24 October 2016

Charts For a Monday Evening - New Car Time - Is it Safe?

You may recognize part of tonight's title from the movie, Marathon Man.

It is just charts this evening.  And a personal observation.

I ran into an unexpected car problem that occupied quite a bit of time on Thursday, Friday, and today.   I took the queen out on a nice Autumn day for some test drives and tapped the rainy day fund for a new car purchase.  It really had not been planned.

In case you happen to own an older Ford Escape, or a Mazda Tribute, be aware that it may have a potentially dangerous mechanical condition that you may not yet fully understand.

Ford has put a literal 'band-aid' on a serious steering problem for some of the affected model years with a recall for 2001-2004 Escapes.  But some of the years after that apparently have the same problem and same component based on internet owner forums I have read and videos I have seen over the weekend.  Ford says they can buy the same band-aid for $90 if their cars are not covered by the recall.  But it is still just a band-aid.

The recall does not fix the problem, except in a Clinton-esque definition of fixed. It just theoretically gives you enough steering control to pull the car over to the side of the road after the subframe fails, ideally without a fatal loss of steering.   But after that it is not safe to drive.

Ford dealers seems to agree, and will only take the car in trade for $500, and will send it to a wholesale auction to junk it.  I cannot really blame them.  The car is not safe to drive.  And fixing the problem with genuine Ford parts is prohibitively expensive.

In order to truly fix the car one must have a replacement for the subframe and lower steering component for which a Ford dealer must charge about $5,400, of which only about $700 is labor from the dealer.  Ford corporate seems to have priced the parts for this repair at about 3 time the comparable market price based on an internet survey I made of other new parts providers for the same part number and also for very similar components for other vehicles.  Nice touch.  I thought only Wall Street knew how to really rip a customer's face off.

You might be able to get this done by a local mechanic if you can obtain a good part yourself either new or used, preferably from a Southern junkyard, for about $1700, or less if you have a full garage and can do it all yourself.  The subframe also cradles the engine and is not a casual repair by any means.  I hear it takes 6 to 10 hours depending on your experience and available equipment.

I found out that the car was not road safe from a local mechanic who was changing the oil and happened to notice that the frame had separated and the steering control was compromised and could fail anytime.   I took it to the dealer and they confirmed that it was unsafe to drive.

Corporate Ford responds to this by saying that the recall had been performed in accord with the government NHTSA and will absolutely not do anything else, at all.  I like the dealership quite a bit and have bought three cars from them, but their hands are tied.  Without saying anything they were obviously ashamed.

The dealer performed this recall in 2014 and at the time it was still 'safe' but no one ever mentioned that it was not really 'fixed' and would eventually fail.  I guess safety is a state of mind when you get to define it.

I maintain my cars well, and drive them in some challenging situations like the bridges around NYC in heavy traffic and the BQE in rush hour.  I shudder to think of how I might have discovered this cheap definition of 'safety.'

The recommended solution for my car, which is very similar to the one in the first video, is to junk it with under 100,000 miles, or spend more than it is worth to properly repair it.  It has no other known problems.  It was one of my favorite cars and I tried to take good care of it.

A long time observer of the automotive industry called this 'the worst recall I have ever seen.'  Thank you Obama administration's Department of Transportation.  Good job guys.

And so today I went out and bought one of the three medium priced car lines that my mechanic friend said are easier to repair and of better quality based on his years of experience:   Toyota, Honda, and Subaru.

This is what happens when trust in a business-customer relationship has been abused beyond reason.  As far as I am concerned that company put my family at risk for a few hundred dollars in extra profit.

This has been my own personal experience.  Your own may certainly be different.  But it is good to be aware of these things.  And the media seems to be at best asleep, cutting back severely on real reporting, or at worst very selective about what it chooses to inform us about these days.

One can make a case that American companies had lost sight of the need for quality in their products through complacency and bad practices way back when.  But they certainly learned that lesson in the 1990's, or at least had discovered how to do it.  And many companies did.

Now, if major companies falter from quality, it is not because they do not understand how to do it.  No, it is because choose to do it.   Short term greed and and executive arrogance can provide a breeding ground for foolish institutional decisions, almost carelessly but nonetheless consciously. This most often comes from the top down, from those who are aloof from the actual business and see only the current quarter's numbers, but do not understand their own companies or their customers.

Could we have any better examples of this breakdown in corporate ethics and good governance than in the banking and pharmaceutical sectors?

There is a price, a set of consequences to be paid— always.  And it takes a very brave manager to stand up to that sort of group thinking in the executive suite.

As for the government, well, I think we all know by now what the problem is there, and have seen the bad behavior and very bad example that they are providing for so many.    Ignore the spin and the optics, and follow the money, and you will see very well where it leads. It may be ugly, but it is not all that complicated.  You just do not yet know what to do about it.

Have a pleasant evening.