GM's Quality Quandary
Detroit Free Press

By Mark Phelan

April 10, 2006

After General Motors has chased Toyota for more than 20 years, independent quality and reliability surveys finally give GM something to boast about – but not enough.

The best vehicles GM builds – models like the Chevrolet Malibu and Tahoe, GMC Yukon and Buick Century – topped many Toyota models in the respected J.D. Power and Associates initial-quality and long-term dependability studies last year.

"Look at the midsize sedan segment. We own that from a quality perspective," said Bob Ottolini, GM executive director for product development quality. "The Toyota Camry and Honda Accord are below all our recent entries in that segment."

However, while virtually every car and truck Toyota builds gets high marks in influential independent studies like those by J.D. Power and Consumer Reports magazine, a few models with very poor quality – particularly four minivans that went on sale in 2004 – torpedoed GM's overall score. Several of the company's most important brands dropped into the category automakers dread and shoppers avoid: below industry average.

If GM can get it right some of the time, why not all the time? Answering that question – and quickly – is vital to the company's future as it strives to hold off Toyota, recover from last year's $10.6-billion loss and remain the world's largest automaker.

GM cars – the Chevrolet Malibu, Malibu Maxx and Impala, Buick Century and Pontiac Grand Prix – took five of the seven top places among midsize cars in Power's 2005 Initial Quality Study, based on a survey of new-car owners. They finished above the Camry and Accord, both of which have earned sterling reputations for quality and reliability with decades of excellence.

Besides the minivans, GM's vehicles "are doing pretty well," said Neal Oddes, J.D. Power director of product research and analysis. "Across the board, though, the minivans did not launch at all well."

But even a single bad model reinforces the reputation for low quality GM gained in the 1980s, said Chris Denove, coauthor of the new book "Satisfaction: How Every Great Company Listens to the Voice of the Customer."

"The image of GM's vehicles is far worse than the reality," he said. "GM has changed. Some of the best-made vehicles in the world today are being produced by GM. It's paying for the sins of its past."

Denove wrote the book with James D. Power IV of J.D. Power.

"The data show the difference really is perceptual," Denove said. "Every automaker has had some quality glitches. Honda recently had transmission problems, but it got a pass because people expect Hondas to have good quality."

The converse of that is also true, however. Buyers unfamiliar with GM vehicles have come to expect poor quality, and the minivans reinforce the stereotype.

Toyota is the industry's benchmark because the quality of its vehicles doesn't vary much from one to the next.

"We strive to get better by reducing variation in our manufacturing," said Kevin Martin, general manager of the quality division at Toyota Motor Manufacturing North America, in Erlanger, Ky. "Everyone can screw in a bolt, but we teach people to recognize when it's misthreaded ... to recognize a fault and keep the problem from ever leaving the factory."

Toyota also benefits from the fact that it has fewer platforms for its vehicles than GM. A platform, or architecture, is a set of parts and systems that form the basis for a range of models. Because Toyota develops fewer architectures, it can spend more time and effort improving each of them. GM has been working for years to reduce the number of architectures it uses. It used to have five architectures for midsize front-wheel-drive sedans, but it has moved to a single platform for all cars like that – models including the Malibu , Pontiac G6 and Saab 9-3 – around the world.

Although developing a single top-notch architecture has boosted the quality of many of GM's new models, some vehicles – notably the minivans – continue to use old platforms engineered years ago.

"Once GM gets to average reliability on our scores, they seem to take the emphasis off continual improvement," said David Champion, senior director of Consumer Reports' automotive testing center. "We see other manufacturers that are mortified by an average score. It's a different mind-set."

GM disagrees with that assessment, saying that it has moved from simply fixing things when they break to developing vehicles robust enough to last at least a couple of hundred thousand miles with no defects.

To reach those goals, GM has a more rigorous engineering procedure. Whereas the company used to quit testing vehicles and parts at an arbitrary target, engineers now test them until they fail, and design them to last at least 200,000 miles – more in the case of vital and expensive parts like engines and transmissions. "We have considerably more vehicles in test fleets now than in the past," Ottolini said. "We're putting 500,000 miles a year on vehicles before they go on sale."

In addition, the company has changed the way it builds vehicles.

"There was a lot of training to build the Malibu ," said Raymond Dominguez, an assembly team leader with 36 years' experience at the Fairfax , Kan. , plant that builds the Malibu . "The process is a lot better than it used to be. We have carts on rollers to carry heavy parts that we used to have to lift, and electric tools to attach wheels with less mess and strain than the old way."

Lawrence McLuney, another team leader who has been at Fairfax for 36 years, said that "the parts fit a lot better now. The standards are higher today. We're paying more attention now, wearing protectors to cover our belts, rings and watches" so the cars' paint doesn't get scratched.

"The workers here are really proud of the Malibu ," McLuney said. "We know we're building a good-quality car."

That's fine for vehicles that are entirely new like the Malibu, Cadillac CTS sport sedan and the Chevrolet Tahoe, GMC Yukon and Cadillac Escalade SUVs that just went on sale, but models like the minivans, which carry over much of their basic engineering from previous vehicles, aren't subject to that painstaking clean-sheet approach.

GM scrimped on minivan development, basing the vehicles on an 8-year-old architecture. The result is a vehicle in which many parts are difficult to install, said Marty Cain, a 29-year veteran who does repair work at the Doraville, Ga. , plant that builds the minivans.

"It's a tough vehicle to build," he said. "It's probably been a nightmare for some engineer."

While nearly every assembly-line worker in Fairfax got training to build the new Malibu , minivan assemblers received training only if the part they installed had changed from the old van, said Ernie Burel, a team leader with 29 years' experience at Doraville.

"Some parts fit poorly, and that threw us a curve," he said. "Now we're making our own manuals for how to do each job. It's evolved since the new minivans started" production.

"Every way, we're finding something new."

The vans' low ratings trouble workers at the plant, Cain said.

"It makes you feel bad," he said. "I come in every day wanting to build a good car. I want to leave feeling like I did."

Company sources say GM is developing an all-new minivan in its new Lambda family of vehicles that should go on sale around 2008.

GM's major brands are about midway through their vehicle-replacement cycles. That means even if GM gets everything right with its new models, it's saddled with some weak players like the minivans for at least another couple of years.

"I don't understand why one division or platform gets it right and others don't," Champion said. "I have to put it down to management decisions and lack of attention to detail.

"They need the foresight to decide what goes forward, and then they need about seven Bob Lutzes," he said, referring to GM's vice chairman and vehicle-development guru."They need people who will not sign off on a product unless they are committed to making it the best in its class. They need that focus across the line."

In author Denove's opinion, GM needs "to continue to improve their quality, but they also need to become a styling leader so people will want to buy their products even if the quality is perceived as lower. That's what Chrysler did with the 300, and that's how GM can get people into its cars so they can see the quality is fine."

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Adam Lumsden
(83) 300D
Vice-President of the MBCA International Stars Section

They are trying, I'll give them that much. I like the new Vette, the engineering and quality they put into those things is a bargin for $50k. The old Vette's however are POS plastic rattle traps.

Stick a 1990 Vette next to an 07 Z06! Night and day.

The problem is the average public who don't follow things like this as close as we do, still preceve GM as building junk.

The real queston is can GM turn a profit before the clock runs out? Will York, Kirk's henchman force them to sell off Sabb? Kill Pontiac? Will the $14B thats coming in over the next 3 years from the sale of GMAC be enough to aid in the turn around?

Meanwhile Toyota is figuring out what to do with the billions they have in the bank.

Its an interesting story to watch play out thats for sure.

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1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

[QUOTE=Hatterasguy]They are trying, I'll give them that much. I like the new Vette, the engineering and quality they put into those things is a bargin for $50k. The old Vette's however are POS plastic rattle traps.

Stick a 1990 Vette next to an 07 Z06! Night and day.

The problem is the average public who don't follow things like this as close as we do, still preceve GM as building junk. ....
QUOTE]

It explains all that in the article. The 80's and 90's vehicles are junk, but now they are putting out some of the best. I'm sorry to those of you who can't see things the way they are and not for what they were. American cars are once again near the top.

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Adam Lumsden
(83) 300D
Vice-President of the MBCA International Stars Section

Correct me if I am wrong but I thought the JD power survey only tracks short term satisfaction (less than a year). I and many others on this site, judging from the vehicles in their sig line hold on to vehicles a bit longer than the average. GM has a good short term quality? I say "so what". Show me the vete in 10 years or 15 along with the rest of their line. Put it next to a Honda with 250k on the odo. That is what I think shows quality. Not that the car will start and not visit the shop in the first year or two.

I will say that finally Chrysler and GM are coming out with some 'interesting' cars. Chrysler had the Prowler (yes under powered but very neat looking) the Viper, now the 300, the Cross Fire, Charger and soon maybe the Challenger. GM has the Solstice and Sky, the 500 is good basic transportation, the Mustang is finally back and I may have missed a few others. I guess that is a step in the right direction.

The bottom line is, can they keep these on the road for more than 5 years, 10 years? Time will tell. It took Honda a very long time to build up their reputation. MB lost their rock solid built like a vault reputation in less than 10 years. It's a hard road to the top but you can fall off the cliff very easily.

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Sent from an agnostic abacus

2014 C250 21,XXX my new DD ** 2013 GLK 350 18,000 Wife's new DD**

- With out god, life is everything.
- God is an ever receding pocket of scientific ignorance that's getting smaller and smaller as time moves on..." Neil DeGrasse Tyson
- You can pray for me, I'll think for you.
- When you understand why you dismiss all the other possible gods, you will understand why I dismiss yours.

You raise some good points.

GM needs to (and will) kill Buick, Ponitac, SAAB, and all the little junk they have bought for no good reason over the years...) and keep Chevy, Caddy, Hummer, and Saturn.

It's a no brainer.

La Crosse is the "bank" just like Aurora was for Olds. Once that is killed, Buick is a gonner. Pontiac is next. Face it. Once the Camaro comes back... you'll have the Vette and the Camaro... the GTO is a total joke and a half... they COULD have saved Pontiac with the GTO, (think Dodge Charger) -- but GM is simply too stupid to make it happen.

I understand Saturn now has a sporty thing... but don't know about it.

Saab could have been an ass-kicking brand for GM, but they totally made a joke of it with the Subaru ***** they pulled. -- A real shame. Saabs were a blast to drive when they weren't junk.

The way I see it, the only other choice is for merge. Similar to Benz-Chrysler... which, face it, isn't going to happen. The brand is junk right now.

Caddy... that's another story. I don't know what the hell they were thinking when they ported the vette to that Caddy deal, but aside from that, there is hope. The Caddy Suburban (Hahahaha, Sorry, Escalade) makes GM a TON of cash. It's a friggin Suburban with leather and it rings the register like mad.

Oh well... We'll see. I own the stock, and it's a dog. But I got it as a toy...

Actually if York gets his way Hummer goes by by as well.
I think GM will re organize into three "brands"

Saturn will sell the base cars.
Chevy will sell the base trucks.
Buick will sell the midlevel stuff. (cars, and SUV's)
Caddy will get the high end.

GMC will probably be carried over as well to sell up market Chevy trucks.

Hummer is pointless and when gas prices rise will not be profitable anymore. The writing is on the wall with that brand.

Saab is a useless husk of what it used to be, chop. Pontiac is pointless at this point as well.

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1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

No way! Not even close!!!

Saturn will be the "hip" brand. (Sicon (sp?)
Chevy will be the "base" (Toyota)
Caddy will be the "up" brand (Lexus)

Hummer will be Hummer, because it makes money is is well positioned as a "tough" brand. Hummer has a TON of opportunities out there.

Saab COULD be the "euro" brand, if they did things right.

I think one of GM's biggest obstacles now is the "Employee Pricing" they offered last year. And I don't mean the profits they lost while selling at those money-losing numbers. I mean the probably incalculable bad-will they created in their customer base. Folks, many of whom were loyal, long-time GM supporters, who bought their Yukon, Impala, insert-most-GM-models-here, in the months preceding the Employee Pricing campaign, paid many thousands of dollars more for their vehicles than did people who had little history of supporting the marque, and who will very possibly never buy another GM. GM successfully destroyed the used car/trade-in market for their previous customers, buried people in cars who should never have been buried, and generally alienated tens (if not hundreds) of thousands of former customers. They'll overcome this horrible mis-management - even if it takes the goverment to step in as a "lender of last resort" (in other words; you and I financing a bailout; ala Amtrak, New York city, etc) to make certain they survive. Let's hope they can learn this go-round.

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"Diplomacy is the art of saying 'nice doggie' until you can find a rock."

I have to agree with you on this.

Not only what you said, but also the fact that many people will simply wait for them to do it again.

They (GM) need to learn to sell cars because people want them, NOT because they are cheap. If people want a cheap car there are brands they can buy...

Build something that people will want (or think they need) and watch the money roll in.

I think most people would be surprised how nice GM's cars are if they got in and drove one.

I frequently rent the new Chevy Cobalt when I'm out on a business trip, and it is really a solidly built car. I was given a C240 wagon as a loaner car from the local Mercedes dealer, and the Cobalt had more of the "solid as a bank vault" feal than the Mercedes. I kid you not when I say that the door of the C240 rattled when I shut it.

The problem is not that the Cobalt, or any other GM car, is a good car. The problem is that all the competition builds good cars as well, so it doesn't stand out.

Look at Hyundai. I'm sure people with loooooong memories might still remember the late eighties / early nineties Hyundai's, and think they are all junk.

But I'm telling you. If you get in a new Hyundai and drive it for a day, you will be blown away. Their cars drive smooth, quiet, and refined. Their quality is just a hair under Toyota and Honda, but if I put a Honda or Toyota badge on any of the current Hyundai offerings, I'm sure you would be fooled into believing you were driving a Japanese car.

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Paul S.

2001 E430, Bourdeaux Red, Oyster interior.
79,200 miles.

1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".

company a friend of mine works for has 5 or 6 cobalts and there is always at least 2 of em in the shop for something.as for the rest of gm well i say axe the hummer it's a glorified piece of junk,they should have left it as the h1 that had character.and a diesel.the gto is a joke,i would have tried to make kindof a retro car out of it,ford hit the mark with the retro mustang,chevy is not with that new camaro,that thing looks like something out of the road warrior movie, mel gibson would puke.should have brought back the SS chevelle not the cobalt.

Gotta I am just relaying what GM's largest shareholder is thinking, and what his rep on the board of directors is saying.

York wants Hummer and Saab cut.

I agree with him, these guys are sharp business men who are looking 5, 10, 15 years down the road. They are trying to turn this company around. When gas reach's a certain point Hummer will just cease to be a money making brand. The writing is on the wall for SUV's, its like 1970 all over again with the muscle cars.

Saab is pointless, the best thing for both Saab and GM is if they figured out someone to sell Saab to.

__________________
1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

And oil prices are going up again. This summer is going to be very interesting indeed to watch GM.

I hated the look of the new Civic, but Honda said "We'll sell it and you'll like it mister". You know what, I am beginning to like it the more I see it. GM needs to understand that. Just because some loyal customers of yours always liked that crappy dash or that floaty ride doesn't mean you should reintroduce it in the next model and kill innovation. Thats why the Corvette is so appealing. I mean who would have thought the Corvette engineers would get rid of the flip around headlights, but they did, in the name of innovation and no complaints, no backlash, it worked. They can't be the same company

My God its got a Bangle butt!

Hmm so thats where the idea came from...

__________________
1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

I work on Chevys all day, they're still junk... If about 75% of the customers cant tell the difference between an oil leak and "normal seepage", youre doing it wrong. If The New car lot is bringing you Tahoes for a recall as they come off the truck... Every malibu needs a fuel level sensor, a harmonic balancer adjustment, the 3800's need an intake, trucks all need a water pump, sometimes 2, theyre on number 3 for the steering rack lube, bandaid fix, still no solution, every truck and suv needs a intstrument cluster rebuilt, oh but lets not forget every engine save the ones they got in the Vette are completely useless for power and definitely sound how about personality? but wait, every Corvette on the lot leaks like the outside needs to be lubricated, so maybe I dont know how to define garbage. The leather cracks at like 10K miles, the front bumper on all the trailblazers warp, and even the economy cars dont do so well, maybe 25MPG. The ecotec, is a joke.And then they tried to supercharge it, and I never seen such a fast car sound and feel so slow. They cant build cars. And if youre bragging about being better than Toyota, you just lost my vote... People dont like good cars, they cost money, they want cheap garbage that they wont mind getting rid of in a couple years. Chevy makes it, but toyota and honda make it cheaper.