally bought a new General Motors product (hint, it's not a Saturn).
I love Ford. Always have. And-I'll be back someday when they return to "Quality is Job 1."
Did I mention Cognac in this article? Let me pour one and think about it.
More Food For Thought
Well I see that the introduction of a new model Sunfire and Cavalier has been delayed until the year 2004-first of all because the car was crucified in customer clinics and secondly because they are going to send it to Europe first. The new "Delta" series car is a (dare I say it)-global platform.
The rumor has it that the first Delta platform car in the U.S. will be a Saturn "S" Series. Makes sense to me.
General Motors has acquired a 20% or so stake in Fiat. You know, we used to joke that Fiat meant "Fix It Again Tony." In Europe and even in Italy, Fiat sales are in the dumpster and GM thinks that's a good investment. Heck, if they wanted squeaks and rattles, they've already got Opel.
No need to worry though, the next Sunfire actually might be a Toyota Sport Utility. Not to be confused with the alleged negotiation with GM, Isuzu and Honda to swap engines. We also have Saab in the line-up now. Between Saturn and Saab, I believe GM has cornered the entire international Propeller Head market. Of course, as I have often pointed out, normal people have bought some of those cars too.
Jim Ziegler is President of Ziegler Supersystems Inc. jziegler@dealeronline.com.
