By Robert Farago
May 20, 2008 - 831 views
A number of our Best and Brightest have emailed this link to The Wall Street Journal. The article seeks to reposition the American auto industry's most recent go-go years (1999 - 2005) as a bubble: a delusional miscalculation by the industry's movers and shakers that demand would increase, well, forever. In a sense, yes, absolutely. The Big 2.8 inflated their turnover with dodgy deals and bulk sales. And now they're getting hammered by unsustainable excess production capacity. But it should be said that The Big 2.8 have lost market share to their rivals, as well. In other words, their fall from grace is not just a reflection of a down market; it's a reflection of decades of competitive mistakes, misfires and misadventures. They didn't misjudge demand as much as they misjudged everything else. And it's not like they weren't warned. This website has been sounding the alarm for over five years. We predicted the death of SUV and truck sales. We flagged cannibalism. We pointed our fingers at image-bleeding brands. We highlighted hybrids. We rang the alarm on cash burn. We predicted the systematic pillaging of the UAW's multi-billion dollar Health Care VEBA (oh wait…). And TTAC will continue to ring in the changes, no matter how gruesome. The only bright spark in all of this is the fact that a blogger from GMNext has responded to a post. This is the first time Detroit's gone online with us. Perhaps they finally recognize they need strong medicine. But probably not.
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POWERED
May 20th, 2008 at 2:14 pm
Robert… Again you are right on. Its not that people aren't buying…they are buying better. When they had the cash, did detroit put it into R&D? Nope, they purchased Jaguar. When they had the cash, did they experiment in better cost effective production as did Toyota…? No, they purchased Saab. And Volvo. When they had the cash, did they take a chance and back up any type of hybrid car? Nope… We get the Hemi. We get the Shelby. We get the Excursion. MBAs and return on the dollar for the shareholders.
May 20th, 2008 at 3:30 pm
Daimler did much the same thing with chrysler. Rather than reinvest the money they made in new plants or products they spent a fortune on Mopar and lost their shirts. They would have better served the shareholders with bigger dividends and returns than buying the 5 star.
May 20th, 2008 at 3:45 pm
Mr. Berkowitz showed a plethora of patience in the prodding about the Flex’s details.
May 20th, 2008 at 7:54 pm
I’m curious about the Flex’s fit n finish being “very good”. Is that “very good” like honda has “very good” or is it “very good” for a Ford?
May 20th, 2008 at 8:38 pm
@Accurate_to_the_Vector:
Fit and finish in the Flex was, in my opinion, as good as or better than any Honda branded product in the US. I’d say the build quality of the interior is at the top of the list of mainstream vehicles in the U.S. Seriously.
May 20th, 2008 at 9:46 pm
“Robert…
Again you are right on.
Its not that people aren’t buying…they are buying better.”
Nope, a lot of folks in this market are simply buying what is fashionable or safe at the moment.
More times than not, the truly exceptional car is left in the lurch while the socially acceptable one is given the nod. You really won’t find a market with more outstandingly boring cars sold than the U.S. market.
May 20th, 2008 at 9:59 pm
Steven Lang:
Nope, a lot of folks in this market are simply buying what is fashionable or safe at the moment.
The people have spoken. As they always do.
May 21st, 2008 at 9:44 am
Side note:
The interior fit and finish of my 06 Honda CR-V is “not very good.” Glad to hear the Flex interior is squared away.
DT