Change or die for the Big 3
"Our restructuring plan is working."
And it always is, until some unforeseen market force blows up beyond "anyone's expectations."
Gas prices. Steel prices. Hybrid demand. Congress.
Pick a poison. But if you have to restructure your restructuring plans more often then your quarterly reports, you're problems are bigger than having too many trucks.
That was made clear again Tuesday when May's monthly sales figures were released and for the first time ever, the Detroit Three were overtaken by Asian automakers in terms of overall U.S. market share.
General Motors Corp., Ford Motor Co. and Chrysler LLC now lay claim to
45.4 percent of the U.S. market. Asian automakers, led by Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., now control 47.8 percent, according to Autodata Corp., which compiles monthly sales figures.Even more striking and unfamiliar was the elevation of the Honda Civic as the No. 1 selling vehicle in the U.S. Ford's F-series pickups had been king for more than 30 years. Plenty of people knew
So what happened and how could the executives at the Renaissance Center, Glass House or Auburn Hills auto complex not know?
Your neighbor Joe knew. You knew.
Truth is, plenty of people in the know, knew, too. They've just been ignored, pushed aside or told to play along because that's part of the Detroit auto culture -- and part of the problem.
Money was good and consumers were demanding and buying big pickups. And, make no mistake, nobody has ever been forced to buy an SUV or truck. Consumer demand drove the U.S. auto market and the automakers rightly responded.
They didn't plan well and allocated too many resources into one segment at the risk of another, but that Explorer, Escalade or Ram that you're driving today didn't arrive thanks to Jedi mind tricks played by Obi-Wan Mulally. Changing business plans
How, or if, Detroit's automakers make a real shift in how they do business will determine whether they'll survive. They have to further thin their work forces, diversify their product lineup and bring tomorrow's vehicles to market today -- if not yesterday.
That won't happen overnight in this industry, nor would it in any of similar size and it requires realistic expectations from investors, consumers and policy makers. Perhaps the recent spate of changes will drive Detroit properly into the future.
No longer can we trust that revamped business plans are on track.
We'll believe that when the next thing we hear isn't something we've already heard before.