Okay, I'll admit I have a point in creating this debate, but my mind is open and I am waiting to see some great evidence.

Today there were dueling letters to the editor about the woes of GM (the local Saturn plant in Spring Hill is facing major cuts and perhaps a future termination).

One letter alleged that the labor costs of making a car amount to an average of 5% of the price of a GM vehicle in the US. Alternatively another argued they comprise $5,000 a vehicle.

I come at this debate with a common assumtpion that I often believe because UAW union members do receive a very high pay. Yet I have never avoided American cars because of the price. So if the high price isn't the problem, then why do high wages and benefits factor into GM's woes?


The questions for debate are:

What are the major reasons that GM has been in a prolonged slide?

Do GM cars cost too much in the American marketplace? How does this factor into your assessment of GM's woes?

Is the quality fo GM cars a major reason for their decline?

Does the UAW figure prominently in the problems facing GM?

Support your argument with facts and statistics as much as possible.

If I may, the question should be broadened, not just to GM vehicles, but to American car industry, which is on a slow, steady and inexorable decline, and has been for ages. In recent years only one of the Big three US car manufacturers has managed to report a profit at all, Ford and GM are planning massive plant closures around North America. At the same time, Toyota recorded its 12th straight year of record profits, and its share of the North American market has risen every year to the point where it is now in first place.

US car manufacturers, for whatever reason, simply are not competitive, and this is despite the fact that the big three have received three major government bailouts in the past 30 years, worth tens of billions of dollars, and they STILL cannot compete. Toyota's Stock market value (always climbing) is currently 14x that of GM, whose value has been steadily shrinking for years.

Part of this is bad decisions on the part of GM management, who have focussed on SUVs and refused to consider the possibility of Hybrid cars until Japanese manufacturers had started to dominate that emerging market. But its is also due to poor design and reliability, US made cars on average have an astonishing 750% higher chance of critical failure in the first 5 years of ownership than Japanese made cars. A good indicator of reliability is average resale value in the free market, yet the top 5 cars for value on resale compared to original value are all Japanese.

So the real question is, why do US cars manufacturers suck so badly, and, after three massive government bailouts if they still are dying, is it time to let them die? After all, the US is supposed to be the home of the Capitalist free market, and the market it seems has spoken.

What are the major reasons that GM has been in a prolonged slide?

Does the UAW figure prominently in the problems facing GM?

Yes, the UAW is a major factor in the problems facing GM. Reference a recent Forbes article (Saving General Motors, Forbes, Nov. 14th, 2005, pp. 56).

The UAW, through past deals and future concessions, is consuming all of GMs profits. GM as agreed to spend $1B per year in a new health care fund. They spend $6B a year on health care for their workers, who don't pay premiums. GM has a jobs bank, which prevents GM from laying-off employees, since even if they don't have factory jobs for them they get paid to do anything else they want--or nothing at all.

GM is hemorrhaging profits and can't recover because it can't cut workers costs. Healthcare spending is higher than the revenue of most companies and they can't downsize their workforce to save money.

Read the article for a five-point plan on how GM can recover. Dealing with the UAW was plank number 3. The others were 1. Iron-willed leadership, 2. A revival plan with defined goals and a timetable, 4. A shift in power and responsibility to the people responsible for the products, 5. A reversal of the supplier policy.

What are the major reasons that GM has been in a prolonged slide?

Do GM cars cost too much in the American marketplace? How does this factor into your assessment of GM's woes?

Sales price is not the issue, costs are. GM Loses $1.1 Billion in Q1

If you examine Q1 2004 with Q1 2005, you'll see some striking statistics: in Q1 2004, GM actually profitted over $400 million from its North American business. This year, it lost $1.3 billion. How can anyone explain a $1.6 billion turn around?

Two factors: #1 rising interest costs. GM paid an additional $900 million on its debts. This is largely beyond the immediate control of GM: rising interest costs harm most businesses.

#2: Increased health care payments to retirees. GM's health care burden has risen over $1 billion in the last year due to pre-negotiated terms with the union. It pays over $6 billion a year in health care expenses for its current and former employees. GM is cutting many of the fringees it gives its employees- both salaried and union, including redcuing tuition reimbursement for graduate and post graduate degrees, lowering matching funds in retirement plans from 0.50 to 0.20 per dollar, and eliminated merit pay raises for non-union workers.

The company (heck, the industry) has been far too generous over the years. Until it corrects it legacy costs, it cannot be competitive.

?

GM has lots of expensive labor contracts with existing and former (retired) workers. Thus they are at a disadvantage cost wise to some very tough competition like the Japanese and Koreans. At the same time their products are mediocre, especially in the quality area.


They cost too much for their quality. Just look at Consumer Reports. Very few GM cars are even near the level of Japan and now even Korea!

Quality and features. But Quality is their worst problem and with “bean counters” running the company I don’t see them changing soon.

QUOTE

Does the UAW figure prominently in the problems facing GM?

Yes. As above

As a long time gearhead- I have had GM products as a rival for my beloved Dodge products LOL- but of course, never wanted my competition (as I saw it as a teenager) to go out of business.

As usual, the Unions are being scapegoated by decades of very, very bad and self serving management. Every single concesion that the UAW has ever recieved from GM is to build a firewall, if you will, between the UAW members and absolutely horrendous self serving management types.

1) UAW makes no decisions as to product developement, sales, marketing, budgeting, and a host of other decisions- thier only influence is in the bargaining process for thier members, getting them the best deal that they can and maintaining the most amount of members on the payrole they can.

2) Though there have been wildly succesful models of GM products- you only have to go to the horrendous decisions to stop some very succesful products (such as the RWD Camaro) and "greenlighting" some serious crapploa- such as the GM Holden Australia based pontiac GTO for american markets- when any car nut in the US will tell you a FWD musclecar wannabe will never, ever sell well in that intended demograph! Ignoring brand lines such as Oldsmobile, with an enormous long term customer list, and just giving out cruddy olds after cruddy olds that never sold, while purchasing Fiat (or one of those other extreme quality car linesLOL) and spending BILLIONS on this losing venture- much higher than those "legacy costs"- maintaining a losing company and line for years. And buying Daewoo- ooo, another brilliant decision! oh, and the wonderful line of Isuzu diesel trucks- sterling rep there too LOL

Possibly the only real good decision was thier increase in Suzuki- that seems to be a winner to some degree.

NONE of these things above help GM in the long run like adopting some Japanese management or Euro management models instead of the old 1980s "give unto myself and the company can go down the tubes- I am getting my golden parachute" mentality that permeates corporate culture today.

3) UAW has no vested interest in seeing GM fail, it would be against thier own interests in fact- these job losses don't exactly help the folks in the head office of UAW staff! The "full time staff" of GM UAW are just as qualified (lawyers MBAs and the like) as the GM management to run GM if they were in Management- in fact, many union leaders are former management in any Union hierarchy- most are, at the very least, educated in business and labor law with a law degree, masters level minimum. They can read a stock sheet, company mailers etc- they know GM is in trouble, and are powerless to stop this scapegoating of thier members and the long slide of oblivion of GM from the mess management has made of this company- but the bottom line is- the laws favor management in a major way, anyone that has ever worked on a negotiating team gets this message loud and clear- management holds all the cards- you only have one- work stoppage. And even that is in a position of weakness due to the immorality of the scab worker.

4) HOWEVER- long term health of the company has absolutely no rewards or risk for management- as thier golden parachutes are funded.


Corporate America has done thier job too well, they have demonized the very poeple that are historically thier best customers, and thier most loyal.

Once upon a time, driving a non-company made car into a parking lot of any brand company (drive a dodge on to the dodge parking lot etc) would gauruntee if not physical violence towards you, but at least the car! I don't condone this- but it is a good illustration of how proud the GM worker USED to be, before the right wing demonization of the backbone of our economy- the union employee.

I remember a cousin checking tags as a kid on all family shirts to make sure that it had the "union" label in it- and requesting the shirts that didn't and promising to buy the "correcct" shirt- and we didn't argue a bit- this was our families livelihood!

Management is 10000% responsibile for this loss of loyalty due to their own actions- layoffs while increasing thier own pay and golden parachutes etc.

Now it is a vicious circle- the millions of employees in this nation feel little or no loyalty to companies that expect more and give less while, once again, fattening up the CEOs wallet.

A good excerpt from an article highlighting the above issues:


http://ddo.typepad.com/ddo/ceos/

Good datapoint on how Japanese executives respond to a crisis in their business. In addition to Japan having a lower ratio of CEO comp to average employee comp, such punitive measures are interesting:

Executives at the Tokyo Stock Exchange will take temporary pay cuts after a computer breakdown shut down trading on the exchange for three hours earlier this month, frustrating investors and shaking confidence in Asia's biggest bourse.

TSE President Takuo Tsurushima's monthly pay will be slashed by 50 percent for six months from November as a punitive measure, while systems chief Tomio Amano will receive a 30 percent cut over the same period, the exchange said in a statement Thursday.

All seven other TSE operating officers will also take cuts in their monthly salary of between 10-20 percent, while Chairman Taizo Nishimuro will voluntarily impose a 50 percent cut in his pay for half a year.

On Nov. 1, trading in most stocks and bonds on the exchange, where over 2,000 issues are listed, was suspended for all but the final 90 minutes of the trading session due to a glitch in the transactions system. (Link: Yahoo Finance)

American Management Style: Systems fail, business as usual. Systems work in a crisis (NYSE), we deserve a multi-million dollar bonus.

"The thing that really surprised me was that he was paid a [$5 million] bonus for [restarting the exchange after] 9-11," said Muriel Siebert, an NYSE seatholder since 1967 who heads up her own brokerage. "Now, I think Dick did a superb job that day. ... But a lot of people in this country would have paid for the privilege of having that responsibility. And they would have done it without a bonus." Link


Japan: Systems fail, you pay.

I wonder which system will produce better results over time? America, for "not scaring off risk takers", or Japan's, for "holding people accountable"?

Let's apply this idea to another industry:

America: car sales unprofitable, liabilities greater than ability to fund them, design of cars is boring - pay executives millions!

You see where I'm going. Just bear in mind this executive retribution example as something to propose when you're on the board of a company or a 5-10% holder and company performance goes south for some reason. - Ed

What are the major reasons that GM has been in a prolonged slide?

It is a symptom of the American car industry in general that has to do with several factors such as quality, brand identity and innovation.

Check out this recent consumer report on reliability. You'll see that of the 31 highest ranked cars 29 of them are Japanese. There is one GM branded car in the top 31 and one Ford branded car in the top 31. That doesn't exactly speak very highly for the American car industry. This isn't a new trend, this is one of the reasons why Japanese models have taken our country by storm despite the fact that they are generally more expensive than their American competitors.

Another problem that most American cars have is brand identity. Their cars are extremely generic and if pressed to name models of cars I'd be willing to be money that you can not only name more Japanese and German brands but you can also state what they are supposed to "say about you" based on the commercials and marketing. Both GM and Ford have some specialty brands that do ok but their main lines are completely generic.

Finally, innovation. Since the 80's the Japanese have been beating American car companies at the innovation game. They are doing it again when it comes to hybrids and alternative fuel technology. While the large American companies are still cranking out huge gas guzzling SUVs and sedans Japanese companies are focusing on hybrid and alternative technologies, and smaller functional and efficient cars. This is where the market is going and the American companies are already years behind.

What do all of these things have in common? I'll give you a hint, they have absolutely nothing to do with unions. They have everything to do with inept leadership and management.

Do GM cars cost too much in the American marketplace? How does this factor into your assessment of GM's woes?

I don't believe they cost too much, for most models they cost far less than their Japanese and German counterparts. The only models that beat them in price are the bargain basement models like Kia. People just increasingly don't find that the cars are worth the money and would rather pay more money for reliability, better fuel efficiency, sleekness and style.

Is the quality fo GM cars a mojar reason for their decline?
Definitely, see above.

Does the UAW figure prominently in the problems facing GM?
The cost of labor is certainly a factor in GM's problems but not to the level that a lot of people make it out to be. If you listen to the anti-union crowd GM is declining solely because of the unions, management and leadership couldn't possibly have anything to do with it.

Even if you went in tomorrow, fired all excess capacity and took workers wages and benefits down to wal-mart levels GM would still be sliding for all of the reasons I mentioned previously.

Blaming UAW is a way that some people can get around admitting that the real problems lie with the leadership and management of the company. Unions are easy to blame because you can tie them to liberals and democrats and for some people that is basically the root of all evil. It doesn't make for a very convincing argument amongst the rational though.

If GM was an innovative company delivering the kinds of cars that people wanted to buy then the wages paid to union workers would be irrelevant.

To add on to some of the points I made above, we can talk a little bit about Ford which is suffering many of the same problems and has recently been in the news because they announced today that they are going to be cutting 25,000 to 30,000 jobs and 14 factories by 2012, equating to roughly 20 to 25% of their US workforce. Story.

I found the following section to be the most relevant:


Of course some of their union, pension and health care obligations have cost them money and have limited flexibility but that isn't in any way the cause of their problems. You'll notice that Ford's market share has declined for 10 straight years now. You don't lose market share because of costs like labor and health care, you lose market share because people don't want to buy your products. This reinforces what I said in my previous post about innovation, staying ahead of the curve and brand identity.

You'll also notice in that excerpt that Ford relies on the sales of SUVs to keep them in the money and this is true of a many American car makers. They were very hot at one point and they make a decent amount of money. However, increasingly people don't want fuel guzzling cars and so SUVs aren't selling as well as they used to.

Let's post your exact quote of the article, with different emphasis:






You don't think Ford puts thought into what their customers want? Does GM?

Of course they do.

Markets are about supply and demand, which sets price. Then you have cost versus the market set price. To say that cost doesn't lose you market share is to completely misunderstand how products are sold.

Why does Ferrari sell so few cars? Is it because nobody wants their product or because the cost is too high for many people? Should Ferrari put more effort into quality or marketing to sell more cars or would it lower its price to sell more cars?

Large companies like Ford and GM have a myriad of advantages and disadvantages. Their size allows them to bully small suppliers to gain a price break. Their size allows them to spec out their own quality systems that suppliers need to adhere to (the costs are born by the suppliers). Their size also ties them down and does not permit flexibility.

The fact of the matter is that giant companies like Ford and GM are no longer competitive because of inherent bureaucracy and labor costs. It happened in the steel industry (which steel plants are profitable: large steel giants or small "minimills"?). Volume does not necessarily mean profitability.

Oh I'm sure they do Amlord, but if you'll kindly read my previous post you'll see what I think about that "thought" they put into their products (and additional evidence about what consumers think about those products). Ford and GM react incredibly slowly to what consumers want these days. Ford plans to be producing about 250,000 hybrid cars by 2010, which is about 10 years too late.

The reasons they are losing market share has nothing to do with their costs it has everything to do with how the company is managed and what directions are pursued.

You are excessively simplifying things.

Ford's North American sales were fairly stead ($81.4 billion this year, $83 billion last year). How come it lost $1.2 billion this year versus a profit of $1.6 billion last year?

The bottom line is what counts. Why did relatively the same sales figures end up in such a big swing in profits (more than the actual sales difference)?

COST!!!

You might define Ford's success in terms of how many people it employs but I assure you that the company and its investors do not. The bottom line is net profit per share.

If the answer is so easy (and so distant from economics) as which products it offers, how can the company turn a profit in Europe? How can sales worldwide increase from $147.1 billion to $154.5 billion and profits be down?

COST!!

By the way, hybrid vehicles represent only 1.2% of the automotive market. That amounts to around 205,000 units. Even if Ford picks up every single hybrid sale, it still loses market share this year. Fords's market share in the hybrid market (in the US) is around 8%.

EDIT to add:

Look at these comparisons between GM and Toyota. Notice the "health care cost per vehicle" (GM $1525 Toyota $205). Notice the "cost per hourly worker" (GM $73.73 Toyota: $48) Notice the "profit per vehicle" (GM loses $2,331 Toyota profits $1,488). None of that has to do with what style of car people are buying.

No Amlord, actually I don't. I really could care less whether Ford, GM or anyone else lays people off. I really don't care about unions. What I do think important here is the measures that matter: market share and customer satisfaction indicate that the American car industry in general isn't delivering what it needs to and that is the reason it is in decline. This manifests itself in several ways. I see these same companies trying to lay the blame solely on labor costs, unions and health care. Those may be contributing factors to their profitability but it does not explain why they are in decline and why customers are not satisfied with their products. The reason for that has to do with management and strategic direction.

Actually, I found this tidbit to be far more interesting:



As I've said before, I've never personally worked in an American union shop that didn't involve lots of reading newspapers and magazines. And I've never been to a GM retirement party that didn't have hilarious pictures of the retiree in his/her favorite sleeping spots.

American customers want products better and cheaper. GM and Ford couldn't do it if their CEO's worked for free.

How can GM (or Ford) turn a profit in Europe, or South America, or Asia and not turn one in the United States?

Decline is such an ambiguous term that it shouldn't be used here. What the heck is "Decline"? Loss of market share? Lower profitability? Lower workforce employed?

If you define decline as market share, then the answer is competition. There are many more options today than there were 15-20 years ago, which is not a bad thing.

The bottom line is who is delivering the best product for the best price and making money doing it? It's clearly Toyota, who is not burdened with the legacy retiree costs that the Big 3 are. Toyota is not burdened with plants that run at 85% capacity (Toyota's US plants actually are running at 107% due to overtime).

Go on thinking that the Big 3 are simply making the wrong kinds of cars. You'd be wrong. They still sell more units in the US than Toyota and other Asian competitors (almost double) but they lose money doing so. Why? Their costs are structured that way and the market determines the price they can sell for. It's a lose-lose.

Ford and GM need to drop MORE market share if they hope to be in business long-term. (Actually, what they need to do is raise their price per car, which would kill their market share). Or they need to shed their bloated overhead (thanks, UAW!! ).

Yes, the big 3 needs serious restructuring. I don't think anyone would argue otherwise.

CJ, first let me say that I do agree with you that product is certainly a large factor in Ford's and GM's woes. However, I think you are missing the impact their labor situation can have even on that. With their labor contract, they are essentially relegated to producing high volume vehicles. That makes it difficult to jump into new niches such as hybrids (maybe not the best example, as those could probably be made at existing plants). There are also work rules, etc. which make bringing in new vehicle types difficult. Market economics also played a large part. Are you going to devote funds towards a low-volume, risky project like hybrids were even just a couple years ago, or are you going to put resources towards high-volume, high profit SUV's? Consider that the vaunted Japanese have been trying to break into this market for some time as well. Any company needs to protect their cash cow. I think both Ford and GM did take much of that cash and put it into product development....look at the new models that have or are coming out. Ford in particular is revamping its entire product line. It just seems like they're late in the game because product cycles take so long...these new models were being developed four years ago, when SUV's were still going strong. I would also note that both automakers have made tremendous strides in product quality, also there is still probably a quality perception gap in the public (whatever happened to Ford's 'Quality is Job 1???).

Where domestic manufacturer's still lag behind is in product development cycles. This is critically important. First, Japanese companies' quicker development cycles let them get to market quicker (note the hypbrids you mention). Second, it allows them to recover more quickly from missteps, letting them pursue market segments that GM and Ford might have to forgo. This is surely also at play in the hybrid segment, as well as other potential segments such as hydrogen, etc. Union work rules play a part in extending this development cycle as well. Especially when excess costs make it more difficult to recoup development expenses, making venturing into new segments even riskier.

In short, I don't think unions are the cause of GM and Ford's problems, although I think they do certainly play a part. Unions would do their workers a service by working together with management to address these issues. The alternative, as recent announcements by both Ford and GM show, is losing jobs. That's hardly in the union's, or the companies', interest. This will become more and more critical over time. Toyota's goal is to get to where a customer can order a car over the internet, and have it built to order and delivered in two days. They are also pursuing 1 year development cycles (just-in-time carried into both manufacturing and development). Currently, GM and Ford are playing catch up with a running game. Unless they get better at moving quickly, their downward market slide will only continue.

Each of those markets have completely different customer demands and products. You can't compare them to the American market. For example, Ford actually does very well in Europe because its Focus and Mondeo models are popular with Europeans. There they are delivering what European consumers want - compact cars and fuel efficiency.

In the case of the American market, Ford and GM are not delivering what the customer wants, see the consumer report cited in this post.


Perhaps Eeyore should answer this question since it is his debate. Based on the questions for debate it seems to me that we are not talking about profitability, we are talking about things like market share, innovation, leadership, etc.


The facts here are that American car companies have been losing market share for the past decade primarily to Japanese car companies. If you look at any consumer report or ranking of quality of cars rated by numerous factors you'll find companies like Toyota and Honda occupying the top spots. It doesn't matter if they currently sell the most cars, they are selling fewer as their market share erodes and eventually they won't be on top.

These companies are not losing market share because of anything going on with the cost structure of their cars, it is because they are making the wrong kinds of cars. People have been demanding more fuel efficient cars since the 90's the japanese companies have delivered and american companies have not, it really is that simple Amlord. Japanese companies are already years ahead in terms of hybrid and alternate fuel technology ensuring that they are going to lead the charge in the next few decades.

We are talking past each other because you are talking about their profitability which is a problem due to things like unions and health care. What I am saying is that in the long term these companies are losing because they are not reacting quickly enough to consumer demands and they are no longer innovators in the industry. They are doing business with a mindset that is decades old when their competitors are thinking forward. In the long run that equals going out of business, regardless of what your costs are.

CJ, you are making good points, but I think part of the reason you and Amlord appear to be talking past each other is due to the extremism in statements such as this. Do you really believe that going to market with a 10% or so cost disadvantage has nothing at all to do with Ford and GM's current situation? Of course it does...otherwise why would companies worry about cost at all? At the very least, consider that funds for research and development have to come from somewhere, so if you have a cost disadvantage you also have a research disadvantage. None of which indicates that your points are invalid. I just think they're being lost amidst statements such as this. Consider it from the other perspective...as long as they have a cost disadvantage, it really doesn't make much difference what cars they make, as their competitors will only follow their successful products with cheaper, better models. In fact, this is exactly how the Korean manufacturers are gaining market share.

No, I believe that it is important. I'd compare the Big 3 to a patient that goes to see the doctor. That patient learns that he has a broken finger and he also has cancer. However the patient focuses on the broken finger and expends all of his energy and resources on it when clearly the cancer is the bigger problem.

I'm not trying to suggest that the Big 3 don't have numerous problems, they absolutely do. But what I see is all of them trying to blame their problems on a small factor. The truth is that they have forgotten how to lead the market, be innovative and give the customer what he wants often before he knows he wants it. That is what Japanese companies are doing and that is why they'll continue picking up market share and why they'll continue to pull down consumer awards.

You don't get to be a market leading innovator simply by tossing your unions out or cutting your costs. It is a lot bigger than that, it has to do with the people leading the organization and it has to do with company culture.

I think that you are over-estimating the American demand for fuel efficiency here. According to the Bureau of Transportation Statistics, domestic autos still outsell imports by well over 2 to 1. And trucks / SUVs outsell passenger cars by 9.5 million to 7 million, despite the fact they generally get less mileage. Large & medium SUVs and pickups far outsell smaller, more fuel-efficient models. American manufacturers have smartly focused on the more profitable truck and SUV market, ceding more of the passenger-car market to imports with lower cost structures.

It's hard to argue that American manufacturers are producing cars that people don't want when they have an overwhelming market share. I'm not a huge fan of the US auto industry; they are a great case for transformational change in a big way. I'm wondering if amlord is right - they should lose even more market share and ruthlessly focus on their most profitable sectors, while simultaneously cutting costs.

No I'm not carlito, and it isn't any sort of estimation the historical numbers and consumer awards prove it. Just because the Big 3 hold the most sales right now doesn't mean anything, you didn't even bother to consider the trends cited here so far. The trends say that more fuel efficient vehicles have been selling better.

I'm looking at the trends, but I don't see where you are getting this. Fuel economy is increasing in every size segment of vehicles, from compact to full size. More fuel efficient vehicles from all manufacturers are selling better in terms of automobiles, yes. But less people are buying automobiles, and more are buying trucks. Medium-sized SUVs (like the Explorer or Toyota Highlander for example) have increased sales by 170% since 1995, despite getting only 20 MPG vs. 29 MPG for compact cars. Large SUV sales have gone up 500% during this time, despite only getting 17 MPG.

Again, trucks and SUVs far outsell passenger cars. Truck / SUV sales have quadrupled from 2 million to 8.6 million since 1980. Passenger car sales over this time have decreased from 9.1 million to 7.7 million (my #'s were a bit off in my earlier post). You can drive through some parts of the country and not even see a car.

You have twice cited the consumer reports reliability study. Reliability is one measure among many. Japanese have owned reliability since the 80's, yet they have only really penetrated the passenger car market, while US manufacturers still own SUVs and trucks. Think of motorcycles - the Japanese own reliability / price / value, the Europeans build the best bikes in the world, and then there's Harley. So they sell on lifestyle. It's all about building the set of attributes that consumers value. The Prius may be hot today, but the Lexus hybrids are sitting on the sales floor. Reason - lexus buyers don't care about fuel economy.

Actually, you're right. You don't become a market leader by cutting costs, but you DO maintain profitability by elminating one of the largest portions of waste within an organization. The UAW is nothing but a cesspool of inefficiency and cost ineffectiveness. Pension costs and the inability to change staffing levels doesn't allow any UAW manufacturer to lay off without costly buy outs. This doesn't even address the absurd cost of direct labor. The average assembler according to the UAW earned $25.63/hr in 2003!!!
Check this out Here. ?

That's really not necessarily the case with most other non-union assembly wages...



Ummm.... sorta.

It's not really the wrong types of cars, but moreover not particularly marketable cars.
From CNN.com...


Is it really about Hybrids and fuel efficiency?? Not really. It's more about making cars that people want...
Here's a good quote again from Cnn.com...


So what do GM and Ford need to do? ? DUMP the UAW AS SOON AS POSSIBLE and change the way that they do business. If they don't realize that reactionary sales won't maintain market share, they may be out of business... especially coupled with the ridiculous cost of labor.

What are the major reasons that GM has been in a prolonged slide?

Do GM cars cost too much in the American marketplace? How does this factor into your assessment of GM's woes?

Is the quality fo GM cars a major reason for their decline?

Does the UAW figure prominently in the problems facing GM?

Support your argument with facts and statistics as much as possible.


A simple answer, YES.

To hang the downfall of the AMerican auto industry on one party is just wrong. I'm here in Detroit and there's plenty of blame to go around.

You have management that is self-serving as mentioned above. They continue to give away money in dividends when they should re-invest. And they've made very bad moves as well (see above).

The unions are in denial. They still think they deserve $25/hr for sweeping floors. And the size of the retired GM workers excedes the actual workers at GM now. It's a mess and they won't make the consessions needed.

The cars are bad because they don't invest money in R&D like the Japanese or even Germans do. But how can you when you have such a burden to workers?

One advantage Europe and Japan have is gov't health care. GM is spending tons of money on American retirees for health care instead of making dynamic cars by investing R&D money. The Japanese don't have to worry about that, their society takes care of their workers.


The one thing that gets me mad is when Americans bash the American auto industry. Without a robust US auto industry we really are missing a vital part of our economy. Auto manufacturing is a HUGE percentage of our GDP. We should be looking to get universal health coverage so American businesses can compete and we should be supporting American ventures. If GM or Ford can't do it, let's help another AMerican company get on it's feet.

I agree with you, and made some of those points in my initial post here.



As far as I know (and I could be wrong about this) the only way they could pull this off would be to file for chapter 11 bankruptcy and successfully reorganize and emerge from it. I don't know of any other way you can legally dump union contracts. United Airlines recently did this to shed a lot of their obligation for pensions and they just successfully emerged from bankruptcy last week. However they are only the third airline of 166 or so filings to do that.

So it would certainly be very risky, it'd tank their stock - do you feel that would be the correct move? Just curious, not trying to argue one way or the other.

Or they could move all their plants to Mexico or maybe China, like they have been doing.

Realize, all yee union-bashers, that the bell tolls...it tolls for you. You say "kill THEIR salaries", it won't be long before people call for your salaries to be slashed as well.....

I know this from personal experience. If you think you're making a fair wage....check out what they're making in Asia or Eastern Europe for the same work.

Ford also realizes its not all about cost-cutting.



I would also note that Ford has been focusing on fuel economy and environmentally friendly design for several years now. The Escape hybrid is one product that has come out of this focus.

More details, and a good analysis of Ford's restructing plan, can be found here.

I found the UAW Statement in response to be typical. Which isn't a criticism...just that's its typical political speak. Would have been nice to hear them say something positive about what they were going to do to help Ford achieve its goals, rather than what they were going to do to cost their employer as much money as possible--which is the problem still with union-management relations. Neither succeeds unless the company succeeds, yet too often it seems they forget that.

Certainly the costs of labor have impacted negatively upon General Motors and factors heavily into Ford's announcement today of layoffs and plant closings. Another reason is GM as well as the other U.S. automakers have resisted hybrid and alternative fuel vehicles in favor of costly, gas-guzzling, SUV's. When it was a prudent strategy to start going small, the Big Three gave us Escalades and other hulking pieces of steel instead.

I haven't bought a new car in...well, I've never bought a new car. I've always gone with used cars. I've never wanted a brand new American car. If I were going to go buy a new car it would probably be a BMW or a Mercedes. I hate what is supposed to pass as a luxury ride for most domestic cars. If I'm going to pay that kind of money for a hot ride, I'd rather pay a little more and get a better car.

I've never bought a foreign car. My cars have been Chevys, Pontiacs, Oldsmobiles, and currently a Ford Thunderbird. I always wanted one and I love it. But now that it belongs to me and not the bank, it may very well be the last American car I drive.

It's popular to blame the costs and lack of quality on the workers and the labor unions and they certainly deserve their share. I'm not surprised though there isn't a lot of criticism being directed at the management of General Motors and Ford. I definitely don't see a lot of calls for the guys in the suites to start chopping their pay for their bad decisions.

In a move that surprised the Detroit Auto Show Tuesday afternoon, and in a NEWSWEEK interview afterwards, York, best known for pounding the table and demanding more, proposed that GM shareholders sacrifice half their dividends to help put the company on a financially sound footing. Compounding this heresy, York called for the 10 outside members of GM's board to take directors fees "significantly less" than their current $200,000 a year and for GM's five top executives, whose salaries average $7 million dollars, to take significant pay cuts. The director and salary cuts aren't "huge dollars in the scheme of things," York said, "but [are] a very important indication that we're all in this together."

The higher up the food chain employees are, York said, the larger percentage cut they should take. He said the company can't hope to recover solely at the expense of its unionized workers and its suppliers. "If you try to get 11 pieces from a 10 piece pie, it doesn't work," he said. "Shared sacrifice is the only way to go."
http://www.msnbc.msn.com/id/10793074/site/newsweek/

As symbolic gestures go, it's not much. But whatever happened to "one for all and all for one?" While the notion that a top executive should (horrors!) dare to give up some of their salary may sound like radical socialism to some, it's a recognition that GM is going to have to take a big bite of a moldy bread sandwich and everybody has to swallow.

Shared sacrifice makes more sense than the "bash the unions" sentiment already running rampant in this thread.

Hobbes, unless that date is a typo this is an article from 2002, which is the last time they cut 30,000+ jobs and it didn't work - they are doing it again

Since this quote is from 4 years ago it means one could evaluate whether they've actually made good on this:


I'd say that regardless of whether you churn out 20 models a year is irrelevant if the designs are just a reheat of old stale designs and they don't introduce anything new or significantly improve the car.

Given that this article is 4 years old and we are going through the same thing again I'd say that Ford hasn't learned their lesson and one shouldn't believe that this new plan will put them on the path to success either.

What are the major reasons that GM has been in a prolonged slide?

I tend to think that the major problem has been a lack of great and innovative decisions to push the industry into the future instead of riding out the remains of last century's profits. This company has been struggling since the mid-1970s and other than making some shrewd investments in other companies, GM products have had many more flops than successes.

Do GM cars cost too much in the American marketplace? How does this factor into your assessment of GM's woes?

Now, I am cheap, but when I go shopping for American cars it never seems to be the price that I find outrageous or offensive, but I generally don't like the vehicles much. Maybe I am not a great example though, because I always end up buying used cares and with the exception of a 1985 Audi 5000, all of my cars have been American. (my other favorite cars have been a 1976 Monte Carlo (which I really did like) and a 1993 Thunderbird (which I had to trade in for a Chrysler minivan with the arrival of kid #3)

This is my dilemma, for as long as I can remember there has been a resentment of UAW wages and benefits and they have been pointed at as the source of GM's problems. For me the blame on the UAW goes more to the fact that I just don;t think American companies seem to get the same quality of construction as some imports.

Yet these imports always seem to be more expensive than the American cars they compete with. Americans today seem to chose imports not because they are cheaper but because they are better.

And the old flaw of ducking out of the low end markets seems to have started all over as GM bails out of GEO and Saturn to leave room for Kia and Hyundai.

Is the quality of GM cars a major reason for their decline?

no I wouldn't go that far. But it seems that the major moves of GM in the last 30 years have often fallen flat. What are the dream cars since 1975. I remember going to school where kids drooled over 1960s and early 70s cars like Camaros, Mustangs, GTOs, and Chargers.

Could it possibly be whatever went wrong in Corvette Summer?

Does the UAW figure prominently in the problems facing GM?
Apparently it does. I have been frustrated trying to come up with numbers for this thread. But I still don;t get that if labor and benefit costs are the big problem, why are American cars still generally reasonable buys? In truth, while I like buying American, I usually end up buying an American car because I can't afford the Japanese or German or Swedish competing models.

I gave instructions for backing up this thread with evidence, I have not found any new evidence to add other than what I;ve found in this thread.

Oops...danged google search. Here is a link to a webcast of the current plan. Same sentiment holds....an emphasis on many things beyond cost cutting, particularly focusing on innovation. I would point out that he does allude to my statement above that capacity has been driving product decisions, which is one of the reasons they are cutting capacity to more realistic levels.



FWIW, William Ford has declined to accept any salary at all until Ford returns to profitability, and most of the immediate cuts are coming from their white collar workforce. I mention this not to contradict your statement. Shared sacrifice does indeed make more sense...just pointing out that Ford (the man and the company) seem to agree, and are actually proactively acting upon that sentiment.

Okay- I guess none of you guys here collect cars, dream about cars, or live and breath cars like I do- so perhaps you don't feel it as strongly as I do- GM's products just plain suck- no other way to say it- you can sit and tout that stupid ignoranct crap about how the poeple building the cars are taking too much of the profit and whatever- but it still doesn't change the fact that GM products suck now and have sucked for years- sure, they have a hit here and there- but they will continue to decline, I don't care if everyone in the freakin' nation starts volunteering to work on them for free- they will still be turning out sucky product lines. Sure- they get a bounce from the SUV or old faithful's buying the trucks- but still, the overall product, year after year, just plain sucks.

I work on them, and I have seen what they have been producing. I can't tell you enough how much thier product lines suck, and how many customers can't wait to unload a used one, but less a new one!

Dodge makes a better truck line, hands down- probably the best truck line in the world- ford now has the mustang, and that will do very well- but the new camaro? Look for a massive failure there- like the GTO, like the SSR truck etc etc- all they have is keeping slightly changing the Tahoe and Blazer/Suburban/hummer lines, otherwise, it remains the same old crap.

God love 'em, ford is really trying to give the consumer what they want, and I think you will see Ford do well soon, and really start doing better and losing less share to other makers

DCX is going to rule the world if they keep going in the direction they are- they don't really try to make the cheapest- just the best for the mid-range price- and poeple are falling all over themselves to snatch up Mopar stuff now.

But management at GM just doesn't get it- and neither do the poeple scapegoating the Unions either- they make an easy target, they don't have the advertising dollars that GM execs have, or the ready access to the press to point fingers.

But the reason GM is in a slide, is that when anyone that doesn't know anything about cars asks guys like me that work on thier cars, I tell them to stay the heck away from GM! Don't buy a single car post Olds shut down- that was really when the slide began- is when they announced they had to shut down Olds.

One guy said it best "GM did best when it was run by former engineers, now they have MBAs running the show, and they are running it right into the ground"-

They don't have car guys in the lead or ones with real pull- they had Bob Eaton from Mopar- the guy that greenlighted the whole Viper thing and spun off all those other "nostalgia cars"- prowler, PT cruiser, 300 C line, the hemi- but they freakin' ignored everything he said!


The management of GM are market morons, and have no clue as to what folks want to buy in a global way- sure, they may get a truck right here, a vette right there- but overall, every dang line they make is just not a spectacular seller, they just don't have enough "W"s in the columns- they have more "L"s- and that is entirely the fault of management- no matter how you spin it

GM is spiraling down hill because the word of mouth of gearheads is "they suck"- and you can't buy advertising, marketing or focus groups to offset that- you simply have to provide a good product that those guys like.

Folks that buy using consumer reports and stuff, as thier only tools, are playing with fire. They have alot of testing and such that doesn't translate sometimes to what the guys working on them, collecting them, and , most importantly act as non-paid full time salesman of the company

You take a died-in-the-wool chevy man, and he will tell you about yesteryear, and the next thing out of his mouth will be "but the whole new GM line just plain sucks"

I hope that was clear enough.

I have purchased only one brand new car in my life (I insisted that when I received it, the car must have fewer than 20 km on the odomiter), and I did a lot of research on the options.

The results were pretty straightforward. Honda and Toyota cars have consistently better performance, fewer defects, longer lifetime and better fuel efficiency than American models. Also significant was the substantially bettr customer service.

This is all reflected in the real value indicator for cars, their resale value. The Honda Civic and Toyota Camry have had the highst relative resale value for about 7 years. That is market-driven approval at its finest.


In Canada, the Japanese market share is even higher than in the US, because for very cold weather US cars are known to be unreliable. The Big three in the US may well have huge problems with unions and costs, but they need to improve their image, and the only way they can do that is improve their cars.

Amlord, you posted a page ago about spiralling costs despite 'relatively static' sales. Well, the numbers you gace showed that sales had dropped $1.6 BILLION dollars in a single year. I think you downplay that substantive drop a little too much. I have no idea what the union situation is in car manufacturers in the US, but the move towards Japanese cars is even faster in Canada, and as has been pointed out the reason the Big three have ben able to maintain their European shares (though they are losing market space there as well) is because they focus on entirely different kinds of cars...

From my experience with GM cars, I agree with CR (though I really know nothing about cars or economics). Mr P's whole family used to buy GM out of American loyalty, but I haven't permitted us to own a GM car since we sold his after our first couple of years of marriage. First, the warranty was terrible. Very few things were covered, to include the paint which started chipping off when the car was only two years old. The things that were covered on the warranty required what they called "diagnostics" which weren't covered. So, when we took the car in for repair (which seemed like every month) they had to run at least an hour's worth of diagnostics and charged us for this. We hit our limit when the paint chipped off, which was an obvious manufacturing defect, and they refused to pay for it. These were not little chips, but large chunks of paint missing....Our car looked like camouflage with bright blue and primer. They eventually agreed to repaint it when we threatened to picket outside their building. GRRRR. I do think that paying three retired GM workers per current worker is an unsustainable formula, too, which is probably why they resort to stupid things like adding fine-print expensive diagnostics to their warranty agreements. Anyway, that was about a decade ago so maybe they have their act together now, but from the sound of things, maybe not.

We have had no problems with the seervice from Ford, I would definitely buy Ford again.


*sorry the above was all anecdotal

This is an area where I don't care what "studies" or "focus groups" or whatever says- lot's of times, folks are idiots when it comes to thier vehicles- and they are just as idiotic towards Japanese cars sometimes as well. I frequent boards where mechanics discuss issues we deal with, and some of those boards I have over 10K posts! It has been my "seed" money for most of my life for other projects, business investments etc.

This is a comment by a GM mechanic:

"I'm gonna take a break from GM until (if) they come off the financial ropes and get religion on product quality. "

However- Vermillion- Toyota is getting a puffed up reputation for no good reason as well- in fact, Lexus is the big inside joke now " a 40K Piece of crap Toyota for idiots with lots of money and no mechanical knowledge"- All three of the american manufactures make far bette cars in that class for far less money- it is a perception vs reality.

Honda seems to be getting too expensive and big for thier bridges-but, among mechanics- there is still a saying "If it sounds to good to be true, it is probably a Honda" - however- their whole car line is horribly over-priced right now in class- as far as a car guy's perspective (of course, in a biz perpective- it is priced just right because folks are still buying them!)

Honda has a wierd set of trends, cyclical in nature- where they start thinking outside the box, offering the best product on the market for the dough, then going all safe and over priced for a long time.

Thier motorcycle line is a classic example- it could be said that the 69 CB750 Honda released back then almost caused the end of Harley Davidson- until they learned to market the "image and lifestyle" instead of the bike itself- which, is another joke about bike guys "hells yuppies" we call them, in the least profane statments - because Harley is a clearly inferior product for the price. But right now, all the the "big four" japanese manufaturers are making air cooled V-twin harley copies for less money than a harley- but the bottom is going to drop out of that market REAL soon- because that is a nearly 100% Baby Boomer market. Almost no market share at all among younger buyers 40 and under. Big anti- harley backlash building righ now- but, unlike GM, Harley recognizes this, and is prepared to try to change with that-

And that right there is a great example of aware management vs clueless management- which is why GM sucks- they just don't get it- and instead of being smart enough to start changing thier behavior- they just villianize their best customers and thier most IMPORTANT asset- the UAW workers.

DR- if those UAW guys at GM are hating thier own company- there is a reason!

I have been to the Chrysler UAW plants- and those guys are freakin' motivated car making automatons! Not a non-mopar (or daimler) in the parking lot- and saying a bad thing about a dodge product may very well get you a knuckle sandwich for saying such things in thier "turf"- no foolin.

Enthusiasts like me are given the red carpet when we visit our "mecca"- and the UAW workers treat you like you are a part of thier special brotherhood- and I am not being facetious here- slap on the backs, hand shakes, car talk- between management and line workers on break- and real peer review of performance happens all the time- they are very, very proud of the product they are making- to the point that a slacker can and will be run out on a rail. Competition is fierce to work on certain lines- the Viper line had no employee with less than 18 years seniority- folks moving thier whole family from other areas to be closer to the factory they wished to work at more.

You don't have any of that at GM anymore!

Ford has also recognized this - and has been doing the same thing- I have good feeling's about Ford.

GM needs a management enema BIG TIME.

The only thing GM management can seem to do is blame others for thier crappy performance, and give themselves nice parachutes so when it folds, they walk away rich.

Far be it from me to ruin your union critiques, DR, but I don't believe you're barking up the right tree.

If unions are such a problem why would Toyota pull a plant out of the South and move their operations north to a union happy nation like Canada?


Is it so surprising that Toyota's plants ran at full capacity and Ford's didn't when foreign cars are increasing their market share?

I worked at a Ford/Toyota dealership not too long ago. Ford Service was doing okay because cars broke down more often than Toyota's. On the other hand Ford Sales couldn't keep up with Toyota Sales unless the factory gave big incentives like 2k cash back on new cars. Meanwhile, back in Toyota's showroom, corporate headquarters was less interested in offering incentives, preferring to let the quality of their vehicles speak for itself. Toyota insisted on increasing the number of cars we rolled out of the lot to chip away at domestic sales, confident that once more Americans bought their product they would stick with the brand. It looks like they got first part down. Time will tell if they're right about repeat customers.

Is the quality of GM cars a major reason for their decline?
Quality and fuel efficiency. Domestic cars consistently score lower on fuel efficiency.

Is the quality of GM cars a major reason for their decline?
Yes and no. Well, at least with Ford I can say that they can't improve on the car's quality without raising costs and turning potential customers to look at foreign alternatives. It seems like domestic auto makers have tried to improve on quality. They've come a long way, but can't peak without increasing costs. I think the industry has hemmed itself by giving value as much importance as quality. People with a tight budget are drawn to this until they get fed up with time away from work/family due to recurring Service visits.

Does the UAW figure prominently in the problems facing GM?
It may very well be part of a problem, but it's not the origin of the automaker's blues, nor is axing unions the solution.

Funny how timely this subject is- I just read it in our daily paper here a few minutes ago- Ford, in fact, does get part of the equation "trimming down the corporate beauracracy that slows new developement down and does not respond to market wants"- hit's it right on the head- they went on to talk about how Nissan turned stuff around- but they missed the mark there as well- that is MBA speak again, and sometimes, MBA speak DOES NOT translate well down to selling cars.

If I had the riegns of GM tommorow this is what I would do FIRST:= go look in the garage of every board member and executive in the company that makes over 100K per year- including the engineering and development crews. I would fire evey one that doesn't have at least a couple American muscle cars, or modern cars hot rodded up, of the brand GM.

Pretty much what Iacocca did with Chrysler. He hired car nuts. He went K car at first-- but he realized early on, that making econo boxes and minivans wasn't going to be the long term solution for a healthy company- but making excitement in the brand, building brand loyalty through a several pronged approach only car guys would understand down in ther pits- I have a mini-van, but want a viper too!

Bob Eaton and a couple other guys- look at thier car collections- older and newer vettes, mustangs, souped up street machines that THEY THEMSELVES have wrenched on through the years. They make trips down to the "drawing board" themselves to see "what is cool here"- that is why the German corps started looking at Chrysler so hard in the first place- and then screwed up by not following those guys lead, and when they figured it out, turned things around. Bob Eaton went down to the "skunk works" and saw the rendering of the Viper and said "good god, I have got to get me one of those!"- and Carrol Shelby was on that team as well- and within two years, light speed in car terms- you could buy that car off any showroom floor in America!

Instant excitement in Chrysler- and every line they had shot up. Sure- you have to buy the mini-van, but darn, you sure wouldn't mind having that Viper- you need a pickup truck- but you want one with a viper motor!

Ford is "getting it"- the mustang clearly shows that the Ford CEO (named Ford of course) is a car collector and enthusiast- he is "getting it" and very fast.

Let's take the UAW rocks notion down about two decibels...

The fact of the matter is that in order to maintain profitability in an ever changing market, the United Auto Workers have proven to be far more expensive and far less efficent than other alternatives.

Why don't Japanese automotive plants have the same capacity issues?
read here

Why did it cost an avg of $25.63 for an assembly job 3 years ago?!?!?!UAW wages

Frankly, it's only part of the picture, but to employ people at OVER double the sustainable cost is absurd. The average assembly job in America pays...
Assembly pay
The article states the average assembly pay was about $22K, which is less than half the $53K that a UAW worker would earn at straight time.

I think this sums it up....GM and Ford have to change their product line to meet the needs of a changing market. It's simply the norm in business. Consider the MASSIVE slump that US auto makers hit during the 80's... hence,

From CNN.com... (here)

So, to say that Hybrid or economical cars are the reason that GM is in a slump is near-sighted. The reality is that the cars they've made are largely too expensive and haven't changed much in multiple years to meet the needs of the changing market.
Gas prices... according to Edmunds.com haven't made any real change in the sales of more fuel-efficient cars.

I think that GM and Ford need to make a couple of sincere changes. They need to move jobs (I know this is going to be unpopular) overseas until the UAW realizes the error in its ways. Frankly, as long as the UAW believes that a low-skilled labor job demands over $50K in wages... we're going to have problems.

Secondly, Ford and GM need to make cars that people want to buy, which includes quality products that follow market trends. This could include utility cross-overs, "more fuel efficient" sedans, and of course following styling trends. (remember the article talking about Ford's models looking just like the previous ones??).
Has anyone ever considered that the Accord, one of the US's best selling models, has had 1/2 dozen or more body styles in the past 10 years?? Hmm....
(edited to add- I almost DEPLORE buying japanese, and we just bought my wife a new Accord! lol)

aevans176,

I wouldn't say that an assembly line worker in an auto plant is low skill. Those plants are highly automated and require skills above the level of most assembly jobs. In general, they operate very high amounts of capital equipment.

As Professor Walter E. Williams explains, workers that have jobs with a lot of capital equipment make more money, because they are more productive: link



I don't necessarily have a problem with UAW line workers making high hourly wages. It is the fringe benefits which never end that is killing the Big 3. Retirees have health insurance forever with very little out of pocket expense. As those retirees age, they cost more and more and more. The UAW is (rightfully) defending the deal they made with the Big 3 in better times. However, they are shortsighted and are harming future workers and potential future workers.

Japan's auto companies (primarily Toyota and Honda) are not saddled with that cost.

So why did you buy an Accord? Unless your dealers down there are marking up WAY over MSRP- there is no reason whatsoever for an informed consumer to buy Japanese- and that is the other leg in this equation- Americans, as usual, are dumb as rocks most of the time when it comes to thier money and how they spend it (oops- not meaning to say you are as dumb as rocks- that kinda came out wrong )- but, if you shop around, there are quite a few cars that cost less than hondas right now that offer just as good as quality- just not from GM - though, in all fairness, it is smart to shop the dealer, not the brand!

A Dodge Neon is head and shoulders above any car in it's class- and that includes the Accord- in performance, ruggedness, reliability, - and here is a biggie- cost to maintain- the accord alternator, for instance, can run you, depending on what year- from the cheapest Auto store in your area- from 225 bucks to 425 bucks- where the Dodges usually is less than 50! Alternators go out- they always do, no matter what brand- big difference in costs!

The ford Taurus and Focus lines, now that they fixed the tranny problems, are very good.

The Accord, though I am a big Honda fan, and own several of thier motorcycles- is all hype for the dough. Same with 90% of the Toys and Nissans. Now- the new asian "tiger" brands- Hyundai etc- and soon, Hyongsung- will probably whip anything in class for some time- Hyundai now that they have fixed THIER quality control issues is pretty much kicking but- they were very, very bad at first.

But the American public has 0 loyalty to American brands, not just because of quality issues- but because of the basic betrayal by the American car company management- you non-car guys may not understand this at the gut level- but when you are car crazy, you probably get at least 1 request a week to "what should I buy"- and we greaseheads USED to be the main cheerleader for the US brands- but now, no more- why? NOt because of UAW, that is for darn sure!

It is because of morons at GM boardrooms that don't listen to what guys like me say anymore- and that is sad- because, it used to be, guys would literally drive thier cars up to the back doors of GM engineering shops after hours and even the president of the company would sneak out to check things out- all on the "hush hush"- because OF COURSE we don't CONDONE this kind of behavior- wink wink- but now- those board room guys wouldn't muss thier armani messing with the common folk- and only hire engineers now that feel the same way.

Every enthusiast in America probably e-mailed GM and told them not to build the new GTO that way- an Australian holden, very popular in the south pacific- but not even to the enthusiast tastes here- and it flopped, just like we said it would. Same for the SSR truck, etc etc.

Dodge literaly has rappers calling the plant trying to get the first models off the line- you know how that sells a car line?

You can still pull up to the back doors, instead of the engineer named Jack, it might be Dieter- but dang- the president and CEO of DCX drove the V10 motorcycle in testing HIMSELF. That bike is freakin' insane! 300mph top speed, incredible bike, takes major cojones just to climb on it- you think GM could buy that kind of advertising?

You guys can blame UAW all you want- but I know why these cars aren't selling, and darn near every enthusiast and mechanic will give the same reason- bad management.

I don't know if it is still true- but 1 in 5 jobs in America were auto related- and the aftermarket is booming- and it is mostly union built parts, because lot's of us DEMAND high quality non-chinese aftermarket parts in our cars- and are willing to pay more- you see, I can buy, for my race car, "stroker" cranks and rods from Eagle that are made in china for about 1395 for their cheapest 500ci kit. From the American version (there are several- but I will say Keith Black for now) - it is about 3000- same with Indy heads stuff- all forged right here in America, with union labor and all that- guess where I spend my money? Because it is money well spent- the shipping costs alone for sending back faulty parts makes the extra money and takes the risk out of these sales.

And I can tell when they try to slip me some crappy chinese speed parts to- because, you see, I personally quality test them again- and they always come up wanting.

Now- the "bling bling" crowd doesn't care as much- they just want to bolt a spoiler and what we call a "fart can" to thier "ricer" and claim it has 100 more hp because of it - but a ricer race car costs nearly 4 times more to do the same times in the 1/4 mile as the older V8 iron- I know, because I have built both, several times over (hey, look at my Avatar for God's sake) - that is a 1967 Valiant- 800hp, all motor, 500ci motor, built for under 10k dollars. To do low nines on the street with one of thos "ricers" will cost you AT LEAST four times that much. I know, because I have built a low 9 second- ACCORD.

As long as the American public CONTINUES to blame the employee, who has no decision making capability in the areas that matter- instead of management THAT HAS 100% OF THE DECISION MAKING CAPABILITY IN AREAS THAT MATTER- we will lose- period.

Our execs are horribly over-paid and horribly under educated for thier field- oh sure, they can do accounting and budgets, but they have not a freakin' clue on how to sell cars or products anymore. Even more importantly - how to get back their brand loyalty.

I have literally seen fistfights between guys yelling at each other what was better- Ford or Chevy. Now only the Chrysler and Ford marque really carries that continued loyalty.

Do the math however you want- UAW has no culpability in this at all.

This isn't related to the UAW, but more to corporate tax environment. When Daimler and Chrysler merged, they could have chosen to headquarter in either the US or Germany. They chose Germany, a country with low corporate taxation, and one that doesn't double-tax earnings that are repatriated from abroad. Japan does have a higher corporate tax rate, but I think (not sure) that they do not double-tax repatriated earnings. At least not at the same rate.

I hate to give you a shocker... but need I discuss the resale value of an Accord vs. the Neon? We bought the Accord because the dealer gave a better trade-in for our previous vehicle and gave a better warranty than the alternatives, coupled with the notion that we finance vehicles on 36mos or less and the value on the back end is tantamount...

You can preach about alternator costs all you want. Common perception is what matters, and a Neon doesn't have nearly the resale value. This might just say something about the debate in itself... consider that a 2002 Neon in perfect condition, according to Kelly Blue Book.com retails at $6680. The same Accord (or similarly equipped) retails at $11,600!!!! Consider that similarly equipped 2006 models are only about $2500-3000 apart, that's a net loss of $2400 on the conservative side. That doesn't even take into account that the options on the Neon aren't nearly as nice...and the car is far smaller!. I think you'd be better off comparing a Civic to the Neon... For God's sake, a Neon now still comes equipped with a tape deck as standard equipment (according to Dodge.com).

I actually drive a Chevy Truck, and have (ironically) owned a Dodge and a Ford before. My personal experience is simply an anecdote, but I had a 94 F150 that was great (it got totalled in a parking lot... go figure) and I also had a 1996 Ram that was ok but problematic. I bought all three vehicles new and got what I'd claim to be similar financing deals, etc. The reason that I loved the Chevy is that my truck came with Onstar and at the time I believed was one of the best looking trucks on the market. Strangely, shortly after I purchased the last truck both Dodge and Ford changed their body styles... My current truck has been in the shop one time in over 85K miles, and that was covered by the warranty. (**knock on wood**!) It's many people's perception that Chrysler products are sub-par and (hence www.mychryslersucks.com ) and I can say that my experience is similar. The 96 I had had wiring harness issues that no one would/could fix... then the warranty ran out, and I had to dump it. I couldn't keep it in the shop for an issue that wasn't my fault.

Are these factually based opinions? Probably not, but consumer opinion drives sales. As I said, I drive American trucks, and believe it to be the right thing to do. However, considering my wife's propensity to be fickle with Automobiles, the Accord just made sense (especially because her '02 had an AWESOME resale value as well...). Also, check out this site.... is perception a false reality?... maybe not....
Recalls

According to the above site... Ram outweighs Silverado by 48 calls!!!!
Funny thing is that the recalls for Ram were in the mid-late 1990's... while Silverado have been more in recent years. Maybe perception will swing... but right now it's rooted deeply in the cruddy models made in years past.

I can't argue with the resale or your wife's penchent for resale- nearly every vehicle I have ever bought I got more out of it when I sold it than what I paid for it- and public perception is somewhat of what I am talking about.

I chose the Dodge Neon simply because it is a pretty good value- and I have raced them, so I know them well- and same with mid-level accords- I have never seen a "stripper" Accord- but have gutted them personally LOL- I have also smashed them into ice walls ( no joke- it is winter racing the FWDs rule the day there) , and have cut the welds out of the cars to put in different panels and metal.

I also know a great deal about recalls and how and why they come- I just posted a long recall list of Harley- about 5 times more recalls on all Harley products in the nation than all the other Japan motorcycles combined- but, even though I am absolutely no Harley fan, and wouldn't buy one for myself, and even somewhat anti-harley
http://harleys-suck.redztread.com/whs.html
(back atya there homey- in fact, it doesn't take long to find an anti-anything site- doesn't take much! )

Recalls sometimes make no sense, sometimes they make great sense. I have a recall for the clockspring in my T&C mini-van- apparently, in some test somewhere, or some crash somewhere, something was found to be fatigued wrong or activated wrong, sometimes it is a very good thing to get replaced, like in some of the rear tire mounts on a variety of SUVs, because a low speed crash takes out the whole back end of the car.

I would agree perception is very important, and it has alot to do with both the Car companies market share loss in general, and American attitudes in the workplace and out.

Why work for a company that treats you like crap, pays okay, but obviously management has not a freakin' clue about how to fix things, and in fact, blames you every time they come up with yet another crap idea that is obviously doomed to failure- obvioius, but to the guys making these dumb decisions. And you would think they would learn flop after flop after flop. Then you have rigid company policies that pretty much make's sure that you have to torque off every customer in front of you, but you have to pres