That average thing they have now just doesn’t cut it. The car looks decent enough. It just doesn’t offer anything compelling. It’s just not exciting and has no potential in it’s existing form.

They’d better get their electric version of it ready. Offer several versions each with different amounts of range at different prices.

I just paid over $4/gal tonight. An electric Cobalt for $20k? My commute is 50 miles round trip. Surely they can do that… Who else has an electric on the market?

Then came the heralded Cobalt to replace it, already 1-2 generations behind its competitors.

And don’t get me started on Ford’s Focus. (Though TTACers’ heavy voting for it in the last TWAT is indicative that y’all understand already)

Red herrings like “pensions”, “the unions”, “gas prices”, “high labor costs”, “shifting markets/economy/consumer spending”…

All that is academic bullsh*t for the talking heads to fill hours and hours of airtime with.

There is an absolute bottom line as to why GM, Ford and Chrysler and losing everything: sh*t product that’s about one-two decades behind the times.

… Stemming from an arrogant attitude where business “leaders” took over everything from actual car folks.

Let’s stop with all the hand-wringing, excuse-making, pseudo-intellectualism on “why the Big 3…” and change the fundamentals that created this situation: ironically, “pure” business thinking is not good for… business.

Bingo. It’s wrong to believe to everyone driving S-classes and 7-series is rich. Many of those customers used credit to get those cars, including business leases that could be written off against business income earned when times were good. Now there is less income and less credit, so those sales are going to fall.

There’s another issue. Companies such as BMW have the financial strength to be able to mitigate some of this through their leasing programs, but GMAC is in no position to push too many drive-now/ pay-later programs that could prop up GM’s current sales.

I think that the folks thinking about luxury car sales staying strong forgot that too many people who are dependent on credit to get one are part of their customer base. It’s one of those disparity of income arguments.

There may be some truth to it, but I can tell you the new business tax in Texas is going to stop a LOT of small business owners from buying a new car or leasing a luxury car. The Governor and our legislature found common ground on the idea of helping big business, but destroying the little guys. No one yet really understands the new law (which is part of the problem), but from what I can tell, we are going to see a lot of corporate HQ’s up and leave.

Think of Ford as the New Orleans Hornets, looking meek while they build, then taking the league by storm. GM would be like the New York Mets: adding expensive free agents like band-aids, but not paying any real attention to their weaknesses or how their players play as a team. The Mets make a big, loud move every off-season only to be outplayed during the season itself.

Here are the April sales for Toyota: http://205.209.52.72/p-157833~Toyota_Reports_April_Sales.html

You’re right, Honda’s relative success is due to its strong small car lineup. Toyota is a larger company with a more diversified lineup, so it is strengthening its efficient car sales, but at the expense of its gas guzzlers.

There’s another issue here, though, that Mr. Lang touches upon: the credit crunch. Lexus sales for the year are down 10%. I remember reading some prognostications that held that luxury car sales would remain strong throughout a downturn, but I think those will prove to be wrong.

With tighter credit, a lot of people who were buying expensive vehicles will find themselves spending less. It’s anecdotal, but I’m noticing a trend in which frugality is almost becoming a fad, in which people want to show off their common sense by spending less and getting bargains.

Honda has less to lose in this area than Toyota, because Acura has been a weak brand for many years and has not provided the lift for Honda that Lexus has for Toyota.

With all of this, GM is in serious trouble. Americans want efficient cars, and they don’t have much to offer. They are perceived as a truck company, not a place to get your compact cars if you want them. As we all know, unlike Toyota, they don’t have enough cash to ride it out.

Also, Toyota can act more efficiently. If the trucks aren’t selling, they’ll make fewer of them. They can easily convert their production lines to make the popular models. GM can’t, its factories aren’t as flexible. There is no way for them to sell their way out of this, they have no choice but to start killing off the weakest vehicles, laying off people and shutting down production if they are going to cut the burn.

I can’t find April sales of Honda/Toyota now, but over the past several months, sales of most of their models Y/Y have been off except for the most fuel efficient and major model updates. The problem for GM and Ford is just that their years-long lack of interest in really fuel efficient stuff has left them with not much in the way of demand. The Focus has a 35 mpg rating which explains why it moves. Even the Cobalt seems to sell pretty well, whereas the pathetic Aveo sets on the lots.

But the head bystander George Fisher said he believes Chief Executive Rick Wagoner has a winning formula despite recent setbacks. Of course Fisher has been failing in his responsibility since 1996, so his views might be subject to question. Fisher said “Our major worry is to make sure we have the right cars and trucks”. Hey, he gets it.

Uh, that is simply wrong. And the FJ is a POS.

Honda makes a nice looking car as does Nissan.Face it Toyotas are appliances,and they were never made for real car people.

I would have to say Ford Mustang. Plus it has much stronger sales overall as well.

You are right in saying that most Ford products have been bland. It’s been that way for the most part for decades.

But as a counterpoint, I would say that the American market doesn’t have a particularly strong record of embracing unique designs over the long run. Other than the Prius, I can’t think of one model that has even cracked the Top 20 and had a design that truly stood out. Perhaps the Grand Am or the current Civic stood out to the Corollas, Focii, and Escorts, but other than that I can’t think of anything else.

OK, I’ll bite. Name me one mass market GM or Ford car which isn’t at least as bland as the competing products from Toyota and Honda? Name me one Ford which has the funk-ability of a Toyota FJ Cruiser? I don’t personally like the FJ, but it is hardly bland. Honda’s Element is weird, but it does it’s job better than the really horrible Chevy HHR.

“I’m a bit disappointed that Ford will post a loss of that level, too. I thought they got their act together? What gives?”

The numbers aren’t in, so who knows. My guess is that falling Explorer and F150 sales are bigger than increases in the Fusion, Focus and Edge have been able to make up for. The problem with having the #1 vehicle in the market (F150) is that when the market takes a hard turn there is nowhere to hide. Hence Ford’s recent announcement that a Mexican F150 factory is on a crash program to retool and build the sub-compact Fiesta.

Don’t worry dude. You can put together a decent post, which puts you ahead of 70% of the country in communication skills. If they go Tango Uniform, you will land on your feet.

As for the story, I classify this sort of announcement timing as Investor Relations rather than Public Relations though the two are pretty closely linked at many companies like GM.

On the one hand, it’s just smart business, to time these announcements. OTOH, you do have to wonder if the folks over at GM have any skills in carmaking rather than stuff like PR/IR, government relations, etc.

Gratz on your call.

WELL WE’RE BIG CAP SLINGERS
WE GOT GOLDEN FINGERS (PARACHUTES)
AND WE’RE HATED EVERYWHERE WE GO

WE SING ABOUT EXCUSES
AND WE SING ABOUT PROMISES
AT TEN MILLION DOLLARS A SHOW

WE DO ALL KINDS OF FLEECIN’
‘CAUSE THE BOARD’S NOT POLICIN’
BUT THE FLEECIN’ YOU’VE NEVER KNOWN

IS THE FLEECIN’ THAT WILL GET YOU
WHEN YOU SEE THE PICTURE
ON THE COVER OF BARRON’S AND MOAN

chorus;
GOING TO SEE GM’S PICTURE ON THE COVER
CAN’T AFFORD A COPY FOR MY MOTHER
GONNA SEE MY FACE A LAUGHIN’ AND A STARE’N
AT THE COVER OF THE WEEKLY BARRON

WE’VE GOT A CHAIRMAN WHO’S A SICKY
NAMED RED INK RICKY
WHO’S LEADIN’ US ALL DOWN THE WRONG PATH
WE’VE GOT OUR POOR OLD GRAY HAIR RETIREES
DRIVING THE SHAREHOLDER WRATH

NOW LETS ALL DECIDE
TO CHANGE OUR MINDS
BUT OUR MINDS WON’T REALLY BE CHANGED

LIKE THE CHANGE THAT WILL GET’CHA
WHEN YOU SEE “BUY” IN THE PICTURE
ON THE COVER OF BARRON’S AS STRANGE

chorus

WE GOT ALLOT OF LITTLE
SECOND TIER WORKERS
WHO’D DO ANYTHING WE’D SAY

WE GOT A GENUINE INDIAN SUBCONTRACTOR
HE’S TEACHING US A CHEAPER WAY
WE GOT ALL THE UNION LEADERS THAT MONEY CAN BUY
SO WE NEVER HAVE TO OVERPAY

AND WE KEEP GETTING THINNER
‘CAUSE RICK, HE’S A SKINNER
WHO STILL ISN’T CARIN’

WHILE HE’S GETTIN’ RICHER
WE DID GET OUR PICTURE
ON THE COVER OF THIS WEEK’S BARRON

chorus

1) No epic releases – Other than the Malibu, Escape, Grand Caravan and Focus, there really isn’t anything for the legacy big three that would give them a sales jump.

2) Old cars vs. Toyondassan – There literally isn’t a market segment where the Japanese in particular don’t offer a better car with a much better overall design.

3) Oil Prices – We all know the story on this one. But even if we had simply extrapolated the 2007 price increases to 2008, we would end up with the same conclusion. The legacy big 3 are extremely weak in all the market segments that attract folks who prioritize fuel economy. That likely won’t change until at least 2010 or 2011.

4) Sub-prime – A lot of folks severely underestimate the importance of this issue. The overwhelming majority of today’s car buyers can’t afford to make a cash purchase. Not even close.

The Japanese manufacturers in particular have substantial cash reserves and vehicles that tend to have much stronger valuations over time. This enables better leasing terms, and more favorable financing packages over longer periods of time.

Even the Koreans enjoyed an advantage over the Americans by the end of last year. All risks being equal, it’s much more difficult for the legacy Big 3 now to provide competitive sub-prime financing at this point… and that’s where an enormous portion of their revenues and profits come from.

5) Capacity and Inventory – Ford has wisely decided to substantially scale back their operations. I honestly did not think they would do it to the degree they did, and I believe it will help them survive for the next few years.

GM on the other hand will have to literally lose about a third of their operating costs in North America in order to make it. There are a lot of scenarios that are being thrown around in the automotive remarketing circles. They include…

A) GM schedules the shutdown of several SUV and truck plants, and decides to put Hummer and Saab on the selling block.

B) A bit more outlandish… but some folks believe that GM will actually split their North American operations into seperate companies and keep the ’stronger’ ones attached to their overseas operations. Chevy and Cadillac would be the ones kept (and perhaps Hummer), but I seriously doubt this possibility due to the obvious legal issues with GM’s dealer network.

This one I found to be the most interesting….

C) GM will cut out a third of their models over the next two years… and they will leave large portions of their car platforms to their overseas operations. This will have the effect of greatly reducing the headcount in the NA operations.

My bet is on some combination of A & C, along with a lucrative buyout plan for their employees. I also wouldn’t be surprised at all if Rick and Bob announce their impending departures within the next few months as well. The new leaders for GM will likely come from their overseas operations, and many of them will not fall into the category of the ‘white male American’.

As gas prices continue to climb, companies who are positioned to sell decent small cars at a profit will continue to increase their market share. Despite looks that make even a Corolla look exciting, the Focus appears to be selling well.

The looming challenge will be to move the “heavy metal” from the dealer inventory, in a market that is trading in “heavy metal” for “light metal”.

The will be interesting to see what emerges as the “silver lining” of this situation.

I’m not sure about the US,but I know in Ontario the government has employment quotas tied to thier
hand outs.

As a senior hourly employee that has declined
all and every buy out todate,I now have no choice but to leave it up to upper management to determine my future.

In poker terms I’m “ALL IN”

nice point with 1.

as for 3, I think Ford’s okay with losing market share. GM wants to be #1 in the market share; I think Mually would rather be small and profitable than large and bleeding. That being said, I’d put money on the losses coming out of F150 sales primarily, with Explorer and Expeditigator sales close behind.

1. I notice that Honda is expected to post a gain, yet Toyota is going to post “record market share”. Can we take that as a gain or a bit of spin to hide the fact that Toyota may post flat sales or a small loss (like they did last month).

2. I expected GM and Chrysler to post a loss, but goodness me, I didn’t expect a loss of that magnitude! Heads can’t just roll, they’ve got to fly! Mind you, even though GM’s accounts department are cocking up and their car sales are tanking, at least, GM’s PR department are busy, with Rick Wagoner at the helm. Covering up one disaster after another….

3. I’m a bit disappointed that Ford will post a loss of that level, too. I thought they got their act together? What gives?

4. Red Ink Rick’s new turnaround plan and the boy who cried wolf. Does anyone else spot a couple of similarities….?