Future of America's auto industry
05-13-2009, 07:26 AM
#1
Thread Starter
Future of America's auto industry
Is there any interest here in discussing this topic? I guess we will find out. I will start out by tossing out some random thoughts...
One thing is for sure, it's a big F'n mess. Chrysler, as we know it is done. The only hope rests with Fiat but those cars reportedly are two years done the pipeline. It's almost a certainity that GM will going into bankruptcy after June 1. Thousands of GM dealers will be gone this year even if they do not. Suppliers can't sit around doing nothing and making no revenue for the next two years while the massive built up inventories are cleared out during all the plant shut downs. Honda, Toyota, etc. are all very worried about the loss of suppliers as this can bring car production to hault everywhere. So much for the just-in-time business model. The big three in the past made money on SUVs and trucks, while selling cars at a loss. Can they change over night? Not likely. Believe it or not there are only three small cars left that were developed in the US (designed and engineer here); they are Ford Focus (US version), Dodge Caliber, and Chevy Cobalt. That's it. You have to remember the US car companies primarily built small cars for one reason - to meet CAFE numbers. Who pushed hardest for CAFE numbers - the UAW to insure they did not lose jobs. Otherwise, US companies would have concentrated totally on their profit areas - big vehicles. It was easy to leave this development go to Europe or Asia. Things were just the opposite in Europe and Asia, where fuel taxes provided a big incentive for customers to buy small. And guess what small cars over there generally priced out about $5k more for the same vehicle, thus it was profitable to design/make small cars there. Did you know Ford has more cash on hand than Toyota. Can you believe that! Not even the mighty Toyota has been above the industry mess because it got greedy with over production, going after the big vehicle profits, etc. And then there's the government running things! I know many of us older guys remember well what happened in the UK when you let that happen. Finally, assuming by some miracle we come out of this a couple years down the road with a handful of surviving companies at all levels, will the general public be able to afford the next wave of new cars which by all accounts put the average median price at $40k within 5 years. How can wages possibly keep up with the huge cost jumps predicted? Predictions are they will be a huge pent-up demand from 2012 to 2015. Hope I'm around to see it and I hope GM and Ford are as well. If the government it really serious about keeping the US auto industry going like they have the banks, the President should be working on his info-commercial for it right now.
Hows that for starters? Your thoughts?
One thing is for sure, it's a big F'n mess. Chrysler, as we know it is done. The only hope rests with Fiat but those cars reportedly are two years done the pipeline. It's almost a certainity that GM will going into bankruptcy after June 1. Thousands of GM dealers will be gone this year even if they do not. Suppliers can't sit around doing nothing and making no revenue for the next two years while the massive built up inventories are cleared out during all the plant shut downs. Honda, Toyota, etc. are all very worried about the loss of suppliers as this can bring car production to hault everywhere. So much for the just-in-time business model. The big three in the past made money on SUVs and trucks, while selling cars at a loss. Can they change over night? Not likely. Believe it or not there are only three small cars left that were developed in the US (designed and engineer here); they are Ford Focus (US version), Dodge Caliber, and Chevy Cobalt. That's it. You have to remember the US car companies primarily built small cars for one reason - to meet CAFE numbers. Who pushed hardest for CAFE numbers - the UAW to insure they did not lose jobs. Otherwise, US companies would have concentrated totally on their profit areas - big vehicles. It was easy to leave this development go to Europe or Asia. Things were just the opposite in Europe and Asia, where fuel taxes provided a big incentive for customers to buy small. And guess what small cars over there generally priced out about $5k more for the same vehicle, thus it was profitable to design/make small cars there. Did you know Ford has more cash on hand than Toyota. Can you believe that! Not even the mighty Toyota has been above the industry mess because it got greedy with over production, going after the big vehicle profits, etc. And then there's the government running things! I know many of us older guys remember well what happened in the UK when you let that happen. Finally, assuming by some miracle we come out of this a couple years down the road with a handful of surviving companies at all levels, will the general public be able to afford the next wave of new cars which by all accounts put the average median price at $40k within 5 years. How can wages possibly keep up with the huge cost jumps predicted? Predictions are they will be a huge pent-up demand from 2012 to 2015. Hope I'm around to see it and I hope GM and Ford are as well. If the government it really serious about keeping the US auto industry going like they have the banks, the President should be working on his info-commercial for it right now.
Hows that for starters? Your thoughts?
05-13-2009, 07:34 AM
#3
thanks for the lose-lose prognostications, Dave 
what do you really think? 
the "greed" from wall street certainly glazed over the eyes of the auto industry. i hope that the ass'y lines can be re-tooled pretty quickly for smaller stuff....and keep some of the jobs and miniscule profits (?) here in the us.
it was interesting to hear that FORD has more money than TOYOTA. how did that come about ?
what do you really think? the "greed" from wall street certainly glazed over the eyes of the auto industry. i hope that the ass'y lines can be re-tooled pretty quickly for smaller stuff....and keep some of the jobs and miniscule profits (?) here in the us.
it was interesting to hear that FORD has more money than TOYOTA. how did that come about ?
05-13-2009, 07:41 AM
#4
Thread Starter
Over-prodcution. Toyota of course has way more on it's balance sheets..... but it's tied up in accounts receivables. Next big question, is how many of those will default in today's market?
05-13-2009, 08:47 AM
#6
Former Moderator
Looks like (American) Honda has consistently played a more conservative game -- and will continue to be able to offer the right stuff. Now if they would only hang in there for us -- with the small rear wheel drive toys! 
05-13-2009, 09:09 AM
#7
Thread Starter
Honda's conservative approach is making them look like the smartest player in the game, that's for sure.
(Of course we won't mention that their ego kept them in the F1 game way too long before they folded.)
(Of course we won't mention that their ego kept them in the F1 game way too long before they folded.)
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05-13-2009, 11:42 AM
#8
Originally Posted by Jet sitter,May 13 2009, 12:28 PM
Personally, I'm not buying any big ticket items.
How about stocking up on the good ol' Kentucky Bourbon?
05-13-2009, 12:25 PM
#9
Originally Posted by paS2K,May 13 2009, 11:42 AM
Sounds sort of UnAmerikan, Glenn
How about stocking up on the good ol' Kentucky Bourbon?
How about stocking up on the good ol' Kentucky Bourbon?
