The Bosses of the Big Three on Nightline
It was a first for national television. All three bosses of the Big Three U.S. auto companies — General Motors, Ford Motor and Chrysler — appeared together June 11, 1991 on Ted Koppel’s Nightline Show.
Koppel reasoned that if the three executives — Bob Stempel (GM) Harold Poling (Ford) and Lee Iacocca (Chrysler) could go together to the White House for a private meeting with George Bush, they could appear on his program together for an hour.
In their meeting with Bush several weeks ago, the three men appealed for help in three areas. First, they wanted no increase in fuel efficiency standards for motor vehicles and a very light regulatory touch on emissions control and safety. Here they were preaching to the choir. Bush, as vice-president, got his kicks from regularly bounding onto the platform in a White House press room to tell reporters how many life-saving regulations his task force was repealing.
Apparently, the three auto moguls just wanted to make sure that their ten year no-regulatory holiday under Reagan-Bush was going to continue, no matter how many Americans gagged on dirty air, were injured in less safe vehicles or lost jobs through our trade deficit, caused largely by large oil imports.
Second, the auto executives complained about interest rates and the banks’ reluctance to lend money to business.
Third, they raised the Japanese unfair trade issue. They said the Japanese were dumping minivans below cost in the U.S. because of the surplus of vehicles. They repeated Iacocca’s complaint that while Europe is tough on Japanese car imports until two-way trade is assured overall, the U.S. is too soft.
Iacocca told Koppel’s audience that he sends Jeeps to Japan and their price goes from $22,000 to $34,000, but that the Toyota minivan priced at $22,000 in Japan drops to $15,000 when it gets to San Francisco.
Koppel pressed the three leaders about why Americans are increasingly preferring Japanese cars. The response from all three was “perception.” Car buyers think that the American cars of today and tomorrow are the lesser quality of American cars of the past decade and a half. Quality control has surged in American-made cars, they said, and the consumer just hasn’t got the message.
I’ve been hearing this song for 15 years now. Don’t judge us by the past, the Michigan car makers say, judge us now. Well, let’s judge GM by its highly self‑ touted spanking new Saturn car.
After four billion dollars in investment, GM has built just 20% of the cars it had hoped to sell in the first model year. The car already has been recalled twice. U.S. Department of Transportation crash tests found Saturn near the bottom. This meant that at 35 miles per hour crash impact into a fixed barrier, a Saturn passenger could receive severe head injuries:
Koppel then asked Bob Stempel the big question: Why doesn’t the Saturn nave air bags? Stempel said that Saturn had to be competitive with its price class and the “majority of cars” in that segment had the automatic belts. This is a limp reply for the manufacturer of a super-duper, high technology car that was supposed to lead, not imitate its competition.
What Koppel did not know was that GM has standard drive side airbags on its Geo Storm model which sells for $7900, or less than the price of a Saturn which can range from a stripped version at about $8000 to a option loaded class costing $15,000. Even the $15,000 Saturn doesn’t have an air bag option.
In contrast to brief televised statements by consumers on the shortcomings of American cars, the three executives declared that their cars were right up there and some with Japanese models. Iacocca said that his cars were more fuel efficient than Japanese cars, way ahead in safety, more reasonably priced and almost neck and neck on reliability. Although Chrysler spends $50 million a month on advertising, Iacocca said he is not getting this message across to the buying public.
That either tells you something about the message or Chrysler needs to change their advertising agency. When there is substance to a claim — as with Chrysler’s air bag leadership — the message gets across. When there is less substance, well there you have that nagging American motorist’s “perception” problem again, don’t you?