Cars That Go Boom: Detroit's Big Three & Me

[aximr]

Ok, I amazed what a short term memory most people here have.
Do we all not recall how many AMERICAN MADE SUV'S we have all be buying for the past 10+ years. Gas prices skyrocket and we stop buying them leaving GM, Ford and Chrysler with a boat load of unsold gas guzzlers. They have to push all kinds of rebates to try and move these things leaving then with no profit and in many cases a loss on these vehicles. And for the record, Toyota, Honda and Nissan are all feeling some pain too. Should detroit have been more diversified in their product offerings? No doubt, but it's had to stop selling vehilces that AMERICANS can't get enough of. 2005 marked the first time in history light trucks out sold passenger vehicles.
And to retool and design more fuel efficent vehicles take a bit of time, at least 30 to 38 months, it dosen't happen overnight. In fact GM and Ford were both doing pretty well through the early part of 2000.
Then there are the labor cost that the Big 3 have that no foreign mfg. has when bulding vehicles here in the US. The Big 3 have an overall labor cost of $78.00 per hour while the foreign mfg have a 42.00 per hour labor cost. Now this figure dosen't just represent pay rate, it includes benifits and the cost to cover retired employees as well.
I think the Big 3 have done a pretty good job competing with the foreign mfg with their labor cost almost double.
And don't think for a minute that US Car companies are the only auto mfg that have gotten in over their heads.
Nissan would be gone today if Renault didn't jump in and buy 40% of the company and then run it back to profitabilty. Mitsubishi needed a bailout a couple years back and got it from the Mitsubishi Bank ( a different company).
Here is another question to ask yourself, if the forigen manage their auto companies better then the US, why couldn't Dalimer make a go of it with Chrysler. They bought them 10 years ago for just under 40 billion and sold them last year for what amounted to 650million. Aloss of 39 billion and change.

I just feel it's too easy to say they build crap, and are mismanaged. It's a sure show of how little you actually know about the situation.

[Pugwash]

Do we all not recall how many AMERICAN MADE SUV'S we have all be buying for the past 10+ years.

Yes we remember, it was a stupid trend that died the death it deserved. We all saw the death coming.

Here's a hint: If it's an exclusively American trend, it'll die. If you can't sell your cars abroad, you're making stupid cars. For cars, where Europe is now is where the US will be in 10 years.

[AustinTech]

Yes we remember, it was a stupid trend that died the death it deserved. We all saw the death coming.

Here's a hint: If it's an exclusively American trend, it'll die. If you can't sell your cars abroad, you're making stupid cars. For cars, where Europe is now is where the US will be in 10 years.

True.

Except the part about us all seeing the death coming. Almost all saw it coming, the American car companies seem to have blindsighted.

Duhrrrr, oil prices are gonna rise? Duhrrrr, people are gonna want environmentally friendly cars?

[Dave123]

For cars, where Europe is now is where the US will be in 10 years.

Yikes,a shoebox on wheels....i really hope Canada isn't included in that one,i like my cars....

[aximr]

GM and Ford have profitable overseas divisions. It's in North America where they are loosing money.
So why is it they can make a profit selling cars to Europe and not in America? They are also profitable selling cars in South America as well.
We all saw it coming? Who are you including in the "we all"?
Part of the losses coming the Big 3's ways are loss that are associates with their financing arms. GMAC, Ford Credit and Chrysler Financial. Some how I think it's a little more complicate than you hint, but thanks for it. I'll give it the due attention it deserves!

Yes we remember, it was a stupid trend that died the death it deserved. We all saw the death coming.

Here's a hint: If it's an exclusively American trend, it'll die. If you can't sell your cars abroad, you're making stupid cars. For cars, where Europe is now is where the US will be in 10 years.

[BigWatchPilot]

I think we have covered all the bases, thanks for an interesting conversation!

BWP

[Pugwash]

GM and Ford have profitable overseas divisions. It's in North America where they are loosing money.
So why is it they can make a profit selling cars to Europe and not in America? They are also profitable selling cars in South America as well.

Look at the cars they sell outside the Americas.

Ford US:


Ford EU:


GM US:


GM EU:

We all saw it coming? Who are you including in the "we all"?

Um, didn't you see this coming? Come on, you must have.

In Europe, we've had crappy gas prices for decades and our car market adjusted accordingly. We call 2l cars large and can't get our heads around why anyone would need 5l V8s. Big engines go in luxury and sports vehicles, not runabouts.

It was common knowledge that gas prices would not remain low in the US. A finite resource that retains demand throughout its life-span will always have increasing prices over time.

[The_Monkey]

Look at the cars they sell outside the Americas.

Ford US:


Ford EU:


GM US:


GM EU:

Honestly, if GM were still making Pontiac GTO Judges, they'd probably be in a lot better position.

GM US:

[Dave123]

Honestly, if GM were still making Pontiac GTO Judges, they'd probably be in a lot better position.

No kidding....that GM comparison backfired on Puggy....

[Pugwash]

No kidding....that GM comparison backfired on Puggy....

No, I don't think it did.

I picked that GTO because it's a gorgeous car, and completely impractical. The fact you're lusting over a car like that shows you're still struggling with reality.