During the grilling the automakers received on Capitol Hill in November and December, commentators on both the right and the left misdiagnosed these impediments. 

To some on the right, the Detroit firms’ biggest problem is labor costs. But these labor costs are less than 10 percent of vehicle cost. In any case, the companies and the United Autoworkers Union are already addressing retiree health care and pension costs, the major source of the labor cost difference between the Detroit Three and Japanese manufacturers. 

Some on the left assert that the major problem is the firms’ failure to make fuel-efficient cars. During the long era of cheap gasoline, though, it was wrong to blame the companies for making the SUVs consumers desired. 

Instead, the Detroit automakers’ long-term problems lie in two areas that have rarely entered the public debate: uneven product quality and lagging innovation. 

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