Posted on 01/08/2006 3:22:19 PM PST by Cagey
DETROIT (Reuters) - Irate U.S. auto workers picketing in the streets and bright prospects for competing Asian automakers cast a damper over struggling U.S. giants General Motors Corp (GM). and Ford Motor Co. (F) as the global auto industry's biggest annual show opened on Sunday.
The North American International Auto Show, at the massive Cobo Hall on Detroit's riverfront, showcases the world's latest cars and trucks, including new models from GM and Ford accompanied by optimism from their executives about a rebound in demand from U.S. consumers.
But auto industry analysts still expect GM, which has lost nearly $4 billion in the first three quarters of 2005, to post its fifth straight quarterly loss later this month.
Crosstown rival Ford is expected to eke out a small quarterly profit. But Ford's Chairman and Chief Executive Bill Ford has said Ford's turnaround plan, due on January 23, will include "significant plant closings" and job losses.
Ford Americas President Mark Fields, who is crafting the turnaround strategy, said on Sunday the plan is "not about fiddling around the edges" in terms of cost cuts.
GM has already announced it will slash 30,000 jobs and close 12 plants in North America. Both Ford and GM have had their credit ratings slashed to junk, and GM executives on Sunday again parried persistent questions about bankruptcy.
"I don't know what leads them to bandy it about. From our standpoint we don't think it's in any way, shape or form a good or viable or reasonable approach," embattled GM Chief Executive Rick Wagoner told reporters at the show.
But the implosion in the U.S. auto industry, long a bedrock of U.S. manufacturing and source of middle-class wealth for blue-collar workers, has not been lost on the United Auto Workers union. The UAW gave up its biggest concessions in years to GM and Ford in the last year, fearful the companies would face bankruptcy without the savings.
Those concessions drew the wrath of angry UAW members outside Cobo Hall on the first day of the show on Sunday.
The protesters were orderly but held signs targeted at Delphi Corp (DPHIQ), a spin-off from GM a few years ago that demanded steep wage and benefit cuts after it filed the biggest ever U.S. automotive bankruptcy last October.
"Corporate America and Labor Leaders: Traitors of the People" and "Blue Collar Runs Companies/White Collar Ruins Companies" read two signs among the picketers.
Doug Hanscom, who has worked for GM in Baltimore for more than 29 years, said he joined the picketing outside Cobo Hall to support Delphi workers who face steep wage and benefit cuts under that company's bankruptcy filing.
"The struggle that Delphi is having, I think it is going to domino into GM," Hanscom said.
Karie Huntley, a 23-year-old Delphi electrician at the company's Flint, Michigan, operation, was out campaigning for political action to enforce the company's pension guarantees. "This is a middle class issue, this is not just a Delphi issue," she said.
Wagoner said on Sunday the agreement struck with the UAW in October was "historic" and would save GM, the largest private provider of health care in the world, about $15 billion of its $60 billion in long-term health-care costs.
But UAW's master contract comes up for renegotiation in 2007. Prospects for more concessions without signals that white collar workers and Wall Street investors are bearing a share of the burden casts a shadow over GM and Ford operations.
INSIDE -- MORE GOOD NEWS FOR JAPAN
It is a different story for Japan's aggressive automakers led by Toyota Motor Corp. and Honda Motor Co. Ltd. Asian brands in 2005 won 36.5 percent of the U.S. market for cars and trucks, up 1.9 percentage points. U.S. automakers, including German-owned Chrysler Corp. , won 57 percent, down another 1.7 percentage points.
On Sunday, in another blow for GM and Ford, Honda swept the top honors at the Detroit show as its all-new Civic and first-ever pickup, the Ridgeline, were voted car and truck of the year by a panel of automotive writers.
Both models were developed and built in the United States.
"Words can't express the excitement," said John Mandel, senior vice president at American Honda.
Toyota plans to make a record 9.06 million vehicles in 2006, just shy of the 9.15 million analysts see GM building.
Analysts last year lambasted GM especially for its reliance on large gas-guzzling SUV's and trucks, contrasting these with Toyota's pioneering gas-electric hybrids like the Prius sedan, the Detroit show's car of the year two years ago.
But on Sunday, Wagoner stood firm.
"Large SUV's? I have a hard time feeling bad about bringing out an all-new line of products in a 750,000 unit segment, to be conservative, that we run 60 percent of. It's the most profitable segment in the industry," Wagoner told reporters.
Then they don't need one, do they? The cars for them are obviously a little further down the economic scale. But remember there are also plenty of people who can, choose to, and do pay $2+. After all, it's THEIR MONEY. Goodness, you pay just about that for a loaf of bread, and more than that for a gallon of milk! To say that b/c some people can't afford $2+ per gallon -- or chose not to make the necessary adjustment in their budget -- that "big" cars should therefore be quashed, is like saying that b/c I can only afford for eat at Longhorns that Ruth's Chris should be phased out.
bflr
The Aveo is an import. It's also boring looking. I almost bought one - ended up instead spending more on a US made car.
US Automakers should outflank the Euros and come out with an entire wave of tiny, tiny cars akin to the "Smart car" which is about to become the newest phenom to hit America from Europe. They cost $15K. They're *tiny*. Ridiculously small! But students and millions of city drivers will be snapping them up as quick as they're available.
Ford and GM ought to fight them head-on, outstyle them and make them cheaper right here.
But they need to *hurry*. For real.
QUICKLY!
"Wrong. With gas now staying above $2 a gallon, people simply can't afford to fill up an SUV 2-3 times a week. Small, stylish cars make economic sense -- and GM better get hip to that fact."
Why can't someone put together a small engine diesel for a pickup? Or put together a diesel hybrid? People would buy these! Are they in the works?
Maybe I'm too ignorant, but GM & Ford need a balanced line-up. Such that when one line is doing we'll, it carries the other side. Acordingly, when tastes change, e.g. from SUVs to small econo cars, the profit isn't lost- it just comes from a different car in the stable.
Thanks for the memories of the Edsel show.
Neat treat for us baby boomers!
"Both models were developed and built in the United States."
Shhhh!
Don't tell Willie Green or the Ford/GM defenders this.
Somebody has to tell these people that squeezing an impact drill every 22 seconds on a car's wheel is not worth $75,000 per year. Then maybe we can compete.
Interestingly, GM benefits from long-standing hatred of the Japanese in China. A lot of Chinese remember what happened in WWII, and want nothing to do with Japanese-built products. Ditto for South Korea.
The Aveo is an import. It's also boring looking. I almost bought one - ended up instead spending more on a US made car.
The Aveo is a GM product - GM/Daewoo, that is
Both Ford and GM sell such cars in Europe - Ford sells the KA and the Focus originated overthere. And GM's Opel unit has similar product.
"Both models were developed and built in the United States."
Anybody who thinks that bugly (and slow-selling) thing called a Ridgeline is a true pickup truck needs to have their head examined!
Its not a real pickup truck but it'll sell to the same people who no longer need their Toyota van. I doubt you could carry much firewood or sheetrock in it.
Even the Aveo looks OK for what it is.
But the problem is that the Aveo looks like it should get 60 or 70mpg and only gets 35mpg, which is just ridiculous for a car like that.
GM and Ford need to start putting some engineering into these aging engine designs. People remember that Honda and Toyota both have cars that get 60mpg, while Detroit has nothing.
Chrysler went with performance and retro and it's paying off in spades. Chevy built the SSR, which is an awesome looking vehicle, but they put a yawn engine in it and priced it like a Vette. How stupid is that?
I think they are finally getting it right with the Soltice. Not at first, but it looks like finally.
I had heard that it was going to be powered with a 170hp engine. Argh. So what. The VW GTI has 150hp and it's a hatchback for gosh sake. The Honda Element has 155!
Turns out they are going to offer a model that has 240hp. It's about darn time. Although, knowing Detroit, they'll price it at $40k or twice what the 170hp model costs.
I honestly do not believe General Motors or Ford (or Toyota) can bring a new design to market in six months. Eighteen months, maybe, but probably the design would still be full of bugs. Two years is moving right along.
The only small car opportunity for GM in 2006 is to import GM-Daewoo cars of the Matiz - Kalos - Lacetti types. They are currently being sold in the UK. These could sell OK in the USA if done right.
If Mallett builds up some hot ones for immediate sale and then helps on development work then the first very hot ones, a "V" type car on steroids, could be on the road by June 1. Truly mass produced "V" type models from the Korean assembly lines could be for sale by spring 2007. The Mallett cars would have to be sold at a large loss. ($20,000?)
Mallett is building one hundred 400 hp V8 Solstices for sale as Pontiacs. General Motors is selling these machines at a loss also.
http://www.mallettcars.com/
GM and Ford Should accelerate the release schedule for their Hybrid SUV's. Who wants a dinky PRIUS, when you can get 35MPG out of an Expedition.
When are they due for the release?
Ford's problems are W-A-A-A-Y beyond that. I have a flexible fuel Explorer (2004). I purchased it because I had a great experience with the prior two that I've owned...both were traded with near 200,000 miles.
The 2004 was just as expensive, but WOW did they "cheapen it up" on many fronts. The '04 models also have a known, very BAD, transmission problem...which Ford refuses to recall. And last week, the back hatch door on my Explorer...FELL OFF! The aluminum hinges just sheared off when I opened it.
It's not the first time it's happened (there have been some cases of injury), they know about it, but do nothing. My car is out of their ridiculously pathetic warranty, and they refused to pay for it.
That's the problem. I will never buy another Ford product.
Yikes!!....Husband was just saying today that he wants to buy an Expedition or a Tahoe 2005 or 2006.
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