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 ...
"Some say it has nothing to do with where a vehicle is assembled, it has to do with where the profits are sent. Profits from sales of Toyotas, for example, are sent to the home office."
Roughly half of Toyata is owned by Americans.
That said --- ROI is what, 15-20%? If a car is designed, marketed, and manufactured in the USA, 80-85% of the gravy stays here.
Exactly...
DAEWOO showed the US just how bad Chinese cars can be.... but Americans have short memories...
Daewoo is Korean and owned by GM. The absolute best small car technology that GM has comes out of Daewoo - it's world class and one of GM's gems.
hahaha, yea that's why they all FAILED US crash tests for the 2 years it was sold here... and promptly left the market with its tail between its legs.
Totally different company now - no doubt that similarly to Hyundia, they used to make bad product. The cars that GM sells as Chevys in Europe are all rebadged Daewoos. The Corvette is still sold in Europe but not as a Chevy - its just a Corvette.
While I'm no fan of unions, I tend to agree with you here. While the unions are an anachronism, management of these companies haven't exactly been visionary, whether you're talking about design, engineering, or whatever. I think the unions are handcuffing them, but management isn't adding a whole lot of value either.
As a dedicated Toyota customer (made in America for the most part), I have always felt that the Big 3 American car manufacturers had FAR less quality and ooomph in equivalently priced cars. I gave up on them some time ago. While I want to support US manufacturing jobs, I do not want to support the UAW and weaselly auto executives.
I rent a lot of (almost always American) cars during my business travels. In the past year or so, it seems that the gap is greatly reduced. I recently drove a Chevy Malibu that was a pleasure to drive. Of coourse, I can't speak to its durability in comparison to the Camry.
Exactly. The management have screwed up in so many ways. First of all, by caving to the unions. Secondly, there is some truth to the rediculous packages they give themselves. Thirdly, they got burned twice by relying on low fuel prices (muscle cars in the 70s, then SUVs today). The late 70's oil crisis was when the Japanese automakers first got their foot in the door, and recently is when they've really exploded. Fourthly, lack of innovation. Today's American cars for the most part are not much to look at - not the way the old classics were.
Wal-Mart. Because they have refused to be run outta business by the unions.
Fortune is TimeWarner.....not a valid source for anything believable.
That was my first thought.
We will have to give them more time and a lot more money first.
UPS is one.
Unfortunately, they have their eye on the US Government. I think the government employees union is that biggest in the country now. And guess who pays that bill?
It already has. Most of the Hondas and Toyotas sold here are assembled in the US, with non-union labor.
If it is any consolation, the Europeans, Koreans and even the Japanese face the same fate - the Japanese will probably hold out the longest.
of course, what will happen is that all of these manufacturers will end up selling what are basically Chinese cars with GM, Ford, Chrysler, and Toyota nametags.
Most likely, the Chinese parts content on *ALL* vehicles these days is sky high...
I am 6'4" and I have a Honda Civic - the 4th one I in a row. the are incredibly well made and fuel efficient (40+ miles per gallon)
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I too am the same height and have found that amazingly enough some of the smaller vehicles have more driver room than the big ones. Long ago I bought two American Motors vehicles new simply because they were far more comfortable for me to drive than anything else I could find. I have sat in some huge cars that had far less driver room than the Honda Civic.
I am not impressed by the style of Jap cars but they
sure run well. I have and will support American car companies but that's my patriotic feeling. I don't begrudge anyone purchasing a Toyota, Nissan or whatever choice.
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