The Big Three, Off Life Support and Profitable, Are Making Good Cars Again

Jim Motavalli

Jim Motavalli | May 03, 2011

The Big Three are baaa-ck, after a long, agonizing skid. With Chrysler announcing Monday that it has finally turned a modest $116 million profit in the first quarter, all of America's carmakers are back in the black. What a relief. I hate "The Big Two."

If you're like me, you have a long and complicated history with these three players. Rare is the American (maybe less rare now) who has never cursed at the perfidy of the domestically made product in the driveway. The wayward habits of Detroit-built cars keep Car Talk in business. If cars ran like clockwork, Tom and Ray would have nothing to talk about (but they'd think of something).

The 1975 Thunderbird: Wow, opera windows.
The 1975 Thunderbird: Wow, opera windows.

C'mon, think back, I'm sure you have a long list of grievances against U.S. iron--especially if the vehicle in question was made in the bleak two decades between, say, 1975 and 1995. In that first year, Chrysler produced Ricardo Montalban's favorite car, the Cordoba, and Ford made the worst Thunderbird ever--a garish thing with "opera windows." And GM? Remember the Chevy Vega?

Today's Big Three are much improved. Really. First, let's have them show us the money. Ford earned $6.6 billion in 2010. Its sales were up 13 percent in April from the year before, and both the new Explorer crossover and (perennial best seller) F-150 pickup are moving well--pushing Ford division sales up 24 percent.

GM's haul in 2010 was $4.7 billion. It was up 27 percent last month, largely because people actually like the new Cruze (selling almost three times more than the lackluster built-by-committee Cobalt it replaced). Demand for the Suburban was down a whopping 31 percent, but I could have predicted that. It's fascinating, but according to Baum and Associates, demand for small, fuel-efficient cars (a category Detroit used to avoid like the plague) now account for seven percent of sales, exactly the same as their most-favored large SUVs.

A year ago, Chrysler was busy emerging from bankruptcy and losing $197 million, but now it's profitable again--for the first time since filing the papers. Actually, the New York Times reports that Chrysler would have been profitable in each quarter of 2010 if it didn't have to make debt payments to the American and Canadian governments. Fiat is buying a majority share in Chrysler, so after that it will have a Franco-American heritage that should spread the misery around if it goes bankrupt again.

Chrysler still has a long way to go, and its product line is still far too dependent on the big SUVs and mega-trucks nobody wants. Dodge Durango sales are down 30 percent, and if you want to know what's wrong with Chrysler today I have two words for you: Dodge Nitro. I haven't driven the new Chrysler 200 yet, so I hope it's better than some critics have said.

The revitalized Big Three have some cool cars out now, and they include:
The Chevy Malibu Eco. The Malibu provided proof that GM could rise again when it appeared in the dark days of 2008. Now the all-new Malibu has been reinvented as a world car, with a 38-mpg on the highway Eco version to complement the Cruze Eco. The Malibu should sell at least as well as the Cruze, and although the Eco could turn out to be a niche product, it's impressive. The eAssist system under the hood is an evolution of GM's "mild" belt-driven hybrid drive, and it incorporates both regenerative braking and a start-stop system that could spread to big-volume vehicles like the Chevrolet Equinox.

Chevy's Malibu ECO: 38 mpg on the highway isn't too shabby. (GM photo)
Chevy's Malibu ECO: 38 mpg on the highway isn't too shabby. (GM photo)

Ford Fiesta. The $13,791 2011 Fiesta (37 highway mpg) is leading a trend that was all too obvious at the auto show--small cars that get close to 40 mpg without a hybrid drive. Others to check out in this category include the new Honda Civic HF (which may be in short supply because of Japanese part shortages) and the forthcoming Mazda3. But Honda, Mazda and Toyota no longer rule in this category. According to U.S. News, which said the Fiesta was the best subcompact for the money, "Honda and Toyota should watch their backs." The Fiesta has been smartly marketed to young people, with an emphasis on its MyFord Touch system and cellphone connectivity. Anything that helps create fuel economy consciousness in twenty-something drivers is a good idea to me.

Fiat 500. I have high hopes for the $15,233 2012 Fiat 500, which is getting a slow start on the American market: Just a third of the 130 American dealerships that will sell the car are open now. The 500 isn't strictly speaking an American car, but its technology will be the basis for a new fleet of fuel-efficient Chrysler-badged cars. I was at the New York Auto Show when Fiat's Laura Soave rolled out the new Cabrio convertible version, which was incredibly cool--mimicking the original 1950s 500 with a full roll-back canvas roof. "It's just gotten easier for customers to decide to go topless," Soave said, adding that it's the only four-seat convertible below $20,000 (but at $19,500 it's not much below that).

Laura Soave introduces the Fiat 500 Cabrio. (Jim Motavalli photo)
Laura Soave introduces the Fiat 500 Cabrio. (Jim Motavalli photo)

There you go, three not-too-shabby (mostly) American cars that will help to erase any lingering memories of those horrible gas guzzlers that once polluted your driveway.

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