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Automotive News & Views Do You Favor A Government Loan To The Detroit 3?
3958 messages, Last post on Oct 02, 2009 at 4:52 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Replying to: steve_ (Nov 26, 2008 8:37 am) At this point, for Ford, a sale is a sale... As for the article on GM and Ford eliminating brands - I would disagree with some points. At Ford, the Mercury unit has been a black hole for decades and simply must go by any rational assessment. Mercury doesn't bring anything new to the customer, but the vehicles are basically Fords with different grilles, headlights and taillights. The investment to create a Mercury from a Ford is next-to-nothing, and the vehicles receive virtually no national advertising support anymore, so the division isn't really costing Ford much money. From a financial standpoint, it's not a black hole. The company has stressed it has faith in the Lincoln luxury division - and it would be hard to suggest Ford forge ahead with no premium-market presence - but in coldly clinical terms (the kind that might be necessary to mollify a Congress running on high-horsepower skepticism of Big Three management acumen), Lincoln doesn't work and hasn't since the 1960s. Lincoln was quite successful during the 1970s, when it set sales records with the "standard" Continentals and Marks, and again during the mid-1980s and early 1990s, when the Town Car was selling very well. I'd ditch the MKZ, develop the MKS and upcoming MKT, keep the Navigator and figure out how to build a rear-wheel-drive Lincoln off of the next Mustang platform. And either kill the Town Car or update it with new styling, a better chassis and a MUCH more luxurious interior.
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Replying to: driver100 (Nov 26, 2008 7:21 am) Could they shut down in the US, continue operating overseas, and then a few years later return to the US? I wonder if they could start fresh without UAW contracts if they "cleaned up" in this way, or if they would still have contractual obligations? Of course none of this matters if they go BK anyway. |
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Replying to: gagrice (Nov 26, 2008 5:31 am) The minivan business might fit into Ford or it might just as well disappear. |
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Replying to: steve_ (Nov 26, 2008 8:37 am) Honda, Toyota and Nissan made a conscious decision to keep their luxury brands separate from their mainstream brands so as not to dilute the luxury image. How many ES owners would have paid the extra dollars if they thought they were getting a gussied up Camry?
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Replying to: lmacmil (Nov 26, 2008 9:32 am) How closely do you want the loan stings to tie Ford or GM to consolidating their luxury brands with the rest of their offerings?
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Replying to: nippononly (Nov 25, 2008 3:25 pm) It would be interesting to see the hourly rate of all the different types of employee positions at GM, Ford, Chyrsler - high, middle, low level management, engineers, accountants, assembly line, etc. On a spreadsheet. Beside the flat hourly rate, (all salaried gets converted to hourly), also see the total rate with all benefits. Congress should have access to all of these details before a bailout/loan. Every single employee should "first" be willing to adjust their compensation to lower than Honda/Toyota as part of their commitment to help their company before Congress gives any loan. When/if these companies start to be profitable, then compensation can be adusted upward accordingly.
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Replying to: grbeck (Nov 26, 2008 9:05 am) This was a clever marketing tool when first invented. Chevy owners would move up to an Olds, Pontiac owners could move up to Buick, Ford owners going upscale could get a Mercury and eventually a Lincoln. Today the idea is dead for the Big 3, but there are dealers that have contracts, and you just can't decide to drop a line of cars, without compensating the dealers selling that line. Cost GM a lot to get rid of Oldsmobile. So, we can say the Big 3 should have fewer nameplates, but it is easier said than done. They could also close down 2/3rds of their dealers, but can't for the same reason.....Chapter 11 is looking better all the time! |
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Replying to: grbeck (Nov 26, 2008 7:57 am) Problem is that upscale buyers will expect more attention than an ordinary Ford dealer might provide. Could a Ford dealer compete in customer satisfaction with a Lexus, Infiniti, Acura, BMW, etc dealer? Would a present owner of a Lexus ES350 consider a Lincoln brand if he/she had to go to a Ford dealer for service? |
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Replying to: kernick (Nov 26, 2008 7:21 am) You're the optimist if you think that approach would work. The Unions don't care, their mission is to bring management to their knees, always. Suppliers are already on the skids and can't reduce prices any more. Banks, contrary to what Congress will tell you (like they actually understand anything) are under pressure from both the Government and their stockholders to "resolve" their bad loans, which usually does not mean working with anybody, it means foreclose. The only solution is Bankruptcy and reorganization in a painful way - they cannot go on like they are and succeed. The situation is grave indeed.
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"GM spends an average $72 an hour on labor, including wages, health benefits and pensions. Non-union Toyota plants spend $42 an hour. Toyota hasn't been building cars here long enough to be stuck with the hospital bills of nonagenarian retirees. The company has plenty of elderly veterans back home -- the Japanese are the longest-lived people in the world -- but guess who pays for healthcare in Japan? The Japanese government. As a result of providing its workers with health benefits that everyone in this country should be getting, American automakers pay over $2,000 more in labor costs on every car they make. The best way to overcome a nut like that is to build big vehicles that you can sell for a big profit. Were Detroit automakers shortsighted? Absolutely. As shortsighted as a 21-year-old who drops out of engineering school and takes a job in a warehouse to support his ailing parents. American automakers sacrificed innovation to keep building SUVs and trucks that would pay their legacy costs right away." Detroit isn't dead yet (Slate - sometimes the link flakes out to the premium version) |
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