GM's Quality Spin

Posted by: David Welch on June 6, 2007

Here we go again. After years of quality improvements from Detroit, General Motors and Chrysler tumbled down the list in J.D. Power and Associates’ annual Initial Quality Study. The study measures problems found in the first 90 days of ownership after interviewing 97,000 consumers.

GM did poorly and a company spokesman argued that the survey doesn’t matter. All of GM’s brands finished below the industry average, which is 125 problems per 100 vehicles. Last year, Chevrolet and Cadillac finished above the mean. To be fair, Buick and Chevy missed the industry average by the slightest margin.

Chrysler fared much worse. The Chrysler brand finished 27th out of 35 brands with 151 problems per 100 vehicles. Dodge and Jeep both finished in the bottom five among brands. Looks like Cerberus has some work to do when it completes its acquisition of Chrysler this fall.

Back to GM. The reason it doesn’t matter, says the spokesman, is that the difference between top performers and the middle of the pack is statistically irrelevant. Toyota, which tied Jaguar for sixth with 112 problems per 100 vehicles, beat Chevy by just 17 problems per 100 cars. He makes a point. Few consumers will notice 17 problems per 100 vehicles. The Power study, he told me, is becoming less and less relevant because quality is reaching parity.

There’s some truth to that. But the argument naively misses a huge point. While some brands like Mercedes moved way up the charts this year and others, like Chrysler, tumbled way down, hot names like Honda and Toyota are in the top 10 every year. Every year!

Consumers love and trust those brands. And those companies have been dining on Motown’s market share for decades now. Sure Detroit is close, by the numbers anyway. But consumers won’t believe that Detroit is as good as Honda and Toyota until they beat them and beat them consistently in J.D. Power surveys, Consumer Reports studies, word-of-mouth recommendations and just general buzz. I’m sorry, why should a guy who’s on his third Toyota or Honda buy a Chevy? Because the initial quality is almost as good and the disparity is statistically miniscule? There’s a great sales pitch.

And by the way, it wasn’t that long ago that GM executives criticized Consumer Reports, in one case very publicly, because their vehicles didn’t do so well in the magazine’s surveys. When CR started recommending more GM cars, suddenly executives and PR folk were crowing about their ratings. They have bragged about past successes in J.D. Power surveys, too.

Here’s an idea. Rather than saying the survey doesn’t matter, buck up and beat Toyota. If the number of problems between the best and the average is so statistically irrelevant, then eliminating 17 problems per 100 cars shouldn’t be that hard. Just get it done, would ya?

Reader Comments

dave logan

June 7, 2007 9:59 AM

Ford trounced Toyota in this year's report and as I recall, Cadillac, Buick and Lincoln usually beat Toyota and Honda. This leads us to ask, "why is the media so biased against US car companies?" The article did not even mention Ford's accomplishment. Congrats to Ford!

Darrell Ebus

June 7, 2007 11:10 AM

While this is a genuine accomplishment for Ford and a cheerful moment for them in a bleak year, let us not forget that initial quality is not the same as quality. After one or two years when these shiny cars have been driven for a while and broken in, it would be interesting to see a repeat survey of their owners and compare its outcome to the one we just saw. Ford's medium, and long, term reliablity history is nowhere near that of Mercedes or the major Japanese brands. Further, the many design deficits (as pointed out by slideshows here in BW) indicate that there are places where Ford could continue to improve its product line and reputation.

phil

June 7, 2007 1:16 PM

Because the quality marks which Ford have achieved took too long to come. Look at Ford's entire line-up they just started making these sedans within the last couple of years. Mazda is Ford's proving ground for mainstream technology. The Mazda6 represents Ford's best example for front wheel drive sedans and of course the proven platform for the Fusion and Milan. Ford would have been better off to use the last generation Mazda Protege Platform for the Focus and avoided alot of the negative fall out from the Focus. No matter how many times it is mentioned about their quality improvements you just don't see alot of Ford or any other American cars with 200,000 miles on them and still running strong.

John Coffey

June 7, 2007 2:28 PM

WJR Radio, Detroit reported this morning that Ford has 5 models that were #1 in inital quality. How could you have ignored that news?

Patricia

June 7, 2007 2:35 PM

I have to say that if I was the editor of this site, I'd fire you. All over the news, every single site mentioning this survey, has talked about the major accomplishment by Ford. Your article, Mr. Welch, is a shameful example of bias. I feel sorry for your lack of profesionalism, and I urge the editors of this site to look into this. After your comments, I'll never trust businessweek.com/autos autobeat articles. Your colleagues here should be embarrassed by you.

Glenn Reid

June 7, 2007 4:40 PM

I've never put too much faith in J.D.Power survey's and the Harber report is highly suspect in my opinion.The best rating is the resale of the vehicle you know that if it as a high resale then you can be sure it's a good vehicle.

Duwayne Anderson

June 7, 2007 5:08 PM

Your point that "Consumers love and trust those brands" [talking about Toyota and Honda] says more than you might think. There's a tendency for highly loyal owners to under-report problems, and [ala the king's new cloths] folks who buy cars that "everybody knows" are better than the pack are more hesitant to be critical.

In the end there's a positive feedback that can take generations to run its course. For me, I stopped buying Japanese name plates years ago, after having been badly burned by Toyota, Nissan, and Mazda.

Duwayne Anderson

collian

June 7, 2007 5:58 PM

The Truth is that if Mazda is not counted as part of ford vehicle sales why should they be counted as part of in Initial quality awards. (JD power was trying to help poor Ford) Excluding Mazda, Toyota and ford where tied with four segment leaders. Lexus is ranked only second to porche and Toyta is far ahead of the Big three including ford in company average.

Ford indeed has improved, GM is was terrible, Toyota and Honda still leads the pack in terms quality (long term or short term)

Joel

June 7, 2007 7:06 PM

"Ford trounced Toyota in this year's report and as I recall, Cadillac, Buick and Lincoln usually beat Toyota and Honda."

I agree. I've noticed for some time now that the media rarely ever mentions or--especially--give praise to GM and Ford's accomplishment in the near-luxury and luxury segment but literally effuses when Lexus maintains its (near) top billing. And where's the discussion about Toyota's slippage in the ratings? Please apply the same criticism across the board, not giving certain standards to one automaker versus another.

Michael

June 7, 2007 11:49 PM

There's not much to defend at being below the average; however, I find David's trouncing of GM on JD's Initial Quality Study myopic and backhanded.

Before David goes off expelling the importance of Initial Quality, he should have been more honest about what it fails to measure - Total Quality.

Recalls, certainly an Initial Quality issue, is completely absent from the recent JD Power Survey. Before railing a company on just one quality measure, it'd be journalistic to do real homework instead of just opining and berating a company on just one of many measures.

"And by the way," this article's attitude exemplifies why many American Auto Execs feel that they're getting the shaft from the media. The media, as you keenly pointed out, helps create that "buzz" which makes people buy a Toyota over a Chevy.

How about this: become less biased in your articles and the Big 3 will do better at quality. I'm sure eliminating your bias and bite won't be as hard as reducing 17 problems per 100 vehicles.

Dave Kleinman

June 8, 2007 12:44 PM

While having my car serviced, I typically talk to the shop owner about cars. An interesting fact has come up the last few visits. The shop owner mentioned how up until the past couple of years, he never saw Toyotas and Hondas in except for routine maintenance. Nowadays, he's seeing all types of cars and trucks from both manufacturers (including Toyota's Lexus brand) for every type of problem. Let's not forget about Toyota's "engine sludge" issue with the V6 engines and Honda's odometer problem.
The bottom line is GM (definitely) and Ford (partially) have improved the initial and long-term quality and design of their products. Are they perfect, no, and neither are the Japanese. Although it is hard not to think of the past when you hear the words "GM and FORD", we must remember that the calendar says 2007, not 1977, and give them the credit they've earned. Just take a look at Saturn.

alan starling

June 10, 2007 9:48 AM

Mr. Welch: Shouldn't you always mention
that both Business Week and J.D. Power are part
of the McGraw-Hill Company. It seems to me that the proliferation of surveys and their frequency is less about customer satisfaction and more about generating profits for your corporation.
I have spent thirty five years in the retail automobile industry and the only survey question we can count on is "What will you buy next time and where will you purchase it?"

Alan Starling

Mark Cooley

June 10, 2007 8:24 PM

David,

Your bias is showing and you left out a very important piece of information didn't you? Ford fared quite well in the JDP survey, and as I recall, led the imports -

I look to BW to report the news in a fair and balanced way - I know you can do better, and I bet Ford will score well again next time, so you'll get another chance at it.

Nirmal

June 11, 2007 4:47 PM

Looks like the author is getting some peanuts frm Japanese car makers. It is very clear tht author is trying to mislead the readers by not mentioning the achievement made by Ford.. He intentionally ignore the fact that JD power mentioned about the decreasing quality of Toyota vehichles.. he don even mentione Lincoln finished 3 rd in overall..... I believe the fact is the GM and Ford produce vehichles atleast of equal quality with Honda and Toyota, but wht really give the japanese an superior perception is the favourable comnts made by the few currupt media people in return for ........

West Roxbury Buick Owner

August 24, 2007 3:07 PM

I own a Buick and my experience with vehicle problems and customer service has been horrible. When I bought my Lacrosse I didn't drive six miles before it had a major engine problem, chucks of metal were found in the oil pan and an engine bearing was misaligned. The dealer attempted to install a new cam assembly and acted as if he was doing me a favor (he even told me Buick would do less for me). I emailed Buick and they told the dealer to put a new engine in the car. However I feel that when a consumer buys a brand-new car and it immediately has a major engine problem replace the car. After the engine problem my Onstar module had to be replaced, steering shaft had to be lubed, a shield between the engine and transmission had to be modified, padding under my seat had worked its way out making the seat creak and squeak, I have a dash rattle that no one can solve, and one of my vehicle's remotes fell apart.

When I started dealing with Buick customer service, I got very little service; the representative handling the problem when on vacation and stopped working on my claim. I was calling the representative and emailing him with no response, other representatives said they would contact him, until I ask to speak to a manager. The manager did very little to help and when I asked to speak to the area manager for Buick in the Boston area she told me the customer care center shielded the area managers from the customers. I don't know what managers do if they don't speak with the customers. As my experiences with vehicle problems continued and I received more poor customer service I asked for the head of customers services address and fax number, I faxed two letters to him to no avail, (I saved my emails and fax receipts so I can prove everything happened as I said). I bought a Buick because I read Buick was high in quality and customer satisfaction but I have not seen anything to support this.

I was very angry about my car's engine problem because the car was inspected the morning I picked in up, while I waited, and the problem appeared when the car idled, Massachusetts vehicle inspections include emissions and the car has to idle, so the dealer probably knew he sold me a bad car and Buick backed him up.

dormand

October 9, 2007 10:12 PM

As a Honda & Acura only buyer since 1986, when GM & its dealers finally convinced me that my GM-only auto prejudice was machochistic and the way to have massive costs in depreciation, I would say that the Hondas and Acuras are still superbly engineered, built and serviced at the dealerships.

While the vehicles are great, there are signs that American Honda Motor Company lacks the depth in management to sustain its historic high levels of customer satisfaction, due to customer service shortcomings.

Examples of the apparent chinks appearing in the previously seamless Honda customer satisfaction experience:

a ) inadequate pro-active communications with the buyers of the 2002 through 2006 autos included in the Vaughn/McQuiston class action odometer miscalibration settlement. Honda agreed in the settlement to adjust warranties and leases by five percent to compensate for this minor engineering problem. They created a major problem and loss of confidence amoung their previously totally trustful customers by agreeing to weak terms with the Court and the plaintiff's attorneys. As a result, one who did not receive a letter from the Court and makes an inquiry gets the runaround. There is no reference to the odometer allowance on the Honda website. Honda Finance gives one the runaround. Out of one sample of owners of six Hondas bought new within the 2002-2006 range, NONE received the letters providing comfort to the owner that that VIN was included in the action.

b ) One franchised Honda dealer, Honda Cars of McKinney, ( TEXAS ) has started some business practices which are clearly adverse to customer interests and satisfaction. HOM has accumulated 22 written complaints to the Dallas BBB, and due to its failure to even respond to the BBB on several of these complaints, has earned the notation that it has an UNSATISFACTORY record with the Dallas BBB.

HOM has started the practice scorned by the 2007 Consumers Report Buying Guide of a dealer adding high-priced, but low uitility "dealer installed options" or DIOs to its new cars. HOM adds a bundle of useless options to each and every new car on its lot, according to one of its salesmen. On a 2007 Honda Accord EX, this bundle of DIOs adds $2,765 to the adjusted sticker price of the new car; these DIOS in the total do not add one cent to the resale value of the car, according to the NADA used car guide on pricing.

Yet HOM advertises that "All we do is Discount Hondas"?????

Would someone please explain how raising prices ( curiously enough, several other Honda & Toyota dealers in the Dallas area raised prices by a similar amount by adding the supplemental sticker for DIOs, thus increasing prices by something under $3,000 while the resale value of the cars is no higher than a car with factory only equipment.) No doubt that this is some miraculous coincidence prompted by each of the owners of these various dealers waking up one morning with the inspiration of
"I am going to raise my prices by a bit under three thousand dollars by spraying some stuff on the car in a bundle which does not cost me much to install." This is a miraculous coincidence surely because it is a Federal criminal act to collude to raise prices with one's competitors.
c ) HOM futher failed in that, after it agreed to unwind a lease in which it defaulted in the critical delivery of promised documentation of federal income tax deductible items aggregated in a lease, it failed to advise Honda Finance that the lease had been voided for until 18 days after the car had been returned and all deposit moneys refunded. As Honda Finance has not been advised of the unwinding of the lease, it proceeded with collection activity of letters and telephone calls to the hapless lessee for 18 days after the lease had been unwound.

American Honda is clearly not doing an adequate job of auditing the business practices of its franchised dealers. For Honda to tolerate any of its dealers arogantly defying the local BBB agency and thus earning the dreaded
UNSATISFACTORY designation is gross negligence, and indicates that it is slipping in the management focus it had in the past of absolute customer satisfaction.

As this is the epicenter of The Sarbones-Oxley Act of 2002, which deals with the adequacy of internal controls of a company which reports to the Security & Exchange Commission.

Honda still makes great cars, but you need to check on the BBB rating of the dealer, because Honda has ceased doing that for you.

Caveat Emptor is an unusual message to those who have taken the safe route by buying Hondas.

This should be interesting.

SkyFive

July 21, 2008 8:43 PM

Mr Ebus summarized it; initial quality is not indicative of long term quality.
Resale is a very good indicator of reliability read; quality of a automobile.

CJ

August 7, 2008 2:17 AM

I have my doubts about GM's quality. I have a 1997 Olds 88 sitting in my driveway with a blown head gasket. Only 75,000 miles and it is now only worth scrap.

I doubt their quality has changed. My experience has been that GM, like most manufacturers won't admit they have lost control of quality or acknowledge defects if they think it will cost them money. That is the root cause of the failed head gaskets on our vehicle.

When GM should have issued a recall, they opted to ignore. This will never change.

iLookeditUp

August 10, 2008 3:27 AM

As for long-term quality, GM makes the the top-ranked car brand, Buick, in the 2008 JD Power Long-term Dependability Study. (For the last three years.) On average, every new Honda and Toyota has at least one problem like most other brands. Those who claim they are perfect are not honest. Toyota had to recall over 2 million vehicles due to BAD ENGINES which failed as early as 30,000 miles. Toyota at first refused to honor the warranties on the bad engines. Look it up, it's true.

CJ, We all know the '97 Olds 88 did not have head gasket problems. You must have overheated yours. What is the rest of the story? Did the coolant get low? Did someone keep driving after the red light came on?

John

September 28, 2008 12:33 PM

My parents work for gm and my dad has 01 chevy venture and it has 130,000 and only had minor problems we still go round town great and my mom has a 04 silverado and that thing gets the best gas mileage for a midsize truck without subsituting power and has had no problems yet with 50,000 miles and my brother has a 01 dodge durangoo and it runs great except old owner problems fault

lynn

December 22, 2008 2:00 AM

Well most people know by now that the media is and has been biased against the domestic auto manufactures. I also agree that owners of the imports brands are less likely to admit to having problems with their vehicles from first hand experience with a couple of friends that own them. When one was asked how he liked his Kia he said it was great only to find out later through another friend that he had 3 new trannies put in it with in the first 50K miles. Which he later confirmed himself as being true as he showed late for work and admited that he was back to the dealer for his fourth tranny. Another owned a Honda and when asked if he had any problems with it he said no but later let it slip that he had to take it back several times for repairs. So I do believe the previous poster is right about this.

Tom

February 22, 2009 1:15 AM

My 1994 Toyota Corolla had 335,000 miles when it died and all I did was give it routine maintenance and change the timing belt in its lifetime. This is common for Japanese cars. Why can't Ford, GM or Chrysler do just that?? That's true quality.

bob

April 9, 2009 2:06 AM

Well I have been buying cars for years and have driven Fords first, then Honda and Toyota's. Today i'm back to Ford and could not be happier as the cars are very dependable BECAUSE I KNOW WHAT MODELS to buy! Initially when I bought Toyota/Honda it was because the GM/Chrysler and Ford cars of the 70 and 80's were so bad they were always in the shop. Honda had unburstable engines and drivelines and if they had a problem they would go out of their way to PROPERLY fix the issue.All the Detroit makes ignored their own dealers and customers and drove them away from the dealerships in droves.I mean look at the GM small cars (Viva/Chevette/oh my God the Vega/Achieva/Celebrity/ and now all the Korean junk - I guess they will never learn)
I buy 1-2 year old Ford Tauras & Focus with less than 20K on them and buy proven engines/ transmission packages. These are great values because they depreciate so much and I do my own maintence and have no problem putting 300-400K miles on them.
The other thing is that there is still so much dishonesty in mostly the Detroit based dealerships that I avoid them like the plague. I believe this has alienated the customers far more than the poor quality cars over the long run.

bob

April 9, 2009 2:06 AM

Well I have been buying cars for years and have driven Fords first, then Honda and Toyota's. Today i'm back to Ford and could not be happier as the cars are very dependable BECAUSE I KNOW WHAT MODELS to buy! Initially when I bought Toyota/Honda it was because the GM/Chrysler and Ford cars of the 70 and 80's were so bad they were always in the shop. Honda had unburstable engines and drivelines and if they had a problem they would go out of their way to PROPERLY fix the issue.All the Detroit makes ignored their own dealers and customers and drove them away from the dealerships in droves.I mean look at the GM small cars (Viva/Chevette/oh my God the Vega/Achieva/Celebrity/ and now all the Korean junk - I guess they will never learn)
I buy 1-2 year old Ford Tauras & Focus with less than 20K on them and buy proven engines/ transmission packages. These are great values because they depreciate so much and I do my own maintence and have no problem putting 300-400K miles on them.
The other thing is that there is still so much dishonesty in mostly the Detroit based dealerships that I avoid them like the plague. I believe this has alienated the customers far more than the poor quality cars over the long run.

GM sucks

June 22, 2009 3:57 PM

GM quality is crap blown up figures. take a loke at all the Enclaves with engine problems and Cadallics with frontend issues. I lost my confidence in the US auto market and there products. Also why doesnt The U.S. auto market leap forward come up with new ideas new better quality products. Something never seen before. People its all bull we are reading hell the dealershit dont know how to fix some of these cars coming out of Detroit. Tell the dealerships to stop cheating on the price of these cars Im happy that some of these crooket dealership are closing. I bet you can get a good deal on a Chrysler They are trying to get top dollar for a car that will be valued at half the sticker price or lest.

Ronald Seal

February 5, 2010 10:14 AM

General Motors trying to cash in on new vehicle sales due to recent Toyoto recalls. Toyoto unlike General Motors has stepped to the plate and admitted that there is defect in their vehicles and that they want to resolve the issues for Toyoto customers. General Motors has been decieving their customers for years. I am G.M, customer for thirty eight years. I own 2005 Chevrolet Cavalier with defective speedometer and other defects.
General Motors has refused me twice recently to replace part, or even offer assistant to help me replace the part.
The loan to purchase the car was with G.M.A.C. part of General Motors.
Loan payoff was 11/2009
G.M.A.C sent letter stating that they no longer had a lien interest in my vehicle. They said in letter that they are unable to sent me a clear title of ownership, Because they don't have the orginal title to the car.
I did research online, I found that other General Motorss customers are having both problems with defective speedometers and are unable to obtain clear vehicle titles to their vehicles that date back as far 2003.
Do not believe General Motors hype about how great they are and the quality of their vehicles.
"The new reinvention of General Motors"
Here in Virginia, there is an elderly gentleman that drove a Toyoto automoblie for 729,000 miles before the engine failed.
"Boycot" General Motors, they will not stand behind their products. All they want is your money. It took me "38" years to understand that they are a bunch of crooks. "Buy G.M. and you will be Sorry"

Steve Coan

January 31, 2011 7:19 PM

Yeah right. Let's not forget the Toyota Tundras wil engine failures at low mileage. Now some Lexus models have been recalled for engine problems as well. Late model Acuras have faulty automatic transmissions as well. My neigbor has an Acura TL that she bought new. The original transmission failed at 60,000 miles, which was warrantied. The replacement failed 41,000 miles later. I work with a guy that also had a TL with a bad tranny at low mileage. The funny thing is that with both of these people, I had to practically PRY the story out of them! If it had been an American car, they would have told anyone who would listen!

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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