WTF is wrong with the American car industry?

Quality is up and rivals that of Japanese and German automakers, according to the J.D. Powers surveys.

Efficiency is better than ever, according to the Harbour Reports.

And yet, nothing seems right.

Market share is on a continuous slide. GM is selling off chunks of itself to cover its financial obligations in the ongoing Delphi bankruptcy debacle. Ford and GM are coming out with plan after plan to idle plants and cut jobs.

What's it going to take to turn things around?

Is it the wrong kind of product? Do people not want the larger vehicles?

Is it a problem of perception?

If you were in the CEO's office at GM, Ford or DaimlerChrysler (even though they're managing to tread water at this point), what would you do?

I don't know what I'd do, but a significant part of the problem for American car manufacturers is that many of them are under the burden of decades of healthcare benefits spending, from when one could work for a company, and reasonably expect their retirement plan to cover their concerns about affording health care. Having to cover union-negoatiated contracts in the face of cheaper, non-unionized labor outside the US probably isn't helping any, but personally I'm not sure that rates ahead of the previous financial burdens mentioned above.

(For the record, I'm not a fan of unions in general, but that's another thread entirely. )

I also suspect that American companies using "tried and true" designs, and in most cases just building on existing design themes instead of something relatively fresh (like for example the Chrysler 300, with or without the V8 hemi). How often is there a major revolution in American car design, nowadays, instead of a gradual evolution? (I'll grant you that revolutions only go so far if they stray too far into "bizarre" for the comfort of the US buying public, though.)

Anyway, just some probably-unhelpful random thoughts as I fight off post-supper brainlull.

It's good they've gotten their quality up to snuff. However they still lag behind in vehicle efficiency (european and asian fuel efficiency requirements are higher). They're also not quite up to the efficiency of a fully robotic manufacturing plant. Sure they're working toward it, but not there yet.



Ford and GM's plants are extremely old. If they manage to shut a bunch down and open up some newer plants with better equipment, they'll be able to pop out better, cheaper cars. This, of course, is bad for the individual worker.



They'll have to start making cars suited to any market. That means the highest possible quality and efficiency standards would have to be met. They'll also have to go much more multinational. That way if they tank in one market, their successes in others will offset the losses.



Yup wrong kind of product. They're making cars for Americans while other car companies are making cars for everyone.



Yup.



The reason DaimlerChrysler is treading water is that they're not an american company. I used to work for them. The last business plan I saw of theirs, was to have enough brands in enough markets so that tanking in America wouldn't matter. Obviously if they managed to get the chinese market, they don't need to give a damn about the american market.

If I were Ford or GM, I'd stop making most of the light trucks and work on the car line and bringing it up to world standards. You won't see a Ford or GM car in Japan, for instance, because they don't meet minimum fuel efficiency standards there (there are a few exceptions though). They've also had some really retarded designs lately and could use some new blood in that area.

big fat pensions.

I think a lot of the problem is quality. I bought a new car a couple years ago and had nothing but problems with it. Granted they were minor problems, like, the panel coming loose off the passenger door and such. It took forever to get someone to actually fix it without going thru mega red tape and an ungodly amount of phone calls. This was on a new vehicle! They want you to buy but once you're out the door, you're on your own. Also I agree with Hiro on the over-paid White collars. I don't think designing is an issue as much as, because there's some pretty cool new vehicles, economic efficiency. Tho, they are trying with the hybrids, but you don't see them pushing them which is sad.

Not just the executives, but they certainly are first in line for blame.

agreed

Here is a common list of asian perspectives of American cars and may not necessarily be based on facts.

- They are petrol guzzlers. We commonly drive cars that have 1.0L to 1.8L engines.
- High annual road tax for engine sizes beyond 2.0L for some countries.
- Excalating petrol prices.
- Japanese cars put out more horsepower for the same engine size.
- European cars are more 'classy' and are status symbols.
- Vague model names and car types.
- For ex British colonies, theres problems importing left hand drive American cars.
- Lack of spareparts.
- American cars are ugly, huge and loud.
- Americans kill asians. So they want nothing to do with them.

GM has become a health insurance provider that also happens to make cars. Healthcare costs add $1500 to the cost of every vehicle. White collar work currently pay 27% of their healchcare costs. Auto companies have been downsizing through attrition, offering lucrative early retirement incentives to meet these numbers rather than resorting to layoffs. Of the 1.1 million people GM provides health care for, only 160,000 are current employees. There are 2.6 retirees for every active employee. Foreign auto makers have just a fraction of these costs, because they have few, if any, U.S. retirees, and in their home countries their governments fund a much greater portion of employee and retiree health-care costs.

I remember when I was in Highschool, my GF's dad worked at the Fiero plant in Pontiac, MI.

He worked in the Paint-spray booth doing cleanup, and made over $80k per year. (Granted, this was with overtime).

$80k for cleaning paint booths? And this was in the 1980's no less.

Its no wonder we're in the predicament we're in.

However, with Delphi cutting jobs, and a GM Strike looming - it doesn't bode well for the Detroit area. I don't even work in the Automotive industry, and I'm still concerned.

Should have been more specific there... I was, indeed, referring to production efficiency, not gas mileage. No argument on the mileage part. While there are some models that get decent fuel economy, I don't sense that this is an urgent concern for the Big 3 or Big 2 or whatever is left.

Now, as far as manufacturing efficiency... there aren't any plants that are "fully robotic," are there?

If you look at some of the newer metal stamping plants, though, it's rare to find a human being working. The transfer presses have steeply reduced the number of people needed to operate the machinery. There've been some huge gains in tha area, at least.



Well, that's certainly happening. I know more about GM than Ford, so that's what I can speak to. GM has shut down two plants that I know of already this year and have plans to close another 10 by 2008. And they are opening a new assembly plant in Michigan later this year. ... Which will make cross-over SUVs (SUV on a car frame). Those get you some better fuel economy, but they're no Prius.



Out of curiousity, when did you last work there?

The way I heard it, and I could be entirely wrong, the Chrysler division was shoring up weakness in the M-B side of things.



But there's the bread-and-butter, as far as the US is concerned. The Ford F-150 and Chevrolet Silverado are forever challenging each other for the title of best-selling vehicle in the country. People are still going nuts for them. You can't just stop making them... can you?



Shall we mention the Aztek. Hey, I own one!

Seems to me, though, that car reviewers are a lot more forgiving of ugly foreign design: think the Scion XB, the Honda Element. Ew! But make one Aztek...

There *are* good designs out there. The Pontiac Solstice is the sexiest thing on the road, IMO. And I love the 300.

Or worse... I once went to a Denny's in the middle of a night and a guy there was laughing about how he was "working" ... his friend had punched him in that day and he had given himself the day off with pay.

No one has mentioned the JOBS Bank either. That program pays laid off autoworkers their regular, 40-hour paycheck *and* their benefits. In return, they do community service, take classes (with GM-paid tuition) or just hang out at a "work center" (ie, daycare for adults). I know someone who got her Associates, Bachelors and is now working on her Master's degree while being in the JOBS Bank for SIXTEEN YEARS.

Smart money says that program is going away in the next contract talks.

It's Delphi workers who are thinking of striking, but that would eventually shut down GM as parts dry up. Remember 1998?

*looks around shifty eyed... being a union kid means it's hard to talk about them*

I'd ditch the unions. I have heard of the most innane stuff from my family (I have relatives in all the major domestic car companies) people that get fired for having others punch in for them, or people caught having sex on the job with a hooker, and then when contract time rolls around, the Union fights for them to get their job back, with full back pay (even if they've been gainfully employeed). People who are kept on for years without doing a single thing because they've got senority and can't be fired, no matter how lazy they get.

When the government wasn't protecting your average joe worker from absurd hours, abusive bosses and miserly pay rates... yes, unions were necessary and a god sent. But in Canada and America, there are now laws in place to do what unions were once necessary to accomplish.

Now most of them pad their own pockets, stick up for principles that make no sense and fight for more gravy even if it means putting another plant out of business.

My sister is the night manager at a parts factory... and they get great pay and great benefits... but then the workers got a bit greedy and wanted more, and from what I'm told they were pretty much asking for the moon. They started organizing a union and the owner flat out that if they did, he'd fire the lot of them and move the operation overseas. I mean, really, if you're making 50K a year as unskilled labour, with benefits, what exactly are you fighting about?

Ohh Ohh I am so putting my $350.00 worth into this thread when I get home tonight lol

Hopefully it wont be too far down the list to bump

- Sam

I think that pensions are a huge issue. The problem is, that the companies promised pensions to the people that they hired, when they hired them. It is very wrong for them to do that and then back out of it now because they were short sighted and invested poorly.

The other big issue is health care. That's a national issue. It's the elephant in our living room and it's going to continue pooping and leaving big piles until we clean it up.

It's all and good and libertarian to say that everyone should be responsible for themselves, but reality is, that there are just some people who are incapible of doing so. We as a community must be responsible for them. That said, we as a community must be able to make some very tough decisions. Like allowing people to die when they want to.

When I saw the fiasco with Terry Schiavo I thought how indicative it was of the real problem going on in this country. Some people we have to make comfortable and allow them to die and others we have to spend the money on to make sure they have the things they need to have strong children that are disease free. Children need immunizations. We have to make these decisions or elect representatives to make them for us.

Other countries have done it, why can't we? We will be at a severe economic disadvantage until we do. I don't believe that we can depend on our employers to continue to foot the bill for health care, nor do I think that we can really do so ourselves (as individuals) without becoming a third world country.

A certain level of health is a community issue and it should be determined what level that is and we should proceed from there and unburden corporations from that.

That said - I also think that corporations should be watched more from a monolopy perspective and many reforms need to be made concerning patents. So many large corporations are stifling small inovative companies by filing restricting patents or by simply buying up the companies so that they cannot compete. I think it is destroying American business.

I think it is one of the things that has adversely affected the American auto industry - they were inbred for so long and kept "American" competition out that when real competition (Asian) came in, it was to large for them to keep out.

Just my 2 lindens.

.

Nope. Ford and GM would never just stop making their trucks at the same time. If one of them cut back their pickup lines, the other would take up the slack. And if by some chance they stopped making full-size trucks, sales of used trucks would skyrocket, and they'd both drop like stones from the market. Unlike SUVs, there will always be demand for pickup trucks, and Americans would never forgive the Big 3 member company that stops making trucks.

On the other hand, it wouldn't be a bad idea to drastically scale back production of the full size SUVs, and encourage sales of vans or cars in their place. The people who truly need an SUV (which is a small number) should still be able to get them, much like how full-ton trucks are currently sold, but such huge vehicles shouldn't be aggressively marketed.

I won't argue that the majority of truck and suv buyers don't need them but I don't believe the excess of McMansions with two or more oversized vehicles in the driveway belonging to a statistically smaller family is due to the suppliers not encouraging them towards more reasonably sized alternatives. It's not that people are gullibly marketed into a mindset of excess; the buyers are responsible for their own self indulgence and for driving a market in which the producers are vying for their dollars. The price of oil is responsible for the current trend away from suv's and towards more economical vehicles. I rather doubt that this trend has resulted from an enlightened awareness of ecological issues and social consequences, but rather an unwillingness to trade the $200 jeans worn while filling up the tank for a basic pair of levis.

Everythiing mentioned has it points but those only things seen on the surface.
I have just come off four year stint working for a auto parts sequencer contracted to
General Motors. In a nut shell we were the people who move the parts from the supplier to the GM Factory. You would not believe the amount of money GM wastes.

Two small examples come to mind. Sending a semi truck 200 miles to pick up a box of parts the size of a shoe box every day. When inquired why not just pick up 5 boxes on Monday for the entire week. The reply was. It would mess up thier Just In Time Parts System and 5 shoe boxes would take up more space. Never mind per General Motors rules the shoe box was strapped to a pallet big enough to hold 5 shoe boxes. The other one that I will always remember is the parts supplier that went bankrupt. For two weeks the driver had to go out to the factory, call in and say "Yep they are still out of buisness" Then we would call GM and a hour later we would get the okay to send the driver on his way. I could write a book on the things General Motors does to waste money in this one department.

I bring this up for I believe if they are so wasteful with money in just how they get the parts to the factory. Who knows how much money they are wasting in other departments.

What General Motors needs to do is have a top down audit from out a outside firm. Read every contract, count every paper clip. Those who are wasting money should be fired on the spot. The impression I felt was that thease money wasting decesions are being made by middle management types who scared to death to fix them for fear of bringing attention to themselfs.

I agree the workers have to get a reality check and realize making 28 bucks a hour for unskilled labor is not the norm and know the company is not a bottomless well of money.
That is just the tip of the iceberg. General Motors does not make bad cars. What they do make cars that are over priced. They keep upping the price to cover the blunders made by management in thier buisness dealings. To hide this fact they complain bitterly about money they pay out for labor. GM grow a back bone. stand up to labor and take a hard look in the mirror what you are doing.

If anyone from GM happens to read this. BRING BACK THE OLDSMOBILE!

Rox