Daily Podcast: Bullet-Proof

daily podcast bullet proof

Prior to the late 80's, Mercedes were known for its "bullet proof" build quality. Of course, they were no such thing. A well-placed slug would stop a Mercedes just as quickly as a Ford Pinto (although the Pinto might cease its forward motion in a far more spectacular fashion). Actual bullet-proof cars began appearing in the US about the same time Al Capone figured it best not to stain his Cadillac 16's upholstery with the contents of his skull. Initially, bullet-proof cars were fairly basic: a normal car with thick metal plates welded onto the chassis. As bad as this was aesthetically, it was worse for handling– which presented a whole 'nother set of lethal possibilities. Eventually, metalworkers fashioned more elegant solutions; you can now buy an up-armored luxobarge or SUV that looks like a normal luxobarge or SUV. Saying that, human nature being what it is, plenty of buyers still make the mistake of assuming that the ability to withstand ballistic or explosive attack is more important than day-to-day safety, or the ability to escape and evade. Modern automakers would do well to learn this lesson: people want what they want, not what they need– even when it's a matter of life or death. And what I need is a couple of days to rest and recharge. See you on the other side.

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  • Kevin Kevin on Oct 06, 2007
    I cannot speak to the argument that they are in any sense “propping up” GM; however, it would have to be compelling in order to convince me that they would intentionally produce at a non-optimal price and quantity Think longer-term, as Toyota is. Could be that Toyota could maximize profits by lowering current prices and selling more units (in which case the guy in the podcast misspoke: they are maximizing truck prices now, not total profits). Why would Toyota accept a non-optimal price/quantity solution? Because it *is* optimal in the longer run. Toyota knows that if they nuke GM when GM is most vulnerable and kill GM off, bad things follow. Political repercussions against Toyota would be severe and possibly the situation would be more harmful than good. So it might be best to maintain the status quo, making healthy profits and gradually increasing market share while not stoking the flames of protectionism.

  • Nick Nick on Oct 07, 2007
    The upside of buying a Dodge/Chrysler is that you can declare bankruptcy on the dealer Or die...actually, that would be even better, sign you up for extra options without you (ever) knowing.

  • Ryan Knuckles Ryan Knuckles on Oct 08, 2007

    Does anyone else notice the relationship between people wanting to shoot you and driving a Mercedes? *T.I.C.*

  • NoneMoreBlack NoneMoreBlack on Oct 08, 2007

    Kevin: What would they be penalized for? Standing by and allowing GM to be bankrupted by the dozens of factors cited by every one of the 149 death watches? Why would "political repercussions" be focused on Toyota at all, and not one of the other dozen auto makers that GM failed to compete against? This site is replete with arguments that Detroit has been shooting itself in the foot for decades; why all of a sudden is it Toyota "nuking" them? As something of a pedantic point, they are not maximizing truck prices now. To maximize truck prices, they would set the price of a truck at infinity. If they are not profit maximizing, then they are simply selling either too many units at too low a price or too few units at too high a price. There are lots of things they could be maximizing that aren't profit, such as revenue, slack plant capacity, or market share. In the absence of a strong argument otherwise, it is a safe assumption that a firm is going to endeavor to maximize profit. It is certainly an argument that long-run profit maximization for Toyota involves propping up a failing competitor, but without some substantial proof I do not see why Occam's Razor oughtn't be allowed to reign.

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