Just read an interesting article in the Wall Street Journal. A Dealer Group has met with the Big Three(sic) and told them the following:
a. Inventories are too high and on the lot too long, b. manufacturers have to stop building cars and trucks to manufature market specs, c. southerners do not want 4 wheel drive trucks, d. northeners want and need 4 wheel trucks, e. manuf should stop shoving vehicles on dealers when they can't move them, f. the manuf are not giving the public want they are asking for.
Well, the market mechanism seems to be reasserting itself. The dealers want to sell cars that the public wnats to buy and not shove down their throats vehicles that do not meet their needs and wants. The fact that dealers are now multi-make and not single make seems to mean that maybe we will be able to get the vehicles we want from US auto manufacturing.
It also seems to me that what the dealers are asking for is what we had in the sixties: cars built to customer order or at least what the customer is asking for. One example was a Florida Ford dealer who couldn't get 20 inch wheels for the consumer. He was stuck with 18' wheels which he couldn't move off of the lot. He also couldn't get 20 inchers to replace the 18" wheels with from the Ford supplier.
How does this strike you?? Flathead, which simply gives me more reason to buy another Studebaker and vote with my philosophy, pocketbook, and sixties era mentality.
During the last good run for the "Big Three" during the 1990's, Chrysler was the manufacturer that showed the way with lightning fast, customer driven product development and leading edge design. Ford and GM were still stuck with their own bureaucratic structure. But business conditions were good enough that Ford and GM didn't have to do anything.
Chrysler was swallowed by Daimler, and has become ironically even worse than the old GM as far as answering questions no one is asking. Daimler shall be held accountable in automotive history for ruining the only American manufacturer that had it right. The damage that's been done is so great that we will see Chrysler become just a cheap version of Mercedes, with product development more like Volkswagen than anyone else. And we all know where Volkswagen is on the market share charts.
100,000+ parked new DaimlerChryslers languishing close to the assembly plants won't even change the attitude of the thick headed executives that have driven Chrysler into the ground. Chrysler now has the highest average days to sale on the lot, with the lowest residuals, and the highest incentives in the industry. If it isn't a German idea, it won't see the light of day at DCX. 42,000 layoffs since 2001 with another 11,000 to be announced will shrink "Chrysler Group" to close to half it's 1998 size this year. But, because they are now German owned, the Press has given this very real American bloodbath a very wide berth.
Ford and GM were finally pushed to make major changes in their product development and design departments. Ford and GM are better than DCX at watching their inventory balance GM got most of the Chrysler designers and managers (i.e. Solstice, New Corvette, etc.) and has made the most progress toward getting things on track. Ford is a year or two behind. Both will survive this current "crisis". I've already written off Chrysler, which has been technically out of business for almost ten years and will soon even more resemble that fact.
The strong yen and a wisely managed and crafted public perception are causing mainly Toyota to ride high right now. Nissan continues to struggle, even with "whiz kid" Carl Gohsn at the helm. The quality difference between ALL manufacturers isn't big enough to spit at, meaning Hyundai has become a player. The up and coming Japanese make this year within Japan is Suzuki.
Just watched an old Studebaker Movie from about 1949 made to boast about why Studebaker was one of the last Independents to survive. It panned across a junkyard of the day, and focused in on a junked Pierce-Arrow, Franklin, etc. The film asked why Studebaker was one of the lucky few to remain after the demise of 2500 other U.S. companies formed during the early 1900's to manufacture automobiles?
As children of the "sixties", we should all understand only cycles are forever in the auto business.
By the way, some of you may use the fact that DCX and Toyota both outsold Ford last month as ammunition to try to discredit my statements. Consider the following when interpreting the sales charts over the next few months.
GM and Ford are weaning themselves off sales to daily rental fleets. The profit margins there are very, very low and in the end only serve to drive down used car residuals. Chrysler, due then to capacity restraints in the mid-1990's, found that a sale mix with as few daily rental as possible drove up financial results from multiple angles.
This leaves the barn door open for DCX and Toyota to increase their sales to fleets, which both have done in recent months. Almost 40% of DCX sales were to fleets in 2006. Where would DCX's position be on the sales chart with
Everything that you posted was also eithe rmentioned in the article or hinted at. I wonder where this will really end. It seems that I am in totally 100% in agreement with your management assessment: The US managers have had their heads buried in the sand. I also feel that they have not learned anythig from their past mistakes. If you agree with these assumptions and believe in the market mechanism--it looks as though our US based car companies are going to go the way of that scene in the movie that you refer to. I have seen that movie and it really wrenched (no pun intended) my heart. Those of us who remember the great days, IMHO, are living through a rude awakening. For our generation it really is sad! You would think that our managers would wake up and move instead of acting like a flock of ostrich!
The argument can be made that GM and Ford have held up pretty well in the face of the unparalleled in history competition from the Asians, etc. American Managers don't have their heads buried in the sand. The "Press" would like you to think they do because they are openly sympathetic to foreign makes and like to spin every economic effect on the industry toward proving that. The economics of the market are something no one can control or 100% accurately predict. Few "Pressheads" would have predicted even a few weeks ago that Toyota would now have to put incentives on the Prius to keep it turning at less than a 30 day supply sales rate. Popularity of models ebb and flow, as we should all understand over history, with the disappearance and reappearance of the convertible, etc.
My favorite Press myth to laugh at is that the Big Three are in the shape they are in because their models aren't small enough or fuel efficient enough. The term "Gas Guzzler" has become as overused by the "Pressheads" as the term "Soaring" or "Skyrocketing" when referring to oil prices.
If the Chief Executive of Ford or GM would have announced in 2000 that he was going to convert their SUV plants, which were selling everything they could build for a handsome profit, to some econobox minicar which held less than 1% of the market, he'd have been kidnapped and hauled off to the insane asylum by the stockholders.
Despite their "green" image, most of Toyota's recent growth in the market has come on the backs of V8 powered "gas guzzling" trucks and SUV's in recent years. But the "Press" openly chooses to ignore that.
DCX was commonly refered too by my former employer as "Occupied Chrysler" __________________________________________ The joke at Jeep Toledo was, "How do you pronounce 'Daimler-Chrysler'? It's 'Daimler'--the 'Chrysler' is silent."
Thanks Flathead and Kevin for an astute and reasoned assessment (that's college-boy for "Fuckinay.")
I agree that US corporate managers are not incompetent; they're merely obedient to a fault. Industry economists have suffered for two generations with "physics envy," a mental illness that forces its victims to express even the simplest concepts in calculus. That's what they do in business school, and it causes you to concentrate on things other than your shop and its product--unit cost, component time investment, flow charts, quality circles, and the panoply of jargonista that make machinists roll their eyes.
Managers are "tasked with" fulfilling goals, reporting on same, and composing powerpoint presentations to show where their area of responsibility stands in relation to the corporate benchmarks. While they do this, their product becomes more and more irrelevant. Is that the managers' fault? Your call, but it's bitterly amusing to note that managers in formerly fascist firms (Japan, Germany, Italy) get credit for instituting new ideas, mouthing off and talking back, totally unlike the "Jawohl Mein Kapitan" stereotype, while our companies slink toward oblivion overseen by a swarm of yes-men the likes of which the world has not seen since the Cultural Revolution. Yet another cost of winning WWII: the system worked fine once, so we're going to keep moving names around until it works again.
I guess I should say too George that all my statements are based on the FACT that Chrysler is now a foreign company. Even though it's German based management and design crew has it's head firmly buried in the sand, it's former American rivals are awake and responding.
When the books for Daimler were being cooked and a profit was shown, the Press referred to Ford and GM as the "Big Two". Remember a year or so ago, Chrysler was now only to be mentioned in the same breath as Toyota or Hyundai?
Funny how Chrysler is only American now when it's in trouble, isn't it?
All vehicles that get more than 35 MPG still represent a very small percentage of the market. Basically, because most people who drive for a living don't want to live in something that small.
The only people who buy cars like that are people who want to make some sort of social statement by owning them, thus the very small market percentage.
I love driving my '64 CDR - more for the talks with others when I'm stopped than the actual travel itself.
If I could find or make a '65 Honda CVCC like new for what I get for the CDR, I'd probably do it. Shrinking the car by 10% in width and length would also be acceptable, but I haven't figured out, yet. (Damn crowded garages!)
in my line of work I am charging $2.50 per mile to get to wherever the key job is.. Gov allows $0.48? a mile deduction this year if I understand right. gives me $2.
to go to the PO to mail the keys/locks for you guys I SHOULD be charging $15 JUST for the trip, but I dont.. it WOULD leave me with $12.. that supposed to cover the business expenses etc.. I got an acquaintence that is charging IF he is within his town, $100 just to walk in the door and say HI..., and $120 an hour thereafter.. he was on 1 job 24 hours (3 days) and had another person helping..
48 hours at $120 per? and HIS overhead is a genuine get your attention beast.. (and its NOT computers)
For all your 'well to do folks', AND by SOME of the cars MPG that I see, you do NOT care.. some of us ARE frugal.. we like to keep what we can.. and some of you ARE making a LOT of money, between the quarter million house, the 3 cars that are costing $50k and UP each.. etc..you GOTTA be
Sorry to think like an auto executive, but I must ask too, how many auto plant employees were paid with an automaker's profit from the purchase of the above mentioned 0- $500 used cars, and why are they only holding a value less than a set of mudflaps in the parts departments of most new car dealerships?
It makes smart financial sense to drive as close to free as possible. I used to do it before I was forced by company policy to behave otherwise. But somebody's gotta populate that used car market. And pricing reflects demand in that same market.
MotorsForum website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.