By on December 31, 2018

Image: JRE/YouTube2018 was pretty lit, am I right? Let’s recap some highlights:

In fact, this has probably been the craziest post-bailout year yet. Since TTAC was one of the first blogs to predict the General Motors bankruptcy, I thought I might honor that tradition by taking this New Year’s Eve opportunity to predict how events that unfolded over the past 12 months will affect the way we buy and drive cars for the foreseeable future. Click the jump and see if you think I’m right.

  • New vehicle sales are going to continue to trend downward. Why, you may ask, especially with the economy trending up and unemployment virtually nonexistent? There are several factors at play, including raising loan interest rates and increased life for pre-owned cars. But equally important is the raising transaction price of new auto sales. Cars are now accounting for the lowest percentage of new autos sold in the history of the industry — under 29 percent in November 2018. Compact crossovers transaction prices average a little bit over $28,000, which not only exceeds the average compact car sale by almost $8,000, it also exceeds the average midsized car transaction price by almost $3,000. It’s going to be harder and harder for lower-income individuals and families to buy new.
  • Another manufacturer will make the call to slash passenger cars in 2019 … and it will shock most of us. With margins shrinking to previously unseen levels, some new car manufacturers are going to have to make a tough call in 2019 — will they trade volume for profitability? Toyota still sells hundreds of thousands of Corollas and Camrys. Same with Honda and its Civic and Accord models. But what about Nissan? Altima sales numbers have both fallen off a steep, double-digit YOY cliff in 2018, and Sentra is down a bit, as well. Maxima is a non-factor. Meanwhile, Rogue sales are higher than ever, trailing only the RAV4 and the full-size trucks in sales volume, and the Murano is climbing by double-digits, as well. Would it be so crazy for Nissan to take the plunge and cut passenger cars for the US? I don’t think so. (PS — I think Acura might next.)
  • Genesis might be DOA. Yes, I know that everybody loves the G70 (including me). Yes, I know the crossovers are coming. But all reports indicate that they are at least another year out. How long will dealers, who haven’t had any inventory for most 0f 2018, be satisfied for the low-volume G70, G80, and G90 models? Currently, about 400 Hyundai dealers have the right to sell Genesis, and even the Genesis brand brass think that’s too many. They’re also asking dealers who want to re-up their commitment to build standalone stores, and while Genesis isn’t mandating a minimum showroom investment at this time, I don’t see how it could be done for less than $1.5-2M each — or the average cost of a Ford/GM showroom remodel. In case you’re not aware, that’s more money than most franchise dealers clear in annual profit, all for the right to sell a brand that most Americans don’t even know/care about. Those crossovers better be fire when they finally arrive, because Americans keep demonstrating that they don’t care about passenger cars. Genesis is starting to feel like a vanity project gone bad.
  • Subscription models aren’t ready for primetime, and they won’t be anytime soon. I have several former coworkers who moved over from Autotrader to Clutch Technologies, and they privately tell me they’re looking for work. The financials of it simply don’t work, at least not yet. Margins are too razor-thin for automakers to lose money operating a subscription service (I hear Melody Lee is looking for some work opportunities) and dealers don’t believe in the business model enough to invest in it — after all, car dealers are often among the last to change or adopt new ways of doing business, so why would anybody think that they’d want to invest significant money in something that even the OEMs have yet to get right?
  • Tesla is gonna Tesla. I have no idea why every autowriter in America appears to either be Team Tesla or Team Haterade, but I find myself squarely in the “meh” camp. Musk and crew have proven to be brilliant, and I do mean brilliant marketers. They don’t spend a dime on advertising and yet they dominate the news pages. They have managed to create more raving fans in just a few years than their competitors have with several decades of a head start. Mercedes buyers will consider BMW. Audi buyers will consider Lexus. Tesla buyers only consider Tesla. That, in and of itself, is a fantastic accomplishment. Yes, the cars appear to have some quality and consistency issues on delivery, and I still think that Tesla will fight an uphill battle against dealers and unions. But they are making and selling a genuinely significant number of cars right here in the United States at a time when Ford and GM are fleeing for China. That alone is worthy of applause. I don’t think they’ll go out of business, and I don’t think they’ll dominate the industry from top to bottom. Apparently I’m wrong by not having one of those two opinions, but whatevs, you know?
  • Jim Hackett won’t be employed by the end of 2019. Ford is a ship currently lost at sea. They don’t know who they are, what they make, or how they’re going to do it. Nothing Hackett has done since taking over the CEO chair appears to have worked. Jim, let me save you the trouble. Kill everything but the F-Series and the Mustang. Kill Lincoln. Kill any talk of “mobility.” Save yourself. PS — Mary, you’re next.

All in all, 2018 was a hell of a year, but 2019 looks to have its own share of drama in the works. Good thing, too, or else I might not have much to write about.

[Image: JRE/YouTube]

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90 Comments on “Bark’s Bites: 2018 Changed the Way We’ll Drive Forever...”


  • avatar
    eCurmudgeon

    “(PS — I think Acura might next.)”

    I suspect it’s more likely that Honda just cuts the entire Acura nameplate.

    • 0 avatar
      sportyaccordy

      I think Acura has some hope. They have a dealer network in place, and they have 2 CATMs (crossover ATMs- RDX/MDX). ILX/TLX could help the Civic/Accord by moving to the same platform. RLX should be replaced by a new, high end ZDX. Lot less development work and investment needed to turn Acura around… only question is HMA’s will to do so.

      • 0 avatar
        jalop1991

        Put the ILX on the new Civic platform, and simply build one model only: the ILX version of the Civic Type R.

        Don’t even call it ILX. Call it Integra. Be bold, and go against the whole three letter name thing. Go back to your roots, Acura. Call it a Type R if you want the family resemblance, otherwise call it GS-R if you want the history.

        But make it a solid DCT. Let the young ‘uns buy the F&F Honda brand with the ugly and the wings and the row your own. Make the Integra GS-R an adult product, complete with adult clothing, interior, and accoutrements. Make it a CLA45 fighter. And don’t just put it out there and leave it; fight for it. Fight for the market share. If Genesis can get buzz on the G70, you can get buzz on an Integra GS-R.

        • 0 avatar
          sportyaccordy

          Ugh, no, they absolutely need other versions of the ILX. I’d personally much rather have a hybrid version with the 212HP powerplant out of the Accord for example… if I want a hardcore FWD car 8th gen Civic Sis are cheap and plentiful. A base lease friendly version is a no brainer as well.

          Bringing names back is not a bad idea though.

          • 0 avatar
            jalop1991

            That’s fine. Keep ILX for lower trim units. Take the CTR, put it in adult clothes, add a premium interior and infotainment, give it the DCT, and call it the Integra GS-R.

            I’d be happy with FWD, but if they wanted to do the SH-AWD, I’d be fine with that too.

            Come on, Acura. Take my mind off VW/Audi. I love my GTI and I know I can get a Golf R or an Audi S3 (or even RS3); make me come back to the fold. Give me a reason to buy a Honda product again.

            I can’t do Civics because my wife can no longer clutch. So it’s auto trans or nothing. And frankly, DCT kicks butt. Acura is already doing DCT, so this isn’t a stretch at all.

        • 0 avatar
          Art Vandelay

          I can say 100 percent that if they put the type r drivetrain under the ilx I would own one.

      • 0 avatar
        Tele Vision

        My friend’s Mother-in-law owns an Acura dealership. It’s sucking wind. With nearly a decade required to bring a new car to market there might not be enough time to save it, unless Honda revamps the current MDX/RDX into a few other models. That said, if Honda can’t make an electric Yukon ( or some such ) out of an MDX in short order it’ll be bad for him, as he’s a kept man and hasn’t had a job this century. Time to get a job, man!

    • 0 avatar
      Pete Zaitcev

      Gosh, I hope not. The new RDX is too nice and there’s no equivalent on the Honda side.

  • avatar
    SCE to AUX

    Bark – I agree with every single word you wrote here.

    I’ll add this:

    1. With new vehicle sales trending downward, I’d expect an even greater push for domestic plant closures and off-shoring. This trend will be at odds with the rhetoric of the Trump Administration and will only generate more friction with the UAW/Unifor.

    2. Tesla’s future will be determined in 2019. They won’t go under, but if they can’t show sustained profitability they’ll be forced to change some stuff. BTW: great photo; that one never gets old.

    3. Genesis: The right cars at the wrong time.

  • avatar
    sportyaccordy

    The Genesis story is especially sad because unlike Cadillac they actually built cars to match market demands. I almost bought one. If the previous Genesis sedan were a crossover my wife would 100% be driving one.

    I had kept trying to give Hackett a chance but after I heard him on a Planet Money interview… good grief. Nobody stands a chance in that seat though. Ford has to unravel decades of crap in a fiscal year. In a down market. With stock pressures. Troubling times.

    • 0 avatar
      mike978

      What crap? They were well run just a few years ago by Mullaley. I don’t understand how Ford can’t make money selling the Focus in the US when built in Mexico when Toyota can make the Corolla in the US and make money. Mazda also seem able to build a world compact car and sell it in the US.
      By pulling out of the US the development cost of the Focus goes up per car and reduces there non existent margins in Europe. I expect Ford to pull out of Europe just like GM did.

      • 0 avatar
        sportyaccordy

        Before the recession, outside of the Fusion their cars were not competitive and the Fusion was mid pack at best.

        After the recession, the cars were good in reviews, but Powershift and Ecoboost threw away any semblance of reliability. The Focus RS head swaps were just the tip of the iceberg…. the cracking heads and coolant to exhaust leaks are not so easily fixed, and Ford is very reluctant to help owners out. To a degree they can’t as they don’t have the money. No thanks

      • 0 avatar
        George B

        Mike978, I believe Ford made the mistake of designing cars for European tastes that are unprofitable at prices Americans will pay. The Mazda platform vehicles were a better fit to the realities of the Ford brand in the US than the European Ford platform vehicles. On top of this, Ford failed to offer a conventional automatic transmission in the Focus even though the one in the Escape probably fits.

      • 0 avatar
        Peter Gazis

        mike978

        The Focus was built in Michigan until May. Ford retooled tbe plant and its now building Rangers.

        • 0 avatar
          mike978

          Thanks everyone for your comments. It is still strange why the Ford compact car cannot sell well in the US (although itvdid a few years ago and then becamecstale( when the Civic and Mazda 3 are world cars and sell in the EU and US well.
          I agree about the transmission and other issues they have left unfixed over the 7+ years this generation of Focus has been out. They should have fixed thise deficiencies, other companies do.

  • avatar

    I agree with most of this. The only thing I have to add would be I think Mary Barra may survive quite a bit longer. While not many in the industry like her, the financial markets seem to be OK with her despite missteps.

    • 0 avatar
      Lorenzo

      When the best thing you have going for you is the opinion of Wall Street analysts, you’re in big trouble. The analysts aren’t as bad as what Obama official Ben Rhodes said about the press (“They literally know nothing.”), but they get most of their information from brokerage house traders, who are largely stock salesmen.

  • avatar
    JohnTaurus

    Because Ford’s utilities dont sell extremely well? Yeah, you make the best selling midsize utility, just forget the all-new generation and put all your eggs in one basket, in other words do what deadbrain and his minions pretend they’ve already done. That makes so much sense.

    • 0 avatar
      sportyaccordy

      You are emotionally overinvested in Ford, and it’s taking a real toll on your critical thinking. Take a step back and sell your emotional shares in the brand in the new year.

      It pains me to have to do this to you but you leave me no choice.

      Ford Escape- down 10.6% vs segment being up 14.5% YTD 11/18
      Ford Edge- down 7%
      Ford Explorer- down 1.5%
      Ford Flex- down 8.2%
      vs
      Midsize SUVs being up 7% YTD

      So no John their SUVs aren’t selling very well at all. They are down in growing segments. Only bright spot is the brand new Expedition which sells in comparatively small numbers.

      Whether you want to admit it or not Ford is in serious trouble. Rather than staking your hopes, dreams and self worth onto the brand’s fortunes…. take a step back and just see what happens.

      • 0 avatar
        scott25

        To be fair all of their crossovers are aged and at the end of their life cycles. New generations could reverse those trend. The new Explorer will be make it or break it since it’s on a new platform. It seems like the new Escape is going to just heavily rework the current one like the Euro Focus did so it’s less of a risk. It just needs to make a better value case for it self, value for money has been Ford’s problem for a while now when it comes to cars and crossovers.

        It’s unclear how long they’ll drag the current Edge out now the Fusion is on death row. Don’t see it moving to RWD, wouldn’t fit it’s target market.

        • 0 avatar
          sportyaccordy

          Eh, the class benchmarks do OK even towards the end of their life cycles. Current Highlander is 5 years old and growing in sales despite new competition from VW, Subaru and Mazda. Ford is just in a bad place.

      • 0 avatar
        civicjohn

        @sporty, they are cleaning out the house in hopes of some kind of deal with VW (or somebody), but they still have the FCF to pay that juicy 8% dividend for the next 2 years, I got rid of 1/2 of my position, but at a P/E of 4.9, you simply have to put a stop-loss order on your holdings and you’re good to go.

        It’s at a 52-week low, so if you can hang in there until 3/4/19, it’s a better deal than a CD right now.

    • 0 avatar

      Chevy guy here.

      Ford has reinvented itself in the past and survived, they will do so again.

  • avatar
    Russycle

    ” Compact crossovers transaction prices average a little bit over $28,000, which not only exceeds the average compact car sale by almost $8,000, it also exceeds the average midsized car transaction price by almost $3,000. It’s going to be harder and harder for lower-income individuals and families to buy new.”

    I just wonder how long that will last. As manufacturers switch from cars to crossovers, supply will rise and presumably prices will fall. AFAIK there’s no inherent reason for crossovers to cost more than cars, shouldn’t be too long before we see low-end utes marketed to folks on a budget.

    • 0 avatar
      sportyaccordy

      “AFAIK there’s no inherent reason for crossovers to cost more than cars”

      Well they do and they don’t. You look at a Civic and CR-V, the CR-V has like 10-20% more raw material. So of course it’s going to cost more.

      But if you compare it to the Accord, which is what people cross shop it against, it basically costs exactly the same in the same trim/powertrain.

      And there are budget options already- all the subcompact crossovers, like the HR-V. Supply and demand has already been met.

      • 0 avatar
        scott25

        Very few subcompact crossovers actually are priced to compete with subcompact cars though, they’re mostly priced above compacts and right on top of their bigger siblings when decently optioned and AWD. The Kicks, Kona, and Soul (if you consider it a crossover) are the only ones that are actually affordable and competitive with the small cars they are killing.

    • 0 avatar
      George B

      Russycle, new sedans are under more price pressure from used sedans than new CUVs experience from used CUVs. Eventually this will balance out as there are more used CUVs and fewer used sedans for sale.

  • avatar
    eggsalad

    I’ve never been a fan of the sedan, so I’m not sad to see them go.

    Who knew that the way to get Americans to embrace hatchbacks and station wagons was merely to raise them up a few inches??

  • avatar
    Dilrod

    I think you’re spot on with everything, especially if we have a recession. It’ll impact the auto industry on the scale of the recession of 1958.

  • avatar
    stingray65

    I largely agree with your predictions, but apparently a lot of Tesla owners are making reservations for the Porsche EV so maybe their loyalty isn’t as strong as many think.

    • 0 avatar

      So Porsche is now is a Tesla’s competition. It is not a bad place to be in if people consider Porsche in the same league as Tesla.

      • 0 avatar
        jalop1991

        “It is not a bad place to be in if people consider Porsche in the same league as Tesla.”

        so by “league” you mean “people throwing money at the latest fashion no matter how quickly the fashion changes,” then yes.

        “Look at MEEE!!!! I have a trendy new ELECTRIC SPORTS CAR!”

        • 0 avatar
          mcs

          @jalop: as opposed to what – look at MEEE I have a trendy new CUV or high maintenance ICE sportscar?

          • 0 avatar
            jalop1991

            Those aren’t the fashion. Nobody cares if you bought an ICE car of any kind. No sir, the “LOOK AT ME!” trend is a combination of electric and expensive, the more expensive the better–even if you just bought last year’s fashion trend.

          • 0 avatar
            jatz

            Jalop, is your daily life afflicted with fashionable people?

          • 0 avatar
            mcs

            @jalop: so, buying a lime green Aventador isn’t saying “look at me” and a Model 3 is? Cruising down the street in a V-12 ICE enclosed by lime green painted carbon fiber won’t get noticed. Damn. Learn something new every day.

          • 0 avatar
            FreedMike

            I dunno, jalop…you think the folks who buy Hellcat Challengers aren’t screaming for attention?

            I’d say about 98% of car purchases signal some kind of virtue. The only question is what virtue the owner wants to signal.

            Just sayin’.

          • 0 avatar
            Luke42

            The difference is that I actually care when I see an EV.

            I live in a college town. We have a few rich kids from China who drive exocitic cars every year. I don’t know or care who they are, just so long as they pay their tuition, do their homework, and generally stay out of trouble to the same degree as any other student. Their car represents a a highly optimized and very expensive version of a suite of technologies that our university has been teaching kids to apply for a century. That’s all well and good, but I’ve had my fill of bespoke high-dollar engineering it doesn’t rock my world.

            But EVs are interesting. They represent an entirely new way to do things. It has sometime tradeoffs, of course, and those tradeoffs are generally more favorable than what I see happening when someone drags their Ferrari coming out of a parking lot. In fact

          • 0 avatar
            Luke42

            The difference is that I actually care when I see an EV.

            I live in a college town. We have a few rich kids from China who drive exocitic cars every year. I don’t know or care who they are, just so long as they pay their tuition, do their homework, and generally stay out of trouble to the same degree as any other student. Their car represents a a highly optimized and very expensive version of a suite of technologies that our university has been teaching kids to apply for a century. That’s all well and good, but the novelty of bespoke high-dollar engineering projects is long gone for me personally (I used to run supercomputers), and so these kind of machines fail to rock my world.

            But EVs are interesting. They represent an entirely new way to do things. It has sometime tradeoffs, of course, and those tradeoffs are generally more favorable than what I see happening when someone drags their Ferrari coming out of a parking lot. Furthermore, you can actually carry groceries and children in a Tesla, abd EVs really might change the world for the better, in a way that an exocotic supercar will not. Now THAT is interesting!

    • 0 avatar
      TDIandThen....

      Now that is interesting if it turns out for Porsche.

      • 0 avatar
        Luke42

        If you like EVs more than you like expensive sports cars (guilty!), Porsche is a Johnny come lately — but one which may have the engineering resources to do something interesting.

        But Porsche’s offerings are only really interesting if they go downmarket the way Tesla has. If they’re just making expensive electric sports CUVs, the interestingness will dissapate when commodity carmakers get into the EV market in a serious way.

  • avatar
    raph

    Well to be fair Tesla hasn’t racked up years of hate like Ford and GM plus they are the plucky EV company fighting the good fight against evil Big Oil and their corrupt henchmen the domestic auto industry.

    Tesla like many companies just had the good fortune of being in the right place at the right time with the right product. Move them a decade either way and the story would be completely different.

    And to be frank Tesla certainly surprises me all the time. I figured they would be heading for the dust bin by years end.

    • 0 avatar
      jatz

      Musk is like Obama and Trump: outrageous offensiveness obscures objective observation.

      • 0 avatar
        Luke42

        No.

        There was nothing outragious about Obama outside of the Fox News echo chamber. His policies were middle of the road (except for renewing the USA PATRIOT ACT), his rhetoric was thoughtful and diplomatic.

        The fact that the Fox News crowd found a way to be offended by the guy makes us think their problem with him didn’t have anything to do with how he did his job.

        But Obama’s presidency is history now.

        Now, we have Trump who can’t put together a coherent sentence, and whose main governing principles are a) swagger & bullying and b) if the last guy did it, it must be undone, regardless of actual real-world merit. Trump.manahes to strike an emotional chord with “the poorly educated”, but he trolls and insults everyone else constantly. I won’t tolerate either of those behaviors from my 8 year old, much less from the President of the formerly greatest nation on earth. Having Trump speak for my country is emberassing.

        You cannot even pretend Obama and Trump are equally outragious.

        • 0 avatar
          jatz

          Thanks, Boss.

          Got mah mind right, now.

        • 0 avatar
          Luke42

          Musk, on then other hand, is a modern day Howard Hughes.

          Hughes was a brilliant engineer and businessman, but went nuts and spent his last year’s in a penthouse in Vegas trying to preserve the purity of his previous bodily fluids.

          Because of Twitter, we get to see Musk going down a similar path. I hope Musk holds it together long enough to fully launch Tesla and commercialize the BFR.

          I fully expect Musk to finish out his life the same way Hughes did — but there’s a nonzero chance that he will do so on Mars, which would make it all worthwhile.

          This is nothing like Obama’s steady diplomacy and nothing like Trump’s casual swagger-over-substance offensiveness.

          • 0 avatar
            Hummer

            Yes, Obamas steady diplomacy of getting us into multiple wars, sending terrorists pallet loads of cash, and using the government to attack people with different political views for a short list of unbelieavable acts against Americans. All that is so much worse than Trump beginning to negotiate peace in NK, ending pointless wars in the Middle East, destroying ISIS, decreasing unemployment to levels not seen in half a century… yea Trump was the issue.

            You are hilariously uniformed.

          • 0 avatar
            Hummer

            Basically your saying you would rather be lied to gently, than have the truth ruffle your delicate feathers. Interesting position, like an ostrich putting their head in dirt.

          • 0 avatar
            Luke42

            I wasn’t happy about Obama’s continuation of wars or his renewal of the “USA PATRIOT ACT”. That’s way too right-wing for me but I’ve been yelled at enough to realize that those are mainstrean centrist actions in the USA.

            Trump does not tell the truth — not in your face, not in any way. Anyone can see this, because he contradicts himself all the time — even of you don’t know anything about economics, business, or international relations, you can easily tell that he’s lying (or incompetent) because he contradicts hinself constantly. Was he lying just now, or 30 seconds ago!? And, yet, the crowds are his rallies can’t see (or don’t care to see) these obvious intellectual failings. Whenever I watch video from a Trump rally or speech, I’m emberassed that my fellow Americans tolerate such shoddy thinking.

            As for scandals, here’s a constantly updated list maintained by “the failing New York Times” detailing the many criminal charges (in various stages of prosecution) against Trump’s associates from the 2016 campaign:
            https://www.nytimes.com/interactive/2018/08/21/us/mueller-trump-charges.html

            Nothing Obama did rises to that level of criminality. Of course, Fox & Friends are just as *offended* by things Obama did but, when you dig into the details and look at what actually happened, Trump is far more corrupt — no matter how you look at it, and no matter who gets the benefit of the doubt.

          • 0 avatar
            Hummer

            You talk about him lying yet you site NYT, and fail to refute my points, Trump has kept more promises by a large margin than any president in recent memory. Why couldn’t Obama do prison reform?

            Simply speaking results are evidence, Obama did more harm than good, Trump is chugging through reform and tearing up wasteful government spending.

        • 0 avatar
          civicjohn

          Yeah, Luke, all Obama did was go after James Rosen as a “criminal co-conspirator”, nothing to see here, just move along.

          And while I’m no fan of the orange one, he hasn’t so far shipped $1.7 billion to any country that I’m aware of, maybe he will in the future.

          • 0 avatar
            Luke42

            @CivicJohn:
            You might want to check the list of Trump associates in jail, on trial, or under indictment and coloare it to your list.

            It’s a bigly list! With all of the best people on it!

            It really does have a lot of people on it, people who Trump said were the best people. For instance, the CEO of Trump’s 2016 presidential campaign (and his right-hand man) have both been to jail, and Trump’s personal lawyer has been sentenced to jail time. But that’s just the beginning of the list.

            It’s worth a read, especially if you don’t get out of the right-wing bubble very often:
            https://www.nytimes.com/interactive/2018/08/21/us/mueller-trump-charges.html

            I promise that there is no editorializing in this article. The “liberal media” and “the failing New York Times” are content to let the facts speak for themselves.

          • 0 avatar
            afedaken

            In the wrong direction. Trump likes it when 1.7 billion comes in. Well, specifically into his accounts. I’m pretty sure he doesn’t care if said account is here in the states.

            I suspect his accountants and bookkeepers (who I’ll bet really are some of the best at their game) would prefer it stayed overseas.

        • 0 avatar
          Pete Zaitcev

          Sending guns to drug cartels was not outrageous, I see.

          • 0 avatar
            Middle-Aged (Ex-Miata) Man

            Nor his repeated (and I absolutely believe deliberate) bungling of several racially-charged incidents involving law enforcement, in which Obama – rather than using his office and place in history to promote needed, sensible dialogue on the issue – empowered and emboldened societal vermin at the expense of the thin blue line separating order from chaos.

  • avatar
    indi500fan

    My daughter thinks Tesla is awesome, she just bought a new Traverse and filled it up for $1.55/gallon.

  • avatar

    I hope Hackett goes away. The problem with American companies is that their sole raison d’etre is to make CEO rich at any cost up to destroying companies and throwing every one else under the bus. Take e.g. Jack Welch – he single-handedly destroyed GE in few year what took hundred years and hard work of many generations to build. Same with Eaton who sold out Chrysler for the personal gain. Than would never happen in Japan – it is one of reasons why Ghosn in Japanese jail – his sole agenda lately was one of personal enrichment at expense of Nissan and its personnel – a big no-no in Japan.

    • 0 avatar
      jalop1991

      “The problem with American companies is that their sole raison d’etre is to make CEO rich at any cost”

      Um, no.

      No.

      Their sole purpose is to increase shareholder wealth.

      “Take e.g. Jack Welch – he single-handedly destroyed GE in few year what took hundred years and hard work of many generations to build.”

      Jack Welch did no such thing. He honed a hugely profitable company–it was his successor that single handedly destroyed it.

      • 0 avatar
        FreedMike

        CEOs are like NFL coaches – they have a short life expectancy. They want to make what they can, while they can. A great deal of their compensation also depends on stock performance. They have a million reasons to make the kind of short-term, make-an-immediate-bump-in-the-stock-price decisions that the OP was talking about.

        • 0 avatar
          afedaken

          Hmm. One wonders if better longer thinking talent might be attracted with an adequate salery, supplemented by options redeemable no less than 15 years out.

  • avatar
    thejohnnycanuck

    Hackett and Barra… what to do, what to do. Bad time to be the CEO of a D3 OEM… unless your name is Mike Manley. Stay the course FCA. Let Ford prove yet again that the Germans are best left to their own devices and as for GM let them wallow in their own bad press.

    I say Jeep will break the million mark in 2019 (if you include Canada they probably already did this past year) and while the Ram pickup won’t take the two spot from the GM twins it will outsell the gaudy new Silverado.

    So FCA appears to be primed for a great year while the other two… well, they’ve made their beds. Let’s just hope they don’t make matters even worse and soil the sheets.

  • avatar
    Peter Gazis

    Mark Baruth

    BUICK LIVES!

  • avatar
    JoDa

    Not only are new car prices rising, the quality and structural integrity are falling at the same time.

    “Team Tesla” are just tribal monkeys who are too stupid to comprehend SEC filings and Thermodynamics…Not to mention the Carbon Cycle.

  • avatar
    scott25

    Agree with all of these other than Nissan dropping cars being a shock. That’s been coming for a while. I’d be genuinely shocked if one of the Koreans made that decision.

    Post Ghosn Nissan will have a lot of changes to make and adapt to.

    • 0 avatar
      Sikeh Beryuf

      The simple truth is that no matter the challenges Car Manufacturers go through, they will always find a way to keep going and keep selling cars. For the past decades, famous automotive companies have passed through several scandals and barriers, however, most of them have triumphed and have avoided shutting down as the last option.

    • 0 avatar

      You think Nissan will finally go bankrupt, without Ghosn?

      • 0 avatar

        Last year Nissan surpassed GM as the world’s third largest car company. Unlike GM, Nissan is competitive in both cars and SUV’s.

        Barra and Hackett have both failed. Time for then to go.

    • 0 avatar
      Luke42

      The MBA logic for dropping cars is clear.

      In the current business/trade environment, low margin products are a crapshoot, because American trade policy is volitile. Imported steel went up 25%, for instance, and changes like that can easily cause them to lose money on any vehicle which isn’t a cash cow.

      So, Ford and GM will only make cash cows from now on. They will be a smaller company, employ fewer workers, make fewer products, and provide less mobility to people around the world. But, they will also be reliably profitable in a volitile business environment, which is exactly what they need to do in order to survive.

      And, yes, this was completely foreseeable and completely avoidable.

      • 0 avatar
        TDIandThen....

        Luke I agree except that there is also strategic repositioning going on to do with automation and electrification. The companies may employ fewer humans but maintain or grow their production rates and more important their ability to customize orders and re-tool for different models. Want your f-250 hybrid instead of diesel? Maybe we’ll do that on the same line in half the time now because, robot.

        The cash the big three are generating can’t all go to dividends and unlike Apple, these truck firms like GM have many physical assets to invest in many different jurisdictions.

  • avatar
    FreedMike

    Will Nissan drop cars? It’s become fashionable to ask who will drop cars next, but every manufacturer that’s done it has a massive truck business to fall back on.

    I just don’t seen Nissan being able to get away with it.

    • 0 avatar
      Peter Gazis

      FreedMike

      I think the imports will cut 1 model at a time. Namely: Honda Fit, VW Passat, Subaru BRZ, Toyota Prius C, Mitsubishi Mirage, Hyundai Accent, Mazda2/YarisiA, Kia Forte.

      • 0 avatar
        afedaken

        A who’s who list of (sub) compacts that sell marginally here in the states. Totally makes sense. Said models might live on in other markets.

        That’s fine, given that most of those companies sell in other markets. The models GM is cutting were comparatively stinkers here in the US, and GM doesn’t even sell in Europe any more.

        Ford is more interesting; they still have plants in Europe, although they’ve been closing them too. Will they retreat from the European market like GM did?

  • avatar
    Sikeh Beryuf

    Tesla is winning because the team has put technology and innovation first. 2018 was very interesting, Ford Mustang is imprinted into the hearts of ford lovers. This ford car model will hardly ever change. It is the pillar Ford car model. It will receive several improvements in 2019.

  • avatar
    TDIandThen....

    Bark

    I’d be curious for a column on what the Italian brands – Fiat, Alfa, Maserati – will or should do. Combined they have a Volkswagen Group-like product range but of course are jumbled up in FCA and other ownership. It seems Fiat won’t put jeep over the million-sales mark to say the least…what could the companies do to rationalize, make real marketing / brand sense, and reach amazing profitability?

    I ask this because I want to world to have more top-end Giulias and clearly each company has a gem in the lineup (124 Abarth for the EU, Giulia, Quattroporte, perhaps).

    And in that vein, what do you think Lotus can and should do, especially in relation to Geeley – owned partner polestar, if anything?

    Thanks as ever for a year of columns I often disagree with and am informed and entertained by. It doesn’t get much better than that, imho.

  • avatar
    statikboy

    So what you’re saying is: people would rather NOT buy a crossover they can’t afford than buy a car they can?

  • avatar
    analogman

    I think Jim Hackett will go down in Ford history as one of the worst (if not THE worst) CEO the company has ever had.

    He might be a perfectly nice guy, but is laughably unqualified to lead a major car company. It’s no surprise. Look at his background – he’s a finance guy, a classic bean counter, who was at a company that made metal office furniture. First, most accounting types don’t have the strategic vision or technical expertise to grasp the fundamentals of developing a complicated product (cars) in a heavy manufacturing environment, and second, making metal filing cabinets and desks is a far cry from trying to make world-class cars.

    I don’t blame him, but the Ford family, who still control the Board and the company. They’ve become like most other shareholders – they just care about short-term stock price. Unfortunately, there’s no way to boost the stock price in the short term by making long-term investments in designing and building world-class cars. Wall Street has shown time and time again that it rewards short-term cost-cutting with increases in the stock price. Hackett got his marching orders from the Ford family: boost the stock price, as much as you can, as fast as you can, any way you can. He can’t do that by investing, only by cutting. So, cut he did – costs, quality, and cars.

    The sad thing is, it just pushes Ford down the path of disappearing. Few companies ever shrink to greatness. Giving away nearly half your unit volume – and revenues – by eliminating cars and handing your market share to the competition doesn’t sound like a way to position the company for long-term success. It is a way to play Wall Street’s favorite financial sleight-of-hand games, with a bean counter talking about ‘profit margins’ instead of more fundamental measures of a company’s health. Throw in some nonsense about Ford becoming a ‘mobility’ company instead of a car company (whatever the hell that means), and presto, maybe you can jack up the stock price a bit – in the short term.

    No, the blame for Hackett being put into a job for which is is woefully unqualified falls squarely on the shoulders of the Ford family. It seems to me that they just don’t care about the Ford family being in the car business anymore. Maybe they’re tired, maybe they’re greedy and just want to cash out. But their actions certainly don’t seem like they want to make cars.

    There’s an old saying in the business world about family run businesses – the first generation makes the money, the second generation lives off of it, and the third generation runs it into the ground. The Ford family seems to be following this pattern.

    I’ll make my own prediction: I think the Ford family is trying to position the company for sale. I would bet to VW. After announcing the discontinuation of cars in the U.S., it was announced that VW might use some of Ford’s soon-to-be available manufacturing capacity. It would make sense, on paper. Ford discontinues its cars but keeps trucks. Ford has (had?) a strong U.S. presence, less so overseas. VW, on the other hand, makes mostly cars, less so trucks, is strong overseas, but has had its reputation hammered in the U.S. by the dieselgate fiasco. It would be a reasonable ‘fit’ for VW to buy Ford. It would give them a chance to re-establish themselves in the U.S. under the Ford name, which would be faster than the decades it will take for people to forget about dieselgate. The Ford family could cash out, get out of the business of making cars which apparently strains their brains, and can take their money and go live on tropical islands someplace. Everybody ends up happy, except Ford car enthusiasts. But then, the customer usually ends up getting the short end of the stick.

    I love my 2015 Mustang GT, and have had a number of Mustangs and other Fords in my life. I suspect this one will be the last.

  • avatar
    krhodes1

    Fundamentally, Tesla is Apple, but making cars. Highly regarded but ultimately not nearly as special as their devotees think products, sold at OUTRAGEOUS prices. The difference being that Apple has figured out how to make mountains of money doing so, because they actually understand how to mass produce things.

    I really don’t care if Tesla lives or dies. I’d never even consider buying one until they cost commensurate with what they actually are, which is about half the current MSRPs.

    I think Bark is pretty spot on with the whole list.

  • avatar
    vehic1

    Hummer: And there’s the view from his remaining 39%.

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