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Originally Posted by Myuzishin  American car company woes are mostly due to their inability to forsee a necessary change and adapt to it. They've been given countless 'bailouts' and subsidies by the gov't in the past (by both republican and democratic administrations/congresses) and yet they continue to be in trouble. Why is that?
Calls for smaller, more fuel efficient vehicles began in the 70's oil embargo crisis (remember gas lines, kids?). At that time, people begrudgingly turned to the only (at the time) makers of quality affordable fuel-efficient vehicles available, Japanese ones. Lots of Americans thought it unpatriotic to buy a Japanese car, but over the years were regularly laughed at at the gas pumps. As they grew more popular, American car companies tried to duplicate the success of the Japanese. However, their hastily designed and poorly produced vehicles quickly showed a quality control issue that Japanese manufacturers had never suffered from. In frustration, American companies tried to niche their markets, concentrating on SUVs for soccer moms and Hummers for Terminator wanna-bes. All fine and good, until gas goes up to $4 a gallon.
If they fail, its not the union's fault. The progress made by unions to secure pay and benefits for their workers has been a tough fight, and the industry would still be enjoying their pool of virtual slave-labor had it not been for the union efforts.
Part of the problem is market saturation. Ill conceived dealership locales and excessive fund drain thru advertising and self promotion robs them of capital that could be used to improve their products and their reputations, which to this day still suffer inferiority (perceived and actual) to foreign manufacturers.
Should they be allowed to collapse? I don't see see it happening, there are other ways for them to survive besides a bailout (Chap 13, mergers, etc.)
In the meantime, I'll buy a Honda and save my pennies. I want some Tesla stock when it IPOs  |
I disagree. Auto manufacturers have been given subsidies and tax breaks by both parties to, develop MPG and safety requirements forced on them by the government, maintain their viability and allow them to compete with imports. Aside from Chrysler in 1979 none have been "bailed out".
The Big 3 are not very nimble in navigating the changing economy because they are completely handcuffed by the UAW. Adjusting workforce is like moving a mountain, people being carried on overhead because of union rules, skyrocketing costs all spell DEATH in a market where the competition is immense, domestic auto manufacturers are at a disadvantage because of the unions, and profit margins are thin.
For many years now Detroit has improved quality and design and ranked at the top or near the top with their import competitors. Look at JD Power reviews, ford, and GM are equal to or above their import counterparts. A lot of it is conception left over from decades ago.
Chevy wins mid-size and Ford right behind it
Ratings | J.D. Power
Look at compact multi use, Honda won but look at Ford Escape and Chrysler Pt Cruiser, both ranked just as high.
Ratings | J.D. Power
Large car, winner Pontiac next was Mercury
Ratings | J.D. Power
Trucks, winner Chevy
Ratings | J.D. Power
Mid size SUV, Dodge Durango
Ratings | J.D. Power
It goes on and shows that the quality gap has closed and has been closed for some time. If a person wants to cling to the conception GM, Ford and Chrysler sucks because of the POS Chevy Vega they had in 1977 as a reason to buy Japanese there is little anyone can do.
One of the other reasons they have trouble is because they are building what sells. People wanted SUV's and trucks so they built them. People wanted mini vans so they built them. Americans are hopelessly short sighted and forgot the gas crunch in 1976 within weeks of it ending, same with the recent gas prices. They also knew if they built a sub compact few would ever sell because people a) Did not want sub compacts and b) if they did want one they were predisposed to buy an import because of the wider selection and established brand line. GM tried to bust into the compact and sub compact market with the GEO and it failed.
The whole "If it weren't for unions there would be slave labor" mantra is old and worn out aside from being completely untrue. There was a time for unions which has passed. their still might be uses for them but the days of them holding absolute power over employers is just plain wrong. They sent whatever industry they infect right down the crapper.
Steel industry.....gone
Airlines are either in bankruptcy, just coming out of bankruptcy or waiting to file bankruptcy.
Ship building.........gone
Auto industry......on the verge of being gone.
Textiles.........gone
Clothing and shoes.........gone
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