Tag Archive | "GM"

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What you aren’t hearing about GM …

Posted on 02 June 2009 by scanjack

The bankers win again. A nation of laws … right.

TARP Babies get paid no matter what it seems.

Are we having fun yet?

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Preconceived Bullplop Regarding the Automotive Industry

Posted on 23 January 2009 by GlazednConfused

Disclaimer:
Yes, I am talking about cars again. The Detroit Three on life support is a once-in-a-lifetime scenario, and can not be overstated. Imagine if Microsoft suddenly goes belly-up in 75 years and goes crawling to whatever black, lesbian, quadriplegic transsexual is running this country for a loan. “We could not predict that Red Hat Siamese OSXVI would gain so much traction in the market! Damn that Steve Jobs, Jr.” You get my point.

I have owned Ford automobiles just about my whole life, with a brief (and happy) foray driving a 1991 Toyota Tercel. That was a great car – I drove it into the ground as a pizza delivery driver. It was my first financed auto, and the barely-reputable used car lot could not have made a better choice for me. I’m not what you call a “Ford guy”, but that company just happens to have the best value for the money whenever I went to buy a car: two Mustangs, an Escort, two Probe GTs (one of which I still own and drive), and our current Ford Edge. I think brand loyalty, like just about any other loyalty that does not involve friends or family, is for suckers. Unless the new Ford Fusion turns into a sports sedan (highly unlikely), there will be zero chance my next car is a Ford.

As a customer, I was never looking for anything fancy and I always had a specific budget in mind. In other words, I was the prototypical domestic automaker customer. One of the myths of the current market is that Ford, GM, and Chrysler are not making automobiles that customers seek.That is not entirely true, and there are many other factors involved (here is a good summary).

What about the foreign nameplates – they must be cranking out awesome cars that attract consumers like moths to a flame, right? You may think so, but there are many examples of “WTF?” thinking for Germans and the Japanese, too. Following are just a few – I excluded the obvious full-size truck and SUV monstrosities. Toyota and Nissan just couldn’t help themselves, could they?

Premium compact crossovers: This segment actually inspired this blog entry. They include the Acura RDX, Infiniti EX, and the BMW X3 pictured above. If you are unfamiliar with them, let me summarize – they are basically rough-riding small SUVs with high-output engines, reduced cargo capacity, and piss-poor gas mileage (20 mpg!). So where is your $40k going? Your guess is good as mine. How much does anyone really value 0-60 times when shopping for an SUV? If you want all-wheel drive with some luxury just option-up a Honda CR-V or Toyota RAV4 and save $10k. A quick aside: I really like new car shows. As an adult, I do not get excited often. However, I’m always jazzed about the SF International Auto Show every Thanksgiving week and this year I went alone. This allowed me to run around like a giddy schoolgirl, sitting in everything once or even twice. What really stood out to me is how painful it was to sit in these small sporty SUV – especially the back seats, which were absolute torture. I realize I am a big guy, but I found comfort in the Mazda3 and VW GTI. How big is the upper-class gymnast market anyway?

Pointless small cars: When is a small car not a good choice? When it gets the same or worse gas mileage and/or costs almost as much as the next larger model. The BMW 1-Series is a perfect example – almost the same prices as a 3-Series, with the same gas mileage (according to Edmunds data). Why bother? The Nissan Sentra and its smaller brother the Nissan Versa both get the exact same gas mileage. Same goes for the Toyota Corolla and the Yaris. Have you seen the Yaris? My god it is practically a toy yet it only gets 30mpg, while the much larger Chevrolet Cobalt gets 1 mpg less. Why isn’t anyone talking about this? A fifteen year-old Honda Civic gets much better gas mileage.

The bottom-line is, the number one problem with the domestic automobile companies has to do with their image. I’m not defending any specific company in any way – especially after reading The End of Detroit. What I’m saying is at this time If you look closely, all of the manufacturers are not much different. Get back to me in five years and we can survey the scorched landscape of survivors.

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Automotive Industry Oversight

Posted on 04 December 2008 by Thraxxus

As you the reader (if you have ever been here before, that means both of you!) probably know, I frequently listen to NPR as I see it being the closest thing to REAL news that the radio world has to offer, in the United States of America anyway. Recently they have been covering, in many angles, and with loads of detail, the American Automotive Company problems. Unless you have been living under a rock you probably know that the big automotive companies in the USA are on the brink of varying degrees of bankruptsy, with Chevy being the worst and Ford being the best.

In their coverage NPR has noted the many different issues with the automotive industry in the USA and why the Asian car companies don’t appear to be having the same problems.

  1. There are too many dealerships in the USA for american automakers. Given this fact that competition is fierce, which drives down the prices of the American Brands, which in turn drives down the profit margins, ultimately making the auto maker less profitable – as is evident today.
  2. The American automaker dealerships have an amazing amount of vehicles on their lots – vehicles they pay to have there – which vastly increases their monthly overhead.
  3. American Auto makers have totally dropped the ball in having foward thinking regarding the needs of their consumer base.

Oddly enough the part that has been missing in the coverage, or perhaps I may have just missed it, was that the American auto industry shake up, in a couple years time, may actually be a good thing.

  1. There will be less American auto dealerships, thus less competition, thus better profits for the industry. Turns out this is not so good for the consumer, but really who cares about them right?
  2. By actually looking at why asian auto makers and dealerships don’t have overhead problems, successful American companies may realize they don’t need 5 zillion vehicles on their lots.
  3. This one guy on NPR today was talking about how he has always purchased American cars since the 50s! What does he drive today? A Toyota Prius. Why? Because American Car Companies haven’t made a hybrid worth driving, or at all. Supposedly that is changing – by 2012.

In closing industry shake ups typically suck for everyone during the shakeup. With any luck the American Auto Makers will learn from the debacle that American Television manufacturers went through in the 80s – that being getting totally owned by Asian Television and electronic companies through better product design at cheaper prices – and will pull through, becoming ultimately lighter, faster, and better companies.

Or they will die.

BTW – I drive a Honda.

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A Thousand Years of Automotive Engineering Has Come to This

Posted on 14 August 2008 by GlazednConfused

I’m sure you’ve heard the gloom and doom by now. Ford has its worst quarter ever. GM is hemorrhaging cash with one foot in the grave. Chrysler is this close from outsourcing all its manufacturing and becoming merely a shiny brand they attach to any car they can get their greasy mitts on. There’s one side of me, fairly strong, that is saddened and wants them all to survive. One of the oldest and proudest American industries down the crapper in a mere 10-15 years. Remember the movie Gung-ho? The Japanese make cars like this, while fat American Midwesterners like Norm from “Cheers” make cars like that. Ha HA – A time of innocence.

Ok so that was a bad example. Little did we know it wasn’t so much HOW they built the cars. Sure, the quality was there and the reputation continues, even if it is more of a myth now. More important is WHAT they built – actual cars. Sure, Honda wasn’t making insane margins from Civics – maybe they were a little jealous of Ford and the obscene prices we paid for their glorified work trucks. But they resisted because they saw the big picture. Think about the movie Who Killed the Electric Car, one of my all-time favorite documentaries (a member of my “Big Three”, with The Corporation and Enron: The Smartest Guys in the Room). GM basically killed their electric car because it wasn’t making money, after investing a whopping $1billion in it (according to their own blog). Wow – one whole billion. They lose that now in just a couple weeks. That’s what happens when you have old-school stiffs, stock market hyenas, and penny-pinching accountants run your company – no vision, just stacks of cash going into executives’ pockets. “Are we still in the Fortune 10? Check. Are we still making 50% from every Escalade we sell? Check. Golf time”. A few more billion and some true foresight could have lead to millions of little Insights already on the road, each one a gleaming symbol of American ingenuity – a modern version of the original Ford Model T.

Instead, we’ve come to this – the Chevrolet Aveo. This is currently the only subcompact car from anĀ  “American” manufacturer. Almost a thousand years of American automotive engineering has been reduced to an anemic, ugly jellybean that still only gets 28mpg. Oh, and it’s made in Korea. As for the compacts, don’t get me started on the Dodge Caliber or Chevy Cobalt – they regularly get dressed down by industry experts. The Ford Focus is relatively competitive, but considering it’s long history, Ford should be more than just keeping pace by now. The bottom-line is this: the only reason anyone buys an American car is two reasons: (1) They have a history with the brand, (which is becoming less and less common) and (2) they are comparably cheap. The second reason is a vicious circle – the less American manufacturers charge for their cars, the less they make, and the less they can invest in better future products. The result is the Aveo.

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