Obama: No choice but to take majority stake in GM

[mjs]

I'm asking you to know what you're talking about or have a basis for your opinions. LOL indeed. I was asking you to do your own research so you know I don't cherry pick. You don't even cherry pick. You just gorge on imaginary cherries.

First Quarter 2008 Top 15 Vehicle Sales
Model Volume vs. 2007
1. Ford F-Series 148,138 -13.7%
2. Chevrolet Silverado 122,779 -19.6%
3. Toyota Camry 107,002 +2.4%
4. Honda Accord 87,802 -3.9%
5. Honda Civic 77,532 +15.3%
6. Nissan Altima 76,407 +4.6%
7. Chevrolet Impala 71,750 -11.1%
8. Dodge Ram 68,862 -25%
9. Toyota Corolla 67,047 -23%
10. Honda CR-V 50,684 +7.9%
11. Ford Focus 49,070 +23.2%
12. Chevrolet Cobalt 48,024 +14.5%
13. Pontiac G6 45,951 +28.9%
14. GMC Sierra 44,207 -7.5%
15. Ford Escape 43,900 +11.7%

I see four Truck models totaling 280,000 units, two SUV models totaling 90,000 units, and ten Car models totaling 700,00 units. With the exception of the Impala, the only big three cars on the list were their smallest cars and they were seeing double digit growth following double digit growth in 2007. During a time that truck sales were seeing double digit drops, looks like 2007 and early 2008 showed plenty of opportunity to go after Japanese market share in the compact and midsize markets. They're doing it now with a vengance including the addition of subcompacts, hybrids, natural gas, and EVs. If US market share doesn't spike in the next five years, you can say I told you so.

http://blogs.edmunds.com/csx/2008/04...cle-sales.html
http://www.autoobserver.com/2008/01/...cle-sales.html

[Fury13]

It was implied that the companies should have had small car model tooling and floorspace idle while they built SUV's in case gas prices spiked. It's too expensive. It takes years to switch from one to the other.

Well, bankruptcy is pretty expensive -- and humiliating -- too.

What I was really getting at is that the US companies should have begun building decent, efficient small cars in moderate quantities at least since '06-'07, by which time the foreign companies had begun offering more stylish, better-trimmed small cars [[Mini Cooper, Honda Fit, Nissan Versa, etc.). Production could have been ramped up as demand increased -- that way, the hit wouldn't have been so hard.

You can say it would have been expensive to do that; but it's also pretty damn costly to have rows and rows of SUVs and trucks sitting unsold on dealers' lots, isn't it? Our engineers and managers are supposedly smart [[although sometimes I wonder); we should have long ago figured out ways and alternate scenarios to respond to rapidly changing markets. It SHOULDN'T take "years to switch from one to the other." They should have gotten flexible. See, GM and Chrysler didn't learn that in time, and now they're bankrupt.

[mjs]

Our engineers are very smart. Its why I'm so confident in the future. The problem is that less than half of GM's 53 execs have degrees or backgrounds in science or engineering and less than 10% hold an advanced degree in science or engineering. The engineers need to be calling the shots.

[Sstashmoo]

Quote: "What I was really getting at is that the US companies should have begun building decent, efficient small cars in moderate quantities at least since '06-'07, by which time the foreign companies had begun offering more stylish, better-trimmed small cars [[Mini Cooper, Honda Fit, Nissan Versa, etc.). Production could have been ramped up as demand increased -- that way, the hit wouldn't have been so hard."

Good points and taken. I think the plan was a fit in the market where they could make a profit. Going head to head with the Asians and competing for the small car market, the big 3 have traditionally came up short. So they concentrated on higher profits and shorter term goals. When your labor and legacy costs are staggering you do what you have to do to survive. In a perfect world we would all anticipate market trends and be profitable. There were just no alternatives for them at the time. It wasn't tough to see this coming.

Quote: "They should have gotten flexible. "

It comes down to cost. Due to the labor rates, retooling for the Asians is just another line item. For the Big 3 those costs are astronomical. The reason they started outsourcing tooling to China when possible, and killed off so many tool shops here in the area. They found out due to the distance involved/communications it was a disaster. Those projects need close supervision. It just boils down to, we simply cannot compete against the cheap Asian labor.

[Sstashmoo]

Quote: "Our engineers are very smart. Its why I'm so confident in the future."

I'm not. Unless you mean the future somewhere else. Until we address this trade issue we have primarily with China, we have many rough years ahead of us. You can have the best engineers in the world and as long as there is an open door to cheaper labor, and zero protection on intellectual property, it's not going to make any difference.

[Cincinnati_Kid]

Sstash, you make some good points, but why would Ford, GM or Chrysler revamp they're lineup to small cars when they don't turn a profit on them?? It was all about the Benjamins. They made a 10 to $ 12,000 dollar profit on every Navigator, Tahoe or Escalade they sold. And when OPEC turned up the heat on gas prices, they were caught with they're pants down. Management is the Detroit 3's downfall, nothing else from what I can see. The workers just build what they're told to build.

[Det_ard]

The problem isn't really that they lack great small cars, through they do. The problem is that their cost structure and balance sheet wasn't robust enough to handle an almost 50% drop in sales. Even blue-chip Toyota is bleeding billions, but they have a deep war chest so they can ride out the current economic troubles. GM and Chrysler were in much more precarious financial positions.

It seems all the pundits on TV think the lack of competitive small cars are what drove GM and Chrysler under. Not so. Their huge fixed costs did. Even if they sold a lot more small cars, they make so little on each one that it's not enough to cover their losses. Light Trucks still command ~50% of the market. Small cars are closer to half that.

[nouthen]

and so begins the era of Government Motors