As a Chicagoan, Michigan has always baffled me. I have spent extensive time in both Michigan and Georgia, and in both states I have had moments where I forget which one I’m in.

Unique to Michigan, however, were two incidents involving enraged local idiots and my Scion xB. I have taken to parking it in my sight at all times while visiting the state, due to the number of threats of vandalism for driving a “Jap car” that “a real truck would crush like a tin can.” Uh, a) wrong, and b) maybe if your company made vehicles more like my “Jap car,” YOU’D HAVE A JOB RIGHT NOW.

Bitterness aside, these were in regions nowhere near Detroit. I have a feeling this is the self-destructive, insulating mindset that our domestic automotive execs are surrounded by.

If so: get them out of Detroit, indeed!

Polish cavalry actions in WW2 were tactically sound, there was nothing suicidal about them (attacking isolated infantry units armed with non-automatic rifles, usually in heavily wooded areas).

Still wrong analogy.

Why are you dragging them into it? They suck at just about everything they do (at least for US consumers), so they provide a poor example.

And since when does GM have a successful luxury car portfolio? As has Ford, GM has failed even more than Honda in maintaining strong luxury car branding. Cadillac has been sucking wind for years, and it is the destruction of brands such as Cadillac that has helped to destroy GM’s profits.

Toyota is making money precisely because it gives affluent Toyota customers a place to move upward to. Meanwhile, Porsche is the most profitable car company on the planet, and everybody would love to buy BMW if only they could.

Luxury and upscale are proven strategies in the auto business — with the right branding, it works magic for the income statement.

GM’s problem is that it put all of its eggs in one big SUV basket. That was a highly risky play, as it was clearly dependent upon low fuel costs for it to work. Since nobody can accurately predict fuel costs with any absolute certainty, it is stupid to craft an entire vehicle portfolio around a rigid assumption.

A smart mainstream company would have products that could play to markets both good and bad, and would stay clear of forecasting commodities. They have enough to worry about without getting into futures speculation.

Sorry. But I’m convinced you miss the point here.

GM’s fallacy, and somehow by implication yours, is that a carmaker must cover every niche in the market, including the luxury ones.

The luxury niche, as hereto defined, is extremely vulnerable to fluctuations in the economy. The present SUV, large luxury vehicle craze was only sustainable due to an irrational pricing of fuel and due to an exponential “growth” in the economy due to derivatives and outsourcing — both of the latter are detrimental to long term growth in wealth, as is evident today.

Honda, by focusing on getting their vehicles as invironmentally “friendly” as possible, while also achieving leadership in fuel efficiency (and subsequently, energy efficiency) will have a section of the market that is more than sufficient for them to grow in, without relying upon irrational purchase patterns.

You miss the point here. Honda will regret not having a functioning luxury brand to meet the market that will invariably arise during an economic recovery. Their returns will suffer compared to their rivals because of this.

It’s great to operate an umbrella store when it’s raining. But if you had one in Phoenix and Las Vegas, your strong sales period is going to be limited to relatively short periods.

Honda does not have the ability to turn Accord R&D into Lexus-level prices, which is why they consistently have lower market share and lower margins than Toyota. Toyota has higher profit margins because it can convert some of its investments in capacity and product development into some high dollar products.

If you want to play in the US market during the good times, which is most of the time, then you had better have a luxury brand in your portfolio. Luxury cars tend to have larger engines, hence the need.

Most of the time, the US is not in recession, and Americans like to spend money on cars when they have the money. When the oil bubble bursts, we will see (once again) that peak oil is based upon theology, not geology, and that consumers will invariably buy more fuel hungry vehicles once they’ve overcome this latest downturn.

To change US fuel consumption habits substantially, the US would have to increase fuel taxes to discourage increased consumption, but anyone who watches American politics knows that this just isn’t going to happen. That’s political suicide, and neither party will support it. Since Honda can’t beat ‘em, they’d be smart to join ‘em, if only they could figure out how to do it.

Back to cars, reading the quotations of varies US auto management and union members whining about small cars is almost too funny. The need a dope slap to wake them up, they do not seem to realize that you have to sell the car/truck/suv to make mony. Also like the “winners” WWI. (using same plan that from the last war) the above seem to be waiting for fuel prices to come down again, and all will be well.

Moving out of Detroit might help, however the costs would be very high and the Feds would make some stupid law preventing them from moving and most of all; who wants them?

CarMax: I haven’t visited any of their stores. Have you had good experiences with them? What advantages do they offer?

I’ve never dealt with CarMax. We don’t have any in Mich. My impression is that it’s about as easy as buying anything else on line. The cars are described and the price is listed. The concept was developed by Circuit City, the electronics retailer. It’s still a dealer, and of course you’d still want to test drive the car -probably. (I would) But you can pretty much pick out a car as easily as if it were Amazon.com. I don’t think they dicker on price.

Do we still need dealers? Well we need a place to have the car serviced.

While an off-topic sidetrack, the discussion about cavalry in WWII can actually be used to cast a light on Detroit’s woes.

First, let me point out that I never wrote that Polish cavalry charged German tanks with swords (well, that would have been sabres.)

This is what I wrote:

To develop this track: in an act of insane “bravery,” Polish horse cavalry charged German motorized cavalry and infantry units in WWII.

There were in fact 16 confirmed Polish mounted cavalry charges against German units during the defense against the German invasion of Poland.

Did they ever charge tanks? I think not.
Guderian writes in his memoir that Polish units did attack his tanks, on horseback, using lances — but this is much disputed.

During “documentation” of one encounter with Poles, the Germans showed dead horses and cavalrymen on the field, and there were German tanks in the background — but these are alleged to have arrived after the battle was over.

Those sixteen charges are not disputed by military historians.

===

SO – what’s the relevance of that to Detroit’s woes?

Sometimes one is so entrenched in what one wants to be true, that one misses truth.
While it’s perfectly possible to understand a cavalry charge against an impregnable foe, in desperation, at the moment — it looks different in retrospect, and becomes no more than foolish bravery. Some will possibly seek to discount the tale — and just as there were stakeholders on one side promulgating it, there can be stakeholders on the other who wish to prove it false.

Consider the discussion threads here at TTAC, and consider the attacks the site is often the target of because it didn’t swallow the Detroit line in one go.
That’s another instance where truth and what we want to be true tend to find themselves at odds. And there’s no end of qualifiers and sidetracks, often fueled by propaganda, introduced into discussions:

1. Honda will regret standing without large cars, when the market turns.

2. Toyota is growing too fast, their quality and service suffers/could suffer. (I’ve written this myself — but is it true? Do I have statistics proving that the proportion of dissatisfied Toyota customers is growing, or is that proportion actually becoming smaller? I don’t know.)

3. GM has done the best it could, given its unfair legacy costs.

4. Nobody knew the price of gas would rise this fast.

5. Good luck towing your powerboat with a compact.

6. Global warming is a crock of shit.

Etc.

All are statements that immediately bring forth impassioned arguments from both sides, often giving the impression that life itself is at stake here.
And maybe it is – for some, the future of their dealership depends upon a specific interpretation; for others, the resale value of their SUV goes south as the price of gas goes north.

A contention: successful automakers do not depend upon spin or variations of the truth in order to be in business.
That was the point of my editorial, which (as I wrote it originally) was about the Profit Basics reality check that Mulally is introducing to Ford — after editorial input it leaned more heavily towards whether Ford wants to be Toyota, and that’s the tack the discussion took.
In addition, because we are expert at sidetracking discussions on the internet, we had this not so salient tangent about military history and Polish tactics during WWII.

Thousands of auto engineers and managers have been inculcated with the belief that “you can’t make money on small cars.”
Which is false. You can make a hell of a lot of money making small cars — but then you have to adopt a “let’s make money on small cars” mindset.
Detroit’s curse is that it has refused to accept that mindset until it finds itself up against a cold adobe wall, facing a firing squad of irate customers screaming for “small and fuel sensible cars.”

There are a lot of false assumptions about cars, and the carmakers which will see success in the years ahead will tackle them, and provide products that defy these assumptions.

This goes all the way to the top. An assortment of quotes from Bob Lutz on the Prius will provide much entertainment — but is also tragic: because coming from him, it sent a strong signal to the GM organization as to where management wanted the focus to be.

Did Polish cavalrymen, in desperation, seeing their fellows mowed down all around them, mount their horses for a final and glorious charge, as the outcome was given? Some resist that interpretation, as the act seems foolish in retrospect, and as it reflects badly upon the politicians and military planners who sent a WWI army against German Blitzkrieg tactics.

The sooner GM realizes that its management is using WWI tactics (and no strategy) against guided ordnance, the better a chance GM has of pulling itself out of a losing battle with something it can build on.
Mulally and Ford have reached this realization (though I don’t doubt there are still a lot of WWI holdouts in Ford management).

Now that the gas prices are inching downwards, given the cooling of the world economy, you can be assured that the voices claiming “Honda will regret only having small cars the day the market wants big ones” will once again sound out.

It’s going to be interesting to see which automakers face up to reality.

First, Polish Cavalry did not charge tanks with swords, it was a propaganda myth put out by the Germans.

Second, the talk about Ford having to decontent their Euro cars for the US market is bizarre. The reason euro Fords sell for that much money over there is because everything is more expensive over there. The truth is, the US has the cheapest cars in the world. Europe is nothing, however, in Singapore, for example, Honda Jazz (Fit) is 57,000 singapore dollars (that’s about 40,000 US dollars) and Honda Civic is 53,000 in US dollars.

Of course personally I have big doubts that euro fords will sell well in the US. Look what is popular here – Toyota Camry – an ugly blandmobile.

First, Polish Cavalry did not charge tanks with swords, it was a propaganda myth put out by the Germans (there is a website called http://www.google.com, very useful, some of you guys should try it one day).

Second, the talk about Ford having to decontent their Euro cars for the US market is bizarre. The reason euro Fords sell for that much money over there is because everything is more expensive over there. The truth is, the US has the cheapest cars in the world. Europe is nothing, however, in Singapore, for example, Honda Jazz (Fit) is 57,000 singapore dollars (that’s about 40,000 US dollars) and Honda Civic is 53,000 in US dollars.

Of course personally I have big doubts that euro fords will sell well in the US. Look what is popular here – Toyota Camry – an ugly blandmobile.

There are two things going on. One is a cultural battle of rhetoric where both sides take shots. Both sides have said ugly things, mostly it’s people too young to remember WWII.

The truth is that we would come to their rescue if ever needed. I also think they would reciprocate if we were truly in need. However, I have not been a big fan of a lot of the games they have played diplomatically, nor the rhetoric that many of their politicians seem to thrive on.

Their leaders say things about us that our leaders would be afraid to say about them because the voters would not find it funny from a President or Congressman. I wouldn’t worry about Freedom Fries or jokes about dropped rifles.

France was not the only country to have had Nazi sympathizers. The U.K., Norway, Hungary, Romania, Ukraine, the U.S. (think Father Charles Coughlin) and many other countries had pro-Nazi factions.

More importantly for me, however, is the lack of respect shown to the tens of thousands of French who did resist in WWII, many as part of the underground, and at a great cost. I am not French, or of French ancestry, but I see no purpose to belittle such a tiny country (the size of Oregon) that, in fact, has quite a proud military history and tradition (For an interesting read, look up Charles Martel). Today, France has the largest military force in Europe.

True, the French did warn us about Vietnam, and true, they did not support our invasion of Iraq. (But, neither did eighty percent of the European general population). I don’t think that justifies implying they are a nation of cowards or renaming French fries to “Freedom Fries”.

Given that armies of the time mostly depended on young men to fill the ranks, how would a lack of WWI vets, who would have been at least in their late thirties, make a big difference? If you mean they didn’t have enough veteran leadership to stand up to the Germans properly, then I will go along. Or, if you mean they simply did not have the national will to go through it all again, I can agree to that. But demographically, I would need more info to make the connection.

During the invasion of Poland, Poland had about 95,000 KIA. During the Battle of France, the French had about 92,000 KIA.

Both nations lost about the same number during their initial invasions. I do hope that no one would accuse the Poles of being perogi eating surrender monkeys. (I happen to like the cheese ones, myself.)

“To develop this track: in an act of insane “bravery,” Polish horse cavalry charged German motorized cavalry and infantry units in WWII.

Foolish, perhaps, but more noble than the French who lied down or bent over.”

Yes, the French surrendered to the Germans in WWII. One must take into account the number of French that died in WWI to understand why. In WWI, France had a population of about 39 million. She lost nearly 1.7 million people, along with another 4.2 million wounded. As a comparision, the U.S., with a population of 92 million at the time, lost a total of 117,000, with 205,000 wounded. France’s loss was greater in terms of overall population than any other country.

In WWI, Austria-Hungary and Germany together had a population of about 116 million, about four times the population of France. They lost a total of about 4 million people, a bit over twice the number of deaths in France.

By understanding the extent of the French losses, one can better understand the lack of military resources (men) in place at the time of the German invasion.

What about CarMax?

I have delt with franchised car dealers many times and the dealings have seldom been pleasant. The main problem is the salesperson is busy selling financing rather than the car. Several other posts on TTAC have mentioned the other usual problems with dealers.

Amazon.com: The advantage here is they do a very good job of listing the features and specifications for the products they sell. Amazon also lists comments from previous purchases who can rate their experiences with the product. I have learned a lot reading customers’ comments.

Best Buy: The advantage here is that the salespeople are nice to talk with and can answer most questions about their products.

Walmart: The advantages here are usually low prices and a great many stores.

CarMax: I haven’t visited any of their stores. Have you had good experiences with them? What advantages do they offer?

Many of my comments here on TTAC are reminders to sometimes think outside the box.
Are dealers necessary?
Do we need to make a lot of noise and heat just to move around?
The piston ICE is terribly inefficient – is there any new type of engine, motor, non piston ICE, or wind up that doesn’t waste 75 to 80% of the fuel fed into it?
Why do people buy something like an Escalade which reminds me of Ru Paul the transvestite?
Why are Asian and European cars that come here usually lighter than 2.8 cars?

What about CarMax?

I am getting more and more indications that Toyota has expanded too fast. It’s clearly a potential benefit when dealers wish to switch brands or when you can expand your network through people willing to set up new dealerships — but not if the dealers don’t get the brand.

A Toyota is a car that’s just a touch better than your expectations, in the category. And a lot of the Toyota “feeling” comes from exemplary after-sales service and from being taken seriously when you come through the door.
If those fail, then Toyota as a brand will lose a lot of the rationale for the premium they’re being paid now, and they should really worry about that.

Here’s Ford’s opportunity. Compared to Honda, for instance, Ford has a huge network of dealers — if they can be made to understand the value of a serious, customer oriented setup, then that will add perceived value to Ford’s offering. If, in addition, that offering is properly streamlined to meet real-world-needs, then Ford is well on its way to turning the ship away from the shoals.

Big IFs – but not MIT stuff. Mulally made Boeing customer oriented (yes, even selling a huge airplane means you should listen to the customer) and streamlined manufacturing — he’s on his way to doing the same at Ford.
Compare that with GM, which thinks its customers are suckers. (The recent campaign against private sales, Lutz on rich people, etc.)

I wanted a new Toyota and I visited 4 Toyota dealers last year before finding one that treated me with respect. So Toyota has problems with its dealers too. A salesman at one Toyota dealer didn’t even recognize my old Camry as a Toyota.

As I have said on TTAC before I am waiting/hoping to be able to buy a car from Best Buy, Walmart, or Amazon.com someday.

Incidentally the Wehrmacht were most reliant on horses out of the Western powers

Using military metaphors in the editorial is definitely sidetracking this thread!

There were 16 confirmed Polish cavalry charges with men on horses against German units during WWII.
Guderian writes in his memoir of Polish units attacking his tanks on horseback, with lances, but this is being much disputed by mil historians, and Polish military historians have dismissed as propaganda the claim that Poles charged tanks on horseback.

You’re right that the cavalry at that time was mostly used as mounted infantry, but there were 16 charges in traditional cavalry style, against German units.
The Wehrmacht’s horses were used for transport, and there were 625.000 during Barbarossa alone – but that’s something entirely different.

The Mark IV’s weren’t rubbish. They compared well to the Sherman. Do you think the sherman was rubbish as well? Just because the V and VI were so much better, that doesn’t make the IV rubbish in my opinion.

It’s pretty hard to use a magnetic mine or other device against a tank from horseback, but I say anyone who tried certainly has a solid pair. There were cavalry charges against infantry, so the cavalry did not always fight dismounted.

Also, it’s true the Germans used horses a LOT. Mostly to pull wagons and guns by the last years of the war though. The loss of horses from Normandy through Falaise (when the Germans retreated across the Seine) was a serious blow. The french also used horse mounted scouts after Normandy when the rest of the allies had (afaik) switched to vehicles.

It ain’t geography, it’s culture and free property. Under Michigan law (and any non right to work state) a union has the right to take the property of any business or the right to work of any laborer.

What a crock.

I have done business with the 2.8, EDS and several other companies in Michigan. The sense of entitlement is overwhelming. The overall attitude is one of zero sum rather than grow the pie. It’s even a problem in management types who have less humility than most CEO’s I know.

The move would have to be permanent, and irreversible. It’s a big bet, but it better be sink or swim. The reason they move back is that most other places can’t handle the culture. I bet if you even went to their Texas facilities you would find a bunch of people from out of state working there.