What's the matter with GM and the other American manufacturers?

[cornermouse]

Why are they flailing and floundering?

http://www.hybridcars.com/news/news.php?news_id=323

"Summary: At a conference in Washington this week hosted by the Alliance to Save Energy, officials from General Motors and Honda Motor Co. squared off over the issue.

For General Motors, the customer is king. The U.S. auto giant says it merely builds what customers want - larger, more power vehicles where fuel efficiency takes a backseat to other perks."

This is why. A further look at the table below is also indicative of why American car manufacturers are in trouble. Only one car is planned and that's the Chevy Malibu in 2007, two years from now. OUR manufacturers are producing SUVs and trucks, which even when hybrid still do not have great gas mileage. Granted, SUVs and trucks should go hybrid or biodiesel, but WHAT ABOUT SMALLER FAMILY VEHICLES?

This is why Detroit is going the way of the dinosaur. Really bad leadership from the CEOs and decision makers at the top of the pyramid. If I owned stock in the American car market, I'd be demanding to know why they're doing such a lousy job. These people need to be fired.

http://www.hybridcars.com/cars.html

Compacts & Sedans

Chevrolet Malibu Expected 2007
Honda Accord Available Now
Honda Civic Available Now
Honda Insight Available Now
Nissan Altima Expected 2007
Toyota Prius Available Now
Lexus GS Expected 2006

SUVs & Minivans

Chevrolet Tahoe Expected 2007
Dodge Durango Expected 2007
Ford Escape SUV Available Now
GMC Yukon Expected 2007
Lexus RX 400h SUV Available Now
Toyota Highlander SUV Expected 2005
Mercury Mariner SUV Expected 2005
Saturn VUE Expected 2005
Toyota Sienna Minivan Expected 2007

Trucks

Dodge Ram Expected 2005
GM Silverado & Sierra Expected 2005

[kliljedahl]

1. They're not used to competition

Keith’s Barbeque Central

[KlatooBNikto]

16. This is as good an explanation as I have found on this matter. GM's

entire business model is based on the idea of building millions of shoddy cars and dump it on the public.That model worked well for nearly forty years when there were no alternatives for the buying public.As the public have gotten used to high quality cars from Japan, Germany, Sweden and Korea , this economic model is unraveling.GM simply does not have a clue how to operate in a comeptitive environment.

A similar thing is at work in advanced technology industries as well. As India continues to produce highly educated and competent professionals by the hundreds of thousands at many of its well regarded Colleges, Institutes and Universities, our competitive advantages in medicine, engineering. law , accounting, banking and insurance are disappearing.So expect the service sector to feel the impact of competition as well in the next few years.

In addition to your observation, let me add that, compared to India and China, our standard of living is high and we are going to pay the price for it.

[converted_democrat]

2. Well.....

I have heard about this alot over the last week and almost everyone is blaming it on the "worker" because of the health care and pension aspect. I do not buy it though. They had their pants around they knees the last time there was an oil "issue" in the 70's. Same thing happened again. The management at GM truly defies logic in some areas, they said the other day that the "real" reason people were not buying GM was because GM wasn't putting enough identification indicators on the product. Bullsh*t.

[KlatooBNikto]

4. It is a good thing they don't have GM IDs on their cars.If they do, they

stand to lose a few more thousands of customers.

[cornermouse]

5. Well....

I just bought a hybrid car. Had an American company actually been producing a hybrid with good mileage, I would have bought American. Instead, I have bought my first foreign produced car. I would have preferred to buy American, but I couldn't buy something that they (the decision makers) refused to make.

[converted_democrat]

7. Good for you!!!! Way to be a good citizen!!!!

[cornermouse]

10. I needed a car now, not in 2007. I needed to cut gas costs.

American manufacturers were not producing it. Its that simple.

[DemonFighterLives]

14. YOu hit the nail on the head in post #2

Welcome to DU btw.
GM wants to push behemoths when gas prices have risen 100%. It happened in the late 70's when the American carmakers lost their shorts the first time. History is repeating itself.
All this feel good oil war was helping the Hummer rise. When people realize that the price of oil/gas has risen, the behemoths will become sidelined.
Dumbass lack of vision is no excuse, the car makers should be striving for fuel efficient and alternative energy vehicles.

[entanglement]

22. History repeats itself, but the big automakers NEVER seem to learn n/t

[MichiganVote]

3. They are in trouble b/c they will hustle for big CEO salaries/bonuses

and not much else. They are the equivalent of the spoiled rich guy's kid who is spending the inheritance faster than the interest generated from the "trust" fund. Look out below auto workers, your pension is next!

[cornermouse]

6. I think everyone's pension is next.

I think the airlines are just the beginning of it.

[converted_democrat]

9. I agree completely.........

I bet many companies will come forward and do the same thing. No matter what industery it is. It will be just another way to "cut cost."

[DoYouEverWonder]

8. You would think these folks would buy a clue

when you see cars like the hybrid from Toyota that sells for more used than new and Mini Coopers all over the streets because they are cute, that these jerks would say, 'hey, let's give the people what they want.' But no, they just want to shove bigger and bigger hummers down our throats. I hope they all go belly up because that is the only thing that will stop them and their stupidity.

[cornermouse]

11. You would indeed.

Also the fact that there is a waiting list should probably make some people think that this is an indication that there is a market that is not being served...

[DrRang]

19. 10x profit on SUVs

I've read several times that GM and Ford have relentlessly pushed SUVs and El Bloato Grande trucks because they make about 10 times more profit per vehicle than on sedans. Figure I seem to remember is 1,500 versus 15,000.

[Toots]

20. Remember the American Motto "Greed is Good"

The bigger they are the harder they fall but the one's that will suffer will be the workers. the CEOs are set for life. Their great great gandchildren will have more than enough while the worker that made all that money for them gets the shaft. Where will the church get all it's money when the workers no longer have any? How much do you think the CEOs give to the church? I would bet zero is pretty damn accurate. Remember "Greed is Good"

[teamster633]

24. And it was this very sin that brought them to grief...

...back in the 70's as well. They made more money on the big gas guzzlers and they were damn well going to make them. The fact that the public had no choice but to stop buying these dinosaurs seems never to have occurred to them...then or now.

[fasttense]

12. They can't seem to diversify

Instead of making mostly gas hogs they should make both so their market doesn't dry up when gas prices rise. Instead they make basically only one or two types of vehicles and bet the company on it.

How come Japan can afford to pay their manufacturing employees 20% more than what the average American manufacturing employee makes? Why is it Japanese companies make profits with high labor costs?

[patricia92243]

13. They are not progressive. They are still living in the "good ol days."

"Without a vision, the people perish." They have no vision for the future, and they have perished.

[tsuki]

15. Executive compensation

OFFICERS
Pay Exercised*

G. Richard Wagoner, Jr., 52
Chairman, Chief Exec. Officer $ 4.82M N/A

John Devine, 60
Vice Chairman and Chief Financial Officer $ 4.22M N/A

Thomas Gottschalk, 62
Exec. VP, Law and Public Policy and Gen. Counsel $ 1.73M N/A

Gary Cowger, 57
Group VP and Pres, GM North America $ 1.55M N/A

*Dollar amounts are as of 31-Dec-04 and compensation values are for the last fiscal year ending on that date. "Pay" is salary, bonuses, etc. "Exercised" is the value of options exercised during the fiscal year.

On edit: from http://finance.yahoo.com/q/pr?s=GM


So 4 men, without ideas, a plan for the future, leadership or business forsight, rape the company for 12.32 million a year and do not exercise any options during that year. As I have always maintained, we are outsourcing the wrong end of the work spectrum.

And they have the "balls" to call the American worker lazy? How much health insurance would 6.16 million a year buy?

[tech3149]

17. not just GM but in all the corporate world

the problem is MBA's running companies. The run based on a sell more or profit more basis. They aren't grown into the industry they run from the bottom up.

A personal example is my ex wife. She spent her entire adult life and teenage life in books. Either retail or libraries learning on the way how to evaluate the books and learn what people wanted. In the 80's she was offered a position in purchasing for a Canadian bookseller. The executive that offered her the position made the stupid comment that "I don't need to know books to sell books" Needless to say, her choices were consistently high volume sellers, most of this jerks sat on the shelves until returned.

[JHB]

21. Know-it-all MBAs are the Neocons of the economy...

...They can be useful advisors as long as they're two or more steps removed from where the real power is, but if they getg a chnce to take over then ideology rules the day and everything goes to hell (except for them, 'cause they're looting whatever they get their hands on).

[0007]

18. Greedy greedy greedy CEO's. They'll soon wake up after the

foreign market runs em out of business.

[hatrack]

23. "Buildling what customers want" - right . . . .

Oh, so that would explain why in 1997 Chevrolet felt compelled to spend $65 million on marketing and advertising for the Silverado ALONE.

No, no, no - advertising isn't designed to created demand that wouldn't exist otherwise. No, it's just to inform prospective customers about the features and costs of particular products.

Bullshit. If Detroit were building what customers want, they wouldn't be in deep shit as they are today.

[apple_ridge]

25. Detroit simply doesn't look to the future.

They build primarily on current profit margins and those are big SUV's and trucks. If gas prices hit $3+ a gallon, they'll be crushed by the weight of their current focus on gas guzzlers and will be hard pressed to make a quick shift to fuel efficient cars. Hell, they've been fighting CAFE standards since day one. Meanwhile, Japan has been never given up on producing efficient vehicles and are perfectly positioned to gain greater market share as gas prices rise.

Also, considering the quality of the vehicles that Detroit produces, it is astonishing that they are still players. Most of their success has been based on consumers who feel the need to buy American and not quality of product. Now that the Japanese are entering the larger truck market with vehicles of considerably better quality, trucks being the most profitable line of products, Detroit will only continue to lose market share and profits.

http://www.detnews.com/2005/autosinsider/0501/06/A01-50668.htm

I wouldn't be surprised to see GM filing for bankruptcy in the near future, particularly when you consider that their current debt load is approximately $300 billion and they have a current rating of "junk" in the bond market.

http://www.cbsnews.com/stories/2005/05/06/national/main693430.shtml

But you and I will probably be bailing them out.....