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Tiger Beer
Joined: 07 Feb 2003
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 Posted: Sun Nov 09, 2008 8:50 am Post subject: The failure of the Detroit automakers |
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http://news.yahoo.com/s/ap/20081109/ap_on_bi_ge/autos_what_happened
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DETROIT � At Ford Motor Co. they called it "Blue," a team set up around the year 2000 to design an array of small, fuel-efficient cars to compete with the Japanese. It didn't get far because no one could figure out how to make money on low-priced compacts with Ford's high labor costs.
Besides, the automaker was racking up billions in profits by selling pickups and sport utility vehicles. Times were good and gas was cheap.
"Blue" is only a small blip in automotive history, but it tells a big part of the story about why Detroit automakers are in a mess so critical they could be only months away from bankruptcy.
Democratic leaders in Congress asked the Bush administration on Saturday to provide more aid to the struggling auto industry, which is bleeding cash and jobs as sales have dropped to their lowest level in a quarter-century.
House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said in a letter to Treasury Secretary Henry Paulson that the administration should consider expanding the $700 billion bailout to include car companies.
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As Honda and Toyota took over the small and mid-size car markets, Ford, GM and Chrysler put most of their resources into trucks and SUVs, which brought in billions in profits that covered growing health care, pension and labor costs.
"In a market-based economy when you have to try to be profitable, you go where the money is," said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
When times were good, the automakers did not take on the UAW, which the companies say drove up their labor costs to $30 per hour more than Japanese companies paid their workers. The figure includes pension and health care costs for hundreds of thousands of retirees. |
The more I think about it, this corporations MUST pay healthcare insurance for employees and retirees at inflated prices, the more I think that our entire healthinsurance scam is one of the major factors making U.S. companies extremely uncompetitive in the world market place. |
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khyber
Joined: 16 Jan 2003
Location: Compunction Junction
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| Posted: Sun Nov 09, 2008 11:59 am Post subject: |
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| The more I think about it, this corporations MUST pay healthcare insurance for employees and retirees at inflated prices, the more I think that our entire healthinsurance scam is one of the major factors making U.S. companies extremely uncompetitive in the world market place. |
You'd think...but take a look at the first two sentences:
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It didn't get far because no one could figure out how to make money on low-priced compacts with Ford's high labor costs.
Besides, the automaker was racking up billions in profits by selling pickups and sport utility vehicles. Times were good and gas was cheap. |
First, don't those two bolded parts seem incongruous? Their labour prices were too high but they racked up "billions in profits"?
It's pretty clear that a lack of vision and an unwillingness to invest in innovation was the main reason for their downfall.
Seems more to me that they're trying to shift the blame away from their ineptitude. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Sun Nov 09, 2008 12:56 pm Post subject: |
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| We shouldn't bail them out. Let them go under. Of course it won't happen for political reasons, but giving money to American auto companies will just stave off the inevitable. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Sun Nov 09, 2008 2:01 pm Post subject: |
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I'm in the market for a small car. Ford and Chrylser have zippo pretty much and GM has the Vibe, which might be a product of Daewoo. I'm looking at Toyota, Honda, Hyundai, or KIA.
But I dunno. We've been down this road before, back in 1980. Oil was at record highs, the big three had nothing fuel efficient, and the Japanese mopped the floor. |
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khyber
Joined: 16 Jan 2003
Location: Compunction Junction
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| Posted: Sun Nov 09, 2008 3:50 pm Post subject: |
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| have zippo pretty much and GM has the Vibe, which might be a product of Daewoo. I'm looking at Toyota, Honda, Hyundai, or KIA. |
FWIW, the Vibe is actually directly "related" to the Matrix (a strange 'Corolla' from Toyota).
I'm not sure how ownership/engineering work but just thought I'd throw this your way.
http://en.wikipedia.org/wiki/Pontiac_Vibe
hmm...says:
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| The Vibe is the mechanical counterpart of the Toyota Corolla Matrix and is based on the Toyota Corolla's E-platform. |
http://www.canadiandriver.com/previews/vibe_vs_matrix.htm
Virtually the same car.
It's funny that the one American car you may be looking at is basically designed by the Japanese.
I just don't get it. America HAS some of the greatest engineering minds in the world; it's fair to guess that Ford has a least a couple of those. If they can't design a decent affordable efficient car what that says to me is that they are a company that has given up: Why give them money? |
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IlIlNine
Joined: 15 Jun 2005
Location: Gunpo, Gyonggi, SoKo
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| Posted: Sun Nov 09, 2008 5:21 pm Post subject: |
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The amusing thing is that Ford of Europe has a lot of efficient, well regarded cars on the market... with engine options that are not available to north america. They have the know-how, all the engineering has been done, all that would be required is a re-tooling of their north american plants and they could at least start selling SOMETHING resembling a quality car relatively soon...
If they do something like this remains to be seen...
But I predict that it will be companies in China and perhaps TaTa (indian) that will enter the US marketplace and absolutely clean up with cheap cars. |
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catman
Joined: 18 Jul 2004
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| Posted: Sun Nov 09, 2008 5:29 pm Post subject: |
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| These companies were doing poorly when the economy was strong. Are they worth saving? |
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BS.Dos.
Joined: 29 Mar 2007
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| Posted: Sun Nov 09, 2008 5:31 pm Post subject: |
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| khyber wrote: |
| I just don't get it. America HAS some of the greatest engineering minds in the world; it's fair to guess that Ford has a least a couple of those. If they can't design a decent affordable efficient car what that says to me is that they are a company that has given up: Why give them money? |
That may be so, but in pursuing a particular market like they have been at the expensive of developing lower-end models etc, they given the Japanese a big head start in development. If they decide to go after the same market, then they're going to be playing a tough game of catch-up. I think that the US auto industry is in a very tight spot. The Germans have basically tied up the luxury end, while it seems the Japanese etc have the small/mid-size market pretty much sewn up. Also, I reckon you'll be seeing serious competition from the Chinese be the end of the decade.
All in all, it's not looking to rosy for Ford and GM. I seriously don't think that the US administration will turn their back on them though. The implications are just too big. It's not so much the GM/Ford factory workers who will lose their jobs that's important, but the five other guys who are dependent on that one factory workers job; suppliers, auto repair shops, the guy who owns the shop outside the factory and who relies on the passing factory workers trade each day for his living, that's where it'll have more of an impact.
Think the first thing they need to do, is to claw back their domestic market. I think it's fair to say that the days of the big guzzler are over. GM and Ford need to start pumping out some new models and fast. Having said that, I don't think that GM and Ford are alone at the moment. I'm sure that the high-end car manufactures are also sweating at the moment as the demand for big margin, top-end brands (Mercs etc) will probably slide in tandem with the wider financial slow-down, espeically in respect of those large corporate fleets that gobble up cash. This could open up bigger demand for smaller, more efficient models. US auto makers just have to exploit it.
Personally, I think the key is to develo psome loss-leaders and start attacking the Toyota market share and try and develop both customer retention and regain some brand loyalty. Easier said than done though and it'll take fuk-me sized buckets of cash. |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Sun Nov 09, 2008 5:40 pm Post subject: |
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Who is the largest HealthCare provider in the US?
It's GM with over 1.1 million employeers, retirees, and dependants.
I think GM spends more money paying out benefits than they do to make automobiles. |
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Jandar
Joined: 11 Jun 2008
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| Posted: Sun Nov 09, 2008 5:40 pm Post subject: |
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These companies have given up on research and development.
That's the simple truth, most of the automotive patents have expired or aren't worth the investment for the life cycle of the patent. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Sun Nov 09, 2008 5:49 pm Post subject: |
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| khyber wrote: |
| I just don't get it. America HAS some of the greatest engineering minds in the world; it's fair to guess that Ford has a least a couple of those. If they can't design a decent affordable efficient car what that says to me is that they are a company that has given up: Why give them money... |
It's not that they CAN'T design one, they just refuse to for the same reasons automakers and the oil companies sabotaged the public transportation infrastructure in the last century: they need to keep the American public guzzling and paying for gas at the highes rates possible.
Last edited by bacasper on Sun Nov 09, 2008 5:59 pm; edited 1 time in total |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Sun Nov 09, 2008 5:53 pm Post subject: |
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| bacasper wrote: |
| khyber wrote: |
| I just don't get it. America HAS some of the greatest engineering minds in the world; it's fair to guess that Ford has a least a couple of those. If they can't design a decent affordable efficient car what that says to me is that they are a company that has given up: Why give them money... |
It's not that they CAN'T design one, they just refuse to for the same reasons automakers and the oil companies sabotaged the public transportation infrastructure in the last century: they need to keep the American public guzzling and paying for gas at the highes rates possible. |
Yup, there is a conspiracy in everything, including GM and Ford's pitiful performance. |
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bacasper
Joined: 26 Mar 2007
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| Posted: Sun Nov 09, 2008 6:00 pm Post subject: |
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| bucheon bum wrote: |
| bacasper wrote: |
| khyber wrote: |
| I just don't get it. America HAS some of the greatest engineering minds in the world; it's fair to guess that Ford has a least a couple of those. If they can't design a decent affordable efficient car what that says to me is that they are a company that has given up: Why give them money... |
It's not that they CAN'T design one, they just refuse to for the same reasons automakers and the oil companies sabotaged the public transportation infrastructure in the last century: they need to keep the American public guzzling and paying for gas at the highes rates possible. |
Yup, there is a conspiracy in everything, including GM and Ford's pitiful performance. |
No, there's not. But here there is a well documented one. Read some history if you need to. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Sun Nov 09, 2008 6:00 pm Post subject: |
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| bacasper wrote: |
| khyber wrote: |
| I just don't get it. America HAS some of the greatest engineering minds in the world; it's fair to guess that Ford has a least a couple of those. If they can't design a decent affordable efficient car what that says to me is that they are a company that has given up: Why give them money... |
It's not that they CAN'T design one, they just refuse to for the same reasons automakers and the oil companies sabotaged the public transportation infrastructure in the last century: they need to keep the American public guzzling and paying for gas at the highes rates possible. |
No. Now you're getting your information from Roger Rabbit? Geez. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Sun Nov 09, 2008 6:03 pm Post subject: |
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| bacasper wrote: |
| bucheon bum wrote: |
| bacasper wrote: |
| khyber wrote: |
| I just don't get it. America HAS some of the greatest engineering minds in the world; it's fair to guess that Ford has a least a couple of those. If they can't design a decent affordable efficient car what that says to me is that they are a company that has given up: Why give them money... |
It's not that they CAN'T design one, they just refuse to for the same reasons automakers and the oil companies sabotaged the public transportation infrastructure in the last century: they need to keep the American public guzzling and paying for gas at the highes rates possible. |
Yup, there is a conspiracy in everything, including GM and Ford's pitiful performance. |
No, there's not. But here there is a well documented one. Read some history if you need to. |
I'm not disagreeing with GM's past connection with public transportation; I'm disagreeing with your claim that they want Americans to pay gas "at the highest rates possible." That's illogical and history contradicts that claim. |
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