Archive for December, 2008
See, this is what they get for having poor management, not cutting their production and making cars nobody wants. Oh wait, sorry, I was thinking like all the uninformed out there who don’t understand the auto industry. It appears that the American 3 are not alone in feeling the pain from the terrible economic situation we are all experiencing. Read more at Autoblog for the details…
Toyota potentially heading to first annual loss in 71 years!
Toyota Logo
And the hits just keep on coming. As you will see in the article, Toyota has been the poster child for all of the uninformed about how the American 3 should be running their companies. We have noted in earlier posts that their cars aren’t leaders in fuel efficiency, they’re not far (or at all) ahead in quality, and now we’ve come to find out that they’re having a hard time selling cars too!
Read more at Autoblog!
It looks like the miserable shape of our economy is taking a toll on everyone (is that a surprise?), including foreign automakers!
Honda is expected to report a $1.4 billion second-half loss, after cutting their full-year operating profit by 67%. The reasoning for this is in part due to a slump in demand and the rise in value of the Yen. In its defense, Honda did have a $2 billion first-half profit, so it will end up with a net profit at the end of the year. Coincidentally, Ford also had a profit of $100 million for the first quarter of 2008, signifying that the company is on its way to turning around.
Speaking of the pot calling the tea kettle black; maybe Richard Shelby will tear into Honda and its business structure? Nah, who am I kidding…
-Alex
I was going to create a giant post with a look into the two-faced policies of Alabama Senator Richard Shelby, but now I don’t have too. I website has been setup by a GM retiree which put’s Shelby’s actions in the limelight. Take a look here: http://www.BoycottAlabamaNow.com/
-Alex
You’ve already been providing financial assistance to foreign automakers!
Source: Detroit Free Press
So you’re against the automaker “bailout?” But did you know that taxpayers (i.e. you, if you’re a US citizen) have already provided financial support to foreign automakers, right here in the good ol’ USA?
As Stephen Collins states in his editorial Tax Fairness for U.S. Automakers, the U.S. automakers are asking for financial support on the order of $16,000 spread amongst approximately 240,000 employees (for all three automakers). In comparison, the state of Tennessee has offered Volkswagen tax incentives and other subsidies to the tune of $577 million, which equates to $288,000 for every job created.
Similarly, Toyota is getting its share, equaling $300 million for building a plant in Texas, which works out to $150,000 per employee. And in Alabama, Hyundai, Toyota, Honda, and Mercedes are getting incentives equal to $111,000 per employee.
But there is a difference between the financial support that the domestic automakers are asking for and that received by the foreign automakers: the loans provided to the domestics are going to be paid back, whereas the incentives provided to the foreign companies will never be paid back.
If you ask me, I think the financial support is worth it…
-Alex
Source: Tax Fairness for U.S. Automakers
4) The American 3 do not build technologically advanced cars.
Ford SYNC uses
As stated in my previous posts, the D3 produce cars that are competitive in terms of quality and fuel economy. Well they also produce products that are competitive in terms of technology. Some of these technologies are already out, while others will be out in the near future.
Ford released it’s SYNC in-car communications and entertainment system on 12 models for the 2008 model year. SYNC, co-developed with Microsoft, allows portable digital music players and Bluetooth enabled phones to be operated with simple voice commands. It can also receive text messages and read them aloud. The SYNC system was ranked #4 on Popular Mechanics magazines’ Top 10 Most Brilliant Gadgets of 2007. It was also recognized by Popular Science magazine with a “Best of What’s New” Award for 2008.
Ford has announced several new technologies that it will be releasing in the near future. Blind spot monitoring and collision awarness are two technologies design to help reduce the number of collisions that occur each year. A technology they call MyKey allows parents to set limits on variables like top speed, radio volume, etc. to help keep teenage drivers from getting into trouble while driving.
In 1995 GM developed OnStar, a subscription-based system that provides in-vehicle communications, security, turn-by-turn navigation, and even remote diagnostics. Drivers and passengers can use an in-vehicle audio interface to contact OnStar representatives for emergency services, vehicle diagnostics and directions. The vehicle can also contact OnStar in the event of a collision, even if the driver is non-responsive. The system also allows users to take and place telephone calls hands free, by using voice commands to spell out the phone number.
GM is currently working on a car called the Chevrolet Volt, that has been the talk of the auto industry for the last two years or so. It is currently a concept that uses a gasoline engine as nothing more than a range extender (the gas engine is not used to drive the wheels directly.) Instead, the car has batteries that drive electric motors to propel the car. The Volt will be able to be charged at home overnight, and provide 40 miles (GM est.) of electric driving before the gas engine ever turns on, and when it does, it’s only used to recharge the batteries. The reasoning behind this vehicle is that most people commute less than 40 miles every day, meaning that their drive could be entirely free of using gas. While this technology is still a way off (the Volt is scheduled for a late 2010 calendar year release) GM has made several public statements that they have test mules driving around their proving grounds capable of driving 40 miles on electric power alone.
Chrysler is now offering uConnect, an in-vehicle internet enabling technology that allows drivers and passengers the ability to access information, entertainment and technology while on the go. Five major areas are touched upon; music, gps, phone, studios and internet. Chrysler also recently announced that they have 3 different electric vehicle concepts that they are testing with the hopes to have them on the market in 2010. The concepts range from a minivan to a 2 seat sports car.
As you can see, each automaker is pushing the envelope with emerging technologies, to make our cars safer, more entertaining, easier to use, and more environmentally friendly. There are technologies here that even the foreign automakers are now starting to copy, meaning that the American 3 still have an edge in the technology department.
I have heard that in parts of the country, people do not seem to know that Ford, for example, builds anything other than the F-150 and Mustang. This, sadly, has happened for good reason. During the truck and SUV boom of the 90′s, the American manufacturers let their car programs fall by the wayside, instead focusing a large portion of their development budget on the newest, latest, greatest, and biggest 4×4′s. Cars were an after-thought, as they did not bring in the same large profits of their truck and SUV bretheren. The Japanese manufacturers produced quality cars, but even they wanted a piece of the truck and SUV profit pie, and eventually built plants in America to build their own versions of the gas-guzzlers.
Even though this was the case as little as 5 years ago, the American 3 have made a very strong comeback in the car arena. As you could see in my earlier post about their fuel efficency, they build small and mid-size cars that are very competitive when compared to their foreign rivals. I also pointed out that their designs are built to high quality standards, putting them in the same league as the foreign brands. To prove that their cars have other very strong selling points are a couple awards that I would like to point out.
Last year the Saturn Aura mid-size sedan was named the 2007 North American Car of the Year at the North American International Auto Show in Detroit, MI.
Then in 2008 the Chevrolet Malibu took home the honors winning 2008 North American Car of the Year. Both of these cars were up against some steep competition (both domestic and foreign) and were picked by a large jury made up of various members of the automotive media.
The 2008 Cadillac CTS won Motor Trend magazines coveted 2008 Car of the Year award.
For 2008, 3 GM vehicles made it on Car and Driver’s 10 Best List; the Chevrolet Malibu, Chevrolet Corvette and Cadillac CTS, more than any other manufacturer.
In 2007, Ford won more JD Power awards than any other automaker. Ford, Lincoln and Mercury all had segment winners. Those three nameplates also finished in the Top 10.
The 2008 Ford Focus was named one of Kelly Blue Book’s Top 10 coolest cars under $18,000. With its combination of SYNC in car entertainment technology and 35 mpg on the highway, it was a tough car to beat.
The Ford Mustang ranked as the most problem-free “Midsize sporty car” from JD Power’s survey, while the Mercuy Milan was the highest ranked mid-sized car, and its sibling, the Lincoln MKZ, was the top-ranked “Entry premium car.”
All of these awards are only a small part of the story behind the cars that make up the American 3′s portfolios these days. Their trucks and SUV’s are superbly engineered, besting those offered up by their foreign competition. That same engineering mentality that goes into their trucks and SUV’s, is now applied to their car programs as well. “Good enough is not good enough” any longer. From the Chevrolet Malibu, to the Ford Fusion, the quality shows. They do not build just trucks and SUV’s, they build some damn fine automobiles as well!
I know this is relatively old, but this site was formed after Peter Karmanos Jr., Chairman and CEO of Compuware Corporation in Detroit, wrote the following letter to Richard Shelby, Republican Senator in Alabama and major critic to providing financial support to the automakers.
Peter Karmanos Jr. lays out the hypocritical antics of Richard Shelby, which show that he has nothing but disdain for the American automakers.
Read his letter by clicking “read more.” Read the rest of this entry »
To whom it may concern:
I am outraged that the loan package bill did not pass through the Senate. I cannot understand how our Senators only look out after their own best interests and not those of this Nation. This issue is not about the past faults of the three automakers, their management, or even the union; this is about the industry of this country and the United States as a whole.
It has been proven, time and again by various academics, economists, studies, and polls that if one or more of the automakers files for bankruptcy, or worse, goes under, it will wreck havoc on this nation. It will deepen this recession, or put this nation in a depression, it will put extreme financial burden on millions of people, it will extend mortgage defaults by hundreds of thousands, it will cause huge losses in pensions and 401k funds, it will instantly wipe out a $100+ billion tax base, it will add to our health care problems, it will contribute to our educational system issues, it will affect this nation like nothing we’ve ever seen before. From the east coast to the west coast, 300 million people, will feel the pain.
But despite all of this, what I fear the most, is that this nation will not be the beacon that it once was in this world. People around the world are already recognizing that the American 3 automakers are failing, what makes this country great is failing, and that the United States is failing.
My American Dream is fading…
Sincerely,
Alexander Mazur
Ford Employee and Proud Citizen of the United States of America
I encourage everyone to send a letter to the White House via this link.
Email: comments@whitehouse.gov
Subject: Loan Package for American Automakers
I’m working on my letter and will put it up as soon as I’m finished.
-Alex
