Posted on 01/29/2007 11:22:19 AM PST by .cnI redruM
The Big Three are hemorrhaging money, and struggling to stay competitive with foreign rivals. Fortune's Alex Taylor crunches the numbers.
NEW YORK (Fortune) -- An enormous gap still separates the performance of Detroit automakers from their foreign competitors - and it isn't all their fault.
The stupefying $12.7 billion loss that Ford Motor Co. reported Thursday for 2006 comes one year after General Motors' equally horrendous $10.6 billion loss for 2005.
But for all the bad decisions these companies have made by not listening to their customers, they aren't entirely to blame. Structural inequities between the U.S. and Japan - notably in labor costs and currency - account for a big chunk of Detroit's problems.
The evidence can be seen in a report prepared by the Detroit consulting firm Harbour-Felax, first released back in October and updated for Fortune. For anyone who makes a living from the domestic auto industry, it is depressing reading. An enormous and persistent gap separates the home team from the import companies - large enough to question the continued survival of the U.S. companies.
(Excerpt) Read more at money.cnn.com ...
The stupefying $12.7 billion loss that Ford Motor Co. reported Thursday leads me to believe that the F series may not be enough.
Hahaha!
Where's Willie G when ya need him?
I think you posted the wrong person. That's why I joked about the Chinese cars coming to a WalMart near you....
As you said, No thanks!!!
Our family has two vehicles-- a Ford product built in Canada and a Honda product built in Ohio. I can tell you which one has lower maintenance cost despite being driven twice as much and having about the same number of miles on the odometer. Can you tell me which one is more American?
They may be able to file for reorganization, nullifying their pension liabilities and starting from a baseline budget.
And somehow this doesn't affect the numerous productiona and assembly plants the Japanese/Korean/European car companies operate here in the US?
Quality, aside from perception, is not the issue. It is costs. There is nothing wrong with the products Detroit produces.
Detroit simply is uncompetitive on a cost basis while the Japanese manufactures (in Japan or here in the US) are not burdened with the legacy costs Detroit has.
Still whining on some wanna be website.
You mean there is still one industery that illegals have not taken over?
Oh well. I thought maybe he had a new Amtrak route.
99 Ford Windstar--Total piece of crap.
>>Many of them see it as a complete failure of management to "make cars Americans want". <<
Of the 27 cars I have owned in my life, I have NEVER enjoyed one as much as my Scion xBox.
A few of my favorite union and govt. examples.
Janitors making $60K a year (plus tremendouns beneftis) ...
Washington mandating that a municipality remove 99% of the contaminants from some of the purest natural drinking water in Alaska, so the town had to drive up the road and dump filth into the water so they had something to remove 99% of...
Railroad unions mandating that the person who works in the caboose remain on the payroll years and years after the need for a caboose was elimintated...
Welfare FAMILIES living together and making income totaling $1milion per year...
(personal experience:) Computer Database Administrators working for the govt. who did not know how to turn on a database, installers who could not install, computer programmers who could not program (transferred over from the department of public works where they drove a truck- to 'fill a slot') where they campainged for public office all dayt on the public dime...
Yep we need more govt. programs and unions.
You were implying that the products were bad.
Sadly though this is a big part of it. Every single time I am looking for a new car I try to buy American first. I go to Ford, Chrysler, Chevrolet and Cadillac. All I want is a sedan (not an SUV) with enough headroom (I am 6' 4") and a roomy cockpit. I walk on to the lot and I tell the guy "If you have a car I can sit in without hitting my head on the roof ,I will buy it now." Guess what? They all suck. I put the seat all the way down and back and I still hit my head on the roof and bump my knees on the console. Every single time I wind up with a Mercedes because that and Volvo are the only cars that fit. I hear that Infinity and some Honda models fit well but I do not want Japanese. Here's a clue Detroit - Americans are bigger these days. Not only that I am decision maker for 4 drivers who you didn't sell a car to because I could not fit into it!
"notably in labor costs and currency..."
Labor costs, I can see. Currency makes no sense. The dollar is no higher vis a vis the yen than it has been for the last year. In 2005, the dollar started out weak, and appreciated a bit, but it's still below 2003 levels.
And the value of the yen is really kind of neither here nor there, given that all of the Japanese manufacturers have factories in the US now. In fact, it's not really an issue of US vs. Japanese wages so much as it is union vs. nonunion wages.
Buy a Volvo next time - Ford owns them.
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