Post Number: 2203
|Posted on Tuesday, April 24, 2007 - 7:18 pm: || |
Post Number: 847
|Posted on Tuesday, April 24, 2007 - 7:23 pm: || |
I was ideally thinking that Detroit would make it through the whole day without bringing up the auto industry on this note. Thanks Royce for ruining my dream and reminding me how annoyingly tied Detroit still is to being a one industry town.
Post Number: 1562
|Posted on Tuesday, April 24, 2007 - 7:53 pm: || |
"...how annoyingly tied Detroit still is to being a one industry town."
It's not just annoying, it's killing us.
It's tough to diversify the economy quickly, but somebody better come up with some ideas, fast.
Post Number: 11517
|Posted on Tuesday, April 24, 2007 - 8:08 pm: || |
Somebody needs to come up with a new governor, fast!
Post Number: 4267
|Posted on Tuesday, April 24, 2007 - 8:12 pm: || |
And before long one of the Korean auto makers will topple Toyota, then a Chinese company and so on. You will never see Toyota dominate the US like GM did for nearly 80 years. Not gonna happen.
Post Number: 63
|Posted on Tuesday, April 24, 2007 - 8:32 pm: || |
I see a majority of these automobile manufacturers, especially American manufactures, to merge over the several years; the term itself "Big 3" is antiquated.
China is up and coming force, as are the Koreans.
I think Ford, GM, and Chrysler will be around, they'll have a new name and a new look.
Now the UAW, that's another thread.
Post Number: 184
|Posted on Tuesday, April 24, 2007 - 9:03 pm: || |
If only we had a new governor the entire global economy would change in Michigan's favor and the United States would stop exporting its manufacturing sector and GM and Ford would make and sell more cars. Oh, and Republicans would rebuild Detroit brick by brick until it was a world-class city. Only if we had a new governor.
Post Number: 1376
|Posted on Wednesday, April 25, 2007 - 12:17 am: || |
All the blaming of the politicians really makes me laugh.
Post Number: 502
|Posted on Wednesday, April 25, 2007 - 1:29 am: || |
Toyota may find that being number one is not all it is cracked up to be.
Post Number: 2269
|Posted on Wednesday, April 25, 2007 - 1:58 am: || |
Sooooooooo............pg we should congratulate all the car makers that Toyota has passed as being number one is really a bad thing.........must be a strategy devised by our guys _ sell fewer cars_ .............why didn't toyota think of that?
Post Number: 1022
|Posted on Wednesday, April 25, 2007 - 8:28 am: || |
I just can't fathom GM's current management team. Wagoner has got to be the worst, I've not checked but I would wager that he's presided over more consecutive profit losing years of any Chairman in the company's history. That's right, even considering the 1930s! Why the pet rocks won't fire him, I just don't understand it. GM management is content to let Toyota have the number one spot here, they believe those customers they've made rich (by Asia standards of course)in India and China will keep the company from going out of business. A recent article I saw was the rear drive cars we were promised that Lutz killed, well the Chinese will get them not us.
Post Number: 1616
|Posted on Wednesday, April 25, 2007 - 8:59 am: || |
there are still 3 quarters left in the year, which is the length of time that the mark of who's #1 in sales is traditionally judged.
this has little to do with polititians, ITS THE PRODUCT STUPID!
Post Number: 795
|Posted on Wednesday, April 25, 2007 - 9:30 am: || |
this has little to do with politicians, ITS THE PRODUCT STUPID!
GM could have a competitive lineup of models for sale in every segment of the North American market and they still wouldn't be able to generate long-term profits unless they are able to get their structural costs in-line with their current market share and comparable to those of their competitors.
The only way to win with a "product-only" strategy is to create "must-have" cars in each of the product categories, such that GM can set the pricing and generate massive profits. But that ain't gonna happen because GM has too many models and there are too many competitors out there who will fight back.
Over the long haul, only the lowest-cost producers will survive in the North American vehicle manufacturing industry, thanks to our low cost of entry and lack of trade barriers. Our trade policies invite the competition to set up shop here and also permit global sourcing strategies for all manufacturers that are only limited by shipping cost constraints. This is great for the car-buying public and not-so-great for those employed by the high-cost vehicle producers.
Post Number: 505
|Posted on Wednesday, April 25, 2007 - 10:16 am: || |
thank you gravitymachine, i've been arguing in other circles the same point about annual sales determining who's #1. the way many of the articles have been written is misleading. some of them even state that fact about halfway through, but still, they insist on using the quarterly numbers to declare toyota tops. what's next, daily sales? hourly?
i wonder how many of these sales were lost by cutting low-margin fleet sales. if so, oh well, i'll take profits over '#1' any day. besides, even if GM does lose the title this year, i honestly don't expect it to last long.
(Message edited by scottr on April 25, 2007)
Post Number: 12
|Posted on Wednesday, April 25, 2007 - 11:05 am: || |
Scottr - I'm curious about why you are confident that GM will retain the title. Just going by the sales chart in today's Wall Street Journal, it seems inevitable that Toyota will pass GM globally within a year, and probably also in the US market in a few more years. I'd like to feel better about GM's and Detroit's prospects, but I have no industry knowledge. Can you share what you see?
Post Number: 1567
|Posted on Wednesday, April 25, 2007 - 11:39 am: || |
Mikeg, great post.
Cambrian, maybe it's good that Lutz killed the RWD cars. That's a pretty inefficient design and RWD vehicles don't match up well with the Japanese-designed cars.
Gravitymachine, excellent point. It IS the product. Build a car that people can't resist. (For example, I wouldn't be able to resist a car that got an average of 50 mpg and had an MSRP of $18,000 or so.)
The time is ripe for a modern-day version of the Model T (or VW Beetle). Durable, versatile, efficient in the context of its era, and affordable.
Add modern amenities such as power steering, brakes, windows, door locks; safety features such as ABS and front/side airbags; and creature comforts such as cruise control, split folding (and ergonomically correct) seats, etc.
Build such a car in volume and reap the profits.
Post Number: 200
|Posted on Wednesday, April 25, 2007 - 11:55 am: || |
A car that got 50 mpg would certainly require a lot of extra cost to achieve such efficiencies. It would also be built in Mexico, for a very small profit.
Look at the Ford Fusion - it's very successful, but it's a low-profit vehicle that is made in Mexico
Just wait though. I work for a supplier, and we're finding that even Mexico is too expensive - we're starting to move more manufacturing to China.
Post Number: 4268
|Posted on Wednesday, April 25, 2007 - 12:13 pm: || |
Alfred Sloan's goal was to create a car for every purse and every purpose. He wasnt trying to be the biggest. Of course, he wanted to make profits like everyone else, but you dont need to be the biggest to do that. This is a blessing for GM....GM needs to go by that motto again.
Post Number: 65
|Posted on Wednesday, April 25, 2007 - 12:22 pm: || |
China, India, Korea, The Philippine Islands, and then what, Senegal, Kazakhstan, Bucharest?
They can find people to work for nothing, or do the job for less than the last guy did the job for, all day long.
These companies, formerly known as, "The Big 3," need to change the way they do business, all employee’s, from work shirts to white shirts.
If not, instead of having a gym to work out in, they’re going to be taking a class on how to learn a second language, so can communicate with their new employer.
Post Number: 796
|Posted on Wednesday, April 25, 2007 - 12:28 pm: || |
I was repeating the mantra of Rick Wagoner and his management team, which I believe to be the only solution for the long-term survival of GM.
Cambrian may not like Rick's results so far, but I trust Wagoner's ideas and approach over Cambrian's "plan", which is basically to just fire him and his upper management team. GM has to get the Delphi bankruptcy behind them and get a workable national agreement with the UAW and CAW before they are "out of the woods".
Post Number: 1798
|Posted on Wednesday, April 25, 2007 - 12:34 pm: || |
And that agreement needs to be a builder for both, neither side can afford to hold the other hostage unless they want to be Farmer Jacks and be out of jobs in 20 years.
Toyota is looking at a 13 billion dollar profit this year compared to a -2 Billion dollar loss for GM. Those stylish small cars need to be profitable and if that means cutting benefits so their spouses and kids can't goto school on GM's dime then so be it. It is time to be competitive, Toyota is no longer blooding your nose, he just knocked the wind out of you and the beatings need to stop.
Making little jokes about recalls and nationalities are sign of jealousy and not going to change anything.
(Message edited by _sj_ on April 25, 2007)
Post Number: 1617
|Posted on Wednesday, April 25, 2007 - 12:47 pm: || |
some good reading on the subject
Post Number: 1569
|Posted on Wednesday, April 25, 2007 - 12:53 pm: || |
Gravitymachine, that is a well-articulated blog entry. Really tells it like it is.
Post Number: 1025
|Posted on Wednesday, April 25, 2007 - 1:17 pm: || |
Any other line of work, sports teams, running a TV station, or a produce stand if you produce results like Wagoner's you'd be ousted by now. I don't why he has the sympathy of so many. Must be the Union's fault, poor guy!
Post Number: 1799
|Posted on Wednesday, April 25, 2007 - 1:23 pm: || |
Any other line of work, sports teams, running a TV station, or a produce stand if you produce results like Wagoner's you'd be ousted by now.
Funny you say that here in Detroit.
Post Number: 72
|Posted on Wednesday, April 25, 2007 - 3:20 pm: || |
It's ridiculous to blame CEO's and local politicians including those at the state level.
This is happening for one reason, our government and citizens (voters) are allowing it to happen.
We cannot compete with third world nations. Despite all the trendy terms like "Globalization", and phrases like "Global economy", there is no way in hell we can compete and maintain our quality of living. We need to stop the robber-barons from sacking our manufacturing sector and exporting it overseas. Vote for whomever intends to abolish NAFTA and tighten up on imports.
"Are you better off than you were 4 years ago?" Ronald Reagan
Post Number: 797
|Posted on Wednesday, April 25, 2007 - 7:52 pm: || |
Vote for whomever intends to abolish NAFTA and tighten up on imports.
Wrong approach - the Council of Economic Advisors proclaimed in 1988 that the 1930 Smoot Hawley Tariff Act was "probably one of the most damaging pieces of legislation ever signed in the United States."
The Act exacerbated the Great Depression since the real effect of the increased tariffs was to increase prices and increase price rigidity, plus it resulted in more than 60 other countries passing retaliatory tariffs.
Besides the restructuring that certain businesses are currently undergoing, what is needed is less government regulation so that productivity growth can generate the earnings needed to grow existing employment levels and so that new start-ups can thrive and employ displaced workers. US manufacturers have the intellectual capital at all levels of the organization chart which, if unleashed, can find and implement the ideas which will allow them to do more with less. US companies also have ready access to financial capital to start-up new companies if they have a solid business plan. The only "robber-barrons" out there are the Kirk Kerkorian types who are looking to pick the bones of distressed companies - they are not the cause of the trouble.
Post Number: 1380
|Posted on Wednesday, April 25, 2007 - 8:16 pm: || |
Wagonner and Co are on the right track. Probably more so than any other management heads at GM in the last 30 years.
They are making real changes that are starting to show real results, and in the places that count: The Bottom Line. GM isn't here to provide a service, or give people jobs, or make sure the Michigan economy doesn't go down the crapper, or to sell more cars than anyone else, it is here to make money. Simple as that. All the rest of it is the effect.
For the first time in a long time they're doing just that. And they're finally fixing the structural issues they should have fixed in the early 90's but didn't because the SUV craze put a temporarly blindfold on those problems.
It is not over. But GM is doing it right. Being number 1 is sometimes a nice little bragging right, but in the big picture means absolutely nothing. In fact, being number 1 is probably worse than #2. You have the target on your back, and in autos that isn't just your competitors aiming for you. It is the enviros, the politicos, you are public enemy and private target number 1. Look at all the crap McDonald's has to put up with, while Burger King and Wendy's never get discussed. Same with Starbucks. Same with Wal-Mart. Being the biggest means you have to not only focus on keeping yourself on top, but you have to also fight all the negative attention you're bound to get. It is very possible that Toyota could now be branded the "big evil one". What if people in America suddenly get upset that Toyota caused GM to lose its place in the world, and a big Toyota backlash arises? Everyone loves the underdog (Toyota trying to catch GM) but now that they've caught them, how many people will now want to see GM win?
And even though it was only 1 quarter, GM will not make it up. I will guarantee it. Toyota is still on a long upward projection, GM on a long downward. Another 9 months isn't enough time for either of those trends to change direction.
GM is no longer sells the most number of cars in the world. Big deal. They used to sell the most cars, be the most profitable company on earth, and were by far the largest company in the history of the world with the profits to go with it. I'm more disappointed by the loss of prestige and profits than I am by the fact that Toyota sells more cars.
This will be good for GM. 80 years of being number 1 make you complacent.
Post Number: 799
|Posted on Wednesday, April 25, 2007 - 8:50 pm: || |
Here is an excerpt from Rick Wagoner's message to GM employees and retirees on this subject and which also addresses Scottr's question about fleet sales:
24 April 2007
Like many of you, I woke up to news reports today of Toyota passing GM in global sales in the first quarter this year, for the first time ever. While we posted record first quarter global sales of more than 2.2 million units last week, Toyota’s first quarter results were approximately 79,000 units higher. We still have the majority of the year in front of us, and we will fight hard for every sale – all the while staying focused on our long–term goals as a global, growing company.
One question is where did Toyota pass us in sales? Basically, Toyota beats us badly in their home market of Japan (by 2.4 million units on an annual basis), and we win in most other markets (in fact, we win in 12 of the other 14 largest markets). Toyota has also cut our lead in the U.S., which still totaled 1.5 million units at the end of last year. Generally, we lead in the key developing markets like China, but Toyota and others are battling us hard in these markets, as well.
But so much for the numbers… what’s really important is our plan to address the competitive challenges from Toyota, and the many other strong global competitors, in our industry. Here’s what we are doing:
First, we need to keep developing great new cars and trucks. You all know what Bob Lutz and his global product development team have been doing in this area, and I can tell you the future of our new products is even brighter. Let’s keep that going.
Second, we need to stay focused on our revamped sales and marketing strategy, which focuses on our products and their great value, and brand building, rather than a heavy reliance on incentives and discounted sales. By the way, following this strategy cost us about 70,000 units in lower daily rental sales in the U.S. and Canada in the first quarter this year… nearly the entire amount of our global sales gap versus Toyota. But it was the right thing to do. Our sales and marketing strategy requires patience, but it’s working, and we need to stick with it.
Third, we need to stay focused in addressing key challenges such as energy diversity and the environment. We’ve been quite proactive in this area over the past year, including last week’s announcement of the Chevy Volt fuel cell concept car at the Shanghai Auto Show. We’ll do even more in the energy diversity and alternative propulsion arena going forward.
And finally, we need to stay focused on quality excellence and cost competitiveness. On the latter front, it means taking the tough actions, such as those that reduced structural costs in North America by $9 billion on a running rate basis by the end of last year. And it means that we are staying focused on further reducing our still huge health care cost disadvantage versus Toyota and other non–U.S. based manufacturers....
Post Number: 73
|Posted on Wednesday, April 25, 2007 - 9:13 pm: || |
Quote ""the Council of Economic Advisors proclaimed in 1988 that the 1930 Smoot Hawley Tariff Act was "probably one of the most damaging pieces of legislation ever signed in the United States.""
About the same time our politicians and manufacturing liquidators hopped into bed with China, coincidence? And, sure it would cause price increases, money to pay another Americans salary. Thats how our economy works. Who's salary are we paying now?
Quote ""what is needed is less government regulation so that productivity growth can generate the earnings needed to grow existing employment ""
Do away with the EPA? Turn our lakes into cesspools again? Fewer taxes on the manufacturing sector, so the working man can pick up the slack? Do away with labor protection laws so unions can gain even more strength? The majority of federal regulations are to protect the rights of workers and the environment.
Quote ""so that new start-ups can thrive and employ displaced workers.""
Doing what? What can be done here that can't be done in China for 1/20th the cost? Its a smart business model to set up a company in a place where the labor is 20 times more expensive?
Not only are we losing the manufacturing, we're losing our technology with it. Much of it patented and copyrighted, these folks don't care about US patent law, they've made that abundantly clear.
Post Number: 2211
|Posted on Wednesday, April 25, 2007 - 10:20 pm: || |
Jerome81, your argument fell apart when you tried justifying GM's number two spot as a good thing. When is coming in second place a good thing? The fact is Toyota has been able to determine what Americans want and give it to them. GM, Ford, and Chrysler are always making excuses. No one desired SUVs, particularly the large Expedition types, but the Big 3 forced these vehicles on the American public when gas was low and they fed on our fears about being in a small vehicle.
Then the price of gas exceeded three dollars and all of a sudden the Big 3 was caught with their pants down. Instead of developing cars that could go farther and emit fewer harmful gases, the Big 3 was stuck with a huge inventory of SUVs that nobody wanted, and nothing in development to compete with Toyota. Why didn't the Big 3 learn from the early 70s? Why repeat the same mistakes from the 70s in the mid 1990s?
General Motors got greedy with the SUVs and is paying for that decision. Why didn't they learn from the past? I don't know either.
Post Number: 1382
|Posted on Thursday, April 26, 2007 - 1:03 am: || |
What I meant is that by being #2, it oftentimes takes away from the "distractions" of being number 1. GM is primo example. They were the evil auto company. Killing the earth. Killing drivers. This is not stuff Toyota, Honda, Nissan, Chrysler, etc have to deal with. Wal-Mart is beat on day after day for labor practices. Nobody ever talks about Target or KMart/Sears. Starbucks is the evil coffee company, driving down coffee prices and creating "slaves" out of coffee harvesters. Do you hear about Caribou? Petes? Folgers? McDonalds makes people fat. It is killing Americans. Their coffee burns people. You never hear about Burger King or Wendy's involved in these problems. ExxonMobil is evil because they make too much money by making Americans addicted to their product then jacking up the price too high. When was the last time we heard big stuff about Chevron or Royal Dutch Shell?
That's all I'm saying. Obviously #1 means you're the best. But when you're GM, and you're number 1 but struggling through everything you've been going through, not having to fight off being public enemy number 1 means it is one less thing you have to worry about and can instead focus on getting your business fixed.
Post Number: 4271
|Posted on Thursday, April 26, 2007 - 1:13 am: || |
Toyota, now that they're number one, will get nailed by the media and other groups just for being number one. Having the Democrats in power clearly will not help things for them either.
Post Number: 4275
|Posted on Thursday, April 26, 2007 - 11:10 pm: || |
http://www.economist.com/busin ess/displaystory.cfm?story_id= 9084687
Rising in the East
Apr 26th 2007 | LIUZHOU AND SHANGHAI
From The Economist print edition
Though struggling at home, General Motors is doing well in China
THE industry saw it coming, but it is a symbolic milestone nonetheless. Figures released this week show that General Motors has been overtaken by its Japanese rival, Toyota, which became the world's biggest carmaker in the first three months of this year, with global sales of 2.35m vehicles to GM's 2.26m. As it restructures itself, America's top carmaker has wisely cut back on discounted sales to car-rental firms, boosting revenue per unit but reducing overall sales. Slipping from first place, where GM has been since 1931 apart from a few strike-related blips, will dent the car giant's pride. But the good news is that GM's American business seems to be on the mend—and it is on top in China, the world's most promising car market.