Car Focus

It is the time of year when the new automobile models are being introduced and as usual I find myself looking to read everything I can about the new models.  I have been fascinated by cars since I was a young kid, and only later on did I realize how important the automobile industry was to the American economy.  Now I am not a believer that whatever is good for GM (or Ford of Chrysler) is good for the United States, but I do believe that the American car industry doing well is inextricably interwoven with the American economy doing well.

For many years, the greatest excitement about the new models being introduced was reserved for foreign cars, for the most part those cars imported either from Germany or Japan. And the reality was that I was part of the foreign car bandwagon.  American cars didn’t excite me and more importantly, I just didn’t have a sense that they were as durable or well designed as the German or Japanese cars. Now American cars are at the top of the list in almost every category.  The new Corvette, the new Impala, the new Cadillac CTS, the new Jeep Cherokee, the new Ford Fusion are all the best of breed; tested continuously and praised for all they represent and for all the value they provide.  And because American cars are so good at doing what they should do, it is no longer unusual to see American cars well represented in important foreign cities.  Beijing and Buick is the best example.

In many ways, the higher education industry is in a similar position.  American higher education is respected at home and around the globe. The impact of higher education on the economy – taking into consideration all levels of public and private education– is huge, and here too, the American economy doing well is dependent on higher education continuing to do well.  We need to be relevant, we need to be reasonable, and we need to be a good investment in the future.  Foreign competition continues to grow but in almost every area, our education is still the most sought after.

At times, for the automobile industry, economic incentives have been key to the public’s purchase of automobiles.  No money down, very low interest rates, low leasing rates, and discounts off the sticker price have all made a difference.  Discount rates are key to higher education purchases as well.  Either scholarships or well below cost public tuition provide the same, price cutting, economic incentives.  As the economy improved and as cars improved, the automobile industry was able to reduce the reliance on price incentives.  In higher education, we are still struggling with how to come to grips with price incentives.  And what makes it especially difficult is that public institutions may have exactly the same cost structure but because there is a subsidy from the state where the public institution is located, public institutions do their discounting up front and visible for all to see.  Imagine higher education, if Ford were a public company with a permanent subsidy for all Ford purchasers.  What would GM and Chrysler do?

I know many of us – especially in the private section– are looking for ways to reduce the increasing reliance in higher education on discounting to attract students.  Since it is no longer unusual for a private institution to approach 50% in the first year discount rate, the pace of discount rate increases by definition will slow down.  But unfortunately, I don’t see a workable solution for phasing out what so many of us have become dependent on.

Objective Evaluation

No different than many of my peers, I have strong feelings on many issues. Some are well grounded in fact; others are “gut reactions” on a much more emotional level. Likely, my evaluations, opinions and judgments reflect my values, which impact their objectivity.

When I purchase products, I look for the most highly rated product at the best price possible with the greatest reliability. And where I look first is Consumer Reports (CR). I have been reading and relying on CR for decades; I am a lifetime subscriber; and I am as impressed today as I was when I first started reading CR decades ago. The only major change in my CR reading habits is that I glance at the magazine when it arrives, but I do my research using the online version.

Consumer Reports has not been thrilled by many American cars over the years; Japanese and German cars prevail here and I think their judgment has been accurate. Most car magazines have more widely different results but the objectivity is often compromised with ratings that give significant points to styling or the fun factor or some other intangible way of skewing results. Often, the difference between first and last in the typical car magazine is directly tied to these somewhat subjective standards. I don’t need or want a magazine to make style evaluations for me; I’ll do that myself. What I need is a full evaluation of ride, handling, acceleration, gas mileage, reliability and safety results. Here CR delivers and delivers well.

New cars have come and new cars have gone and the ratings in CR for American cars are consistently in the fair to middling group; that is until now. The new Chevrolet Impala has just been evaluated and is now rated as the top large size car by CR joining the highly acclaimed ranks of cars such as Audi and Infiniti.

In evaluating the Impala CR stated that “with its 2014 redesign, the Chevrolet Impala has been dramatically transformed from a woefully uncompetitive and outdated model—one that was to be avoided even as a free upgrade at the rental-car counter—into a thoroughly modern and remarkably enjoyable car.” CR continues by noting that “This phoenix like rise has propelled it from the bottom of our large-sedan ratings to being one of the top-scoring cars we’ve tested overall. . . . and in the process, it’s now reclaimed a stature befitting such a classic nameplate.” In addition to the terrific write up, Impala received 95 out of 100 possible points and was ranked higher than upscale sedans from everyone including Acura, Lexus, Toyota, Hyundai, and Nissan.

I supported the government bailout of General Motors and of Chrysler. They were each effectively given a new lease on life and both, as well as Ford, are doing a great job utilizing the opportunity. Our industry and our products can compete effectively with the best. What a terrific change for American automobiles. Now if the industry can resist taking the consumer for granted, which I am convinced caused some of the earlier difficulties, American automobiles should continue to thrive. This is a good lesson for all of us to remember in industry as well as in education.

Along for the Ride

When I was a young kid, my parents owned a mom and pop butcher shop. Both of my parents worked very hard and my being out of school for the summers was a real complication for them. For a number of these summers, my parents did without any vacation whatsoever for themselves so that they could afford to send me to a sleep away camp in Pocono Pines Pennsylvania.

The first year I went to camp, early in my elementary school years, the trip to camp was made by train. My parents transported me and my classic camp trunk to Penn Station. It may not have been the Hogwart's Express but it was nevertheless a great experience and a very efficient way to get from here to there.

Between now and then, I have been on the Long Island Railroad many times and on the Acela Express a few times. But for all practical purposes, train rides, especially covering any real distance, were part of my youth. That is until this year. In the last two months, I have been on a new high speed train in China as well as the Eurostar train which goes under the English Channel, from London to Paris. In both cases, what a comfortable and convenient way to travel. The train in China, which travels to Sanya, the Hawaii of China, is a smooth quiet riding train with speeds that easily match the Acela. The convenience is also unmatched. The Chunnel train, which both left and arrived precisely on time, was equally effortless. With train service this good, cars become a second best alternative.

Our country already had train tracks in place that makes much of the country, especially major metropolitan areas, easily accessible. What we don't have are attractive, efficient trains, except for the Acela. We have made substantial progress in driving more efficient cars but to make the kind of overall transportation progress we need, we can't do so without having an efficient attractive railroad network that transports not only products but also people. I am not advocating for the end of cars, just advocating for a more comprehensive system that provides alternatives. It's a proven attractive alternative.

Outcomes Assessment

My car, similar to many recent model domestic and foreign cars, has a stop/start engine capability. If I apply the brakes, the engine stops within a few seconds and once I step on the accelerator, the engine springs back to life almost seamlessly. Initially, I wondered about the reliability of the stop start technology. My painful experience with a Chevrolet Vega has conditioned me to expect that once the engine stops, good luck in getting it started again. But the experience to date, through thousands of miles of driving, has relieved my anxieties and built up my confidence. I know that start/stop works and that it is reliable.

As noted above, the start/stop process is almost seamless but you are nevertheless aware that the engine is stopping and starting. But this is a small price to pay for saving gas and being more economical. But that leads to the following key question: what is the savings involved and in a cost benefit analysis, how does the savings compare to the extra costs involved. In other words, I am looking for outcomes assessment on the car level.

When outcomes assessment first surfaced in higher education and also in K-12 education, I wondered whether these efforts were really necessary. There were many outcomes that were clearly present, so what was the necessity of a comprehensive effort in this area. There were also substantial additional costs involved in undertaking any comprehensive assessment effort. However, working with outcomes assessment over these recent years and seeing how it now leads naturally to continuous improvement has convinced me as to the wisdom of the efforts in this area. Especially the migration of assessment to the individual areas and courses in the curriculum has convinced me that on both the micro level and the macro level, education and our students are the beneficiaries.

On the K-12 level, I am equally convinced about the benefit of comprehensive outcomes assessment but I am also somewhat more concerned. I have this feeling and some supporting data to go with the feeling, that assessment has resulted in an overemphasis on testing. And too much testing too early in a student’s career replaces a love of learning with a sense of apprehension which is clearly counterproductive. We need a balance and we need assessment that is imbedded in the curriculum rather than overemphasizing examinations.

I am a lifetime subscriber to Consumer Reports and a tremendous fan of their highly systematic assessment of the worth of many products and many services. Their testing of cars and their surveys of car owners constitute a model of assessment in the moment and over time that has been unmatched for many years, and still is unmatched by any of the competition.

Dutch Treat

I just returned from a family vacation week in the Netherlands spending time at the Floriade (which is the once every ten years flower show) as well as time in Amsterdam and the surrounding areas. I thoroughly enjoyed the trip. Certain observations and comparisons are inevitable and these observations may help us and our county in the years ahead.

First is the observation regarding scale. Everything seems smaller. Not the people but the cars, the homes, the stores etc. And yet it is clear that smaller works very well. The largest cars I saw during the entire week, with very rare exception, were no larger than our mid size cars and SUVs were few and far between. (Under the heading of full disclosure, I did see one Chrysler 300 and 2 Bentleys. Interesting, I thought the Chrysler stood out in a more distinctive way.) Now back to smaller cars: think about the savings in gas if we can adjust to a smaller scale. We have been slowly moving in that direction and I don’t think we are any the worse for that movement. We should continue this effort; it would be a great way to counter rising energy costs.

Housing, even in very upscale areas, also seems noticeably smaller. The square footage is much more limited and attached housing is much more prevalent, even in the suburbs. Many of the apartments and houses also came with roll down window shutters that provide extra weatherproofing and storm protection. And stores and restaurants are noticeably smaller. Now I happen to like large stores and huge malls in our country because of the selection that is available, but once again are we using our resources as efficiently as possible? I had no trouble finding anything I wanted even though the stores were often, by my definition, cramped.

Having done significant driving and also traveling on buses and public trams, I can also tell you that the infrastructure seems much better maintained. Bad roads were few and far between, though the roads were often too narrow for my comfort level. Highways had fewer lanes but Amsterdam did have traffic that rivaled downtown Manhattan. Therefore, the car was returned the day we arrived in Amsterdam. The trams in Amsterdam were clean and modern and the rail system throughout Europe is first rate. Now, infrastructure needs as we know are usually financed by government and here the Netherlands scale (tax rates) may be larger rather than smaller than that of the United States.

A comprehensive comparison of the Netherlands and the US requires more than a few observations and facts. Education, health care, a safety net, defense expenditures etc. are all part of the equation. And the reality is we want it all and we want it on the largest scale possible. We should as a people be able to do some downsizing (cars, homes etc.) on our own initiative and with miniscule impact on the quality of life. For the rest we need to confront the choices that we have been reluctant to confront. We know we can’t provide more with fewer resources. Government needs to cut back on spending, or increase taxes, or do both. Having all of the above is not an option. I look forward to the Presidential candidates giving us the necessary facts that will allow us to make these necessary decisions regarding who to vote for and what direction our country will follow.

Last Chance

As I have noted before I am a car person and so last night I took advantage of an opportunity from a local dealer to take a preview firsthand look at the new 2013 Cadillac ATS.  The ATS is aimed at the Mercedes C class and BMW 3 class competition, a competition that BMW has dominated for a number of years.   The luxury entry level cars are key bread and butter cars for the upscale brands and Cadillac has been absent from this market for many years.  I actually remember when Cadillac first entered this market—the vehicle was the Cadillac Cimarron, a mediocre leather trimmed version of the Chevrolet Cavalier. Since my brother had one of the first Cimarrons delivered, I know up front and personal how mediocre feels, drives, rides, and lasts.  Cadillac’s last attempt prior to the ATS was the Catera, a decent car that was based on an Opel that coupled anonymous style that never conveyed luxury, with a respectable road manners.  But nothing special doesn’t compete effectively with BMW, Mercedes, Lexus and Infiniti.

The ATS is very impressive inside and out. It has style but doesn’t in anyway copy either the BMW or the Mercedes. Instead the style is distinctly American, slightly more brash with somewhat more flashy trim than either of the European leaders of this market.  And the inside is also very classy and elegant. Once again a little more styled and brash than the corresponding European cars but in a very positive way.  The car also comes with almost anything you could possible want in a luxury car including all wheel drive.

Lincoln is in a similar situation with the new MKZ entry level luxury vehicle.  Here too, this is a critical effort on the part of Ford.  Previous MKZs were simply slightly more styled (but not necessarily more attractive) Ford Fusions.  And here too the new car seems to be up to the challenge with a contemporary look and flowing lines that denote class and luxury.

The Cadillac advertising campaign as noted in Automotive News is “dubbed Cadillac ATS vs. the World.”  The characterization is correct.  The US automobile industry has come back in a very impressive way.  The government bailout in my opinion has served us well and US firms have demonstrated we can be fully competitive across a wide range of cars.  But ATS and MKZ are aimed at the market that seems to date to have eluded even a respectable showing for American cars.  If the quality and durability are there, if the ride and handling are there, if the quietness is there, if the service is there, we can make a significant impact not only on American markets but also in Europe and elsewhere.   We are challenging the world leaders in this critical market segment.  From what I have seen, I’m optimistic about the result, and the ripple effect of these cars being successful can impact our overall economy.  It would be gratifying if the last chance showed how well we can compete just when it mattered most.

Take Your Time

Part of my non-work identity is defined by three interests – Broadway musicals, chocolate and cars.  In the cars category, I read virtually every car magazine and look at virtually all car related websites.  I don’t claim this is in any way intellectual but growing up at the time that cars helped define the national and individual identity, and personified progress, made a tremendous impact.

At the end of last week, I was reading a newspaper review of a 2013 top of the line but still popularly priced imported car.  As part of the review, the writer commented unfavorably on the restyled grill and front end of the car.  I completely disagree and think the restyled car is noticeably better looking. In looking at most car magazine or newspaper reviews including this one, and especially car comparison tests, the end results are usually very close with “fun to drive” or some other subjective factor being the ultimate determinant of which car is ranked first.  I often disagree because subjective factors are just that, factors the depend on one person’s (or one magazine’s) priorities, which clearly differ from individual to individual.  For some reviewers, being able to go from 0 to 60 miles almost instantly helps determine the fun factor; it just isn’t that kind of priority for me.

I sometimes think that for too many parents and too many soon to be college students, there is too much reliance on the opinions of others, especially when those others are making determinations based on subjective factors. And here I am talking not only about college guide books but often also about family, friends, and teachers. How often over the years have I heard parents say that their son or daughter should go to and graduate from the same institution they graduated from?  How often, over the years, have I heard one soon to be college student saying to another that the other student should attend the same institution so that they can continue going to school together?  Or a teacher or a counselor stating that many of his or her students have loved institution X and this student will as well. All of these opinions and all of these reasons could be completely on target but there needs to be on the part of many families a more comprehensive effort to find the best match, not for someone else but the best match for the person who is about to enter college.

Within any quality band in higher education, there are many choices. These choices are limited for many by financial considerations, but even with those considerations, there are often multiple choices.  What matters most – possible majors, class size, living options, support services, internships, civic engagement, a religious framework, career services, etc?   These factors all enter into a student’s success.  All of us talk about what we, as colleges and universities, do well, and we deliver that message in a very convincing and comprehensive manner.  But for the college selection process to work as well as it can, there needs to be, on the part of many of those embarked on selecting a college or university, more of an effort to find the best fit.  Making the best use of scarce resources by graduating in the least time possible is only possible if the right choice is made regarding a college before day 1 of that undergraduate experience. 

We all know that informed decision making is key to the wise use of resources. But for individuals and families, we need to-do more to make this happen. In this time of constrained resources, how do we make sure up front the resources are there to ensure the best educational decision making?  No question, it will cost us more now but the savings over time will more than compensate.

Autonomics

The worries began as soon as the economic news was released.  After three months of strong economic growth, the March figures just recently announced were a major disappointment.  The gain in March was a modest 120,000 jobs, half of what the gains were from December through February.  And of course as soon as the statistics were announced, both the economic doubters as well as the political opponents of the Obama administration began to question the strength of the recovery. For me, one month of bad news doesn’t represent the start of a new recession just as one month of good news doesn’t represent a vibrant recovery.  The economic situation we are in will be clearer over time.  And given how interconnected many economies are, the result may not entirely be of our doing.

I have my own economic barometer.  My hypothesis has not been tested (at least not by me) but I believe the results are accurate.  I believe that attendance at a major automobile show, as well as where the attendees congregate at the show, is a leading indicator of economic expansion.  I attended the New York auto show this year on the first day it was open to the public.  It was a beautiful day and the show was extremely well attended.  If you go back to the 2009 or 2010, the contrast was extremely noticeable.  In those days, there were according to my observation fewer couples, fewer kids and smaller exhibits.  This year the couples were plentiful, the kids were plentiful, and the cars were plentiful.  And what mattered even more to me, is that the cars being looked at were not just the dream cars that are affordable by very few but the bread and butter cars that help determine how many cars are manufactured and sold on an annual basis.

Almost every manufacturer (and especially every US manufacturer) had desirable new cars available or on the near horizon.  Seeing a new Chevrolet Malibu or a Cadillac ATS, a new Dodge Dart or Chrysler 300, or a Lincoln MKZ or a Ford Escape were  just a few of the many signs of American manufacturers responding to the need of the public.  Foreign manufacturers were equally impressive in their lineup of cars including, to make sure we have additional highly desirable choices, the South Korean manufacturers (Hyundai and Kia).  And yes, in looking for a new car for me or my spouse, we would now also consider a Hyundai or a Kia. The diversity of the lineups was also noteworthy.  No lack of sedans, SUVs, crossover vehicles, all-wheel drive vehicles, hybrid vehicles, small vehicles, larger vehicles, faster vehicles, and more economical vehicles.  The automobile industry to its credit and to the credit of our government is back as a positive key factor in our economy.

Economics, as I have indicated before, has a significant psychological component.  Automobile manufacturers producing cars that appeal to the public stimulate additional car sales.  These car sales in turn lead to higher profits and, most likely, additional investments by the industry.  This leads to more jobs and more discretionary income. And the end result as this process continues is a more robust economy.  Based on my caronomics analysis, the economy is doing better than the recent job statistics suggest.  Our government bailed out GM and Chrysler; nice to see that they (as well as Ford, etc.) are now returning the favor by moving our economy forward.

Carnomics

I’m a car person as you may have gathered from previous blogs. But it actually makes good sense to be an economist who also happens to be a car person given the important role that the automobile industry has played and continues to play, for good or bad, in our economy. Right now it is certainly for good. It is once again a very positive time in terms of the domestic automobile industry and all three key manufacturers—Chrysler, Ford, and GM – are doing well, having demonstrated impressive growth for the 2011 model year. Automotive News reported that “U.S. light vehicle sales were up 10 percent to 12.8 million in 2011 after a similar rise the year before.” And the promise is there of even better times. Just look at three key domestic products introduced at the 2012 Detroit auto show. The three, in alphabetical order, are the Cadillac ATS, which has the promise of making the kind of impact on the entry luxury market, presently led by the BMW 3 class, that has never before happened with a domestic product. My brother had a Cadillac Cimarron. Saying the car was forgettable was the nicest thing that anyone could say about it. It was better than the Vega that I bought which was the pits but it was on the low side of mediocre which made it a strong catalyst for foreign cars sales. The second is the Dodge Dart which is a genuinely attractive, well designed compact car. It should be able to compete effectively with both foreign and domestic competitors in a way that the Dodge Caliber never could. And the third is the Ford Fusion. The Ford is a very attractive competitor to the Camry or the Accord. It looks better than both of the other cars and many other competing brands, and seems to have the functionality and the quality to be a major player in the major arena of car competition. There are other cars in the wings from all three manufacturers that have the promise of being just as successful and the evidence is clear and, in fact increasing, that Detroit can compete successfully with the best cars around the globe. At the same time that I am watching the latest Detroit success story unfold in the form of all these impressive products, I have also been reading and have just finished “Once Upon a Car: The Fall and Resurrection of America’s Big Three Automakers- GM, Ford and Chrysler” by Bill Vlasic who is the Detroit Bureau Chief of The New York Times. The book starts at a time (2007) when light vehicle sales were 3 million above where they are today and is must reading for a very comprehensive overview of what went wrong and what ultimately happened to these three automobile titans. What went wrong, and this was just a few years ago, was just about everything—building cars that weren’t responsive to what customers were looking for; building too many overly similar cars (with Mercury and Pontiac being just two examples); too many different platforms, engines, etc. around the globe undermining economies of scale; and labor costs including fringe benefits (and health care programs) that created a clear and very serious economic disadvantage. The failure was across the board— arrogant, isolated management together with myopic labor and this book chronicles it all in a well written fast paced and thoroughly absorbing volume. What went wrong was just about everything, and what is going right now is just about everything which I hope continues into the foreseeable future. The US government deserves great credit for engineering much of the turnaround (specifically the saving of GM and Chrysler), and the car companies (led by Ford) deserve great credit for designing a comeback which demonstrates the strength still inherent in American manufacturing and the US economy. We should all celebrate this success story but also remember for the automobile industry and all industries including higher education, that success taken for granted is just the first step toward devastating failure.

Happy Birthday Chevrolet

This month, Chevrolet turns 100 years old.  Happy Birthday Chevrolet.  In the Chevy line-up over the years are many of the models that I fell in love with when I was growing up.  I still love seeing an early Corvette and I have always been crazy about the ‘57 Chevy Bel Air hardtop, ideally in candy apple red though I could do without the fluffy dice hanging from the rear view mirror.  But the Chevies I most wanted, came out when I was nowhere near driving age.  When I reached driving age, the first car I bought and paid for was a ‘69 Chevy Nova.  The car was OK transportation.  The car had three options—a (powerglide) automatic transmission, an AM radio (with one speaker), and for $6.95, real vinyl upholstery.  The car was reliable transportation but nothing more.  I really wanted a car along the lines of the more classic Chevrolets. I wanted a car that I could connect with on an emotional level.

In 1974, a new Chevrolet Vega came out.  The car was nicely styled, especially the hatchback and I purchased it with almost every option that Chevrolet offered.  And in fact not only did I purchase a Vega, I convinced two of my friends who were in the market for new cars to purchase a Vega as well and by purchasing three at the same time, we got as good a price for the car as possible.  The car was a sales success, not only among the three of us, but it also resonated well among the general public.  It may not have been a 1957 Bel Air or a Corvette, but I liked driving it and  even looked for reasons to drive.  So far so good.

Within months, the  three speed automatic transmission started slipping and shortly thereafter my three speed transmission became a one speed transmission.  In rush hour, when I needed to drive at 15 miles per hour or less, I was fine; otherwise I was going nowhere fast…except back to the dealer.  The dealer was courteous and immediately kept the car to repair the transmission.  It seems that there was a synthetic transmission oil that had replaced the previous oil and no doubt GM saved a few cents on each car by this change.  Which is fine…as long as the replacement was thoroughly tested and as durable as the original product.

Now, any car can have a one-time problem and especially in the mid 1970s one time problems were the norm on cars, not the exception. But there was one other flaw that quickly developed. Though the car was  economical  in terms of gas mileage (very important given there was a gas crisis a few months earlier), it tended to burn oil continuously which quickly negated the savings on gas. Lemon laws were no doubt inspired by cars like this.

Though I would pay the price for the Vega a second time in terms of trade-in value, I was ready to trade it in ASAP. My next car was a ‘76 Toyota Corolla.  No problems whatsoever; no emotional attachment whatsoever. It took me more than a decade before I would drive another American car, and the vast majority of cars I have purchased or leased since that time were not built in the USA.

I wish Chevy well in its next 100 years and I like some of the cars that they are making today.  But Chevy and GM will always provide a classic business lesson for all of us.  If you take your customers for granted, if you always assume that people will see the USA in their Chevrolet, the customers and your market may diminish or disappear.  In this very competitive environment, complacency will not carry the day in the automobile industry or in higher education nor does it deserve to.

Parking Revelation

In coming back to my office from a University Lecture, I cut through a main administrative parking lot. The lot has three rows of cars and a total capacity of approximately 60 cars.  Though I don’t normally take much notice of cars in a parking lot, for whatever reason that day these cars caught my attention. In the entire first row of the parking lot, there was one American car.  In looking at the remaining two rows, there was perhaps one more American car. The American cars were not new models and the other cars varied from relatively old to new looking.

In a totally unscientific survey after this experience, I have been looking over the cars in whatever parking lot or street I happen to be in.  The proportions are very similar.  American cars seems always to be a minority, sometimes a small minority while foreign cars—especially Japanese cars—are an overwhelming majority of the cars in any garage, parking lot, strip mall, city street, or neighborhood I come in contact with.  And when there are a significant number of American cars, they tend to be SUV’s.

Given the difficulties that American car companies have encountered, given the American car brands that have disappeared (just recently Saturn, Pontiac, Hummer, Mercury) this is not that surprising. When I grew up, everyone I knew who drove a car drove an American car. The style, the power, the convenience features, the American cars had it all. Foreign cars existed at the fringes; American cars dominated the market.  But as I learned when I purchased a Chevrolet Vega, American cars are not always a solution and are sometimes part of the problem.  The Vega was a totally inadequate car and it took almost two decade before I returned to an American car.

American companies dominated the automobile industry for decades.  But then because the car companies were not listening to the consumer, or because they took the consumer for granted, or because build quality and/or gas mileage did not satisfy the consumer, or because the cost structure of building an American car was no longer competitive, the market for American cars disappeared.

American higher education is still the best in the world.  We deliver quality education on a large scale to a broad range of our college age population as well as or better than anyone.  But just as our dominance of the automobile industry eroded to a mere shadow we should not take for granted that our dominance of higher education will continue.  We have a series of challenges ranging from the increasing importance of distance learning, to the increasing impact of for-profit higher education, to the cost of higher education, to the lack of full appreciation regarding the importance of higher education to our society.  We also face the challenge of increasing foreign competition in the years ahead both for international students as well as our own students.  We need to formulate comprehensive responses to the issues that are confronting us.  And assuming we will always be fine, since it always has been fine, will prepare us as well as GM, Ford, and Chrysler were prepared for their competitive world.