The Contemporary Sisyphus: America’s Auto Industry is in a Rut

Although Detroit has spent years trying to conquer seemingly insurmountable issues, the American automotive manufacturers as a group have unfortunately failed to deliver any significant turnaround. The problem stems from Detroit’s losing its American audience because the public no longer views U.S. auto manufacturers as credible.

From the 1970’s to the 1990’s, domestic automotive manufacturers had abundant opportunities to realign their strategic direction and retool their brand credibility. While it was clear that Americans wanted “quality” cars, Detroit ignored these demands, continued to erroneously claim that it produced quality products and consequently, lost its validity.

Japanese and German competitors readily understood the market and filled the need for quality so well that they charged a premium for their cars—and American consumers willingly paid the price. Being unencumbered by battles between unions and management has also allowed foreign competitors to gain market share, resulting in a win/win situation for them and a lose/lose one for American manufacturers.

From the 1990’s and to the present, foreign manufacturers pulled off another remarkable coup when they began investing in American automobile plants. Toyota, for example, launched a subtle, long-term corporate image campaign to convince Americans that it was truly part of America’s fabric. Toyota plants created jobs for Americans, paid taxes, supported local communities and developed credibility while assembling and selling their automobiles. The reputations of foreign competitors, if you can still call them foreign, began to soar while domestic manufacturers lost their “Made in America” trump card.

When Detroit tried to please everyone with too many makes and models, it lost its mojo, competitiveness and again, credibility. Consumer confusion was intensified with a sea of lookalike models and price points, and companies seemed to implode as internal competition increased. For example, GM is still holding on to this detrimental practice by maintaining its Chevrolet and GMC lines of trucks. Imagine the efficiency that would result in combining the two. GM needs to grasp this concept before its competitors, who already understand this notion, put it completely out of business.

While they are financially weak, I think The Ford Motor Company is emerging as a possible winner from the domestic auto industry crisis. Its 2008 line-up of cars and trucks is impressive, and these models all seem to be in synch with each other. Think about Ford’s strong selection of cars, Focus, Fusion, Mustang, and Taurus, and their crossovers and SUVs, Edge, Escape, Explorer and Expedition. All are competitively priced with relatively individualized details and without harmful internal competition. Every model offers a distinctive value and stratification. Any visit to a Ford showroom will easily convince you that there is a new quality in its vehicles that makes them worthy of consideration. The line-up of trucks, starting with the Ranger and scaling up to the F-450 Super Duty, is equally impressive. I’m excited for The Ford Motor Company and applaud it for making the tough decision to sell the Jaguar and Range Rover lines in order to focus on its current selection of vehicles. I believe its Volvo line should be kept in the stable, because it has its own separate well established brand based on safety.

Now is the time for Ford to rebuild its corporate brand. This remerging automaker needs to grasp the opportunity to develop a breakthrough campaign that will re-establish its brand image with the American public while it goes head-to-head with its foreign competitors.

Ford has thoughtfully conceived a better product at a better price along with something else that money can’t buy—credibility.

James Gregory is president of CoreBrand.