Why are American Car Makers Hurting???
- Thread starter Mickmeister
- Start date
Formula1000
Registered Member
Poor quality
Poor service
Poor reputation
Cost too much - due to unions & retirements
Body styles have gone down hill
Poor service
Poor reputation
Cost too much - due to unions & retirements
Body styles have gone down hill
superstring01
Moderator
GM & Chrysler have actually done something that puts them on the right track-- they've got great warranties now, something only offered through Eastern manufacturers.
~String
Broadening your market is always good. It's interesting though that the US carmakers never focused on the European market. The European market is not that small, and currently still growing due to the constant increase in size of the EU and the economy of the EU.
It's not easy to sell cars in Europe though. Europeans are very critical of cars and they have a long memory. Certain European car manufacturers still suffer from a bad image build up 30 or more years ago!
The Japanese carmakers have penetrated the European market really thoroughly though. Their concept of the economical and reliable car was perfect for the European market. Especially after the 70s oil crisis when gas prices rocketed in Europe (and not so much in comparison in the USA). Gas guzzlers died out then due to economic reasons.
Interestingly, despite that the engines have become more economical in the average European car, they also have become larger again, basically nullifying the progress in terms of economy.
Currently you see more and more advertisements for American cars now here. Probably because of the low dollar. They haven't really penetrated the market yet though.
Maybe I can already give some positive news for the American car manufacturers. The SUV is getting more and more common how here. However, I must warn caution against optimism, because most SUVs here seem to be either of Japanese origin, or the more expensive version made in Germany. The only American SUV I see here regularly is the Jeep version.
superstring01
Moderator
I think they have. Ford and GM either own outright or indirectly a good chunk of the European automarket, and have for years.
Opel and Vauxhall since the 1920's, and Saab since 2000, have been owned by GM, and they are sizeable players in that market.
Jaguar, Rover and Volvo have been owned by Ford for about a decade now, and they are sizeable players as well (though, Ford has been trying to offload the tired brands, Rover & Jaguar, for some time now).
I agree. When I was living in Europe, the (surprisingly reseved) statements I got out of the English, French and Spanish was that they didn't trust the reliability of Ford and GM.
I'm not sure it's all that simple. The majority of the cars the USA sells in Europe are made IN Europe. GM operates 15 plants in Europe while Ford operates 41 (44 if you include Turkey). The adjustments made through the exchange rate wouldn't have THAT much of an impact on the cars that are sold there. Besides a few things imported from plants around the world, the fast majority of the work is done "in house".
I can't even imagine the cost of their fuel consumption. At about 2.75 per galon, adjusted for the PPP and not current exchange rate, and that's about 2 Euros for 3.8 litres... and THAT is a record high! (in Venezuela it's currently 25 cents a galon!)
~String
Last edited:
The GM SUVs are probably the worst for fuel economy. Hummer, Fords, and almost all GM SUVs are terrible in fuel efficiency. I heard that the Hummer H2 consumes around 4km for 1L (10Mi/gal). When it comsumes more gas, it creates more carbon dioxide which cannot be good for the environment.
superstring01
Moderator
Well, finally, GM and Ford are catching up in the economy of their fuel efficiency. Ford actually has quite a few hybrids available.
Nothing like striking while the iron is hot!
~String
Nothing like striking while the iron is hot!
~String
superstring01
Moderator
They are hybrids, Toyota and Honda currently are offering them as well. If not available right now, they will be by mid 08.
Toyota Highlander Hybrid:
Ford Escape Hybrid:
I know that both GM and Honda are working on offering some of their current SUVs in hybrids too.
~String
The unions are not responsible for the single biggest factor killing US manufacturers right now - employer-based health insurance.
Back in the day, the unions wanted that (probably to get their hands on the money pile). GM, in particular, prevented the unions from supplying the health insurance, and part of that deal was GM supplying it.
The whole US economy is stuck with the results: a system as antiquated as a gravity-feed gas pump.
(Anyone who wants to blame the unions can even look at Prohibition, when the Mob got big enough and connected enough to ordinary life to get in tight with the labor unions. )
Back in the day, the unions wanted that (probably to get their hands on the money pile). GM, in particular, prevented the unions from supplying the health insurance, and part of that deal was GM supplying it.
The whole US economy is stuck with the results: a system as antiquated as a gravity-feed gas pump.
(Anyone who wants to blame the unions can even look at Prohibition, when the Mob got big enough and connected enough to ordinary life to get in tight with the labor unions. )
Did you read Superstring's post? The benefits these union guys get are absurd. I see guys retire a fifty or younger from GM and they expect GM to support them for the rest of their lives. WTF? How in the hell can a company compete when it must not only operate under absurd work rules, but it must continue to pay workers for thirty of forty years after they stop working?
Baron Max said:
Negative - actually the average Japanese labour cost is higher than that of the USA.
Though it is true however that the German labour costs more than the Japanese one (well, as of 1999 at least, but I suppose they are pretty identical by now).
See:
http://www.eurofound.europa.eu/eiro/2002/03/update/tn0203104u.htm
Also, I should metion, in average, Americans work more hours than Germans or Japanese. It doesn't look too good for Americans, does it? Working longer hours with lower wages while producing substandard products - the phenomenon you see in many developing countires.
Best,
superstring01
Moderator
And why wouldn't they? If the Union was, indeed, going to supply the health insurance, where do you think they were going to get the money from, printing presses in the basement? Union dues, that's where. If the unions were going to somehow contracturally supply the health coverage, you BET that they would have gotten a whole hell of a lot more in union dues.
No matter how you slice it and dice it, the Union's faught bitterly for the current slate of benefits that are ridiculous in nature. Although the pathetic costs of American health coverage are passed on to the buyers (as you pointed out), the biggest bruiser to the industry is the pension benefits, the UNION DEMANDED employee protections that prevent GM, Chrysler and Ford from firing their unproductive employees, union "equal pay" rules that prevent productivity raises (and, consequently, raises comensurate with performance: there's nothing unions hate more than meritocracy) and union contractural obligations that force GM, Ford and Chrysler from closing unproductive plants in certain areas.
I won't disagree with that sentiment. America is at a crossroads and we're waffling at the prospect of making this decision and it's costing us dearly. WE either need to restructure our current regulations of Health Care because we are all slaves to our horrific medical system (though the care is great for me and those who have good coverage, our lives ebb and flow based upon this system) OR we need to totally socialize medicine. The latter prospect scares the shit out of me, but our current system passes on the ridiculous cost of health care to people buying American made sofware, foodstuffs and machines who live in places like the Philipines and Ecuador. It doesn't make sense.
~String
so the american unions decided to build shitty cars? and the US leadership is not responsible for invading iraq?
Mickmeister
Registered Senior Member
With the way union workers are, yes. They are lazy. Immigrant workers are much better to work with than American. They work for their money.
So americans are lazy and destroying the USA and illegal immigrants are trying to save the USA?
Mickmeister
Registered Senior Member
Americans are definitely lazy to say the least!
Now that's bullshit. It's just union workers who are lazy because, like communism, union rules remove the relationship between performance and pay.
I'm kind of irked by the way some personal sample sizes used to generalize the industry styles of ENTIRE countries... So you had 1-2 American cars that had problems, and 1 foreign car that didn't, therefore, foreign cars have higher quality?! You may be right, but please post something with a significant sample size. Personally I know a lot of people who have very costly repairs for their foreign vehicles, while I've had none for my 01 made Saturn, but that doesn't make a trend.
Superstring was right, American companies didn't prepare for the fuel costs. They were/are enamored with gigantic trucks and SUVs. Profitable with lower fuel costs, but not any longer.
This is a myth/excuse propagated by American car companies. In the past, it amounted to about 500$ more for Americans to make a vehicle, on average. It's definitely not the cause of their problems. GM just made a really good new labor deal for themselves, reducing their costs more.
Superstring was right, American companies didn't prepare for the fuel costs. They were/are enamored with gigantic trucks and SUVs. Profitable with lower fuel costs, but not any longer.
This is a myth/excuse propagated by American car companies. In the past, it amounted to about 500$ more for Americans to make a vehicle, on average. It's definitely not the cause of their problems. GM just made a really good new labor deal for themselves, reducing their costs more.