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The most dramatic improvements have been made by U.S. automakers, who developed an infamous reputation for poor craftsmanship in the 1970s and early 1980s. Yet for every gain the Big Three have made, their Japanese competitors have continued to earn top ratings for quality and to expand market share. In a survey by J.D. Power Associates, a leading automotive analyst, buyers of this year's Japanese imports reported only 119 problems per 100 cars during the first 90 days, while owners of new American cars reported 163 glitches. Even so, the quality competition has drastically boosted value for the car buyer: before 1960 the typical U.S. auto warranty was just three months or 4,000 miles. Today Chevrolet offers basic coverage of three years or 50,000 miles and Chrysler covers selected models for five years or 50,000 miles.
Shaking off bad manufacturing habits may be expensive, but it pays. Companies say that eliminating the waste and bureaucratic backtracking caused by defective products can save as much as 30% on production costs. Says Milliken: "Quality is not cheap. But the potential savings far outweigh the cost of going after it."
The new American commitment to quality comes at a time when competitive challenges from abroad are growing rapidly and more and more foreign-owned plants are being based in the U.S. In the 1990s such competitors as Japan and West Germany will be joined by strong new rivals from much of Asia, from a more muscular European Community and from such Latin American countries as Mexico and Brazil.
The rules of the game will keep changing, and the standards will keep getting higher. Says Xerox Chairman Kearns: "We realize that we are in a race without a finish line. As we improve, so does our competition. Five years ago, we would have found that disheartening. Today we find it invigorating." That kind of ambition is essential, because U.S. manufacturers still have considerable catching up to do. If they are successful, the MADE IN THE U.S.A. label will once again stand for excellence, not just sentimental patriotism.
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