BUSTING THE AUTOMOTIVE MYTHS
Friday, February 13, 2009 @11:06am CST
Reported by: Gary Grubbs, Lawrence Hall Abilene







With all of the interest in government stimulus packages, Congressional oversight, political wranglings and much…much finger-pointing that occupies the news right now, I thought it might be interesting to present some information about the American automakers [Detroit 3] that hasn’t seemed to make the news coverage we seen from the main stream media. Why is this important? I think everyone should have facts that are verifiable.

I would like to share, in this edition, some comments that were made by Mr. Ed Peper, GMNA Vice President for Chevrolet, at the Automotive News World Congress in Detroit, Michigan on January 20, 2009.  Mr. Peper is the VP in charge of North American operations for Chevrolet, and was asked to be one of four American auto executives to address the World Congress.  The reason I chose his remarks were for two reasons.  First, I am very familiar with what he is specifically addressing with regards to public perceptions and the flow of misinformation about the Detroit 3.  Secondly, while he admits he is speaking from a specifically Chevrolet perspective, his comments are very telling about the American auto makers.  GM, in particular, along with Ford and Chrylser are NOT the second rate organizations that the press and certain members of Congress portray them as.  In fact, to be totally honest with you, I find it really pretty disingenuous for certain members of Congress to rake the Detroit 3 CEO’s over the coals about how bad they and their companies are, and just now are discovering the continued misuse of taxpayer money with regards to banks, insurance giants and Wall Street Executives.  Nevertheless, here are some of the comments made by Mr. Peper, with all respect, somewhat annotated.

“To say 2008 was a pretty wild year for our industry would be an understatement.  Between gas prices “spiking” to more than $4 bucks a gallon, to the mortgage crisis…to the woes on Wall Street… and available credit evaporating…this was a brutal 12 months…there has never been a year like the one we just experienced…especially in the automotive world.”

Mr. Peper points out four benchmarks that effected the auto industry, none of which had anything to do with the automakers being the cause.  As he says, “It all has to do with “Setting the Record Straight” about the domestic auto industry in general…”

To make a point of fact, the Detroit 3 had approached Congress about getting “short-term loans”, to help bridge a cash short fall caused by a combination of all four economic crises.  As he states, “I was fascinated, yes… but I was horrified at the same time.  I couldn’t believe that many of our legislators knew so little about our industry… and about our great products.  It was like watching a “time warp”… with General Motors, Ford and Chrysler… being treated like they were Nash, Studebaker and DeSoto.”

Based on comments made by several U.S. Senators, in particular Sen. Shelby, Sen. McConnell and others, these “educated” and intelligent people promoted “three areas where the myths and half-truths seemed to dominate.”

One – Nobody buys domestic products.
Two – Domestic quality and reliability can’t compete with the import manufacturers
And three – the domestics are way behind the curve in producing fuel efficient vehicles.

“To each of these misguided assertions, I have a one word answer…False!!!  I could have said “Hogwash” – or something even stronger -- but I have to consider the dignity of this event.”

Mr. Peper begins to address each of the myths in the following ways.  It is also important to acknowledge that Mr. Peper is an executive with Chevrolet and GM, so his comments are biased with regards to specific products.  No matter, they are factual and verifiable.

“First, “nobody buys our products”.  Oh really?
Here’s the truth…[Chevrolet’s] global growth continues unabated, making Chevy one of the fastest growing brands in the world.  For example…

• Chevrolet has become the second largest selling GM brand in the Asia-Pacific Region.
• Chevrolet sales have grown in China nearly 16% in the past year… that’s double the industry average growth of 8%.
• Chevrolet was also Number One among all the foreign brands in Russia last year, increasing our sales by 24 percent over 2007. 
• Chevrolet broke through the 500,000 sales mark in Europe last year and set a new market share record!
• Chevy accounted for 90% of all GM Sales in Latin America, Africa and the Middle East… as a result; GM posted its fifth consecutive record sales year in the Region.
• Chevrolet sold more than four million units globally!
• Bottom line, Chevrolet remains one of the most respected brands around the world. 
• Chevrolet has been the industry sales leader in the United States for two of the past four years!
• And when the economy got tougher and the fuel and credit crises hit during the last six months of 2008, Chevrolet  outsold Toyota by more than 30,000 total cars and trucks for the second half of the year.
• Chevy had three cars among the top 10 sales leaders in 2008 --- Impala, Cobalt and Malibu
• Consumer Reports now ranks the Chevrolet Malibu LTZ with the V6 engine as the best American car.
• Our large car, Impala was the total sales leader in the segment
• And in 2008, Impala posted a total segment share of 32.8%, up 6.2 points year over year.  Taken together, we sold a half million Malibu’s and Impala’s last year in one of the toughest markets this industry has ever seen.

And those are just related to passenger car products that, according to Sen. Shelby, “no one buys.”

Next is trucks. 

“Americans still want trucks and they still want choice!  Did you know that one out of every 2 large sport utilities sold in the U.S. and one out of every 3 pickups sold in the U.S…is a Chevy?  …And as you all know, we weren’t the “newest kid on the block”.   “You can also see the acceptance of our products through the nearly 300 different media and industry awards we’ve won around the world in the past few years…including the 2007 North American Truck of the Year with Silverado… the 2008 North American Car of the Year with Malibu… Corvette ZR1 and Malibu being named All Stars by Automobile Magazine just last week… and so much more.  …So I don’t buy the argument that we don’t make products consumers want.  The facts tell a very different story… and we are going to continue to get the facts out!”

What about quality?  Mr Peper tells us this.

Now, let’s set the record straight about the second myth – that is, “domestic quality and reliability can’t compete with the import manufacturers.”  Frankly, this fable is crumbling in a hurry.  I’m proud to say that Chevy and our domestic brethren are moving up the quality ladder in many market segments.”  For the record “…Malibu and Silverado... finished number one in their class in the 2008 J.D. Power Initial Quality Survey…in two of the largest segments in the industry…”  “…Malibu finished as the [overall] fourth highest vehicle in initial quality in the entire industry.  The only cars to beat Malibu were the Porsche 911, the Lexus LS and the Mercedes Benz S-Class – cars that, in many cases, cost triple the price of Malibu.”

“And every year, Silverado faces some of the toughest competition [Ford and Dodge] for quality in the full-size pickup segment.  But our victory this year validates our claim that Silverado is “America’s Best Truck”….So I believe the quality and dependability of domestic products can stand up to the “exacting analysis” of the industry… without apology!”

The fuel efficiency issue also receives factual correction of perception, as well.

What about the third myth – domestic brands are behind the curve in fuel efficiency?  Again, the facts prove otherwise… and the evidence is so extensive, this is where I’ll spend most of my time today…  One reason is our [GM’s] fuel solutions strategy – five different paths to reduce our dependence on foreign oil and create a sustainable future.

First, improving the fuel efficiency of our current lineup… today, we [Chevy…GM total is 13 models] have eight models that get at least 30 mpg on the highway… and when Equinox arrives this summer, we’ll have nine models.  The public is noticing the difference!  Today, Fuel Economy is the top reason to buy a Chevy car… and it ranks number four with our truck franchise – I am sure no full-line truck manufacturer has Fuel Economy as a “top-five” reason to buy for their truck portfolio.

The second path is Bio-fuels and ethanol based fuels that are not made just from agricultural products.  Instead, we are teaming up with innovative companies to create cellulosic bio-fuel from materials like garbage and old tires.

To date, GM has delivered 3.5 million vehicles that are compatible with E85… and more than 2.5 million of those are Chevys.  We need to make this a much bigger part of our Fuel Solutions Strategy, because it is our quickest solution to reducing our dependence on foreign oil.

Third are Hybrid powered vehicles that fit the way our customers live.  We currently offer Hybrid versions of our Malibu, Tahoe… and we are now building our Silverado Hybrid Pickup.  By the way, our Tahoe Hybrid gets the same city economy as a 4-cylinder Toyota Camry.  And GM will have 15 hybrid models on the road by 2012.

Fourth are Fuel Cells, embodied by our test fleet of more than 100 Equinoxes operating in New York, Los Angeles and Washington, D.C.  With fuel cell technology, we have driven a half-million miles with zero petroleum and a “zero carbon footprint”.  In fact, the only bi-product is water vapor.


Now, our fifth path may be our best known – and that’s extended range, re-chargeable electric power, as represented by Chevy Volt….In fact, we announced last week that the lithium-ion battery pack that will power the Volt is ready to go…GM will invest approximately $30 million to construct a new facility to assemble this battery pack right here in Michigan… the first battery-assembly plant operated by a major automaker in the U.S.

“…Many of our customers are getting it… but some politicians aren’t on the same page!  And neither is the overall culture at times.  In part, I believe we must do a better job of spreading the word.  It falls on us to take the lead and tell our side of the story… nobody is going to do that for us.”  ”…But the job has only begun.  We must continue to dedicate ourselves to responding immediately to the “three big myths” when we hear them, no matter where they emanate from!

At this point, it is important to give the facts a little more light.  Sen. Shelby, R-Ala, Sen. McConnell, R-Ken and others from Tennessee and Mississippi represent states that have given well over $1Billion in state taxpayer money to the likes of Honda, Toyota, Mercedes, Hyundai, Nissan and other, to “entice” them to build plants in their states.  In addition, the state of Texas gave Toyota $533M to locate their plant in San Antonio.  These were to create job and strengthen their state economies, which is something we would all do.  However, I do find it interesting that they would support foreign corporations that ultimately take their profits and reinvesting in the own countries.  No matter what anyone says…there is a large amount of dollars that leave our economy and “go home” to foreign countries.  We need to remind Congress that they are Americans, first and foremost.  Their first obligation is to, at least, not hurt American industries by having one set of standards for the Detroit 3 and a different set for our foreign importers.

I know this is somewhat lengthy, but a “bullet points only” format would not give you the same sense of commitment shared, not only by Mr. Peper and his colleagues at GM, but it also is indicative of the same commitment hard working Americans have to create the best products and the best industry in the world, during this Global Economy.  The full text of Mr. Peper’s comments are available by request at

As we all watch, with degrees of interest, the next chapters in this story, I hope this information has given you a more informed and clearer picture of the American Auto Industry.  Our industry is not perfect, but for over 100 years, the American Auto Industry has set the standard for transportation manufacturing all over the world.  It is time for Americans and our representatives to be reminded of that.


Gary Grubbs is the Marketing/Advertising Manager for Lawrence Hall – Abilene. Contact at ggrubbs@lawrencehall.com.