So, why are our motor companies failing? It's been a key topic within the economic crisis, both generally and in regards to the stimulus bill. So why were they on the verge of failure, and how can they fix things?

Personally, and this is just me guessing here, I think at least part of the problem stems from the fact that they're making better cars that last longer, and they have been for a while now. People are still driving cars built in the late 90's that are running really well. There are a hell of a lot more cars out there than we really need, so selling a new car is much more difficult than it used to be because there's competition from well-built used vehicles. And the major car companies haven't yet acclimated to the fact that, even with an increasing population of drivers, they don't need to build an equal amount of new cars.

I'm absolutely certain the answer is way more in depth than that. But I drive past car lots with hundreds of brand new cars, and I ask myself "who is going to buy all these?" Hell, I've yet to buy a new car. We own a 2002 Stratus and a 2004 Mazda 6. Both run great. Both still look pretty good, too. And most of my friends are in the same category as buyers. We don't care that it's not a 2009, as long as it has the right features, still runs well, and gets good MPG.

Thoughts?

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Very good points.

I think unions a lot of times tend to take things a little too far and feel they are entitled to much more than they're worth. The company I worked for before the one I am at now has a union and this year during negotiations, the company offered them what amounts to basically a 21 pecent raise over 3 years, raising starting pay from 52K a year up to 63K. Many members of the union wanted to vote against the contract because it wasn't enough in their opinion. The contract ended up passing, but not without opposition.

I can understand if your company is posting record profits wanting a raise, but the American car builders have been posting losses for quite a while and it hasn't stopped the unions from continually going back with their hands out. Would you rather make a few more dollars an hour and cause your company even further economic hardship or are you willing to just stay where you're at and let your company continue running so you can have a job? The answer is pretty simple for me.

I'm no expert but I'll list all the things that I believe played a part:

~Legacy costs that far exceed anything their competitors face.
~Poor anticipation of market trends.
~A reputation for producing poor vehicles during the late 70s and early 80s that they never recovered from.
~Unions that refused to look at the fact that their competition was now global and that salaries/benefits needed to reflect that.
~Their attempt to cut back inventories at a time when they were actually producing quality vehicles again.

Oops forgot one:
~Their business model that emphasized financing rather than innovation in production or design.

I completely agree with what Xan said. The UAW and others are out of control. But I think there's a problem with the product, too. The union issue is a great measurement of expense, but the cars aren't selling, period.

American cars are generally much better quality than ever before. Yet they continue to be plagued by the perception. It's a cliche, but perception is reality. Even though the new Chevy Malibu is supposedly a great car... Camry's and Accord's have been great cars for over 10 years. It's hard to chip into that kind of brand in a few years.

Also, frankly, American car design is absolutely the pits. There are some brights pots, but in general, the whole move back to retro with the charger, mustang, etc., was a huge mistake if you ask me. Their middle sedans look like a dogs ass. GM and Ford are a step behind the Asian and German imports.

They also don't have any signature cars like, say, the Prius. Love it or hate it, and you can debate total cost of ownership, but the Prius has the sticker with the incredible gas mileage. There is no American car with that kind of ownership of.. anything.

Having said all of that, even Toyota posted a loss for the first time ever, if I recall. It sucks to be at the bottom of the pile, though.

Kula basically hit most of the points, Cringely has a few words to say about it too
http://www.pbs.org/cringely/pulpit/2008 ... 05507.html

I also agree with Kula.

You may all now faint.

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Hope is the new black.

Ford Mondeo

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