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Published: Wednesday, 1/13/2010

A test for the Detroit 3

THE North American International Auto Show in Detroit has special resonance for many Toledoans, especially those whose livelihoods are tied to the fortunes of the domestic auto industry. This year's show provides an important opportunity for the Detroit 3 to make clear that they have overcome their recent travails and are ready again to compete globally by building cars and trucks that consumers want to buy.

The auto industry's woes in 2009 are painful to recount. Overall U.S. auto sales were the worst in three decades, Chrysler Group LLC and General Motors had particularly tough sales years as they emerged from humiliating, if brief, bankruptcy proceedings. Sales of several Chrysler Group models built at Toledo plants, such as the Jeep Liberty and Dodge Nitro, were dismal.

Industry sales rebounded last month, helped by broader availability of consumer credit and more-favorable economic indicators. But domestic car companies, like their global competitors, will take advantage of these improved conditions only if they offer appealing, high-quality, fuel-efficient vehicles.

To that end, the Detroit auto show is a good time for domestic automakers to strut their stuff. Chrysler, now affiliated with the Italian automaker Fiat, is displaying three Jeep production models made in Toledo: a performance version of the Liberty and two new editions of the Wrangler. All three models will be vital to Jeep's fortunes until Chrysler can offer all-new products late this year or in 2011. Also on exhibit is a "robotized" engine developed by Fiat, to be built in Dundee, Mich.

GM is displaying four new or redesigned vehicles at the Detroit show that promote its surviving brands: Chevrolet, Cadillac, Buick, and GMC. Those brands' sales increased last month while total GM sales remained stagnant, suggesting the wisdom of the company's decision to kill or sell four other poor-performing brands.

The prediction by GM CEO Ed Whitacre that the automaker will return to profitability this year is a bold statement of confidence that will need to be redeemed in the marketplace. Workers at GM powertrain facilities in Toledo and Defiance are building transmissions and other components that underlie the company's pledges of better fuel economy and effective alternative technology, such as electric vehicles.

Ford Motor Co. scored a coup at the Detroit show this week when it won awards for both North American Car of the Year (the Fusion Hybrid) and Truck of the Year (the Transit Connect). At this year's show, Ford is showing off a new V-6 engine that its plant in Lima, Ohio, will build.

Ford is differentiating itself from GM and Chrysler by reminding Americans that it did not take federal bailout money or declare bankruptcy. More significantly, Ford sales are up on the strength of better consumer ratings and renewed attention to manufacturing and engineering.

This year should be better for the auto industry than last year; it could hardly be worse. But the Detroit 3 are no longer the Big 3 in the United States, and never will be again. Rather, the U.S. market is becoming one in which six or more global automakers battle for supremacy.

Still, Chrysler, GM, and Ford can maintain profitable shares of that market. How car buyers respond to their offerings at the Detroit auto show will begin to demonstrate their ability to do so.



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