Ford has improved their reliability considerably, post-bailout. Ford is really the only example I can see of the bailout doing anything good.
Pre-bailout, Ford was pretty abysmal. I would actually say they were less reliable than GM. They took the influx of cash and overhauled their entire manufacturing AND design processes to turn out some great cars. The only thing in their lineup looking bleak to me is the Escape (ugh, just no).
The problem is that they're still pretty cheap on their interiors and panels tend to come loose and break a lot. American consumers tend to value interior over most other car features unfortunately. Modern Fords, save for the Escape, are pretty reliable and Honda has shown themselves to be much less so in recent years. Mazda is still too small volume to matter.
tl;dr: Ford is great now, Toyota is still on top, Honda is majorly slipping and GM still blows goats.
The bailout provisions required some pretty strict limitations on dividends. As I understand it, quite a few members of the Ford family derive a significant portion of their income from FoMoCo stock dividends.
It doesn't hurt that Ford was able to borrow large amounts of money before the meltdown, so they had the capital to weather the storm.
Ford had been improving well before the auto crisis, but they were never in danger of going under. It was Chrysler and GM. Ford never took the bailout, honestly, I think that helped their sales a lot. Hard to shake the "Government Motors" or the "Fiat" image.
Toyota is still the best. People are always shocked when they hear how many miles I have on my 2006 Tacoma. I also like Subaru, surprised they ranked as that expensive to maintain.
The only problem I have with Toyotas (and I'm in a new Camry rental after a Rav4 got totalled) is that the suspension, handling, and styling seemed to be designed by people who hate driving.
I have an 06 Tacoma and I prefer its handling to every other vehicle I've driven, including the F-150, Tundra, Outback (though the Outback is the most similar), Mercedes-Benz crossover (don't know the exact model.) I've also driven a Viper and a Corvette, but I'm not including those in my comparison for obvious reasons. I think it's just preference. Then again, trucks have different suspension than cars. My mom used to have a Camry, and I never liked driving it. It might just be a truck thing.
YMMV: We had a 2014 Fiesta with a DCT and the thing worked like a first time driver on a manual. Herky jerky, seemingly missing clutch engagement. They might have done a lot better with interior build quality, and their higher end models are impressive (hell, their 3 cyl 1.0L turbo engine for the Fiesta is a masterclass in small car powerplants), but they aren't even halfway to a Honda or Toyota, who have essentially reinvented (and continue to reinvent) car manufacturing.
I recommend watching James May's Building a Car documentary. It was a fascinating window into all the aspects of car QA.
I've heard a lot of complaining about Honda lately which bugs me. I actually purchased a Honda motorcycle[0] because of tens of industry reviews lauding the quality and reliability and avoided a Harley at least in part because of the "It's a Harley. Sometimes they stall."[1] (that, and I'm a twig of a man so I'd look ridiculous on a Harley).
[0] Specifically, I purchased a model they'd brought over from Europe (good sized engine, sport/touring, 100+ miles to the gallon but "you don't buy a bike to save on gas") and the reviews for the European model were universally good.
[1] This was an actual quote from the guy at the Harley dealership after he succeeded in starting a floor model only to have it crap out after 5 seconds of idling. He thought I'd be impressed with how loud the damn thing was. Little did he know I wasn't looking to be that guy, I just always wanted a motorcycle and the bike I purchased is exceptionally quiet.
I had a 2000 Acura Integra that I bought used (the model is essentially a gussied up Civic) that I loved and drove for 10 years. Loved that car. Comfy reliable etc.
I bought a 2007 Honda Civic Ex because we needed 2 cars. Its a nice car, but Honda reliability has definitely fallen (though it is still miles ahead of European and US cars).
The new Honda Civic looks really good and seems reliable so my next car might be a Honda Civic (the 2007 is going strong and we drive so little I hope it lasts another 10 - 15 years). But there was a point between 2009 and 2014 when I felt Honda had lost its way with the god awful cheap iteration of the Honda Civic. It was essentially a money grab based on their reputation.
The worst car I ever owned was a 1993 Mitsubishi Eclipse. I used to joke that friends don't let friends by Mitsubishi
Yep. My 2009 Shadow isn't gonna win any awards in either handling or speed or even "coolest sounding exhaust rumble" but the damn thing is near bulletproof. Shaft drive is a little heavier but removes the need for chain/belt maintenance. It's been knocked over by teenage vandals and still started right back up with no issues. It was my first "proper" bike (after screwing around town on 50cc scooters) and it probably won't be my last but it's been a workhorse, no doubt.
A lot of it depends on the model and "generation". For example, the 2002-2007 (7th gen??) Honda Accords had bum transmissions that pretty much crapped the bed when hooked up to the V6. The I4 versions were really solid.
It's less about general dependability and more about a few slip ups that Honda made that are making people question the brand as a whole.
I saw an unofficial automobile brand slogans meme at some point. The ones I remember were "Toyota: for people who love white kitchen appliances" & "Honda: resting on our laurels."
Honda motorcycles have exceptional reliability but I'm not sure that is directly comparable with their auto line. Out of curiosity what model is getting 100+ miles to the gallon?!?
I should have clarified, I am reliably getting over 100MPG, but the motorcycle lists, I think, 50 or 60 MPG (still not bad). I generally use the bike only to ride up north and back and shortly after buying it I bumped the info button and noticed it had a MPG display. It was stuck at 99, which is the max it can display. I assumed it was broken but after several trips I realized they're a little over 100 miles each way and I was filling up the 4 gallon tank about once every two round trips, so I did a one way after putting a gallon in at a half tank and sure enough, I arrived with the needle a little higher than it was at (not perfect accuracy, but confirmation enough for me). I'm a pretty simple rider, no need to goose the engine (well, ok, occasionally). It's an all highway drive most of it rural highway (no passing lane) at 55 MPH, too, so it's basically the most ideal circumstances for fuel economy, too.
It's the 2011 Honda NT700V and I love the thing. It's a sport/touring (nothing like a crotch rocket or a monster touring bike), very comfortable to ride, quiet and since purchase it has had zero problems and I have been able to do all of the routine maintenance myself due to it being easy to take apart. Granted, I live in Michigan so I don't get to ride it 5-6 months out of the year and I've got under 10,000 miles on it so I'd expect it to still be running well. The only downside is the oil filter is a smaller version of a very common filter, requiring me to buy it online and it use 10-W30 oil which is really hard to find retail (Motorcycles use different oil -- wet clutch -- who knew?) -- online it's twice the price I can get it retail when enough of it is in stock (O'Reilly carries a high-end synthetic for it that I purchase a quart at a time when I'm there for other reasons -- they've never had 3 in stock at a time).
Yes it was. Ford got $5.9 billion in TALF money. Nissan got some too. Just because it wasn't TARP doesn't mean that it wasn't a bailout. They also got a $9 billion line of credit from the government.
Clever PR misdirection on their part.
They were also lucky in their timing - they had already mortgaged about $18 billion in assets in 2006. Neither one of those events on their own would have been enough to save the company. Both turned them into a major competitor again.
Ford took a loan. Ford got an interest rate that a normal citizen couldn't get, clearly there was special treatment. But it's not like we handed them 9 billion dollars. It seemed like banks were freaking out in 2009, and really wouldn't give a loan at any interest rate. Assuming a sane banking structure, where it was possible to get a loan, 1% on 5.6 billion is around 50 million a year.
"bailout" is a fairly fuzzy term. If the banking system was working, there would have been no need for DOE loans. There was also the benefit of improved milage, thereby reducing carbon emissions. This seems like the sort of thing the DOE does anyway, and wouldn't raise eyebrows in a sane banking environment. I think by your meaning of "bailout" student loans are also a bailout.
On the other hand, GM and Chrysler went bankrupt. They sold secured assets to new GM and new Chrysler and, i believe, gave investors quite a haircut.
So with the bailouts, they took the haircut right away and baked the risk into the deal they made with the auto manufacturers. Then they ate the risk in their transaction right away and wrote down the loss.
With the loans they made to Ford they used a different tactic -- they said to hell with the financial risk (which you usually bake into your interest rate) and made the loans anyway and left open the possibility of devastating financial losses. The only reason we're looking at this positively is because Ford was a success story. Had Ford folded, congressional heads would have rolled and we'd be cursing the TALF loans and praising the TARP bailouts.
Just to clarify that the whole banking system was locked up and there was no capital. In a normal market GM and Chrysler could have done what Ford did.
Ford was in better shape than the others because they had mortgaged everything before the financial system locked up. That means they also started improving everything sooner.
From my perspective in Michigan the auto bailout was a huge success. My friends in the industry report that most of the cruft in the big three was cut or let go and they really shifted the culture. The whole industry is focused on technology. The suppliers survived. Hundreds of thousands of jobs exist because of the injection of liquidity.
I similarly think that the bailout was a success. I just think that people have a horribly myopic perspective when they act like Ford didn't receive government/taxpayer benefits during the financial crisis.
Fisker and VPG were clearly failures, Tesla and Nissan seemed to work out ok though. You're clearly much more well versed in this situation than i am. It looks to me like a subsidize what you want and tax what you don't style economic policy, just like corn in Iowa. or FHA loans.
But i think we agree (since you changed your terms) it's not exactly a "bailout", but the timing sure was super handy for ford.
I think you're confusing the energy efficiency loans with the TALF money. TALF was the Treasury, intended to prop up the industry, and is arguably a bailout; the energy efficiency loan was the DoE thing and was predicated on development of certain models of electric/fuel efficient cars.
The Ford lobbyists are a principle-agent problem on many levels, but of course all of corporate America is.
When a supplier loses two customers while all its other customers order more parts than before, there might be some costs associated with adjusting to the new circumstances, but it won't go out of business.
We should have at least let GM burn in a fiery ball of death. Chrystler I'm a little less positive on as I generally approve of the Fiat deal and what the company has done since...some of it anyway.
I'll say this, there is a delay between a manufacturer improving and it actually showing up in reliability metrics. So perhaps Ford have improved, but their stats are being ruined by cars made in the early 2000s.
But that being said, the only useful data for reliability is after the first three years since very few vehicles have issues when they're "brand new." It is more in the long tail that they become expensive to keep on the road.
Next time I buy a vehicle I'll re-examine the reliability data and see if the picture has shifted.
4-5 year old MB's are pretty reasonably priced (I tend to buy a little farther out on the price curve than that).
Mercedes also had a horrible rust problem with their mid-late 90s cars. They switched to an environmentally friendly paint process that was terrible for paint adhesion and rust prevention. I have a perfectly good '98 E300D that's going to go the junkyard because of rust issues. Explain to me how that's saving the environment again?
By rusting away, the car will turn into iron oxide, which is "natural" and thus helps the environment. They should have made the paint an energy source for microorganisms, then they could claim to have a biodegradable car.
I've been in a climate known for being hard on vehicles (Minnesota) for ten years and the only rust buckets I ever see on the roads are older American vehicles (Dodge SUV's and minivans in particular). I've owned Nissan and Honda vehicles in that time and never had issues with rust.
My relatives have no problems with Toyota cars since ~2009, unlike previous Big 3 vehicles with a continual trickle of issues, even in brand-new vehicles. Plus they're just nicer on the inside and hold up longer.
I'm not American, so I don't have an intricate knowledge about your car market, but isn't GM doing relatively well since the bailout? At least their Volt/Bolt models seem to be pretty innovative, at the moment it would be my choice (i.e. the Opel Ampera derivative) if I were to look for a new car.
Fairly well. I could be wrong but I believe during the big 2008 downturn people stopped buying cars, yet of course GM needed to keep paying off their capital expenses. So they had a classic cash flow problem. Now sales are normative like you'd expect. Might be a silver lining in that the crisis likely motivated management to make improvements[1].
Although I'm under the impression that their fiance division GMAC took big loses. The standard wikepidia link seems to say GM divested before the big crisis hit.
Ford never took bailout money AFAIK. They revitalized on their own which is very commendable. If they were just a little bit more reliable I'd probably buy one.
My parents buy Fords almost exclusively and they range from about as reliable as my Honda to abysmal and expensive so YMMV.
Ford borrowed $5.9 billion from the Department of Energy in June 2009 through the TALF program. Another ~$2.1 billion was given to Nissan ($1.6b) and Tesla ($465m) from that at the same time. It was a $25 billion fund for encouraging higher fuel efficiency.
I bought a 2014 Focus, which I think has developed quite a reputation for expensive and frequent repairs. Fortunately, the primary (overwhelmingly so) candidate is the transmission.
This played into my decision when I got a 2014 Focus as well. I got a manual transmission.
Its much harder to screw up a manual. The Dual-clutch thing is somewhat innovative, but the Focus's engine is high-rev / turbo-charged (getting the most power at 4000+ RPM). At the low-end, the engine is jerky and everything.
Its much smoother when I rev the engine higher (maybe 3000+ or even 4000+) before shifting up. I'm not really sure how the "automatic" DCT of the Focus is supposed to manage the engine without things getting shaky.
I definitely recommend the 2014 as a manual car. Very simple driving behavior fix to just rev the engine a little higher.
We've got a 2012 Focus as our sole car (my other car is a motorcycle if I'm looking to go all "bumper sticker" with my phrases). I believe this was the first year that they switched the US Focus to be the same as the European version which was a different, superior vehicle in past years.
It's also a manual and it's the base model so the interior trim is boring black plastic. Stereo and all that are very basic and there's absolutely nothing exciting about the car.
That said, It was under $15k new in the late summer of 2011, hasn't had any major issues or maintenance other than scheduled visits, oil changes, and the like.
Granted we've only had it for 5 years but the thing is paid for and for $15k, it's been a fine commuter car and for the few longer trips we take every year. Previous car was a used (forget the year) Jetta with fancy heated leather seats, 6 speed, sweet stereo, moon roof, and all that fun stuff. The damn thing was in the shop at least two or more times per year during the few years we had it before we threw in the towel and traded it in on the Focus.
Sure, I sorta liked the perks and that 6 speed, 6cyl was a hell of a lot more fun to drive but it wasn't thousands-more-per-year more fun to drive. The car was also not new when we got it so it's not a fair comparison to a car purchased new. If anything, I think I learned that buying a new (or newer) car that's simpler with a lower base cost can still be less spendy than going used when you add in maintenance costs.
The Mk3 Focus (2012 and later) has a surprisingly perky engine above 4000 RPM. I'd say its one of the funnest rides under $20k brand new. As you note: there are plenty of low-end models that are ~$15k for a completely brand new car.
The Mazda3 manual transmission has slightly better low-end torque and a solid transmission. Its only slightly more expensive, but I personally didn't like the layout of the interior and the placement of the windows. Otherwise, great car with a superior engine to the Focus.
Pre-bailout, Ford was pretty abysmal. I would actually say they were less reliable than GM. They took the influx of cash and overhauled their entire manufacturing AND design processes to turn out some great cars. The only thing in their lineup looking bleak to me is the Escape (ugh, just no).
The problem is that they're still pretty cheap on their interiors and panels tend to come loose and break a lot. American consumers tend to value interior over most other car features unfortunately. Modern Fords, save for the Escape, are pretty reliable and Honda has shown themselves to be much less so in recent years. Mazda is still too small volume to matter.
tl;dr: Ford is great now, Toyota is still on top, Honda is majorly slipping and GM still blows goats.