The Worst Cars On The Road
By all accounts, Detroit’s Big Three automakers have begun producing better-made, longer lasting, more efficient vehicles. It’s a distinct change from the 1990s and early 2000s, when they fell behind their European and Asian counterparts in each category.
“This change is not even a gradual thing,” says Christine Overstreet, an automotive consultant and director of Heels and Wheels. “It’s like they’ve said, ‘OK, we really want to step it up, we really want to compete, we’re ready.’ After past years of being so bad, they’ve really stepped up their game.”
But with three exceptions–the Mercedes-Benz S550, Smart Fortwo and Nissan Titan–all of the cars on this year’s list of the Worst Cars on the
Road are (still) made by domestic companies. That includes the Dodge Dakota, Chevy Tahoe Hybrid and Chrysler Town & Country. The only American car company with zero vehicles on the list? Ford.
Behind the Numbers
To determine our list of the worst-made cars on the road, we started with the lowest-rated vehicles from six reliability and performance studies conducted this year by Consumer Reports (for more details, click here).
Any car, truck or SUV named among the worst in at least two of those studies made the final cut to be on the “Worst” list.
We should note that the Mercedes S550 is the only vehicle that qualified for our list because of a high cost of ownership, low fuel efficiency and a low rating for overall value, not because of any problems with reliability, safety or performance, which affected every other vehicle in the top 10. Indeed, luxury vehicles like that sedan and the Cadillac Escalade are arguably at a disadvantage on lists like this–their luxurious interior upgrades, high-quality trim and powerful engines work against them.
David Skeel: The Real Cost of the Auto Bailouts – WSJ.com
President Obama’s visit to a Chrysler plant in Toledo, Ohio, on Friday was the culmination of a campaign to portray the auto bailouts as a brilliant success with no unpleasant side effects. “The industry is back on its feet,” the president said, “repaying its debt, gaining ground.”
If the government hadn’t stepped in and dictated the terms of the restructuring, the story goes, General Motors and Chrysler would have collapsed, and at least a million jobs would have been lost. The bailouts averted disaster, and they did so at remarkably little cost.
The problem with this happy story is that neither of its parts is accurate. Commandeering the bankruptcy process was not, as apologists for the bailouts claim, the only hope for GM and Chrysler. And the long-term costs of the bailouts will be enormous.
In late 2008, then-Treasury Secretary Henry Paulson tapped the $700 billion Troubled Asset Relief Fund to lend more than $17 billion to General Motors and Chrysler. With the fate of the car companies still uncertain at the outset of the Obama administration in 2009, Mr. Obama set up an auto task force headed by “car czar” Steve Rattner.
Under the strategy that was chosen, each of the companies was required to file for bankruptcy as a condition of receiving additional funding. Rather than undergo a restructuring under ordinary bankruptcy rules, however, each corporation pretended to “sell” its assets to a new entity that was set up for the purposes of the sale.
With Chrysler, the new entity paid $2 billion, which went to Chrysler’s senior lenders, giving them a small portion of the $6.9 billion they were owed. (Fiat was given a large stake in the new entity, although it did not contribute any money). But the “sale” also ensured that Chrysler’s unionized retirees would receive a big recovery on their $10 billion claim—a $4.6 billion promissory note and 55% of Chrysler’s stock—even though they were lower priority creditors.
via David Skeel: The Real Cost of the Auto Bailouts – WSJ.com.
Obama, Savior of Chrysler and General Motors | The Blog on Obama: White House Dossier
It’s not at all clear that Chrysler and GM would have collapsed. Rather, they more likely would have gone through the painful restructuring of bankruptcy, and come out in better fiscal shape with lower labor costs. Instead, the unions were give their pound of flesh, and everyone got the message that it’s okay to be irresponsible.
Obama posits the choice as all or nothing. He’s got to know this is not likely true. And he probably should start mentioning that the estimated cost of all this more than $14 billion. The Wall Street Journal has an op-ed today detailing the costs, monetary and otherwise.
The automakers went down for a reason. As Albert Milliron of Politisite.com pointed out to me, seven of the ten cars rated worst on the road by Forbes.com in April are American made. Ford, which rejected the bailout, has no cars on the list.
I myself bought a GM car last year. I was proud to do buy American. And I was still proud last month as they towed me out from the middle of angry, honking traffic on eighth avenue and 23rd Street in Manhattan.
via Obama, Savior of Chrysler and General Motors | The Blog on Obama: White House Dossier.
