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I see on today's news that Ford and GM are having major problems in the US due to very poor sales. Ford shares are down to '1950's levels' apparently and the US government is offering them £14bn of loan guarantees to help them stay afloat!
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Big problem for US business,cars in particular,they have forgotten about the P word(profit) and how to make it.With cars it is just too easy to keep churning out substandard junk and then expect gov to bail you out.Expect more bailouts until the inevitable BL/Rover happens.
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Big problem for US business cars in particular they have forgotten about the P word(profit) and how to make it.
They decided to concentrate on making big old-fashioned gas-guzzlers (SUVs and other bloated beasts), and got away with it because of a loophole in the CAFE regulations.
Now that oil prices have rocketed, they find themselves hoist by their own petard, as sales go the Japanese makers who produce the more fuel-efficient vehicles that Ford and GM snubbed. Serve them right! (Though I have a lot of sympathy with the workers, who didn't get to choose that daft business strategy, but who now face the collapse not just of their jobs but of the towns they live in).
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I can't say I'm that surprised. In my experience of driving US-model cars they are pretty poor by European or Japanese standards. Its not just the lack of fuel efficiency, but the fit and finish (just take a look at a UK-market Chrysler - poor plastics and fabrics and poor driving dynamics). Ugly things too.
I guess now that GW Bush has become a born-again socialist we'll see a US-taxpayer funded bailout of the US carmakers. A nationalised GM and Ford - now that really will be something to witness!
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I can't say I'm that surprised. In my experience of driving US-model cars they are pretty poor by European or Japanese standards. Its not just the lack of fuel efficiency but the fit and finish
you are not wrong, i've been quite shocked at the dismal interiors on some of their home grown stuff
last year when I flew into Houston and picked up a hire car, i let myself be talked into paying a bit extra for a 'premium car'...was a bit surprised when it turned out to be a relatively bog standard Toyota Camry..then thought it through and realised it was premium to some of the other carp i'd hired before, inc a Ford Mustang (the Mustang was dreadful, truly awful).
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as sales go the Japanese makers who produce the more fuel-efficient vehicles that Ford and GM snubbed.
But Ford and GM do produce small, fuel-efficient vehicles - and they'll fit Americans far better than the Far Eastern cars.
All Ford has to do is to introduce the Euro-built petrol Focus and Mondeo to it's US customers - ten times better than any US-made equivalent. The awful small Chryslers are not even up to Sierra-level yet.
The problem that the big carmakers face is that they are finance houses that make a few cars too. With no liquidity, how can they lend....
Edited by Screwloose on 10/10/2008 at 20:23
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Mondeo was offered to US customers and they did not buy:I see the New Fiesta is going to be!
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All Ford has to do is to introduce the Euro-built petrol Focus and Mondeo to it's US customers - ten times better than any US-made equivalent. The awful small Chryslers are not even up to Sierra-level yet.
They have already done this with the Focus, it has been built at the Ontario plant for several years now but, from what I've read, the quality is not the same as the Euro box.
I can't see many Americans paying $35k+ for a Mondeo either.
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$35k+ for a Mondeo either.
Would it be - I very much doubt it, nearer $20k.
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If it was a European built Mondeo then its true price would be $35k.
Think how much a 2.0 is here, no point taking 1.6 or 1.8's to the US. No point in shipping it across the Atlantic to sell at a loss.
Can't build them in the US as all the excess lines are being converted to produce the Fiesta.
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And by the time the pound has fallen through parity with the dollar...? [Or doubled? Any predictions..?]
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And by the time the pound has fallen through parity with the dollar...? [Or doubled? Any predictions..?]
Given the humungous scale of the US national debt, and the broader structural problems of the US economy, I wouldn't bet on the dollar recovering any time soon. The only question is whether the pound declines faster, and while the UK economy looks unhealthy, it's probably not quite as ill. Not yet, anyway.
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Yes, given the sheer scope of the maelstrom now engulfing most of the world; prediction of any of the outcomes is virtually impossible.
One of the real-world knock-on effects is that every business now seems to have run out of cash to pay any other and the banks have stopped all lending.
Money for wages also can't be found and as they're not so easily deferred, I reckon that there will be getting on for a million either laid-off, or made redundant, by Christmas.
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Ford and GM may be doing badly but so are VW in the USA, making a loss for 5 years. The US market is a very difficult one, they(americans) are much more interested in quality than execution, this is one the Japanese do well and the Europeans do very badly.
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Latest from the BBC seems to be a posssible merger of GM and Chrysler, while Ford look to sell their stake in Mazda. Interesting times... looks like they're all on the brink.
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I think recent events have dispelled the myth that the likes of GM and Ford are immune from bankruptcy because of their size and scale of operation. Should the financial meltdown happen no government will be left with enough money to prop up every company that can't sell ther products, and the bigger they come the more zeros that will have a minus in fornt of them on the balance sheets.
We live in interesting times. Thank goodness I ignored the oft quoted "experts" advice not to pay off my mortgage.
Edited by Webmaster on 12/10/2008 at 01:01
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>They decided to concentrate on making big old-fashioned gas-guzzlers (SUVs and other bloated
>beasts), and got away with it because of a loophole in the CAFE regulations.
They did not "concentrate" on making "big old-fashioned gas-guzzlers (SUVs and other bloated beasts)" just for the sake of it. They built what the local consumer wanted which is why the likes of Toyota and Mercedes built factories in the US to build SUVs and large pick-ups. GM and Ford have plenty of small European/Asian models they market in the US.
>Now that oil prices have rocketed, they find themselves hoist by their own petard, as sales go the
>Japanese makers who produce the more fuel-efficient vehicles that Ford and GM snubbed.
Oh yeah? Although it may not fit in with your prejudiced views, the real story is somewhat different.
The following is from CNN Money: tinyurl.com/4qg5as
"In September, US sales of Asian brands fell by 31%, domestic brands fell by 24%.
Sales of GM's cars fell 10% while sales of light trucks - such as pickups, SUVs and vans - declined 19%.
Toyota Motor (TM) reported that its sales toppled 32% from a year earlier. Sales of cars dropped 28% and light truck sales plunged 38%.
Ford reported that U.S. sales tumbled 35% from a year earlier.
Honda Motor (HMC) posted a 24% drop in U.S. sales, far worse than the 6% drop forecast by Edmunds.
Nissan (NSANY) posted a 37% drop in sales, far worse than the forecast of a 12% decline."
Industrywide sales of light trucks, such as pickups, SUVs and vans, edged ahead of cars for 50.3% of industrywide sales."
>Serve them right! (Though I have a lot of sympathy with the workers, ...
I suspect the United Auto Workers Union would tell you where to stuff your sympathy.
Kevin...
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>>Oh yeah? Although it may not fit in with your prejudiced views, the real story is somewhat different.
You've taken a months view, you need to look at the long term trends where the asian car makers are taking an increased percentage all the time.
Nowwheels is right, the manufacturers did focus on trucks and larger vehicles and only had a few small cars, mainly really cheap ones made by daewoo and sold under 3-4 different brands and Ford sold the focus but it wasn't packaged right for the US (the Mazda 3 sells much better). The Asian manufacturers focused on their core car products and went into trucks only a a small to medium way, they built some factories to produce them and now are converting some to make cars instead.
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In today's papers speculate Chrysler (Cerberus)/ GM merger or Chrysler & Renault/Nissan.
Sounds a bit like all the banks - all brides/grooms looking for a groom/bride with a large doweryy to get them out of the holes they have dug.
Bank holes - dodgy land/mortgages
Car holes - large capacity cars and higher oil / lower disposable incomes.
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If anyone is capable of fixing Chrysler it's Carlos Ghosn, he's done it twice before, but if you were Renault would you buy this basket case?
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Given that Renault factories in Europe are currently working at only 58% capacity (against an average of 78% for all manufacturers), I would have thought the last thing on their minds would be taking on another carmaker in trouble. Although Chrysler is going to build it's own version of a Nissan B-segment car in Japan while building a pick-up for Nissan in the US.
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Bloomberg might disagree about Ghosn's prowess; he's made Renault into a joke....
www.bloomberg.com/apps/news?pid=20601090&sid=ageZX...e
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