I really wish that these bozos in Tokyo would manipulate the currency back to where it used to be. If they did, we would be able to buy new GT-R’s for $25,000 and Priuses for $8,000.

The funny thing is that the weak dollar isn’t particularly good for Toyota et. al., because they have large US operations that earn them dollars, and because the dollar isn’t weak enough for them to be able to dump cars into the market to the point that they could overwhelm it. The manipulators are doing such a lame job that they are screwing them, too.

What we have in the US is a case of the green side of the left making a set of regulations that caused the labor side of the left nothing but headaches. Between the two, they squeezed all the life out of our domestic players. The free market guys should stay out of this argument because they will NEVER win in this industry.

This guy wants to chunk the green (and safety) desires in the toilet to save the labor desires. I have been predicting for some time that the left will split over this, much like the right has split between the social and financial camps.

As a free market guy, I will stay out of it (except to occasionaly throw fuel on it). It’s a perfect example of how you can’t manage a market. Anything beyond the most subtle regulation, and slapping for abuses, and the whole thing goes tango uniform. There are no desirable guaranteed outcomes, no matter how much we want them, regulate for them, or demand them. You can only guarantee failure, never success.

Repeat after me, everybody.

YOU CAN ONLY GUARANTEE FAILURE, NEVER SUCCESS.

Another part of the Japanese market problem is simply the dominant type of vehicles.
“Kei-class” is important and IIRC there are graduated taxes on engine/vehicle size.
Do the Debt 3 offer an engine under 2.0 L?
A competitive (any?) B-class or smaller?
And it is a saturated shrinking market like some others I could mention.

BTW, I nominate Flint for next years “Lutzie”.

Bunter

I have to disagree with your assessment of Lutz’s eduacation. Whatever his faults, this is not his problem.

Wasn’t he a military pilot? The majority of military officer jobs are engineering jobs, and certainly military aviatiors work as engineers (Even if they don’t have engineer degrees). It may not be the same as working at a desk doing design and testing all the time for a decade or so, but it is very similar to working in production or construction as an engineer.

The mindset coming out of the military is very much an engineer approach to most things. Military retirees without engineering degrees are often recruited to work in jobs that would not go to a civilian that did not have a hard science or engineering job.

I would say that MB’s real problem is he has fallen in love with his job and all it’s trappings. He seems to be a risk taker who is not offering up his resignation often enough to get things changed. He likely feels he is fulfilling his role, but when you paid what he does, you owe more to the company than to simply do your own job. Instead, he is running around acting confused because no one can understand the ridiculous talking points coming out of GM.

You should do a bit of factchecking. The yen has tripled in value compared to the US dollar since 1972.

Compare that to the British pound, which has about the same value today compared to the dollar as it did in 1972.

If the Japanese are manipulating the yen, then they’re doing a really lousy job of it, because they have manipulated the yen into becoming a much stronger currency. The Japanese obviously blew it, and should fire those economic ministers and replace them with guys who really understand how to devalue a currency. (There might some Bush employees in need of a job soon, so tell them to send their resumes.)

Fact: Trade policies and tax incentives give a nearly open market to foreign companies here in the US, while we are not granted the same overseas…our government does nothing about it.

Again, I would try a bit of factchecking. The US has a 2% import tariff on cars and a 25% import tariff on trucks. Japan has a tariff of zero.

To be fair, Japan does have some ridiculous equipment requirements that make it tough to import cars or for perfectly good older cars of any type to stay on the roads.

But we’ve done the same thing, by creating “safety” standards that are vastly different from every other country on earth except for Canada, just so that we could keep out gray market imports. We’re playing similar games, we just go about playing them differently.

The credit market – and the housing market – are hardly examples of an unfettered free market. Both are heavily influenced by tax code provisions that make some investments more favorable than others (removing capital gains provisions on the sale of a house, for example). The housing market – which basically is responsible for most of the credit market’s woes – is also heavily influenced by local government actions (zoning restrictions, open space requirements, or even a simple lack of available land for building in a particular area). Those factors can drive up the price of a house, and thus place it outside of most residents’ purchasing power, which, in turn, encourages the use of creative financing.

The idea is that if the free market fails it can only be because it wasn’t free enough, too much regulation and government involvement, they say.

When the credit markets fell into the toilet we were told by these chumps that it was because there was still too much regulation even when it was plainly obvious to everybody with an iota of common sense that the exact opposite was the case. The credit markets tanked because there was little to no oversight.

So now we have the same idea extended to car industry in America. We are told the US car market is failing (for US automakers) because there is too much regulation. If this was the case then I would have expected the European car companies to have been totally wiped out by now since there is a lot more regulation in Europe than the US. But surprisingly quite the opposite seems to be the case; many European car companies are stronger than ever while the Japanese are making only very small inroads in European car market.

And this is the guy in charge of GM’s products. Hah!

I have to disagree. Mr. Lutz may shoot off his mouth on various subjects, but he HAS improved GM’s vehicle development processes. That is what he was hired to do, and, by all accounts, he has succeeded. He also had a decent track record of attractive products at Chrysler before he came to GM.

When GM has given Lutz and his team either a blank sheet of paper, or a solid platform as a starting point – as was the case with the GMT-900s, Cadillac CTS and Chevrolet Malibu – the results are fully competitive with anything else in that particular segment. The GMT-900s are great products, but betting the farm on them in a time of volatile gas prices was dumb. I’m willing to bet, however, that this decision was made by a person or group higher up the food chain than Bob Lutz, even if he did attempt to justify it by saying that “rich people don’t care about gas prices.”

In some respects, Lutz’s hands are tied. He was hired to change one aspect of GM – vehicle development – when what GM really needs is a complete corporate culture change. When Lutz either dies or retires, the “old” GM will reassert itself in the vehicle development process.

I’ve said it before, and I’ll say it again – GM settled for a Lutz, when what it needed was a Mulally. But top management, and the board of directors, really aren’t interested in that kind fo change. They still think that a few solid hits will solve all of their problem. I honestly don’t believe they have yet realized just how tough it is to really thrive and prosper in the North American market – and that it is going to get even worse in the next 5-6 years.

Mulally is tackling Ford’s biggest hindrance – its hidebound corporate culture – which is a more difficult, but ultimately more far-reaching endeavor.

Bachelor’s Degree in Business – Berkley 1961
MBA with Honors – Berkley 1962

And this is the guy in charge of GM’s products. Hah!

I guess Honda didn’t get that memo when it hired Charlie Baker away from Saturn and made him chief engineer of North American operations back in the 1990s, or when it put former GM engineer Gary Flint in charge of the Ridgeline project…

It might help to actually know something about the auto industry. This way, you won’t make these sweeping generalizations, and end up being proven incorrect.

On topic though I believe that US engineers are just as good as the Asian/Euro ones but the bean counters/bueracracy/fiefdums/internal culture all prevent thier true talents from showing. Other than job security (which they effectively do not have anymore) I’m not sure why you would work for one of the Big 2.8 here in the States.

And this doesn’t take good engineering and manufacturing capabilities?

California is the largest car market in the US. If I recall, when your largest customer demands something, you do it. You don’t go behind their backs and try to undermine them.

Why do the car companies thing they have to make two types of US cars (Calif. and Non-Calif.). Why can’t they raise their standards and make all their cars Calif? I’m pretty sure there is nothing about a California car that is illegal in any other state. And why does this seem to be such a big deal for them? So they pass the cost of the special emission systems onto the Calif. customers. Calif. consumers are aware of this price difference and know why it is. It is not a big deal.

An another note, Flint seems to think that all mandated safety, economy, and emission regulations are only applied to US made cars. They are not. The playing field is level. The imports have to meet the same regulations. Dropping such regulations will do NOTHING about getting Detroit to sell cars people want to buy.

You said:

Americans are not as efficient as the Japanese. Our work is not as precise. GM engineers are not as good as Honda engineers.

And let’s not forget:

In America, we do some things better than other places too. For example, we build better bombs.

You have still not answered my point, which is how can the Toyota Tacoma–an American made vehicle–still be one of the most reliable on the market? If Japanese culture breeds better engineers, why is Ford currently beating Nissan on CR reliability studies? Why is Renault currently in charge of the company?

Toyota recently lost a lot of credibility when its 6-cyl Camry and 4wd Tundra scored below average reliability in CR. You might argue that because they were made in the United States, it proves that Americans can’t make good cars. So answer me this:

-Why did the 2wd Tundra do much better than average in reliability, from the same plant? Could it be that the Japanese engineers–who you say are better than GM engineers–are to blame for the problems? Or did our U.S. workforce simply not put as much work into the 4wd units as the 2wd units? If so, why?

-These reliability problems are tarnishing Toyota’s reliability as we speak. So why would they risk their rep further on American factories in California? Because they “know” the Detroit 3 are going to die and the Japanese won’t have to worry about reliability anymore? Or because it had nothing to do with the workers?

-Why do the Chevy Silverado and F-150 currently score at average in CR versus Toyota’s offending blackhead zit? Could it be because Ford and GM primarily invest their time in trucks while Toyota invests in cars? Lastly, does that (and the subsequent loss of truck sales) have anything to do whatsoever with American workers, or could it be because of lackluster American bean-counting management, which is what everyone else has said the problem is so far?

Don’t get me wrong, Carlos, there are problems with American cars. But to attribute this to American culture in general is disingenuous, when the Detroit 3’s corporate culture is far more to blame. If GM engineers were given the same time and money as Honda engineers, I’ll bet they could turn out equivalent products. But the company doesn’t, so the products aren’t.

For the same reason InBev is going to buy AB. The dollar is cheap. It is worth half as much as it was when Bush was appointed by the Supremes.

“To say Americans aren’t as precise or efficient as the Japanese is pure racism, and like all forms of racism, it can easily be proved outright untrue.”

This has nothing to do with race. It has to do with culture. American culture does not have the same work ethic as Japanese culture. Just like some cultures produce better soldiers than others. Just like some cultures have better cooking than others. That is not racism. In America, we do some things better than other places too. For example, we build better bombs.

I am the regional engineer for my company’s largest market area, a company that is the largest of its kind in the world. I am responsible for the planning and management of tens of millions of dollars in capital annually. I am ROUTINELY hounded by upper management to reduce costs by either delayed construction, construction less than what is truly needed, constructing “stop gaps” and then trying to use them as permanent installations, etc.

Accountants should never, ever be allowed to run anything larger than a department in the company. They focus solely on the cost of a particular part/item, regardless of the total cost. “Watch the pennies and the dollars will take care of themselves” is their motto.

Bullshit, it’s the executives’ fault.

Carlos.negros, the Tacoma is assembled in the United States. Bulletproof reliability. Nissan Frontier? U.S. built. Also reliable. In fact, every Japanese pickup built for the U.S. market today is American made, and the Japanese-owned companies do it reliably and well while the American-owned companies (with a few exceptions) do poorly. Same thing with many reliable Nissan sedans. If our work isn’t as precise as the Japanese, why is Toyota planning on assembling the Prius in California next year? And so forth.

Take a look at what happens with newer management in American companies. 2007’s CR listed the Explorer, F-150, Mustang, and many other Ford vehicles as having poor reliability. 2008’s issue listed all those vehicles as having average reliability. CR even called Ford the most reliable of all the U.S. makes. In fact, it ranked in CR reliability studies as being more reliable than Nissan, and Chrysler tied Nissan in the predicted reliability scores.

To say Americans aren’t as precise or efficient as the Japanese is pure racism, and like all forms of racism, it can easily be proved outright untrue.

Exactly. These “legacy costs” are part of the huge overhead expenses that (along with higher payroll) prevent the 2.8 from making money on lower-priced vehicles. No wonder they focused on high-margin trucks and SUVs. They’ve belatedly tried to extricate themselves from this predicament, but now they have no surplus cash.

And about that argument whether the 2.8’s engineers are as good as Toyota’s, Honda’s, etc., I’d like more information. Consumer Reports’ reliability charts for the Dodge Grand Caravan and the Toyota Sienna are strikingly different. I doubt such variations are fully explained by assembly quality. Are there any engineers out there who can cite examples of inferior design dictated by cost-cutting executives?

As far as legacy health car costs for past employees, is this “normal” in the working world? I know plenty of people (including myself) who get health care while they are current employees but what crazy plan is it to provide free health car to people who aren’t even working for you? It sounds like the Big 2.8 promised a bunch of stuff but didn’t fund that stuff up front.