“It would have helped to have a little bit of sunshine.” What a strange statement. Not “General Motors is prepared to weather the economic downturn ahead.” More like “Darn it! Just when we got our new picnic blanket spread out, it’s started to rain!” But then GM CEO Rick Wagoner is a GM lifer, a Harvard-trained beancounter, a man whose self-effacement hides a genuine lack of leadership. “We look forward to the sunny days,” Wagoner continues. “But realistically we can’t plan on it for next year.” So what IS GM’s plan?
Rick Wagoner took GM's helm on May 1, 2003. Despite an arterial spray of red ink, the former CFO refused to set a timetable for a titanic turnaround. In fact, from that day to this, Wagoner has never publicly declared ANY hard targets for returning GM's North American operations to profitability. Not sales per dealer. Or profit per vehicle. Or total turnover. Or market share. Or, God forbid, profit. Nothing.
GM is a public company, with tens of thousands of shareholders and workers. Why haven't these "stakeholders" held Rick Wagoner's feet to the fire and demanded a quantifiable turnaround plan? We need only look at Carlos Ghosn’s Nissan revival to understand the importance of clearly defined targets in a crisis. We need only look at GM to understand what happens when a Board of Bystanders allows upper management to drown out all opposition by playing "Crisis? What crisis?" at full volume.
For one thing, if you don’t have quantifiable goals, you don’t have accountability. Internally, this leads to bad decisions which lead to… more bad decisions. Incompetent managers fail upwards. The same people who brought over the Pontiac GTO from Australia are bringing over the Pontiac G8. The same marketing mavens who counseled potential Saturn buyers to “Rethink American” now counsel them to “Rethink,” while their own status remains quo. In GM’s land of the blind, the no-eyed man is king.
Externally, the lack of accountability frees Wagoner’s mob to justify GM's declining fortunes without a single mea culpa. Over the years, they’ve dismissed “bad news” as politics (unfair currency exchange), inherited burdens (union health care), economic factors beyond their control (housing market downturn, rising gas prices), and the sad but temporary result of their brilliant master plan (reducing incentives and fleet sales). The bad news continues. As do the excuses.
GM's favorite "excuse" is actually simple misdirection. Again and again, Wagoner and Co. point at “The Next Big Thing” and predict "sunny days" ahead. In consideration of GM's $2.1b annual ad budget and their own ignorance, the mainstream press propagates this "bright shiny object" spin– and ignores the mediocrity blighting all of GM's eight U.S. resident brands and the vast majority of its 51 product portfolio.
The media’s willingness to give GM a pass on hard targets, to simply buy into GM’s “pay no attention to that market share loss behind the curtain” ploy, never ceases to amaze me. The Associated Press’ interview with Wagoner is a perfect example; it lays out the CEO's “strategy” without any serious inspection.
“Wagoner said ‘the deal’ topped the reasons people bought a GM vehicle in 2004. Now, thanks to stylish new models like the Cadillac CTS sedan and Buick Enclave crossover, the company says exterior styling tops the list, followed by value for the money. ‘I don't want to mess with that. I want to keep building on that,’ he said.”
Huh? Smack dab in the middle of GM’s Toe Tag Christmas sale, just when the company is loading massive incentives on its products and advertising nothing BUT the deal, Wagoner says his customers are now buying GM vehicles based on style rather than price. Where’s the supporting data for that assertion? Even if we accept this as some kind of cunning plan, what does it mean for GM's future?
Forget it. Style isn't GM’s new secret weapon. GM’s chronic Attention Deficiency Disorder– enabled by a leader who refuses to draw a line in the sand and take responsibility for his company's sinking fortunes– tells us that the automaker will be off chasing the next Next Big Thing just as soon as sales and/or hype over the Enclave/CTS/Malibu subsides.
The truth is, without real leadership, without a CEO with a clear and clearly expressed sense of direction and urgency, GM doesn’t stand a chance. For those of you who think Wagoner has sufficient situational awareness and decisiveness to get the job done, I leave you with his response to a question about the impact of new federal fuel standards.
"I do think the challenge is really twofold. It's not just, 'Can you get the technology?', but 'What happens if people don't want to buy it? That is the question mark that concerns me, but we'll have plenty of time to play that out."
GM no longer issues those pins emphasizing retention of market share, i.e. “30%” – does that count as a forecast? Can’t seem to find one on eBay, hmmm.
There’s some talk from suppliers wondering if next year’s US new auto/truck sales are going to dip below 15 million. In the meantime, GM’s got over 100 days’ supply of pickups on the lots, and no production cuts pending.
Never a rainy day, Rick?
I still think GM (and the other 2) problems stem from the past horrors customers (remember them?) experienced with their vehicles. Getting nailed for transmissions, head gaskets, and other design defects while suffering terrible resale makes Toyota buyers out of a lot of people.
Regardless of the new contract, GM is still locked into having to produce vehicle even if they can’t sell them. Hence the “toe-tag” sale.
The other consequence of the most recent slash-n-burn sale is to further depress the resale value of their cars, even the new CTS, Malibu, Enclave, etc.
Savvy buyers, especially those who may be ready to drop $30-40K on GM’s best vehicles, will now hold thier purchases until GM gets desperate (and we all know they will).
2008 looks to be a terrible year for domestic sales, and even 15MM units may be optimistic. It wouldn’t surprise me to see 13-14MM sales.
Chryslerberus is going to be hitting the wall any day now, and they’ll respond the usual way, by slashing prices and dumping cars on the fleets. GM and Ford will be forced to follow suit to protect what little market share they have left.
The idea that Waggoner & CO don’t see this coming is absurd. The fact is they HAVE NO PLAN, and are waiting for the Next Big Thing to bail them out. They bet the farm on trucks and SUV’s, only to see gas prices rise. Now they’re betting on the CUV’s, Malibu, and CTS to do it.
Unfortunately, GM still has far too many brands and overlapping products. Outlook/Enclave/Acadia; Malibu/Aura/9-3; Tahoe/Yukon/Escalade. The list goes on and on.
And as usual, they don’t have the resources to support them all. When was the last time you saw an ad for the Aura? STS? Outlook? Acadia? GM gets COTY for the Aura (Setting aside the flaws in the award), and it promptly drops off the radar.
The simple fact is that GM needs to shed 50% of its dealers; drop Saturn, Pontiac, and Buick; and trim its model lineup to face reality.
The G8 should be the new Impala. The Astra sould be the new small Chevy. Turn the Lucerne into a Caprice, kill the XLR, and hell, I could go on and on.
But they won’t do it. They’ll keep on fiddling until they’re forced into Chapter 11, because they don’t have the cash needed to buy off the dealers and kill the dead brands.
Waggoner, Lutz, and the rest KNOW they can’t do it, but they keep hoping for a Hail Mary pass. IF gas drops to $2/gallon, IF they get socialized medicine, IF they get a real hit product, IF the fairies and elves find a way to prove Toyotas give you cancer, IF, IF, IF.
Meanwhile, they continue to drive one of the world’s great companies over the precipice.
Ah, what the Hell, their pensions are secure; they’ll all be able to retire to sunnier climates and write books on how it was all the japanese/environmentalists/union’s fault.
I’m sure we can all sell Starbucks to each other and teach our kids Mandarin.
“Incompetent managers fail upwards”thats classic.
Starlightmica:No production cuts pending?Well sorta right.There is not a truck planning running in North America till mid Jan.Oshawa lost 3rd shift,I think Flint is losing a shift also.
More pending?Lets hope not Eh?
Zarba your post is scary but not inaccurate.
GS650G
“I still think GM (and the other 2) problems stem from the past horrors customers (remember them?) experienced with their vehicles…”
That would be a big Y-E-S for me.
I requested but did not receive assistance from GM after I lost a head gasket (dreaded 3.4 that had gone through 3 intake manifold gasket sets as well) on my VERY well maintained, but older van. Even a “yes sir, we’ll pay half” would have been welcome.
The result? Van scrapped. I bought a used Toyota to replace it, ironically, sold to me by an ex-GM saleman now at the Toyota dealership. GM’s current “incentives” didn’t even factor into the decision, it’s down to “gimme something I can use”.
Merry Chistmas all.
It’s more than just Domestic automakers: The American middle class has been on a ‘deathwatch’ for decades. Wages are flat since the seventies, and down (adjusted for inflation) since the dot-com bubble broke.
Our leaders have led us into a free-trade-induced financial albatross. Intentionally. Recall that Bill Clinton’s NAFTA/WTO recession arrived in March 2001, a few months too late for him to get the credit. Clinton was a Bilderberger, and knew exactly what he was doing to the long-term stability of the economy.
The big-three automakers represent a triumph of Capital (the ultra-wealthy) over labor in the opening decades of the 20th century. Developments in the post-civil war period paved the way for the present malaise. See Beatty’s Age of Betrayal: The Triumph of Money in America, 1865-1900.
I, for one, celebrate the arrival of the coming depression, because it marks the end of the ultra-wealthy’s stranglehold over the world.
America’s corporate culture is flawed, and Rick is just a byproduct of it. Too bad he’d rather rake in the greenbacks than buck the system. Shameful.
What amazes me is that non-car media outlets like the Associated Press still don’t push accountability. Are they really worried about ad revenue losses and no free press cars?
I don’t know what its gonna take (other than a complete meltdown of our manufacturing base) to kick these C-level money grubbers off their high horses. Not just GM, not just Ford or Cerberus…
…America lives in a broken system.
Except the ultra wealthy won’t be affected by the coming depression, like they weren’t affected during the last depression.
quasimondo:
I think they (ultra-wealthy) will get hit with the humble stick. Ron Paul has a good chance of winning the Republican nomination, as he’s the only Republican candidate who’s not an intellectual prostitute. While he’s not the perfect candidate, part of Ron Paul’s platform is the dismantling of the Federal Reserve system, which is the primary facilitator of the last century’s concentration of wealth.
Otherwise, an independent candidate will come along to take the election away from the front-running democratic whores.
I haven’t seen a TV commercial for an Impala or a Malibu or a Saturn in I don’t know how long. I seem to recall seeing plenty of ads for Chevy trucks, though. Gonna ride that pony straight into the grave, I guess.
Sadly, it matches people’s perceptions; I’m sure there are kids all over America bugging their dads to buy a Chevy or GMC truck. I’m equally sure that there aren’t any kids in the whole world bugging their dads to buy an Impala or a Malibu.
knochj – While I think that Ron Paul is a great (although as you say, not perfect) candidate, and if I had the opportunity, I’d vote for him, I think you’re over estimating his popularity among the public. He’s probably leading the republicans (and possibly everybody), but only on “internet polls”. The public still views him as a fringe candidate. Here’s a neat blog entry about what is called the “web distortion field” (http://www.ericsink.com/articles/Boundaries.html), basically it points out that while something may be very very popular on the web, the overall size of the web compared to the populace is so small that it’s not a good representation of real life.
Read this, switch out the car names (and market share) with current names/numbers, and tell me what’s different….
http://www.time.com/time/magazine/article/0,9171,924408,00.html
Interesting that none of the above posts (unless I missed it) even mentioned the board of directors lack of visibility in all this. We’ve gotten used to their absence of involvement, not to mention raising hell and kicking Wagoner’s butt out long ago.
In addition to what others have mentioned, a couple of things puzzle me. One is what GM is doing with the Enclave. They finally have a vehicle that the poor starving Buick dealers can sell at good profit so they (GM) cut back on production under the guise of keeping the thing hot, as in desired. IIRC, Lutz said something like “the quickest way to kill a vehicle is to over-produce”. I, unlike King George, do not have an MBA from Harvard, but my understanding is that companies make money from selling things, not from not selling things. So, from a business perspective, it makes no sense to me to make fewer vehicles than can be sold at good profit. If this under producing idea is such a good one, why haven’t they applied it to trucks, for example? And why not apply it to the Saturn version of the same vehicle? What makes sense to me is that GM is trying to kill off Buick dealers rather than buy out their franchises.
Another puzzle to me is Lutz. To be blunt, he says things that are just not true. I don’t see how a guy in the position he holds can not have a negative affect on GM. Some of what he does may well affect GM positively, but I can’t help but think that, unless his ‘inside’ behavior is different from what I see and read of what comes out of his mouth, he needs to go.
@knochj
I’m sorry, but Ron Paul, nor any Independent has a hope in hell of winning the presidency. He’s out of the Republican nomination for sure, and if he becomes Independent he’ll just Nader the Republican nominee. And that’s not taking into account the chance of Huckabee being the evangelicals’ nominee if he doesn’t win it. That’s THREE Republicans splitting votes. Clinton or Obama could leisurely stroll into 1600 Penn.
Back to cars. I don’t see how Wagoner not making definitive statements is that big a shock. Everything about the Big Three is about the future, rather than the present. I thought they were trying to get rid of the stand-alone Buick, Pontiac and GMC dealers and combining them to B-P-G stores. Every little bit helps.
The overlap issue, to me, is just platform sharing gone horribly wrong. When GM’s Lambdas were first being planned, who decided that 1)GMC and Saturn would get one, but Chevy wouldn’t (yet) 2) There would be no minivan based on it 3) They all would have the same wheelbase 4) They all would be 7 or 8-seaters?
The Outlook may be nice, but I don’t think it fits in with all the Euro sportiness Saturn’s supposed to be about. I think a Mazda5-ish kind of vehicle (like the Zafira) would have fit better.
The Acadia really isn’t “professional grade”, so it’s hard to see it as more than a cynical cash grab – a way to get Envoy buyers to trade in their three-year-old models for something newer. Then again, GMC as a whole seems to be getting softer. I hear they are getting a new small SUV from the Antara platform, taking the place of Pontiac dropping the Torrent. By default, the only brand that should sell that in BPG channels should be Buick, maybe a longer-wheelbase version. The Denali line has always been a bit of an odd duck, too.
I guess Buick could keep the Enclave, but I rather it be the only one to have a V-8 option. A bit of exclusivity could help it some.
mikey610: I’ve read that TIME article before; very prescient. The only thing that bailed out Detroit: cheap oil (gas). When you think about the history of America’s love affair with big cars and trucks, cheap gas prices are the critical ingredient. Take that away, and every time it results in the same thing: crisis.
Well, re cheap gas, that has major impacts all over the place; for instance, anybody remember the Honda Accord station wagon, ca. 1991? A typical delightful Honda product, exactly tailored to what all those American families needed, carried 65 cubic feet of cargo and got 30 mpg; so, naturally, America turned as one and decided they badly needed to drive huge 15 mpg trucks which, if not 4wd, at least looked like 4wd.
Ghosn vowed to resign in disgrace if his turnaround plan did not succeed in 12 months.
Wagoner’s refusal to make such a pledge is the sign of an ignoble coward. He has brought great shame upon his family and his country.
“Interesting that none of the above posts (unless I missed it) even mentioned the board of directors lack of visibility in all this.”
GM’s Board is packed with bums such as Eckhard Pfeiffer, Percy Barnevik and George Fisher. I wouldn’t trust this group to spend five minutes alone with my piggy bank.
I truly hate to generalize, but….there is no way for Rick, Alan, and Bob N. to fully grasp the predicament their respective companies are in. These CEO’s still seem “un-plugged”. They are likely surrounded by yes men/women. Furthermore, they lead drastically different lives than you and me. They sit firmly in the lap of luxury. In their insulated world, all is well and will continue to be well by virtue of golden parachutes. These guys make stagering amounts of money for failing. It’s really quite pathetic and a turn-off. Only in a parallel universe (bizarro world) is this feat achievable.
What other performance based business/activity rewards failure. It’s unbelievable.
With that said, are GM’s cars improving? *Absolutely they are! Will GM survive? Only if they unload multiple brands and shrink to a realistic size. That’s not likely to happen because at the top of said leviathans, it’s still the 1950’s.
A family friend stopped by a couple days ago. She said that she and her husband recently test drove a Prius. They are considering the Prius as a replacement for their old 3 series. This couple is immersed in academia and rely on advice from Consumer Reports before they go to the bathroom it seems. I almost chimed in and suggested they test drive a (mild) hybrid Malibu or Aura. Both cars are reasonably priced, reasonably efficient, and will likely be reasonably reliable. Then I caught myself and realized that the couple: (A) would never in a million years consider a domestic, so why waste my breath (B) Might think I’m a Neanderthal for suggesting such blasphamy. I left it alone and I’m sure they’ll swing by in a week or two in the obligatory Camcord.
Saw an interview in Autoweek with Tom LaSorda, new CEO of Chrysler, formerly Toyota USA; they asked him why he left Toyota six months after they put him on the board, he said something like “The folks on the top make 90% of the decisins with 20% of the information”.
It’s quite obvious no matter how well GM is doing in it’s recovery, they’ll be people trying to cut it down. I sort of wonder who those people are. My guess is, it’s GM’s foreign competitors at work. If you don’t know for your information, GM has many vehicles that won best in class. Why don’t you acknowledge that instead of bashing GM.GM has been winning lots of awards recently as best in class for many models. The Malibu, CTS Cadillac and Honda Accord are on the top ten best 2008 cars not to mention engines of the year and the Camry is not even on any list. Why don’t you pick on them for that reason and for their lousy quality ratings and recalls.
asdfghjkl: It’s quite obvious no matter how well GM is doing in it’s recovery, they’ll be people trying to cut it down. It's quite obvious that no matter how poorly GM is doing in its erstwhile recovery, they'll be people trying to explain away its deficiencies.
I have always been critical of GM for all of the reasons stated by Mr. Farrago and the replies above. They are doomed…..unless a miracle happens. Well it’s Christmas and miracles can happen right? Can you imagine if GM shed itself of rabid Rick and his loose cannon sidekick, the board of irresponsible bystanders and all the yes men! If they declared war on the stifling corporate culture they have, the outdated business model, their lopsided policies on cost reduction. Can you imagine a GM fully prepared to do business! It would be unstoppable, capable of realizing it’s full potential, capable of giving the Toyotas, Nissans, Hondas of this world some severe headaches. They have the talent at all levels and they have more than a few workers like Mikey who care about the products they build. I can dream can’t I. Merry Christmas to all!
It’s quite obvious no matter how well GM is doing in it’s recovery, they’ll be people trying to cut it down.
What recovery?
Robert,
If you recall, I presented a detailed, step by step, plan to GM management. I spent countless hours developing “Return to Greatness” and went so far as to host a luncheon for stockholders at the Hotel duPont the day of the annual meeting in Wilmington. Shareholders, besides the large corps (banks) who control the company, absolutely loved the measures and did in fact nominate me to the Board of Bystanders.
Upper management had no interest or use for my efforts and basically flat out rejected even a trial implementation. This included Gary Cowger, Mark LaNeve, Pete Gerosa, and many others who I met with personally on a numner of occasions high atop “The Tubes”.
It is my considered opinion that these men had, and do have, a separate agenda and that is to dislocate an industry to low wage production sources. If there a few years of losses even in the tens of billions, it is a small price to pay in comparison to the hundreds of billions saved long term. Not bad strategy, trouble is they have lied to investors, and for that Red Ink Rick should be indicted.
Khochj you are right on. I can only believe (after years of thinking it was only bad management)the domestics are throwing the fight. You cant tell me everything thats been done in the past 20 years just “happened to be the wrong move”. Vega,x car,astre, always an excuse.Big trucks at the wrong time, no foresight. How has Huyndai done it so quickly? Not to jack this forum but globalism and the destruction of america go hand in hand. How do you let the ford ranger rot for a decade without a make over? the best compact truck in its day had some awesome sales numbers. Now nobody buys them.What happens when detroit goes ka-put.Piece this together with our chistmas buying of chinese made goods, the decline of the dollar by 36% since 2000, and outsourcing, and the picture is pretty bleak for americans.Call me a conspiracy nut but detroit cant be this stupid. The unseen hand rocks the cradle and we aint seen nothin yet…
Merry Christmas!!!
Excellent post, Zarba. Your synopsis of how the different models should be shuffled around under a simpler GM, sans superfluous brands, is spot on…
mikey610, I’ve read that Time article before, and it is good. But I’m also not a believer in history always repeating itself. There are always unique circumstances. And a word of caution – the ability of Time, or any other publishing enterprise (including this site) to predict what will happen, even in the near future is highly suspect. I like to read about it, because it’s fun, and I like to speculate like anyone else, but I don’t take it seriously because, bottom line, there are just too many variables.
Here’s a quote from the Time article to ponder:
“By 1985, the V-8 engine, which has been the auto industry’s mainstay since 1954, will be virtually dead.”
I think that we all know that if GM is going to stay alive, they need to stop the product overlap and kill some brands. I think to put it in a nutshell, GM needs to cut around half of its product lines, and that includes trim lines of certain vehicles.
I’m wondering if RF is feeling a bit ironic with the literary references. The title refers to a book where the protagonist, George, has it all figured out, and no matter what happens, hatches that allows him to survive some pretty dire stuff. The company profiled in this piece, on the other hand, seems to leave everything to fate.
When there’s no plan, how can it go awry?
Here’s a quote from the Time article to ponder:
There was a school of thought that if Newsweek or Time was pushing an idea then you should do the opposite, which was more likey to be correct.
Buickman, the other bystanders on the board just caved or what?
New York Sun in dec21 issue wrote, that Ron Paul can`t buy respect in Washington , no matter how much money he generates. Ditto he can`t translate his campaign cash into votes. The outraged readers sent zillions of replies saying,that of course, you can`t buy respect, but Ron hasn`t bought them,he has deserved them.
The same way GM can`t buy respect buy outsourcing, or pouring cash into advertisements( annual spending equals to 2 new platforms or 1,5 new cars engineered!), by rebadging or buying other companies and adding to their market pie! You need to deserve it! You mentioned Nissan`s turnaround plan. Did you know, that behind rebirth of Nissan stood nothing but great products, that were not outsourced, but in-house designed and engineered.What propels Hyundai? nothing but great ( comparatively to its segment)products that people buy!
America you have tried all the best ways to avoid manufacturing and engineering, but still making it look as if it was yours.Didn`t work! SEE, only fair game rules work!Only fair game work rules! And they are so simple and short. I could write them down on a corner of a napkin!!!!!!!!!!!!Any thoughts on this or Dr. Paul? thanx!!!
I agree with those that say a lot of GM’s (and Detroit’s) woes stem from all the customers they burnt in the past. Now while we keep banging on about the customers they burnt and how they should give Detroit a second chance (and third and fourth etc) this should be a case study for all auto makers in the price you pay when you scalp your customers.
Customers are finally getting what they want from other makes. There’s no other way of looking at it. GM isn’t providing what customers want. Until they do, there’s no way back for them. GM aren’t providing a better warranty (Hyundai do). GM aren’t providing the reliability customers want (Toyota do). GM aren’t providing the quality customers wants (Honda are).
What GM have excelled in, is excuses. How many times have we heard “currency manipulation”, “not building in the United States”, “nobody gives us a fair chance” etc.
Another thing GM have been supreme in, is wishy washy management. Like Mr Farago says, no timetables have been issued, no tangible goals have been set and no firm leadership has been established. It’s really little wonder than GM is slowly becoming the “Marie Celeste” of the auto makers. It’s sailing randomly, with no crew and no direction. It’ll turn up and people will wonder (certainly in the future) what happened to GM?
P.S I was browsing the internet and saw a Euro Focus cabriolet that is sold in Europe. Now if Ford brought this car to North America, they’d have a hit on their hands. I love it. Styled by Pininfarina, you know…..
http://www.ford.co.uk/ie/focuscoupecabriolet/foc_cc_ext/foc_cc_ext_gal/-/-/-/-
“P.S. I was browsing the internet and saw a Euro Focus cabriolet that is sold in Europe. Now if Ford brought this car to North America, they’d have a hit on their hands. I love it. Styled by Pininfarina, you know……”
Katie: This is a case where the exchange rate kills it — with a base price of nearly 19,000 GBP, that translates to around 36,000 USD; certainly into a range with too much competition.
This stuff about GM “teetering on the brink” is making my next car purchase a difficult decision — can I count on that warranty being honored? What value will a GM car have when driven off the showroom floor?
Even Mikey is living under the FUD generated by his directionless employers; how can GM expect car shoppers to respond? (Easy, the mainstream press is assisting in the preservation of the “bubble”; a “turnaround” based on a lack of negative information being released, thus some rise in sales due to increased “trust” can do a “Humpty Dumpty” at any time.)
Talk about buying on faith…
A good way to focus GM’s management’s minds would be to make them pay a hefty fine every time they appear with the new Camaro (double if it’s a photochop!). Maybe a nice car, but in the wrong place at the worst time possible. A complete waste of time and energy. Third to market in the muscle car niche? Get real.
GM is making some real progress in their cars – as shown in the latest Car and Driver “10Best” listing. However, I’m afraid that GM is still headed down the bad path for a long time to come.
The problem is this – it took a long, long time (decades) for Americans to learn the lesson that GM makes lousy cars….
Well, the lesson was finally learned. The last American Car I owned was a ’69 Camaro, in the 70’s. I’m not likely to ever buy an American car now, but that’s not the problem.
The problem is my 22 year old niece, about ready to buy her first car. I was starting to do the Uncle thing of helping her decide on what to buy and -uncoached- she blurted out -“Nothing American – they all break!” Now she knows nothing about cars – doesn’t even know that “stick shifts” exist. But she knows not to buy American. How is GM going to overcome that?
“By 1985, the V-8 engine, which has been the auto industry’s mainstay since 1954, will be virtually dead.”
And a twisting irony in the Time magazine, no one had taught then Toyota now made their own gas-guzzler with their own V8 (Tundra, Sequoia, Land Cruiser)
I forgotted to precised then it’s the Toyota North American line-up. In Japan Toyota had once a powered V8 Crown and the Century http://en.wikipedia.org/wiki/Toyota_Century who switched to a V12
Wasn’t the new Cadillac CTS recently named Motor Trend’s car of the year?
Skooter:
Wasn’t the new Cadillac CTS recently named Motor Trend’s car of the year?
Your point being?
North American capitalism is geared toward short-term gains. Accordingly, the domestic automakers do not think long-term.
Capitalism should be about designing and producing reliable, quality cars people want to buy, not manipulating the books and stock prices to satisfy the Wall Street gods. Change will come only if executive compensation is tied to long-term company performance and returns. Management stock options should not be guaranteed, but instead tied to company performance over a decade or more.
“I was browsing the internet and saw a Euro Focus cabriolet that is sold in Europe. Now if Ford brought this car to North America, they’d have a hit on their hands.”
“Katie: This is a case where the exchange rate kills it — with a base price of nearly 19,000 GBP, that translates to around 36,000 USD; certainly into a range with too much competition.”
The answer is blindingly simple, build the car in North America, Mexico or elsewhere. A Toyota RAV4 starts at £19,095 in the UK, which works out to about $37,890 US at present exchange rates. However, an actual US market RAV4 starts at $21,250 and sells very well.
The argument that a given European Ford can’t be sold profitably in the US based on a currency translation from a European current price into $US is simply wrong.
knochj :
I think they (ultra-wealthy) will get hit with the humble stick. Ron Paul has a good chance of winning the Republican nomination, as he’s the only Republican candidate who’s not an intellectual prostitute.
There is absolutely zero chance of Ron Paul winning the Republican nomination. As a historical reference, the last time a candidate not-preferred by the Republican establishment made headway he was destroyed with a horrific dirty tricks campaign during which the whole Republican party and the media refused to call out the perpetrators. I refer, of course, to John McCain after his surprise 2000 win in NH and subsequent character assassination by Karl Rove in SC.
As for GM: I wonder what the market share of trucks was before the SUV/truck craze of the 90’s? If that’s where the market is headed, with mostly those who really need trucks buying ’em, where does that leave Detroit? Not in a good place, methinks. Maybe I should buy more Honda stock.
Failure is at the top. As a Car guy (11 yrs working in the plant and 27 years selling them) I’ve had to endure generation after generation of the same cookie cutter CEO’s. You know the ones who’s egos preceed them. The ones who look for the butt kissers as underlings. They haven’t had to buy a car for years so how would they know what people are looking for in their stores. Rick Wagoner should resign now – no yesterday and let someone who knows what they are doing take the helm. They have repeatedly let their Customers, Employees, Dealers, and Dealership Employees down. If I told you to invest in a company that was going to do that, would you?