But despite a massive overhaul of manufacturing and engineering systems over the past two decades, a spate of rankings and reports show US cars and trucks still lag behind the best from Japan and Europe. And complacency about quality has started to give way to something closer to alarm.

Much of the concern is coming from the auto makers themselves. Outside directors at Ford Motor Co and General Motors Corp cut senior executives' performance bonuses for last year largely because the companies missed internal quality targets, according to proxy statements released last month. At Ford, despite record profits, bonuses were cut by as much as 29 per cent from the year before.

While executives at US auto makers tend to shy away from talking about quality, researchers and consumer organisations are eager to share the information they've gathered. In addition, the Internet is amplifying the impact of new-vehicle report cards like the JD Power & Associates "Initial Quality Survey," due out Thursday, and Consumer Reports' annual new-car guide. Some 40 per cent of new vehicle shoppers now use the Internet to research purchases, and quality rankings are a staple of car-shopping Web sites.

So far, the rankings haven't been encouraging for Detroit. Strategic Vision, a consulting group based in San Diego, last week named the top vehicles in 16 market segments based on its "total quality index." The index grew out of a survey of 41,000 new-car buyers after at least 90 days of ownership.

Owners were asked to rate craftsmanship, reliability, driving performance and their "emotional response to the vehicle." Volkswagen, despite its small market share, won five categories, including a tie. DaimlerChrysler AG's US products won only three categories; all of GM vehicles, only two; and Ford, only one (and that was as part of a three-way tie).

In a study of vehicle defects by the same organisation, GM and Ford products were the big losers. New-car owners were asked to evaluate the impact of specific defects on their sense of satisfaction. "We wanted to measure when a defect became a problem," says Daniel Gorrell, a Strategic Vision vice president.

On this scale, Toyota Motor Corp, Honda Motor Co and Nissan Motor Co brands fared the best. Three Cadillac vehicles ranked near the bottom, along with the GMC Yukon. The new Ford Focus and Lincoln's LS ranked in the same ballpark. "Cadillac's performance is a major blow for a brand that wants to improve its reputation in the luxury arena," Gorrell says. Of GM's six marketing divisions, three posted significant declines from 1999, two that were about average held their ground, and one improved.

For all that, most industry experts and even Gorrell agree that initial quality is only one measure of how good a vehicle is. But in measures of long-term reliability, GM, Ford and Chrysler still lag far behind Toyota, Honda and Nissan.

Consumer Reports, the magazine of the independent Consumers Union organisation, rates both new and used cars on reliability based on data submitted by a half-million readers each year. Last month's annual auto issue listed "good bets" and "reliability risks" among cars and trucks from the 1992-99 model years. Of 39 vehicles Consumer Reports considered "good bets," the US auto makers accounted for three, and one of those was the Toyota Corolla-based Chevrolet Prizm. Meanwhile, of 35 "reliability risks," 33 were GM, Ford or Chrysler products.

The domestics didn't do much better in the new-vehicle categories. While Toyota, Honda and Nissan as a group had 23 vehicles rated above average and three or below average, the US Big Three had 20 rated above average and 57 at or below average, with Ford accounting for 10 in each grouping.

"In most categories, GM is at the bottom of the charts," observes Gabe Shenhar, Consumer Reports' senior auto test engineer. He notes that some GM products look fine in the first year and even make the magazine's "recommended" list. But then reliability problems start to show up, and the cars have to come off the list. Recent examples, he says, include the Oldsmobile Intrigue, the Buick Park Avenue and the Pontiac Grand Prix.

"I really don't see any sea change in car quality," adds Clarence Ditlow, the executive director of the Center for Auto Safety, in Washington. Ditlow has been monitoring defect reports for years, frequently calling on auto makers to recall and repair problem cars. "Their quality control on the assembly line might be a little better, but in terms of engineering mistakes, they keep making them."

He points to Ford's recent acknowledgment that more than one million 3.8 liter V-6 engines may have defective seals that could fail and damage the engines. The company has offered to extend warranty coverage. "That's not a manufacturing defect," Ditlow says. "That's a design and engineering defect."

Just last week, the National Highway Traffic Safety Administration upgraded investigations into four reported problems involving GM products. The biggest involves reported ignition problems that could turn into steering-column fires in 1994-95 Pontiac Grand Ams, Buick Skylarks and Oldsmobile Achievas.

"An upgraded inquiry is not an indication that a defect exists," a GM spokesman says. "But we are cooperating in the investigations."Despite all the indications of continued reliability problems, GM dealers say their warranty work has been steadily declining. "I used to have five transmission specialists at my Chevrolet store, and now I have just one or two," reports Jerry Seiner, a big GM dealer in Salt Lake City. "The quality has improved," he says, adding that "the standard keeps moving up."

In Fort Wayne, Ind, dealer Thomas Kelley says that his operations are not only doing less warranty work on GM vehicles but also "less major maintenance than we've ever done." Besides GM outlets, Kelley also owns Toyota and Volvo dealerships. "The cars are closer together in quality than they ever have been," he says.

US auto makers aren't letting up either. This year, 50 per cent of top Ford executives' bonuses will depend on meeting quality and customer-satisfaction targets. Substantial portions of the pay of GM and DaimlerChrysler executives are also now dependent on quality.

GM recently assembled a special task force of managers under Thomas W LaSorda, vice-president for quality, reliability and competitive operations, as part of a drive to cut $1 billion from the company's $3.5 billion-a-year domestic warranty bill.

LaSorda, in an interview late Wednesday afternoon, said GM's senior management is committed to making a "quantum leap" in product quality. He is overseeing a team of seven managers, formed May 1, that has a mandate to attack not just manufacturing but also design, product complexity, engineering procedures and several other areas that affect quality.

The push grew out of top management's frustration with GM's current quality image, LaSorda said. "We got sick of it," he said. "We said, we've got to do something fundamentally different, and we spent hours and hours together saying what the hell are we going to do."

DaimlerChrysler's US arm two years ago began using teams of specialists, called "black belts," to attack quality problems such as noisy axles and vibrations in the four-wheel-drive transfer cases of Jeep Grand Cherokees, says Cindy Hess, who was named vice president for corporate quality last September. DaimlerChrysler black belts, working with suppliers, helped improve Grand Cherokee quality by 45 per cent between the model years 1999 and 2000, she says. Overall, she says, DaimlerChrysler has improved quality, including warranty costs, by 54 per cent in the past five years and seeks double-digit improvements every year.

Meanwhile, Ford chief executive Jacques Nasser last year hired an outsider, former Whirlpool Corp executive Louise Goeser, as vice-president for quality. Goeser is now leading a charge to overhaul Ford's quality systems, following the rigorous "six sigma" quality program instituted at General Electric Co and Motorola Corp that aims to sharply reduce defects."We will not be satisfied until we are best in class," Ms Goeser says. "Customer satisfaction is a breakthrough priority for us."

-- The Wall Street Journal