Vic Smith wrote:
On Fri, 21 Nov 2008 12:39:42 GMT, Tom Francis - SWSports
wrote:
Great stuff.
http://online.wsj.com/article/SB1224...googlenews_wsj
Typical perspective form the WSJ, but they've missed the actual most
serious problem.
Anybody must first concede union intransigence, and legacy costs as a
major problem. There have been serious union "givebacks" as the "Big
3" have gone downhill. Supposedly by next year they will be on a
salary par with Honda/Toyota workers.
Pensions will be privatized.
What will be the one remaining major cost disadvantage of the Big 3
not suffered by the Japs?
Healthcare.
With all that out of the way, I believe they still could be solvent,
even with the union burdens, and perhaps sales leaders but for one
major mistake.
Of course, this is just my opinion, and I admit I might be wrong.
There are complexities I see and won't mention, and undoubtedly some I
haven't recognized.
I firmly believe I do see the heart of the problem.
And I have been in many knock-down drag out battles over many years on
the auto groups about automotive quality and technical issues and what
makes buyers tick.
Since I've always been technically/repair cost/reliabilty/dollar value
proficient, there's been no problem making my used car arguments for
GM. Still can. Others could do it for Ford or Chrysler, but I only
know GM's.
The only battle I could never win, and I seldom tried to fight was one
I came late to as far as seeing it's importance.
Here it is in a nutshell.
Brand loyalty, and reputation of family cars.
Camry/Corolla/Accord/Civic has put the "Big 3" on the mat.
Forget trucks, SUVS. They are distractions. Except keep in mind the
F-1xx label, which is relevant.
One reason I came late to this view is because it took years to
unfold.
The Jap cars above all kept a label of quality and customer service
since 1981-83.
Camry/Corolla/Accord/Civic
The Big 3 have nothing to compare in passenger cars. NOTHING
In 1986 the Chevrolet Celebrity was the U.S. passenger car sales
leader. That was the last time a U.S. label had the title.
Maybe Ford Taurus once after that.
Do they still make them?
BTW, I had an '88 Celebrity. It was every bit the equal of the
Camry/Accord except for paint issues later on.
Better on gas and overall costs.
It was by far the most reliable car I ever had.
It was discontinued in 1989, replaced by the Lumina which was
immediately rapped for sticky rear disc brake slides.
If they had been making that car in 2002 when my '88 rusted out, I
would have bought my first new car. Yes, I would have bought a
new1988 Chevrolet Celebrity model in 2002.
Okay, I'm already tired of this, so I'll wrap it up and let you ponder
it or reject it.
The Big 3 never concentrated on continuously improving quality family
compact and mid-size cars, keeping their continuity of label and
customer service.
Camry/Corolla/Accord/Civic made the Japs and destroyed the Big 3,
who never even responded. They just didn't get it.
Those cars inspired brand loyalty.
What's the best selling Big 3 vehicle? Ford F-150.
Old name, continuously improved (I think.)
But you can't survive on just trucks/SUV's.
The GM Impala/Malibu are pretty long running passenger labels now, and
get generally stellar reviews, but it may be too late.
I heard that the average pay and benefits of a US worker is $25 per hour.
For US workers in Japanese automkers the average pay and benefits is $42
per hour.
For UAW members the average pay and benefits is $75 per hour.
GM incurs a cost of $4.6 billion for health benefits for current and
retired employees. The cost per vehicle made in the US in health
benefits, current and retired, is $1,200 for GM. For Toyota it is $200
per vehicle make in the US.
GM has three retirees for each active worker.