TrueDelta

It doesn’t seem that long ago that General Motors was pouring billions of dollars into Cadillac in a bid to make it a world-class luxury car brand that might once again deserve to call itself “standard of the world.” Now, with GM on the verge of bankruptcy, all signs point to a full scale retreat. Assuming GM pulls through, I wouldn’t be surprised if GM eventually killed or demoted Buick, then moved Cadillac into Buick’s “near luxury” position much like Ford has been doing with Mercury and Lincoln. Among the many casualties of GM’s meltdown, this one might be the saddest.

Cadillac’s bid met with an early success. The 2003 CTS’ angular styling might have polarized opinions, but it was distinctive and grabbed the market’s attention–in a good way. Reviews of the CTS’ performance suggested that, if GM persisted, it could offer world-class driver’s cars.

Unfortunately, other Cadillacs of this generation failed to do nearly as well. While I was interviewing people inside GM’s Design Center in 1999, designers in the Cadillac studio were trying to decide whether the planned crossover should have proportions more like an SUV–the direction Lexus had gone with the RX–or more like a wagon. They opted for the latter, perhaps thinking that the resulting lower center of gravity would appeal more to enthusiasts. Bad move. Combine these proportions with a BMW-like price, and the 2004 SRX failed to sell.

The 2004 XLR roadster was sharply styled, but under-engineered, insufficiently luxurious, and (like the SRX) over-priced. GM somehow convinced itself that it could price its cars like their leading competitors from the start–a bad move. Both Toyota and Hyundai have recognized that new entries must start low. If they sell, then you can raise the price. There wasn’t much sales potential with this one, regardless.

The biggest failure of all was the 2005 STS. The CTS had carved out a spot vis-a-vis the BMW 3-Series and Mercedes C-Class. Could the STS now do the same against the 5-Series and E-Class? No, no it couldn’t. The car’s styling didn’t work, partly because GM lost its nerve and tried to tone down the original theme (which might have been even less attractive, but outsiders never saw it). The interior also wasn’t nice enough to compete against the German midsizers.

Offering hyper-expensive supercharged STS-V and XLR-V variants was little more than a distraction. If the basic product isn’t a winner, adding power isn’t going to make it a success.

Vice Chairman Bob Lutz’ desire to offer a production version of the super-large, super-powerful, super-space-inefficient, $100,000-plus Sixteen? At the time this seemed like a loss of focus. Now it seems downright ridiculous.

At any rate, Cadillac’s advance stalled, then reversed when the 2005 STS died on the brand’s Cemetary Ridge. In the aftermath, GM couldn’t decide what to do next. Plans to replace both the STS and DTS with a large rear-wheel-drive luxury sedan wavered, then died. The V8 that would have powered this car was also canceled.

Yes, the redesigned 2008 CTS has deservedly been a hit. But you can’t base a luxury brand on one $35,000 car.

The real harbinger of the future: the 2010 SRX. Based on a front-drive platform and loosely related to the new Chevrolet Equinox, this car could have been a Buick. Cadillac’s target has clearly shifted from the Germans to Lexus and Lincoln.

The latest rumor: Cadillac will get a front-drive midsize sedan, to be priced between the Buick LaCrosse and the CTS. This car’s interior should be at least as roomy as that of the CTS, making their relationship unclear. Think Lincoln when the LS and Zephyr were together in the showroom.

I think it’s clear which two models will represent Cadillac’s future, and which one will be a relic of its final bid for glory. Only one question remains: what will replace the current DTS? Another large front-driver most likely–but using what platform?

Odds are that, following Ford’s lead, the Cadillac and Buick channels will be merged, then Buick will be phased out or shifted downmarket to make room for a near-luxury Cadillac range.

Want to remember Cadillac at its final triumph? Buy a 2009 CTS-V.

Word is that GM will announce the demise of Pontiac next week. Not really a surprise for anyone who’s been reading the writing on the wall. But nevertheless a sign that those in charge of GM’s destiny are more interested in appearing to be doing something than in actually addressing the core weaknesses of the car manufacturer.

Why is so much attention focused on GM’s brands? Because, like the CEO, they’re what outsiders can see and at least superficially understand. The real problems are both less visible and less easily comprehensible.

As some within GM have long recognized, a wide array of brands could be a major competitive advantage. When you have multiple brands to work with rather than just one or two, each brand can be tightly focused, and thus be more meaningful than a brand that must be all things to all people.

So why didn’t GM prosper? Because they failed to provide each brand with distinctive, desirable cars. Instead, every brand attempted to be all things to all people. Why? Partly because distinctive products cost more to develop than badges alone, but also because each brand had its own dealers, and each dealer wanted one of everything.

This problem was addressed a few years ago, when Buick, Pontiac, and GMC were combined into a single channel. This should have freed up Buick and Pontiac to pursue tighter foci. Pontiac’s focus was to be enthusiasts—for real this time. Bob Lutz announced that every future Pontiac would be a rear-wheel-drive performance-oriented car. Three models, each with two or three bodystyles, would have been sufficient: the Solstice coupe and roadster, the large G8 sedan and (planned but canceled) wagon, and a smaller Alpha-based coupe, sedan, and (possibly) hatch. No other mainstream brand offers a compact rear-wheel drive sedan, or focuses so tightly on enthusiasts. An Alpha-based Pontiac could have been a big winner.

So, maybe GM had finally figured out how to realize Pontiac’s potential, only to have gas prices shoot up and then have the bottom fall out of the market.

If the new plan was going to succeed, then why couldn’t they raise the funds to execute it? Because at this point lenders have no faith that GM can successfully execute its strategies.

This doesn’t change one key fact: killing brands does not address GM’s historical inability to consistently create distinctive, desirable cars.

Back in 2001 I provided GM with a critical analysis of their current product development organization and a strategy for creating distinctive, desirable cars. The executive summary can be found here:

Executive Summary of Report to GM

There’s still no sign that substantial changes are being made to the GM organization. They’ve replaced the CEO and they’re reducing the number of brands. This treats the symptoms rather than the disease. How this course of action generally turns out: the surgeon (wielding a cleaver in this case) cuts and cuts and cuts until the patient dies.

Nothing provides more challenges for TrueDelta’s Car Reliability Survey than email, specifically getting it to the inboxes of people who’ve signed up to participate. Too often, it gets trapped by a “bulk” or spam filter.

Some filters are better than others. The worst routinely identify TrueDelta’s email as spam, even though we send no spam and are on no blacklists. Luckily, many people with the worst filters have learned to check their spam folder often–which sort of defeats the purpose. (I receive quite a few email responses from members with [SPAM] inserted into the subject line by some indiscrimate filtering program or another.)

I had been thinking that gmail’s spam filter was perhaps the best, as it rarely had a false positive (identify non-spam as spam). We tend to have a much higher response rate with gmail users than with the users of other free email services.

But this might be changing. Lately I’ve noticed gmail putting some email from members to me into my spam folder. And, what do you know, last night while checking through the spam folder I found the email for Consumer Reports’ auto survey.

Seems this problem threatens them at least as much as it does us.

I’m recently learned that some members think we expect multiple responses to the Car Reliability Survey each month, so they haven’t been responding. Apparently, things have gotten twisted entirely around. Hopefully this post will help untwist them.

The reason for the misperception: these members have been receiving three or four emails each month that say, “Response needed even if there have been no repairs.” What hasn’t been sufficiently clear: this only happens when there hasn’t been a response in recent months (or ever). So these members have come to believe that they’d be getting just as many emails needing a response even if they had been responding to the survey.

This isn’t the case. Instead, members who consistently and promptly respond to the surveys when a response is needed get just four such emails per year. Other months they get a single email asking them to report a repair, if there was one. They never see the reminders that are sent to those who haven’t responded.

In contrast, those who don’t respond do receive the reminders, because some people forget about the intial email and need one. These bump the response rate from about 23 percent to about 36 percent.

Think of it this way: you badly need an answer to a question. So you call the person who can answer it. They don’t pick up the phone, and they don’t call you back. So you call again, and again after that, because you really need this answer. They might think you want to talk to them all the time, and they don’t have the time to talk so often, so they start ignoring your calls. In fact, you just need one quick answer. You’ve only called multiple times because they’ve never picked up the phone.

So, if it seems like you’re being asked to respond to the survey too often, it’s because you haven’t been responding at all in recent months. It’s never too late to sort this out. Respond to the survey when this is needed, and within a few months (it takes the system a little while to “learn” who doesn’t need the reminders) you’ll find yourself receiving far fewer emails.

You can contact us if you have some catching up to do.

Thanks to tax incentives, diesels now account for a large percentage of car sales in many European countries. These engines tend to be more powerful, smoother, and quieter than the diesels of even five years ago.

The most extreme example: the 5.9-liter V12 monster Audi offers in the Q7. It produces 500 horsepower at only 3,750 rpm, and 737 pounds-feet of torque at just 1,750 rpm. The next rung down, Audi, BMW, and Mercedes all offer V8 diesels, but these also sell in low volumes.

The meat of the diesel market begins with small fours and tops out with sixes around 3.0 liters. We’re now getting some of the latter in the U.S. Only VW currently offers a four-cylinder diesel in the States.

Even with gas engines, far more choices are offered to buyers in the UK. The 3-Series line across the pond starts a pair of 141-horsepower 2.0-liter fours, one gas, the other diesel.

While most of TrueDelta’s members are in the US and Canada, some are in the UK and elsewhere. In response to requests, we’ve now added UK powertrains for recent model years of most Audis, BMWs, Mercedes, Saabs, and Volvos. Also select Jaguars and VWs.

Have a powertrain that’s still not in there? Let us know, and we’ll do what we can to add it.

So hopefully we’ll start seeing some Gas Mileage Survey responses for these engines, and get a clearer idea of what we’ve been missing out on.

I strive to remain objective about how different manufacturers compare, and even to give them all the benefit of the doubt. Problem is, ownership of a 2002 Chrysler PT Cruiser (my wife’s car, she wanted something cute and fun) can make this very difficult. A conversation today with a dealership service writer was only the latest incident.

Some background: back in the fall of 2006 we had to replace the wheels on the PT Cruiser because, at 3.5 years of age, the original ones had corroded so badly around the valve stem seats that the tires were losing over ten pounds of pressure per day. Chrysler picked up half of the tab. They felt they were being gracious in doing so. After all, the wheels were six months out of warranty.

I’d never before heard of wheels corroding so badly that the tires wouldn’t hold air. So TrueDelta conducted a special survey on alloy wheel and chrome wheel corrosion. It turned out that while this problem was most common with Chryslers, it wasn’t uncommon with many other makes.

I heard from a few other owners of the same special edition of the PT Cruiser. It seems likely that the failure rate is close to 100 percent for cars in places where the roads are salted in the winter. Just a few months ago, I came across the following on Honest John’s, a UK car site: “Chromed alloys corrode and lose tyre pressure. Are unrepairable and a new set is £2,000, so best to switch to aftermarket wheels.” Wish we had, but Chrysler’s “customer care” assistance was predicated on buying the replacement wheels from Chrysler.

A few months after the wheels were replaced, the torque converter failed at 52,000 miles. This time they picked up nothing. We’d used up our “goodwill” with the wheels–one payment per customer.

We’ve had a few other repairs since then: brake calipers, control arm bushings, wheel bearings, the horn, and the thermostat housing (cracked). Today we had the outer tie-rod ends replaced. We’ve learned that a repair every eight months or so feels like “in the shop all the time.”

But what really concerns me: the finish is starting to flake off the replacement wheels, which are about 2.5 years old. Seems the replacement wheels were no better than the originals. We’ve had this problem once. We shouldn’t have to deal with it again.

So I called the dealer, which is located just a few miles from Chrysler’s HQ. Turns out that they’re not happy that I haven’t had my car serviced there since the awful experience getting the first set of wheels replaced (tires still at 10 psi after paying to have the wheels “inspected,” lug nuts overtorqued so badly AAA almost couldn’t get them off).

The service writer’s final response before hanging up on me: “You’re the one who bought a PT Cruiser, not me. You get what you deserve when you do that.”

The final words I squeezed in before the click: “I can’t believe you just said that.”

I’ll call Chrysler Customer Care on Monday, to see if there’s anything they care to do about the wheels. Probably not.

Conducting TrueDelta’s research, I hear of quite a few such horror stories, with many different brands. Honda might be a bit better than most. Toyota certainly isn’t. In general, the only way to avoid such “customer care” is to not have problems in the first place.

I’m still waiting to learn of a company that truly stands behind its products by consistently taking care of common problems caused by engineering errors even after the warranty ends. If GM and Ford want to live, this is the #1 thing I would suggest that they do. For what such a strategy would look like, read this blog entry from November 2007. Chrysler? They’re most likely too far gone.