Future of GM and Ford

1,113 Views | 46 Replies | Last: 16 yr ago by
txags92
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AG
If you are saying that the Tundra isn't a dually with a huge diesel engine, then yes, you are correct, they aren't competing with the "big dogs". If you are talking about the standard Ford F-150 and the standard Chevy Silverado without all the high dollar engine upgrades, then yes, they are a direct competitor who has taken significant market share from both in the last 2 years.

All of the American automakers should have seen this problem with the UAW coming 2 decades ago when the japanese automakers first started taking serious market share from them by making a better product at a cheaper price. Now it has reached the point where the japanese models are more expensive and better, and they are still taking market share from the Big 3. It would have been painful to divorce themselves from the UAW 2 decades ago, but it would have given them a chance to compete on equal footing with the japanese. Now, even if they ditch the UAW tomorrow, the contracts they have dictate lieftime benefits for everybody they get rid of, so they really have no hope of recovering from the situation they are in. Unless the UAW has a serious come to jesus moment and realizes that they are cutting their own throats and gets serious about helping reorganize the Big 3, I predict that at least 2 of the big 3 will declare bankruptcy at least once in the next decade. Since the UAW has shown no capability to look beyond their own extended hands looking for handouts, I expect them to fight any effort to be competitive tooth and nail.

The really funny thing is to hear people still trying to use the "buy american" charade to get people to buy the big 3's pieces of shiite. Have any of you been to Harlingen or McAllen lately? Have you looked at any trains coming across the border at Laredo? A huge portion of the parts for most "american" cars are now made in Mexico and then shipped to assembly plants in the US. Some of the assembly is even occurring in mexico now. Meanwhile, the japanese companies are building US assembly plants and quite a few models are completely made and assembled using american labor in american plants. So before you start feeling all patriotic watching that "american-made" ford f-150 catch your garage on fire, make sure it isn't one of the ones that consists of >50% foreign made parts.
W
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AG
a couple of thoughts...WWII gave Toyota a chance to re-build most of their facilities and completely make over the "business model." Ford & GM would love to re-do their business model and long-established business practices, but it is doubtful that they can ever do that. The companies are also being killed by medical insurance premiums and pension benefits.

Looking ahead to 2008...Michigan was a blue state. If the election is looking close, don't be surprised if the Republican Congress or White House, throw some kind of a bone to the US auto industry to help them out. Similar to Chrysler, the US government will not let them fail. They are too big to be allowed to collapse.
Azeotroper
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Diablo, wake up.

Around where I live (in the Panhandle) you never saw a Toyota until the early to mid 90's. There was either a Ford or Cheverolet dealer in most small towns and they owned the market. Now, Ford and Chevy have forced little dealers out and now ranchers and pumpers must drive to buy a vehicle (and often drive back to the dealer for service). Many of them are picking a Toyota because they know they are almost bullet proof, and won't have to return for service nearly as often. Over at the Chevy lot, Mr. Goodwrench is a busy man. Toyota's don't even squeak when they've been driven down dirt roads for years. Chevrolets squeak before you drive them off the lot. I bet 50% of all the GM trucks on the road has at least one of its daytime running lights burned out. They haven't figured out that a pickup is more than displacement and torque for the vast majority of buyers. And for the guys who have to haul a large load, yeah a Chevrolet HD 2500 is better than a Tundra. But when Toyota decides to build a truck on a large chassis, the game is indeed over. Toyota already makes arguably the nicest luxury line (Lexus), they make the most reliable mid sized sedan (Camry), they produce a minivan (Sienna) that is rivaled only by a Honda, and make the best small truck (Tacoma) you can buy, and judging from what you see on the road, they make a good line of SUV's. GM can only boast of the Suburban, and now they have almost priced it out of reach of a good many families. My next door neighbor just brought a loaded out 4x4 Suburban and the sticker was over 50K.

And no my name is not Yamamoto or Nakajima, but I can tell quality when I see it. American made cars can not compete. I wish they did, but they are an embarrassment.
AggieTJ
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AG
Speaking only for the 1/2-ton market: Tundras still can't compete with the big 3, or now Nissan, for that matter, but Toy's next truck will no doubt be a fullsize and not a 7/8 truck. The current Tundra is really in need of an upgrade.

The bottom line for all of these manufacturers is that they better figure out how to make their trucks get better MPG. That is the direction we are headed in. Dodge's MDS for the HEMI seems promising. Chevy's so called hybrid silverado is turning out to be a joke and not worth the cost. Ford flirted with a V-6 diesel, pulled out of the development with International, and now it looks like they may head back to it. If the thing can get good enough mileage, it may be marketable.
mts6175
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AG
quote:
They should just say screw it and open up new factories in the south.
Why do you think that Toyota is comming to San Antonio?

Regardless, they can run but they can't hide. Just look at GM's plant in Arlington, it's a Union shop.
2percent
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AG
GM unfortunately has more workers that are retired than are active. It is the Health Care for the retired workers that is the drain. At about $24 Billion in cost and rising quickly- it adds up.

Foreign car companies don't have that cost because they have subsidized health care.

It adds $1,500 per vehicle to GM's cost.

One of GM's options are to declare bankruptcy and lower the benefits to workers that are no longer working.

Opening plants with new workers is what saves the car companies money that are moving into the states.

pencil
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Won't all this catch up with the new foreign manufacturers as well?
txags92
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AG
The problem with the american cars isn't the cost as much as it is the quality. You can easily buy a comparable chevy or ford for several grand less than you can buy a toyota for. Yet in growing numbers, people are buying more expensive foreign vehicles because they are engineered and built better. The American car makers could raise their prices if they would put more effort into true quality, and not "initial quality". I can count at least 4 recalls by ford in the last 2 years that involved millions of vehicles across multiple lines. When was the last time you heard Toyota have to recall every vehicle made of a certain model for a 5 year period? You haven't. because it just doesn't happen. They figure out what the problems are before they sell them or as soon as they figure out the problem exists. The current ford modus operandi seems to be to deny the existence of the problem for years until they have produced 5+ million defective units, then finally give in and recall them all at once.
schmendeler
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AG
in my mgmt 466 class, we read a really interesting case about toyota.

they are basically the model of efficiency on their asssembly lines.

they cut the retooling times from from something like 6 hours to like 45 minutes (i know these aren't the correct times, but the ratio is about right i think)

also, toyota had a really great cooperative relationship with it's suppliers. rather than the american practice of going for the lowest bidder, or trying to own everything through vertical integration, toyota formed mutually beneficial relationships with their suppliers.

maybe someone who has read it recently can help me out here.
SnowboardAg
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AG
Tundra competes with the F-150 and Silverado, no question there.

American has the advantage of towing capacity and that is it. I've owned nothing but Toyota my whole life and probably will never buy GM/Ford. Look at the incentives GM and Ford are offering. Toyota and Honda hardly offer incentives and they do much better, because they don't have to. This is a closed case and obviously an inefficiency of the Unions.

Wasn't it GM that sent a bunch of cars across seas with the steering column on the wrong side of the car. Yeah, that's the person I want designing my vehicle; someone that cannot even do a simple google search.

[This message has been edited by SnowboardAg (edited 4/21/2005 2:40a).]
The Ghost of DUCK01
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How many of y'all stroking off to Toyota have actually owned a Tundra or Sequoia (their full-sized options)? I have. After owning two Fords (a '91 Bronco and a 2000 Lightning), I made the HUGE mistake of falling for the "Toyota quality" line of BS and got a 2003 Sequoia.

For the first 6 months, it was awesome. Tight, no rattles, smooth, etc, etc. However, after that, it was all downhill. The engine starting pinging heavy under hard acceleration. I began digging on the Net and came across a full-sized Toyota site. www.tundrasolutions.com It was well documented on there, in spite of the "home crowd advantage" a Toyta gets on a site dedicated to Toyotas. The problem was well documented among many of the users on the board. We'd all been to Toyota and got the same reply "it's normal." Yeah, it's normal, but that doesn't make it right. Why is there a knock sensor to cut timing under lean conditions? Decorations? Help drive down cost? Maybe the extra weight helped it track better?[/sarcasm] To my knowledge, this issue has yet to be resolved.

Also, there was a big problem with an in-cab exahust leak. Every time you accelerated, you'd get a horrible rotten-egg sulfer smell in the cab. Awful - plus, if that's what you CAN smell, what's getting in that you CAN'T? Again, this is/was a well documented problem among owners.

"After the honeymoon," I began to notice a lot of squeaks and rattles develop. The headliner was coming loose, the radio bezel rattled, and the console wouldn't latch unless you babied it closed.

I also went through THREE radios. Again, many had the same problem. The 6-disc changers kept going out. The only answer Toyota had was "replace 'em."

The proverbial straw was a terrible driveline vibration that came in at around 30mph and died out at around 50mph, with 40mph being the most severe. At 40mph, your pantlegs would sway back and forth and liquid would literally slosh out of near-full cups in the console. Four trips to Toyota and, not fix the problem, but they couldn't even tell me where it was coming from.

Combined with the problems with the Sequioa and how crappy Bossier-Atkinson was/is, I traded in my '03 Sequoia just over a year later with 30K miles on it.

With all that, there is also a problem with them in cold starts. At anything under 50 degrees, a bunch of them have trouble cranking. There were many nights at 2am in the winter where I remember sitting outside of my now-wife's house, trying to get my Sequioa to crank. It would cycle like there was a dead battery, even though the battery was fine. It usually took a few attempts to finally get it to turn over. Again, "we can't replicate the problem or fix it."

Now I'll be the first to admit that all manufacturers have issues, especially with first-run vehicles. However, at that time, the Sequoia had been out for years - plenty of time to work the bugs out. Plus, with a sticker of over $43K for a 2wd Limited, there were way too many issues for the price. Hell, I traded the Sequioa for a 2004 Ford Lariat Supercrew 4X4 and wound up paying nearly $10K less than I paid for the Sequioa. Not only does it have the same features and a nicer-looking interior, it's also four wheel drive. Plus, the ride is just as good if not better than the 2wd "luxury" SUV. I'll admit that my new truck does have some issues, but not nearly as many as my Sequioa.

Trust me - it's not just me. I've seen/heard dozens of people say that it looks like Toyota tried to jump into the full size market way too quickly. The "Toyota quality" that everyone seems to get off to just isn't present in their bigger vehicles. With all the talk of them getting bigger, I can't wait to see how bad they can screw up heavy duty trucks!

[This message has been edited by Emeril (edited 4/21/2005 9:13a).]
schmendeler
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AG
i may be wrong about toyota, but don't most of the japanese car companies already make heavy-duty trucks in other parts of the world?

just because they haven't sold them here, doesn't mean they haven't sold them other places.
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