Very Interesting Subaru Business Story

[ARCHINSTL]

http://autos.yahoo.com/news/are-subarus ... -buy-.html
This is from Fortune magazine,so it is not from some flack.
Tom M.

[Petros]

Interesting read. but the author I think was a little overzealous about the car quality:, their popularity is because of strong brand loyalty that Subaru tends to play up, but its reliability is overrated, the car is plagued with head gasket and oil leak issues. They have regional popularity, but their overall sales are still rather small compared to all of the other import brands. I did not know that Bricklin was behind the first imports of Subaru (and though it is likely a collector item now, that first model was a real piece of junk). Although their reliability has improved since their earlier cars, they still for me have the stigma of poor reliability, and they still are not as good as the other major Japanese brans. An another factor for me is the Subarus are a PIA to work on, that engine arrangement is not very service friendly.

[ARCHINSTL]

Petros - my impression of Subies is the same as yours. Granted, I've never owned one, but my ex had two in the mid/late '80s. We did not talk, so dunno if she had probs.
But - I DID make $50 off her first one; I heard via one of the kids that she was seriously looking at one, so called a different local dealer and asked if he would pay for a sure thing. He said he'd pay $50, so I swallowed my antipathy (just for a moment, mind!), called her and recommended that store, based on some friends' experiences with service and pricing, etc (all fake friends, of course).
She bought - I got fifty bucks!

Incidentally, both of her sedans were FWD only - the last MT cars she would ever own.
Tom M.

[Petros]

I have friends and family members that have owned Subies, they were not happy with them, and now they drive Toyotas interestingly. My sister bought one new in about 1985, hated it, I sometimes worked on it when we lived in the same part of the world. Later she bought one of the early RAV4s, still drives it and likes it. My other sister also has a RAV4, one of the newer larger ones.

I thought it was a rather sly statement that the author of the article stated that the Subies have "better reliability than the Audi and the BMW". that is not exactly a ringing endorsement for the car, and really designed to fool only those that have never owned or are familiar with these German cars and their reliability. They are not bad cars, but not nearly as good as the other major brands of import cars.

[ARCHINSTL]

I thought it was a rather sly statement that the author of the article stated that the Subies have "better reliability than the Audi and the BMW". That is not exactly a ringing endorsement for the car, and really designed to fool only those that have never owned or are familiar with these German cars and their reliability.

BULLY on noticing that! It went right over my head...
I guess you could add VW to that "better than" list as well.
Tom M.

[Petros]

It is really a shame that the German cars are not more reliable, they make some of the most interesting cars with often advanced engineering. But they just can not seem to make them reliable. They are even worse than many of the US made cars as far as reliablity.

I have noticed recently however, is that the model of Mercedes made in a US factory has made consumer reports 10 most reliable cars list. So American (non union) workers in a US factory can make the Mercedes more reliable than they can make them in Germany. This is also true of the Hondas, Toyotas, and Nissans made in US factories. I wish Chysler, Ford and GM would notice that.

[ARCHINSTL]

And "(non-union)" is relative - how?
Tom M.

[Petros]

There are many factors involved with the failure of both GM and Chrysler, one of them was the heavy burden that the unions demanded and got during times of prosperity and expansion. But when times got lean the unsupportable benefits packages, and completely out of line lay off policies (like the workers collect "lay off" pay for up to a year or more after they are no longer needed). Just the retirement benefits for workers that no longer work at these companies added something like $7000 cost to each car. In addition the unions were generally opposed to modernizing the factories with more automation, making the US cars lower quality and not as competitive. They just had too much say in business decisions the company should be making for the sake of staying competitive.

These issues are well documented. There is no reason that high quality cars can not be made in the US with US workers under US laws. But obsolete policies of these deeply entrenched Unions contribute in a big way to the US cars companies making cars that are not competitive. It seems rather foolish of the Unions to adopt polices that would result in forcing their employer to loose money and go bankrupt. Not all unions are like that of course, but the big three auto unions are just irresponsibly unreasonable, holding the company's existence hostage unless they get their way. The hostess bakery liquidation is another example of old deeply entrenched unions just not facing reality of a very competitive market place.

[ARCHINSTL]

The Bakery Worker Union being the downfall of Hostess?
Bwa-Ha-Ha!
Hostess was taken over by a vulture capital company which knew what it wanted to do from the get-go.
In January of this year it filed for bankruptcy.
This Summer the CEO got a three hundred percent (300%) increase to 2.55 million dollars. The next nine top executives got raises of from 75 to 80%.
They wanted the rest of the company, blue and white collar workers alike, to take a 30% decrease in wages, a 17% cut in medical, and the company also stopped paying into the workers' pension fund. The result was a foregone conclusion, not unanticipated.
Oh - I forgot to mention that the toppers got handsome golden parachute packages as well.
Gee - ya think the vulture folks will reap the bennies of their selling off Hostess' brands?

STL lost a Hostess plant and over 400 workers in assorted jobs.

That workers' pay/retirement packages were part of Detroit's problems is no secret; however, management policies played a large part as well.
And of course, management did not suffer as much as did the workers.
I write this as Metro STL once had two Chrysler plants and a Ford plant, as well as the old Chevy plant which made cars, trucks and Corvettes. Chrysler and Ford are long gone and the GM plant moved years ago to a far-distant suburb where it makes only big vans. Chrysler shot itself in the foot and that was the demise of those plants and Ford simply did a product/factory realignment years ago.
Tom M.

[Petros]

I did not say anything about bakers Union. While true that Hostess had a lot of dept from the leveraged buy out, but their product cost was actually in-line with their competitors and they could have stayed in business, the bakers union had already agreed to reduced compensation, they were asked to do more, even when their delivery drivers got all their benefits. their distribution costs where way higher than anyone else because of silly union rules, the truck driver could not unload the goods (like everyone else in the business does), they had to send another car and pay another employee to load and unload the the goods. That is what prevented them from being profitable, not their executive pay, nor their dept. It is silly to blame that, executive pay is overhead and separate from operating expenses.

There were ultimately three things that damaged US car companies, yes poor management decisions (that included bad finance), government regulations, and overly costly compensation and retirement packages. There has been a lot written about the problems with the car companies. One of the most important I think is their poor quality and reliability. If they can not sell the cars they make, none of the other problems are relevant.

[ARCHINSTL]

Actually, while you did not mention the Bakers Union specifically, since it was one of the "deeply entrenched unions" of Hostess, one must make an obvious conclusion.
As a former businessman/employer, to say that my corporation's profit was unaffected by whatever I paid myself as a wrench is completely disingenuous.

When Hostess' top management was unaffected - nay, rewarded - during its bankruptcy, the Bakers Union was quite understandably upset at their chutzpah.
Tom M.

[Mustakrakesh]

New to the forum so I'm not trying to instigate, but I own a 1997 Subaru Impreza.
And frankly it is a superb car, at 150k miles the engine still sounds tiptop.
The automatic trans likes to take its time jumping from first to second, which occasionally will cause a late shift jerk.
We've owned the car for 4 years now, and the past year it has received literally no maintenance, despite being driven daily.
This year I started school to become an auto tech, and when I brought the car into our shop the dipstick was dry :\
I know this isn't proper maintenance, but you have to appreciate the reliance, no oil changes in over a year still running strong.

I know this somewhat biased but still interesting either way.
https://www.youtube.com/watch?v=kRniF4JQN2U

[Petros]

You are talking about a completely different car than the ones that were comparable to the same years as our '83-88 tercels. I had acknowledged that the current Subarus are much better than their earlier cars, but they are still a PIA to work on. And besides, one example of a reliable Subaru is not indicative of a trend, you may just be lucky. I am sure you can find someone who claimed they never had any trouble at all with their old Rambler too.

[dlb]

mustakrakesh, first lesson in auto tech: don't run an engine dry! second lesson, stay on top of oil changes to extend engine life. many cars don't get enough oil changes in their lives but long term, they will have problems. grit and fine metal dust will cause premature wearing so i think it's crucial to stay on top of.