Yesterday, we published a story about how Chevrolet will shut down the Orion Township assembly plant where it builds the Chevy Sonic and Chevy Bolt for a few extra weeks this summer. Most legacy manufacturers take a two week break from production each year to do plant maintenance and reconfigure the assembly line for next year’s models, but the Orion summer recess will be longer than normal to reduce excess inventories. The story got a lot of comments.
The original story bemoans the fact that Chevrolet is suffering from an oversupply of Bolts in the US while Tesla has people begging for its new Model 3, the car that is touted as the Model T for the 21st century. Meanwhile, the Bolt is in critically short supply in South Korea, Canada, and Norway, to name a few places. Yet dealers in California are offering up to $5,000 rebates to clear the cars off their lots and one dealer in Rhode Island has over 200 of them in stock.
Why? Some suggest Chevrolet is setting the Bolt up to fail so it can cry about how Americans don’t want electric cars. If so, the blame rests squarely on the shoulders of clueless executives who refuse to see the changes that are coming in the marketplace and adjust their thinking accordingly.
The Saturn Debacle
Saturn is perhaps the best recent example of how the “Not invented here” syndrome that pervades the corporate culture in Detroit is threatening the legacy automakers with extinction. Older readers can remember back to the intransigence of those same companies when foreign automakers first began bringing smaller, more fuel efficient cars to the American market in the ’60s.
The response was an endless stream of crap-can cars like the Plymouth Valiant, Ford Falcon, and Chevy II. When the front-wheel-drive revolution took place, Detroit gave us more stinkers like the Chrysler K car, Chevy Citation, and Ford Escort.
When Roger Smith took over as head of General Motors, he crammed new thinking down the throats of his lieutenants by creating the Saturn brand. Fresh ideas sprang from GM’s best engineers, people who had been bottled up for too long by the hidebound strictures of the Big Three. The new venture was not named for the planet but rather for the giant Saturn rockets used to send Apollo missions on their way to the moon.
The Saturn factory at Spring Hill, Tennessee, pioneered new production techniques, beginning with an assembly line on which one team built an entire car from beginning to end. They traveled with the car as it was made on a skillet that brought all the tools needed with it.
The chassis was mounted on a scissors jack arrangement that allowed workers to raise or lower the car to the height most comfortable for them. The team members rotated jobs frequently so that everyone became proficient at every job in the assembly process.
Saturn took lost foam casting, previously used for small jobs, and scaled it up for volume production. The process eliminated 90% of the machining needed for conventional castings. It figured out how to make automatic and manual transmissions that shared the same housing so they could be produced on the same assembly line to meet the demands of customers.
Long Knives In GM Boardroom
When Smith moved on from the boardroom, the heads of Oldsmobile (remember them?), Chevrolet, Buick, and Pontiac (remember them?) gutted Saturn’s budget so the upstart division had no money to develop new models. Instead, they were forced to sell rebadged products from other divisions. That was the beginning of the end.
Saturn didn’t dispense with traditional dealers as Tesla has done, but it did bring no-haggle pricing to the marketplace. It is a little known fact that Saturn was designed from the get-go to appeal to women. Smith’s marketing research showed that women made the majority of buying decisions about automobiles. Why not design a car and a sales process that made women feel comfortable?
The original Saturn sedan, the SL, was designed for women. Lots of men complained that it was too small but women loved it. It was the first modern car made expressly for them. The plan was to introduce a second model designed for men but the money to develop that car never materialized when the company was getting started. When it finally arrived, the LS was too little, too late.
What Our Readers Say
Several comments to yesterday’s story came from people who actually went shopping to buy a Chevy Bolt. Their experience illustrates Musk’s claim of arrogance and ignorance, especially on the part of dealers. He says traditional dealers simply don’t understand electric cars and don’t want to engage in the process needed to educate potential electric car owners.
He’s right. Listen to what commenter “Oollyoumn” has to say: “Chevy dealers appear to have little interest in selling these. Being in the market for a new car, over the weekend I stopped at any dealer that might sell a plug-in. The Chevy salesperson told me that the Bolt was not being made yet, that the tax incentive ended January 2017, and that this particular dealership was not getting an allowance of Bolts because Chevy required that they also take an allotment of hybrid truck, and they were not going to do that because hybrid trucks do not sell in this area.
“I gave my opinion that the first 2 statements were not correct, and even provided sales estimates for last month on the Bolt. I asked him to look into it more and get back with me. So far, not a sound.
“The VW dealership was better, but still unusual. I started with ‘I’d like to know about the eGolf.’ The reply was ‘Not sold in this state.’ I said ‘thanks,’ and walked out. Not another word was said. Evidently they didn’t even want to talk me into something else. Two Nissan dealers, Toyota, Hyundai and Ford dealers also have not gotten back with me either. The Toyota dealer said it would take 8 weeks to get a Prius Prime. I think the car has to be on the lot and the customer drooling over it to get any assistance. To bad there is no chance of getting a Model 3 in the next month or two.”
Delphi23 shared this photo in his comment. Good God, people! Could we get a clue?
Dealers Are Not Your Friends
To be fair, GM and other manufacturers have little control over their dealers. They make the cars; the dealers figure out how to sell them. And so far, those dealers are using the same tired old tricks that have pervaded car sales for 100 years — high pressure, bait and switch, outright lies, whatever it takes to get the customer into a car.
For most, it’s a “wham, bam, thank you, ma’am” process that goes like this: “There’s the car. It comes in red, blue, and white. Pick the color you want while I get the paperwork started. I’ll get you right into finance and you’ll be driving that shiny new Belchfire 5000 today!” Then the salesman gives the customer what is known in the trade as the “Three Cs” delivery. It goes like this. “See your car? See your keys? See ya later.”
Tom left us this illuminating comment: “Over the decades *cough* I’ve purchased 15+ new cars, some for the wife and kids. After each purchase, I felt sufficiently soiled by the experience that I needed to go home and take a shower. Elon’s revolutionary selling techniques will put all that in the rear view mirror.”
Selling & Electric Cars
Does GM really want to sell electric cars or is it all window dressing for the CARB folks in California? Ask yourself this. When you are watching television or browsing online, how many ads to do you see for full-size pickup trucks? Now ask yourself when the last time was you saw an ad for a Volt or a Bolt?
Elon Musk is a dynamic force and should be celebrated for his vision and determination. But the competition is giving him lots of help by shooting themselves in the foot repeatedly. BMW was fast out of the gate with its i3 and i8, but since then, it has decided to soft peddle its electric car division and rely on plug-in hybrids instead. BMW makes great cars, but its PHEVs offer woefully short all-electric range. The company obviously has no clue how to make compelling electric cars and sell them.
The auto business is a cruel mistress. Thousands of car companies have come and gone over the past 100 years. More will follow, with the path to their demise greased by their own ignorance and arrogance. Detroit couldn’t figure out small cars or front-wheel-drive cars because of that “Not invented here” mindset. They can’t seem to figure out electric cars, either.
Don’t weep for GM. Or Ford or Fiat Chrysler either. It is simply Joseph Schumpeter’s principle of creative destruction at work. It’s not about jobs being lost at traditional automakers. It’s about new jobs being created in the factories of the future. As the British would say, “The king is dead. Long live the king!”
Photo credit: IFCAR