Many of you might of heard that Cerberus has bought Chrysler for 7.4B, after Daimler had run it into the ground and devalued it from it's original purchase price of 36B.

In another interesting developement, UAW backed the plan, which suprised me since Unions don't really trust or like private equity deals like this- it usually means they are going to break up and spin off the company, basically destroy and dismantle the company.

http://news.yahoo.com/s/afp/20070514/bs_af...ny_070514230424

Also, GM and Ford are STILL losing, big time, Ford stock has lost 75% of it's value since 1999, when Bill Ford took over, from 3billion something to 584 million.

I have said, all along, it is horrible management to blame for this loss of market share and value, even though they have convinced allot of folks that somehow, the poeple that only BUILD the cars (labor) are somehow to blame.

Basically, GM is failing because thier line up sucks, in both timing of release of models, and because thier quality now sucks egs, big time. Ford, I thought, was starting to move in the right direction, but, instead, has moved in the same path as GM, and Daimler's woes are the same- they tried to be as arrogant and over-paid as GM IMHO- because Chrysler had knockout after knockout in it's product releases, Thier products actually sold well, to good reviews mostly- but they just didn't "get it" either.

My own prediction is that GM, if they continue with the management they have now, will not last 10 years. It needs a complete firing of the entire management team, starting with Waggoner. Ford, same thing.

Chrysler may make it yet, it depends on Cerberus' management, and to see if they screw up as bad as the other's do.

I wish I had the bandwidth available to show and tell on GM and Ford right now, but you will not BELIEVE the insanity that is so prevelant in US management. I will give one example. You need a certain amount of platinum for one of the process in building cars. About 1m dollars a day in platinum goes up the smoke stack- no biggie- every car company in the world budgets this - it is in the catalytic convertor process- everyone has to do it.

So, a consultant, a very smart one that is well known among car manufacturers, says this to the company "for, about 40k bucks, I can fix it so you only spend about 3/4 of a mil per day, BUT, for about 500k, I can make that drop to 50k per day- the top execs opted for the 40k fix, because that is what it budgeted for regular maintenance on the plant, but instead of spending the 500 k and saving MILLIONS per year overall, the beauracracy of the company would not allow it- so he did the 40k $ fix. The next year, they tore out the entire system and put in something that cost over 50m$ and got it down to 500k per day- marginally better than his 40k fix, but far worse than the 500k fix!

To blame "legacy" costs when you have bad management making such incredibly lame decisions, constantly over and over- is silly.

So my questions are the following:

Do you think that my prediction is right- that American auto makers GM and Ford are pretty much doomed, if not in my time frame, then which? And if not doomed, then why?

Why do Americans still seem to blame unions for obviously bad management decisions when it comes to the company losses?

Is the sytem that allows CEOs to make horribly inflated salaries while being incredibly incompetent able to be fixed by the goverment, or do we need some watershed horrible crash to get it to be changed by stockholders? If the watershed moment comes instead of goverment intervention, do you think the auto industry, or even the american economy, will survive it?

Without better management and some major concessions by labor they are surely headed for being owned by others or broken up. They cannot compete on price or quality and make money.




Because some of the bad decisions were giving Union workers generous pensions and medical coverage decades ago. Now those bad decisions are coming back to haunt them and labor is not about to give them all back.

?

The stockholders are ultimately in charge and that is as it should be. And it is more than CEO’s – it is bad management at all levels and the short term outlook of US companies. While Japanese companies look out decades US companies concentrate on profits for the quarter and year. Until we get away from this business practice the CEO’s are just doing what the stock market wants them to do and in the process hurting the company.

Thus being “private” may actually help Chrysler ay this point. GMs worst mistake was Smith as CEO – this bean counter did squat to make the product better buy tried just to raise profits. Short term thinking is very bad in the auto industry. IMO GM will be bought by a Japanese company at some point.



There are 100 stories like this. Perhaps the right answer is to out sourse the whole part.

Do you know that the engineering dept and the manufacturing dept of GM work from different prints – and they do not always agree? The whole system at GM is so screwed up I am shocked they are still in business. I would never ever own a GM car.

I don't see unions as being the main problem in regards to this. When it comes to efficiency, Detroit is closing the gap. You also have to consider that they are also taking wage cuts, lump sum retirement payjments, and plant closings in stride. I believe that you hit the nail on the head when yo ustated that the line up these companies offer just sucks. The wife and I are currently shopping for a van and our top two options are the KIA Sedonia and the Toyota Sienna. The only Detroit auto we're considering is the Chrysler town and country, though I don't want to buy a van from a company that faces the prospect of ending up kicking the can.



I don't know if its a structural problem as it is a problem of leadership. Lee Iacocca believes mediocre leadership is to blame, and I'm of the opinion that he's right. To be a CEO isn't an easy thing and it is galling to see someone who runs the company into the ground to come out with more money and incentives than they came in with. We discuss "merit" pay for teachers and other professionals, yet, the idea is just outrageous if someone dares to suggest it for the corporate world. You would think the sector of the economy that supposedly thrives on efficiency and merit would welcome such an efficient, and meritorious idea.

Please do not equate a couple of badly run companies to all of corporate America where there are many thousands of well run companies. Many companies now pay CEOs for merit and fire them when they do not perform. We should do the same for teachers and perhaps have a far better educational system!


The other problem with corporate strategy today is the stock market. Too many companies have developed the short term “by the quarter” mentality rather than the longer view used in the auto industry by the Japanese in particular. GM was hurt badly when “bean counter” Smith ran it and has not recovered yet.

Bottom line is that the best lead corporations prosper and the CEOs there should get big money. The badly run will fall to competition – and my belief is GM is heading in that direction right now. Too many of their cars are just crap.

Actually- there is another nuance to this debate- you see, the largest stockholder bloc is a bankers' group in the GM issue- and they make much more money by the bad debt GM generates than they will ever will make off dividends and stock sales- so they actively seek to run GM into the ground- and block as many attempts to fix GM at this time. I believe the bankers group controls nearly 30% of the stock- an even larger share than Kerkorkian.

CEO compensation is broke and corrupt- but another topic really. Has nothing to do with market forces at all. If it were directly tied to the market- I would hail it as capitalism and correct.

Corporate America is cmopletely corrupt and completely out of touch with actual markets- they have simply exploited weaknesses in regulation and laws to benefit themselves.

Not so true with privately held companies- but publically held companies are worse than the feds regarding inefficiency, corruption and stupidity.

Show me something here please because this makes no sense. Anyone who owns 30% of a company makes a lot more from their profits and rising stock price than they ever could from “bad debt”.



Amusing – the most profitable and productive capitalist society in the industrial world and they are “corrupt” and out of touch with markets? Come on please CR.


For all the collective hand-wringing, the United States is still home to the most productive workers of all the major economies — more than Japan, more than China, more than Germany, Britain, France or most any other nation on earth.
Granted it started from the pole position, but the United States still kept the lead in what some economists have come to call the productivity miracle of the 1990s.
http://www.nytimes.com/2007/06/21/business...&ei=5087%0A

It depends on what you are calling "corporate" I suppose? I mean that term as a publically traded company, NOT a private owner.

We have been losing market share in about every industry there is with a couple key exceptions- small business though, is another story.

As far as the GM investment bankers owners (which has spun off Hughes, and maintained it's tax free status in the sale- there is the profit my man- welcome to high finance! ) I can't find anything "link-able"- all I have is some of the publications I recieve in the mail regarding my mutual fund that invests in these kinds of things.

but they make alot more money off the failure of GM so far, then they ever will unless we make japanese cars illegal in this country.

It depends on what you are calling "corporate" I suppose? I mean that term as a publically traded company, NOT a private owner.


And that is what I mean. There are close to 20,000 “corporations” in the US so to talk about GM as if they were the only one is silly. We lose market share when car companies are run poorly. That is why I believe GM will one day be bought (and run better) by another company.



Whatever you read is wrong. No one invested in GM makes more money when they are losing it.

That is not true Ted- there are lots of ways to destroy a company and make lots of money doing it- it is called "corporate raiding"- Cerebus, who bought Chrysler, is also looking at GM, and they make lots of money by basically destroying the company completely- spinning off divisions until the main company no longer exists. Cerebus may or may not do this to Chrysler.

I guess, technically- "corporate" can be too big of an umbrella word- I am "corporate" in that I own a couple businesses that are 'incorporated"-

but I also have to bet my house on it on occasion - there is absolutely 0 risk for a CEO to run a company right into the ground- I mean- how can Waggoner lose by being incompetant- he already has about 40 million bucks so far- incompetancy works for him!

I find it most amusing, however- is that the employees for these companies, the rank and file, are trying to buy these companies- the Chrysler employee group had the second largest bid for Chyrsler- and I was really, really hoping that it would be accepted- and GM employee groups are doing the same, as far as trying to organize to actually buy the company itself.

For your amusement, don't forget that investors can make money when the corporation does not by shorting the market.

The 1983 movie Trading Places showed how this works with orange juice futures. Same goes for publicly traded stocks.

CEOs who run companies into the ground may not be so stupid and incompetent after all. They could be just following orders. Seems sick and anti-capitalism, but that's how it works. I just can't stop laughing

.


OK but that is not what you are speaking of – you are speaking of an investor who is not buying, breaking up and selling GM. Apples and oranges sir.



As I said many companies (the stockholders) do not allow this anymore and CEO compensation is tied more to performance. As a minimum you get FIRED long before you run the company into the ground.



Why amusing? One of the auto industries real problems is their labor contracts. In decades past the unions were granted benefit and retirement hikes that now put the US car companies at a sever competitive disadvantage to their worldwide competition – esp. Japan.

When the company is “owned” by the employees the workers are much more likely to make concessions in return for a potential share in the “profits”. And in good time the profits can be BIG.

I really have a hard time explaining how folks make big bucks "queering the system"- Seamus and AM have done good jobs of explaining some stuff I could not- like selling short.

However- there IS a 30% ownership of GM bloc that DOES make MUCH more money on selling the bad debt of GM than they do on stocks, and, in fact, they will make much more if GM goes all the way down- it is part of the selling of bad debt that is making banks and collection agencies very, very rich these days.

Have you ever noticed how many times a mortgage gets sold, or known someone that is in financial trouble, hasn't paid thier bills, how they get several different agencies for one debt they had, because that debt is sold and bought?

Labor Unions have exactly 0 impact on the car industry, it is 110% management fault- if they were making cars that were selling well- there would be no problem whatsoever with the contracts- because the employees are the best in the world- period. They paid for the best, and then dropped the ball, by trying to sell junk, and then blame the employees for turning out junk.

GM would be failing if there were 0 labor debt- because they have self serving scumbags running the show.

Chyrsler has had the same contract for thier employees throughout- same legacy costs as GM, however- they made lots and lots of money prior to DCX running it back into the ground - which is sad- because THEY have had knockout after knockout in designing new cars- the PT Cruiser, the Caliber, the entire line of Cummins/Hemi trucks are the best in the world, bar none, the Viper, the Magna/300/Charger lines etc- just killer cars, and customers love them, and DCX managed to screw it up anyway.

It was the rest of the Daimler line up that brought them down. Too bad there- I thought a bit more of Daimler management at first than that.

IF cerebrus doesn't decide to just kill Chrysler, and manages it wisely- I can see Chrysler quickly gaining market share against Toyota- Chrysler already OWNS the best truck line, and that is pretty well known.

I think they made a huge mistake of going with a bigger diesel- sticking with the awesomely best truck motor for a passenger truck in world history- the 5.9 cummins- is a huge DCX mistake that is going to cost them.
I got 30mpg out of my one ton dually 4x4 diesel on a recent 700 mile trip. No other truck on the planet can do that.

That truck is an example of a car guy running a car business- Bob Eaton was the man behind that truck, following the Iacocca mold- and it was probably the last good manager of Chrysler, and he worked in the 'vette division of GM, and greenlighted the new Z06 developement before he was done with that company too.

This is not only my hobby and business, but my investing as well, I wish I could step in with a magic wand, and fire every top management person in GM, and throw those bankers in jail, but my magic wand is broke, and it is very frustrating to see those companies go down the drain.

I find the "employee ownership" thing amusing because the ones that the right like to demonize (union employees) are the only ones that can really save these companies. Management sucks to badly to pull thier head out of thier fourth contact point to just listen to the very employees they demonize.

Well it has taken a while, but you have now caught up with what Britain faced back in the 1970s and 1980s and if it follows the same pattern it will take a lot of pain before you get out of it.

The US auto makers may have built some vehicles that you wanted for your domestic market, but they never saw US built autos as a World wide product and as such you allowed the Japanese to produce the almost truly Global auto product.

Back in the 1960s I worked for Chrysler International and can remember well the jokes and laughter about those " funny little Japanese autos with their little sewing machine engines that would never amount to anything much" If Chrysler had paid more attention to what Mitsubishi was doing when it rebuilt those marine and industrial engines of ours that same quality and reliability ethos may have reached the auto division. US autos were in the main cheap, poorly built, poorly speced and often old technology, but I did love my Rotterdam built Dodge Dart especially after the brakes, shocks and clutch were replaced to much German roads. Ask an old Chrysler man about the Swiss AMAG built Chrysler's and why Chrysler would never let them be sold outside of Switzerland the phrases like quality and running like a Swiss watch could have something to do with it. Why did you have to go for British auto quality when you could have emulated Swiss quality, we no longer have a purely British auto industry as people got fed up buying rubbish.

True it was as much to do with geography that has brought this situation about, but very few nations have the room for the US land ships and you always thought that gasoline would always be abundant and cheap, plus you forgot that many governments us gasoline as a very easy taxation source and those big, lazy, but thirsty US auto engines were a Revenue mans dream and a driver's nightmare to fuel up.

Autos aside you are also now caught up in the short term investment mentality that has dogged the UK since WW2 and still does, shareholder returns have to come quickly and pay well and that is not necessarily in the best interest of a company, but it still has to struggle to pay the piper and quickly.

Simplistic the above may appear, but stop and think about it.

One of your other feather bedded industries is that of the airlines, you only have to look around the World to see those airlines who are protected by national interest have all slowly failed and gone under.

The bottom line CR is WHO CARES. IF the board of directors, the CEO, and management staff cannot run the company well it doesn’t matter what even a 30% share says. And how long would any block last if they tried to sabotage the company to increase earnings?

The reality is the big US automakers have a cost problem vis a vie Japan and IMO the quality is not there either.

That said they are still in the game.

“June 1 (Bloomberg) -- In case you missed it, General Motors Corp. and Ford Motor Co. outperformed Toyota Motor Corp. in the stock market the past 12 months. The next year may be no different as Cerberus Capital Management LP seeks to turn Chrysler around.
Armed with a $12 billion war chest, the private-equity firm can take a hard line in July-to-September labor contract talks with the United Auto Workers. That will benefit all of the Big Three U.S. automakers because contract settlements at one company usually form the basis for agreements at others, analysts said.
While GM and Ford say they must slash union wages and benefits to compete with Toyota and end losses, the cash- strapped carmakers can't afford a strike. By contrast, Cerberus, which agreed to buy Chrysler from DaimlerChrysler AG for $7.4 billion on May 14, can endure a work stoppage in any union battles
Reducing a labor cost disadvantage of as much as $26 an hour compared with Toyota would help the U.S. carmakers narrow losses that amounted to a combined $15 billion last year.

Cost Disadvantage
Even with the recent concessions by the UAW at GM and Ford, retiree benefits remain the U.S. carmakers' biggest cost disadvantage compared with Toyota in the U.S. Of a $26 an hour total labor-cost disadvantage for GM, the benefits account for $22 an hour, according to a report by Harbour-Felax. They account for $14 out of an $18 an hour total gap at Ford. Most of the costs are for retiree health care.
GM had about 357,000 union retirees in the U.S. at the end of last year. Toyota, which doesn't disclose U.S. health-care spending, has 269 U.S. retirees, it said.
The total employee compensation gap with Toyota is probably about $7.5 billion annually at GM alone, according to Lehman's Johnson. That's $10 a share in profit, or enough to develop two or three new car or truck lines, he said. “
http://www.bloomberg.com/apps/news?pid=206...2k&refer=us

What you have to ask is why both GM and Ford stock price rose, it is not always down to having a good product or a more efficient future.

The US auto makers have to start thinking outside the US box and so do the US citizens.

Detroit has a choice. They can emaciate themselves and linger on to get by, or they can invest and start to churn out a better product. Chrysler is doing the latter, with some heavy investing and cooperation with the UAW. A good analysis of this can be found here. I mentioned in my previous post that the wife and I are looking for a van. I had in my own mind a pre-conceived notion that foreign is better, I found otherwise. The Toyota and KIA vans are smaller and stripped down bare-necessity rides. For the same price, less with trade in value, we got a fully loaded Chrysler Town and Country. I couldn't help but notice that there are a ton of these things on the road. I'm not certain if this is true in other geographical areas, but in mine, T&C's are all over the place. Things appear to be good for them as outside of the U.S. market share increased 10.2%.

Without a doubt- the Chrysler T&C is the best of best in every way. They run like sewing machines, and never quit- I have had two, and every person in my family has at least one now. Including the old K-car derivitive landmark first line models, with the 2.2 workhorse in it. Anything with a transaxle can be a beast to work on (the profanity filters won't let me say what i really feel about that ) - but, it helps if you don't have to work on them. In this arena- Chrysler comes out tops, and the Japanese are not even close.

Same with Dodge trucks- no one comes even close- they are the best, period.

Ted is just regurgitating the party line "oh, it's the unions, they stifle this or that" blah blah blah. It is a bunch of horsecrap. Has been for 20 years, and anyone that has gasoline in thier blood knows this. The UAW is the most productive auto works on the planet- bar none, and work more OT and take less vacation than any other developed country.

The biggest problem with the car companies of the 70s was thier infrastructure- NOT neccesarily the cars themselves. At that point, Japanese factories were basically brand new, and state of the art- and the US car companies didn't catch up until the late 80s- but funny now- the American car companies factories are more state of the art than the Japanese, who are looking at replacing thier tooling, all of it, in the next decade or so, to update it.

However- all of them learned thier lessons and are now more modular anyway- you can upgrade just part of your line, as opposed to closing the whole factory for months while you re-tool.

You know why Chrysler went with the V-10 instead of the old Big block dodge of the 70s? Because some VP had a warehouse cleaned out and the original tooling for the 440 rb block line thrown out- so, they just reconfigured thier engine line wih the V-10, which has the same deck hieghts, cam bearings, main bearing configurations as the currently (to the 90s then) built 318-360 LA line. they just added to cylinders to the existing tooling, more or less.

At the same time, Iaccoca and Bob Eaton started the engineering teams on thier way to the current Hemi, based on the small block designs as well.


Tooling, industrialization, design concepts etc are the reason the US companies couldn't compete, NOT the Union- that is just a scapegoat that ignorant folks buy into, very easily.

Sure- legacy costs are something, but not EVERYTHING, not even close. Refitting tooling etc costs WAY more than any legacy costs- no matter how they shuffle the numbers for the sheeple.

Chrysler also, pre-DCX, had GREAT ideas of how to work with labor- and make them "buy into" the company man ideal- take the Dodge Viper line- that was an "incentive" line- only the best and brightest workers with the highest productivity, motivation and seniority got to "bid" on that assembly line. And for a long time, it ruled the world. Only recently did the Z06 'vette knock it off it's pedestal.

If Cerebrus tries to strong arm the UAW- they will destroy the company and everything Iaccoca has been working towards.

but my insider knowledge says that "tough on labor" talk is for the ignorant stock buying masses, the ones that thing that organized labor is some boogeyman that stops hard working management from making a profit - that Cerebrus knows the score, and how Chrysler REALLY needs the employees to 'buy into" the management philosophy to make this work, and are very interested in coming to a win/win labor agreement right now.

Time will tell- if Cerebus manages to gut labor- Chrysler will go away- and that will be the end of it- if they come to some win/win, possibly profit sharing agreement (which is what Iacoca did, making many blue collar workers very rich indeed)- then Chrysler very well may be the #1 car maker in the world someday, no joke.

Also those Chrysler employees that became rich through profit sharing didn't all quit or retire early with thier big money- most of them stayed on the job, and continued to do what they love- assembling fine automobiles. Says volumes of how much pride they took in what they did, and how much they cared for the place that they spent nearly thier entire lives in.

Do you think that my prediction is right- that American auto makers GM and Ford are pretty much doomed, if not in my time frame, then which? And if not doomed, then why?
I think that the automakers will be doomed in the long run, but not because of bad management or labor union corruption. Right now, there are way too many cars on America's highways. On average, there is 1 car for every American. To clear up all the traffic congestion and make room for more cars, the Federal Government would have to increase the DOT budget by a significant amount to repair all the existing roads and to build new ones. Such an investment would require tax hikes, which politicians are reluctant to do.

On top of that, the price of gasoline is projected to go even higher. Take those 2 factors into consideration and the automakers will have to adjust for a shrinking market, and that means laying people off and closing plants.

Trying to rescue the US auto industry may be a futile effort. Instead, Government should look at other ways to revive US Industry as a way of employing the workers who already have and who inevitably will lose their auto jobs.

For the same price, less with trade in value, we got a fully loaded Chrysler Town and Country. I couldn't help but notice that there are a ton of these things on the road. I'm not certain if this is true in other geographical areas, but in mine, T&C's are all over the place. Things appear to be good for them as outside of the U.S. market share increased 10.2%.


Check Consumer Reports and see the difference. I had a Chrysler Grand Caravan and was unimpressed by the quality – very unhappy.

Now I have a 2006 Honda Odyssey and am very happy. The Honda is made in America and twice the quality of the Chrysler.

Yes it costs more to but when you take into account resale and maintenence they are cheaper.

One of REAL telling "slam dunks" in this debate is this- YOU don't hear Japanese companies bad mouthing the unions and the deals MANAGEMENT made, and then couldn't afford because of thier own incompetance- MANAGEMENT takes responsibility for it's failures- NOT ONE American company has said "our management has sucked, the board needs to resign, and we will figure ot what WE have done wrong."

Instead, all thier press releases blames everyone BY themselves.

If the boards of directors don't stop pointing the fingers EVERYWHERE but where it belongs- on bad management.


I hate the fact that American companies are mis-managing themselves into oblivion- it doesn't have to be this way- I am hoping the market forces the incompetent management teams out, before it forces the companies out of business.

I agree but lets remember that some of the huge benefit increases given to Unions labor at US car companies was done before they had serious competition. The Japaneses workers make less money AND they have lower benefits. Thus putting the US companiees today at a sever disadvantage. Add to that the fact that the Japs have come HERE to make great cars without union labot and you see the problem.

That said I agree the failure of the US companies had little to do with the workers or even the Unions. It was and is poor management. They gave up the market through sheer stupidity.

Thus I feel they will either change radically or be sold to a company(s) that can manage better.

Some interesting items have occured as of late. Cerbereus is now completely in the driver's seat at Chrysler and has installed ex Home Depot CEO Robert Nardelli as CEO, while demoting Tom Lasorda. Delphi has reached a four year agreement with labor, and Ford is recalling 3.6 million vehicles. I can't find the article to link to, but GM has evidently broken even in the 2nd quarter. Will look more for that link. Sadly, Buick is getting nailed to the tune of a 29% drop in sales. I'm very surprised at this.

I know personal experiences are something that we should be careful to go by, but I have had two Buicks-they last forever people! I started driving one when I was a teenager that had 100,000 miles on it. Folks, I tried to run it into the ground-it didn't work. It had a new paint job after 150,000 miles, was broadsided twice, only to be fixed and to see a new day. To put it simply-my parents only junked it because they wanted a newer Buick. American cars don't last?, don't tell that to a Buick owner like me.

Well, they just made thier first MAJOR mistep- they have aligned themselves with this steaming pile of crappola- http://online.wsj.com/public/article/SB118...4364590719.html

Cerberus-owned Chrysler last month finalized a deal making Chery its partner to develop a range of small cars for sale in the U.S., and has vowed to work with the Chinese to improve vehicle safety. The Amulet, one of the oldest models in Chery's young lineup, isn't slated for sale in the U.S.


Looks like my enthusiasm WILL be curbed as of now

Yes there are some American cars that last but not many and then the question is – at what cost?

Consumer reports tells the story when they compile the repair history from millions of Americans on their cars and American cars still look pretty bad esp. GM.

They sell for less but then the repair cost is higher and the resale lower. Thus it is hard to justify an American car on paper.

I have a 1995 Nissan Maxima (my third) with 222,000 miles on it. My repair cost has been amazingly low. Same clutch, trans, no engine issues, replaced one starter, one generator, just did rear suspension. The muffler lasted to 184,000 miles! I have just started to notice minor rust near the mud guards.

The rest is tune ups (every 60K miles or so) and tires. I now have a couple of Honda cars and they should be as good or better. A friend of mine in NJ who drives a lot just gave his boy an old accord with 355,000 miles on it.

IMO it is wait and see for Chrysler. If they wake up and really start making quality cars they have a chance – otherwise they are dead meat in the very competitive world car market.

http://news.yahoo.com/s/nm/20070809/bs_nm/...EnOX3Go6akiANEA


"TRAVERSE CITY, United States (AFP) - General Motors Corp's Buick brand tied Toyota's Lexus Thursday in a closely-watched survey of vehicle dependability which showed how far US automakers have gone to improve the quality of their vehicles. "



http://news.yahoo.com/s/nm/20070809/sc_nm/gm_volt_dc



"TRAVERSE CITY, Michigan (Reuters) - General Motors Corp. will begin road testing its Chevrolet Volt plug-in hybrid in the spring of next year and remains on track to produce the rechargeable car by late 2010, a senior executive said on Thursday. "


I think the US companies will do just fine. The Volt is set to totally leapfrog into the 21st Century, putting GM into the forefront in this new technology. GM is a leader in hydrogen research as well.

Though I don't completely throw out consumer reports- you have to understand they are NOT a scientific testing institute- thiers is just a slightly more educated guess than the consumers themselves- my brother had a fleet maintanence company through the 80s and into the late 90s- and, 'cause he was my brother, I got roped into helping him. We didn't buy the vehicles- the customer did, in blocks of 100 or more vehicles (we never took a client with under 50, so really, most had ovr 100 vehicles)- and as with most "company" vehicles- it is beat like a red headed step child.

We had trucks, sedans, etc.

Here was what we came up with, with over 10 years of records:

Foriegn company built trucks just suck. the 22R motor of the toy did well- but they were horribly under-powering thier vehicles they were in (lots of complaints about not being able to hit the speed limit under full load)- otherwise, the foriegn built trucks spent twice as much money in parts for less than half the mileage-

it went:

1) Dodge trucks took the biggest beating with very little maintenance, generally the only reasons for repairs was outright damage- like dropping a tree over the truck (no foolin' )

2) Ford trucks did pretty good, though they had repeated transmission troubles throughout the years of records

3) GM didn't do bad, were usually the cheapest trucks to repair, but they didn't go as far per mile of repair vs the other two- overall, the trucks were a wash $ wise- with the ford in the back of the pack due to transmission troubles

4) Nissan, Toyota truck just plain suck- they fell to pieces in fleet use, couldn't handle the loads, and generally fell apart. The new "full size" trucks they offer just plain suck- they are very, very weak- they are NOT work trucks- they are plastic monstrosities- and the GM Avalanche followed thier lead on this- and they have a high degree of suck as well. - anytime you put an independent axle on a work truck you have problems- look at the hummer as well in this category- it is really a car with a truck body- totally useless or off road work, not able to handle any real loads when in truck form.

Cars:

Suburu was highly rated by consumer reports, and was the underlying reason for the fleet buyer to purchase them- Anadarko had over 200 suburus, purchased based on thier consumer reports tests. Boy, what a fiasco that turned out to be- at the same time, Alyeska pipeline bought nearly 200 Chrysler "K" cars- not the prettiest or fanciest cars - but man, were they tough! The K car out performed the much higher rated Suburu for all years we had this company- hands down. The real tale came from replacement parts- a suburu costs twice as much to fix, both in labor and parts, for a similar "injury".
So, after, oh, 12-15 years experiance in this field, I have determined consumer reports has something screwy going on- because our "real world" maintenance records were COMPLETELY different than what consumer reports um, reported.


I will say one thing for japanese car companies- they have won the PR campaign over the last few years- right now, they are in no way putting out a superior product for the money today- You can buy a "big three" vehicle for less money than a Japanese car, and get a superior product- with the possible exception of GM- they have been turning out some serious crappola for the last few years.

If GM fires thier entire board of directors, it would be a great start, if we really want to see them succeed. Looks like MR Ford needs to go as well.

The real problem with the big three is how we don't fire the executives or hold them accountable for thier failures- we blame the Union anyway- instead of blaming those that deserve blame

For some reason, America has a very hard time holding businessmen accountable for thier actions, and instead, blame the poeple that have no decision making stroke in the situation

Cerbus is a new number in the equation though- as a privately held corporation, they lose thier own money when they screw up,just like a small business owner- could be a good trend!

You seem to misunderstand how they work. They do not guess at anything – they send out millions of questionnaires and ask what type of car you have, year etc. and how much you have spent on various repairs. They then compile the data and compare cars. Thus their comparisons are VERY good and I have found them to be accurate.



The new more powerful versions will be far better. If you beat an underpowered truck you will have more trouble. I think Dodge big trucks are ok as well.




Again it is based on use. If you beat the little car it will break. And Subaru is better today although I consider Honda and Nissan to be twice as good. I always found Subaru’s to be “tinny”.




Nonsense. The crap made by GM and the others, while better, still demands more down time, R&R of more pars etc. My only secret is synthetic oil – I have used it since 1978 and love it.




I agree. The real problem is twofold. The car companies hired bean-counters (like Smith at GM) who cheapened the parts to make more money – and today it is all about parts. And second the Union contracts are a rope around the neck of the American car companies profits – which puts pressure on parts cost.

I had a friend whose dad worked for Ford at their “proving grounds” in the west. Now you know they tell you these facilities are to verify that the parts selected meet the design and longevity criteria but what they don’t tell you is they also are used to select the lowest priced part that will last only as long as (someone) deems necessary.

Thus a shock absorber, or starter etc that costs say X and lasts 80,000 (or more) is compared with one that costs X – 25% and lasts 50,000 miles or less.

Which one do you think they select to maximize profits? This is the definition of “planned obsolescence”.


In any case enjoy the cars you use – I would never ever buy another American car until and unless they show up in CR as being at least as reliable as the Japs – I am not holding my breath.