In 1996, the Toyota Camry was about to become America’s best-selling car. To protect the Taurus’ five year reign, Ford ramped up sales to Hertz Rental Car. The strategy worked– for a year. Despite the catastrophic effect on the Taurus’ resale value and image, despite selling off Hertz, Ford still relies on fleets to maintain economies of scale. As do the rest of The Big 2.5, who use fleet sales to mop up extra production, earn new money for old rope and blow out their sales stats. While Detroit knows fleet sales are slow motion suicide, their moves to curtail the practice are not as convincing as they could– or should– be.
Posts By: Frank Williams
In a recent study of new vehicle owners, Ford products came second in "overall initial vehicle quality." According to Ford's PR release, Honda took the top slot, while Toyota and Nissan tied Ford for second (although Toyota actually beat Ford by three points). Yes, well, it turns out The Glass House Gang paid for the report, which mirrors the format of J.D. Power's Initial Quality Survey (IQS) without reproducing the results. Last year, JD's mob ranked Ford fifteenth in Initial Quality, one place beneath the industry average, nine places behind Honda and eleven places behind Toyota. Anyway, who cares?
Beware the Ides of March! OK, relax. The sales figures are in for Julius Caesar’s final month. While it's hard to find new ways to say "GM, Ford and Chrysler sales are sinking while Toyota's eating their lunch" month after month, it’s not impossible. How about this: The Big 2.5 look more and more like Lawrence Edward Grace Oates (to Toyota’s Roald Amundsen). “I am just downsizing and may be gone for some time.” Anyway, the more things change, the more they change the same.
At last week's DaimlerChrysler stockholder meeting, a man named Ekkehard Wenger stepped up to the microphone and said his piece. "For nine years you have been sitting on this scrapheap called Chrysler. Nobody has learned anything. To call this a sale is a euphemism. If you pay for the garbage man to empty the dustbin, does that mean you have sold something to the garbage man?" While calling Chrysler a "scrapheap" is a bit harsh– the American automaker supported Mercedes for several years when the Germans were losing money– one wonders how Kirk Kerkorian feels about being called a garbage man.
Never mind all that “buy American” and “Asian cars are the enemy” rhetoric. The United Auto Workers (UAW) would love to get their hands on the transplants’ southern redoubts. With their numbers dwindling due to Detroit’s plant closures and buyouts, the UAW realizes they have to go trolling in the transplants’ ponds to stay alive. Last Saturday, they tested the waters with a small group of Toyota workers at the brand’s Georgetown, Kentucky plant. The UAW is smacking their lips at the prospect of dining on catfish sushi.
While the United Auto Workers (UAW) were busy plotting their future, The Detroit News ran a Cyber Survey. “Have UAW members given up enough or should auto makers expect more concessions?” As of the time I’m putting electrons to pixels, only 26 percent of the respondents agreed with the ungrammatical assertion “there’s been enough concessions.” The other 74 percent voted that the “UAW needs to make more concessions.” It’s not too promising when the home town crowd starts turning against you. But does it really matter?
By the end of the year, America’s automotive landscape will have changed dramatically. Chrysler Group will have new owners with new ideas (including, perhaps, dissection). Ford may or may not be in Chapter 11. General Motors’ fate is equally unclear. One big gas price spike and it’s all over bar the filing. And then there’s the United Auto Workers (UAW). This is the year the UAW renegotiates its contracts with The Big 2.5. If the union digs in its proverbial heels to maintain the status quo, Detroit’s doom will be delayed, but not prevented. As will their own.
[Cue organ music] Welcome to this week’s installment of “That’s the Way the Daimler Benz!” When we last we left our hapless heroine, little Chrissie Chrysler, the not-so-sprightly maiden was tied to the railroad tracks. The fiendish Dr Z stood nearby, twirling his mustache, laughing maniacally as he mentally explored the options for disposing of Chrissie’s family farm. Will this be the end of our plucky paladin? Or will a courageous cowboy arrive to save Chrissie in the nick of time? Join us as we anxiously await little Chrissie’s final fate. [Fade organ music]
After a bleak January, February offered Detroit automakers a whiff of spring. The Chevrolet Impala had a 60’s sales flashback. Thousands more customers went fission for Fusions. And Chrysler Wrangled plenty of loot from new Jeep owners (boosting their bottom line to help Daimler get the Hell out of Dodge). While The Big 2.5’s supporters may conclude that the numbers presage Motown’s long-awaited recovery, starting a Deathwatch Deathwatch may be a bit premature.
As you’ve no doubt noticed, things they are a-changin’ on The Truth About Cars. Our new look is evolving, several new writers have made the scene and a whole lot of new readers/commentators are joining us every day. With all that going on we thought we’d better answer a few of the questions we’ve been getting (and throw in a few more we just made up).
If patriotism is a scoundrel’s last refuge, American automakers and their domestic defenders have been fixated on the end game for decades. The Car Connection’s Gary Witzenburg is only the latest industry wag to try to wrap The Big 2.5 in the American flag. In a rehash of a November 2003 editorial for Automotive Industries magazine, Witzenburg offers gullible readers a lesson from his school for scoundrels.
When DaimlerChrysler unveiled Project X, the media was abuzz. Chrysler’s turnaround strategy included eliminating thousands of jobs, slashing vehicle production by a quarter and mothballing its Newark factory. More ominously, the plan pledged to consider “any option in order to find the best solution for both the Chrysler Group and DaimlerChrysler." To tell the truth, DaimlerChrysler’s “Recovery and Transformation” document should have stated the management’s desire to explore “any option to pump and dump Chrysler.” Those alternatives are gradually coming into focus. First, here’s what’s not going to happen…
A recent post questioned the relative power of engineers and MBA’s in the automotive industry. A quick scan of corporate rosters reveals that the biz brains control most companies. The hierarchy makes sense; automaking is a business. Yes, but– whether their MBA’s came from Harvard, Yale, or Vinny’s School of Business and Mortuary Services in Hoboken, the “suits” should know that too much unsold inventory is a bad thing. As a corollary, continuing production as unsold inventory piles up is a very bad thing. As in fatal.
For decades, Toyota has balanced superb management, impeccable quality, exemplary financial discipline and flawless product planning. As other manufacturers chased market trends and neglected core models, Toyota made incremental improvements to existing models and introduced new models slowly and carefully. Their perseverance has paid off; they’ve elbowed Ford aside and are nipping at GM’s heels. But as Toyota prepares to replace The General as the world’s largest automaker, they’re finding out that getting to the top is one thing; staying there is something else altogether.
Valentine’s Day. The day that keeps jewelers, greeting card companies, florists and candy makers afloat from the one Christmas to the next. The day where millions of dollars are spent around the world in the hopes of an increased chance of getting laid. And this year, it’s the day when DaimlerChrysler will reveal their makeover plan aimed at diverting Chrysler Group from its seemingly self-destructive course. Will “Project X” prove to be a lovefest for all concerned, or is it another St. Valentine’s Day Massacre just waiting to happen?
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