Quality Matters - Sometimes

The superior design - both mechanical and energy-efficient - of vehicles from Japan have slowly and inexorably eaten into the once-monopolistic market of American vehicle manufacturers. Where at one time the German-manufactured Volkswagen beetle was the poor man's choice as opposed to the far costlier and infinitely more desirable, sleeker, more powerful and efficient North-American cars, those manufactured in Japan, then Korea, have absorbed a greater share of the market to the chagrin of the big three U.S. car manufacturers.

Ford, General Motors and Chrysler depended upon brand loyalty among North Americans. They depended upon their reputation as quality manufacturers that gave them access to markets abroad. Americans, and Canadians along with them, took pride in buying American designed and built vehicles. Canada was brought into the family through the production of Big-Three vehicles in Canada. At one time workers on the production line were expected to have their choices reflected in the parking lot.

American-designed and manufactured vehicles began to lose ground in the automotive manufacturing industry deservedly. They produced an inferior product. Quality control wasn't the serious issue it was for cars manufactured in Japan who really did turn out a superior, more dependable product. More mechanically reliable, better designed, fuel efficient. Car buyers began to leave the ranks of dedicated U.S.-manufactured owners in droves.

But who could ever have imagined that the day would arrive when Toyota was able to challenge General Motors for the label of largest auto manufacturer in the world? Or that Toyota and Honda would earn a superior reputation beyond dispute as opposed to the flat-lining American industry? And who might have imagined in their wildest dreams that General Motors, once touted as the largest company in the world, might be contemplating bankruptcy?

These are manufacturers whose revenues ranked right up there with the economies of middling-sized countries. And now, we've got a double-whammy striking the Big-Three of historical proportions. Energy prices so high that the love affair with SUVs and vans have completely collapsed. Consumers can no longer be enticed by zero% financing, or by "free" extras. They're left with crippling inventories of vehicles that can't be moved.

And the irony of the U.S.'s primary toy manufacturer, while itself experiencing losses in its first quarter, still outranking General Motors in market value is too much to believe. General Motors shares have fallen to their lowest rate in 54 years and they anticipate massive losses through 2009. A century after start-up as an automotive manufacturer, General Motors reported a loss of $38.7-billion U.S. in 2007. That's staggering.

Their losses, however, pre-date the new energy crunch. They haven't had a good year since 2004. Mattel Inc., on the other hand, has reported a first-quarter revenue rise of 15%. Barbie dolls and toy trucks are still in hot demand.