since I've last been here. It's a differant world. Don't think I could stomach buying another GM product or Dodge after them taking all that government cash. Hats off to Ford.

The Dmax runs great but after this one - I see a furd in da grage.

 

Havent talked you in a while how have you been? Yeh the auto business has been sure turned upside down in the last year or so hasnt it. I think we can all blame it on high gas prices off a year ago. I think a lot off people feel the way you do. I think if GM would have made some changes an scaled down earlier then they did this could have been avoided.

 

Been hang'en in there - busy as all he11...

Its really to bad. I guess good for Ford in way.

 

I dont think so. The credit crunch, mostly due to the housing bubble collapse was most of it. Absolutely no leases were done for several months, no home equity loans to buy vehicles people otherwise could not afford, etc. High gas price was only a minor factor in all of this.

You may be right that if GM did everything right, they could have survived, wounded, but alive, like Ford. With "Red Ink" Rick Wagoner in charge there was no chance of that. Chrysler was toast, no matter what. Daimler had already destroyed them. Remember also, GMAC was the second biggest home lender, and GM and Chrysler co-owned them. That may have sealed their fate anyway.

Jim

 

Bad times indeed for all domestices.

 

I agree. Add the rising unemployment rate, investments losing tons of money and little to no job security.

The real bad part is after GM stole the bailout money its been said they are going to be getting more product from China to increase profits. I don't see what was gained by bailing out either company. I'm just glad Ford didn't take any bailout money.

 

Thats better than the (all too common now days) alternative.What is the "life cycle" of your trucks, if I recall correctly you had an 02 D/A, do you typically turn them back in every 5 years?
If so, the 2011 Super Duty may look good after it has been out for 18months
I agree with pretty much everything you say except the direction of blame on Chrysler @ Daimler.
Chrysler's problems stemmed from the fact that that it was... Chrysler. The Jeep and Dodge truck line have always been reasonable, but outside of the mini vans (which were a dieing novelty), their car line up was always

Daimler came in, injected large amounts of capital, engineering expertise and gave them the platforms so they could produce cars like the 300C, the Crossfire, and they bailed when they realized that the whole company was essentially a lost cause.

 

Sure, that's Daimler's Story. Chrysler had 12 Billion in the bank - money was the last thing they needed, Chrysler was one of the most profitable auto makers in the world at the time. Daimler was running out of money, and their vehicle reliability was at an all time low. Chrysler at the time had class leading engines, and interiors that were equal too if not better then the other American makes.

Development of a large 300c like sedan was already underway, Then the Daimler merger occurred, but it was more or less a take over (there was also greed by chrysler executives looking to cash out) Daimler had access to the cash they desperately needed, and from then on essentially halted development on current/future chrysler car projects/concepts, threw the designs/platforms out, and gave them the old outdated Benz platforms to develop cars out of (300C/Charger, etc.) Daimler-Benz putting a bargain basement budget limit on interiors certainly did not help matters either.

Chrysler vehicles quickly fell from equal to Ford/GM to far below in terms of quality and reliability. Later on in the mid 2000s, Benz easily had the cash to make Chrysler turn around, and make them class leaders again - but they didn't. They simply got every last drop out of Chrysler they could and then dumped them on someone else. (Notice shortly after the Cerberus purchase quite a few of their vehicles interiors made a drastic turn around, the 09 Ram is a great example of this)

 

Regarding GM, I do not buy the notion that their problems had to do with unemployment, lack of credit, and all sorts of other, external problems. That's exactly the set of excuses that Rick Wagoner was offering. GM had the game won, and they steadily piddled away there market lead and their technology lead. This was something that has been going on for a long long time: anyone remember the Vega? The idea was good, but the engineering and quality put into the car made it a piece of junk. Anyone remember the 350 Olds Diesel? The idea was good (turning a gas engine into a diesel was successful in the case of the GMC V6), but the engineering was poor: heads cracked and other problems arose that should have and could have been corrected pre-production.

I doubt that these engineering issues were actually rooted in engineering skills: They all smell to me as if the bean counters were more keen on wringing out every last penny of profit from these products, rather than plowing enough into them to ensure they would actually deliver what customers thought they were purchasing.

The result: The car buying public went elsewhere.

GM bought EDS and spent money in other similarly stupid fashion. This was not a new thing, to anyone familiar with USA businesses: Look at another industry giant, AT&T, which also used its assets to foolishly buy another empire and ended up needing a bail out.

Rick Wagoner and company went thru $13 Billion of the money the Government loaned it in Three Months! And he still had the gall to want and expect to stay on as CEO?

GM, like many large, established USA companies, has itself to blame for its "not invented here" attitudes and for marketing poor products nobody wanted. Just compare Rick Wagoner or Roger Smith or any number of other recent GM heads with people like Steve Jobs at Apple or even Iacocca. Clearly, as John Wayne said in McClintock, they were all culls. There are many more culls in USA businesses and since our dominance in the international market has disappeared, their antics of blowing money on big time expense accounts, corporate jets, and living at the top of (ivory) Renaissance Tower (another big money boondoggle) are no longer supportable.

Now, Whitacre (the same guy who, as CEO of Southwestern Bell, bought AT&T) may not know anything about cars, but I'm sure he won't be burning $13 B every three months -- he knows that much that Rick Wagoner didn't about the car business.

As far as Chrysler goes, my understanding is essentially what Lead Head writes. Also, that when Cerberus (a company that survives by picking up the nearly dead carcasses of corporations and parting them out for a profit -- like Remington, Marlin, and H&R, old time firearms companies) took over Chrysler from Daimler Benz, the whole thing was in such bad shape that the only possible out was the merger with FIAT. "Dr Z" tried to do a reprise of Iacocca and old Walter P on the advertising front, but German management wrecked whatever hopes Chrysler may have had to avert needing the government's help.

I think that the thing that ultimately saved Ford (at least, for the time being) is that, rather than being run by scammers who have been handed the keys by their buddies on the board of directors and the heads of mutual funds, the Ford Family still has considerable say in the running of the company, and that even after Bill Ford's experience and other carryings on, the family had the sense and the power to recognize that new blood was needed from outside and brought in Mulally.

Consider that Mulally is now trying to consolidate all Ford products worldwide, so that they will permit maximum cost savings -- the same thing any intelligent business plan would include. Why build many different platforms for different markets? It makes sense to try to incorporate as much engineering and plant resources as possible into globally based products. This is what Alex Trotman tried to do at Ford in the 90s -- along with selling the ivory Renaissance Tower to the rubes at GM. Maybe Ford will get it right and there'll be no need for it to go the Government, hat in hand.

I would caution against leaping to believe the talking heads on cable news or the dopes on talk show radio. Forget ideology or politics -- this is simply straightforward business. There have been depressions and recessions before that big companies, including Ford, GM, and Chrysler have weathered. Big companies with lots of resources have the staying power to weather such storms -- if they have the right leadership to use those resources wisely. When companies this large crumble, don't listen to their leaders' "blame games," whining, or excuses. They simply need to be fired, like anyone who doesn't do their job -- hopefully before lots of hard working people have to loose their jobs first.

 

^Thats a really good summation in my opinion^

I would add in there also that in addition to the "Olds diesel" and the "Yugo" that (outside of the concept of Chrysler's Mini Van - forgetting the quality of the transmission) the product from the late 70's and all of the 80's from all domestic manufacturers bordered on horrific. The 90's wasn't much better either.

Now Ford, GM, Chrysler face a situation whereby they pissed off a lot of their consumers by providing substandard product, and those consumers moved to various import brands which were providing much more competitive product.
The now face an uphill battle in regaining those customers as the import brands really haven't given them a reason to switch back to the domestic offerings.

 

Chrysler had near-death experiences in 1932, 1962 and 1979. It wasnt just Iacocca's salesmanship that saved them, but they had defense contracts at the time and the government loan guarantees were justified. After buying AMC, primarily for Jeep, they also got AMC small car talent in-house, which the Mitsubishi joint ventures never did. That led to the Neon, which was a cash generating machine for them. Chrysler died the day of the Daimler merger. It stopped being a US company on that day. I was a stockholder and I should have bailed then.

GM's downfall was more like a frog in a pot of water gradually heated to a boil. They didnt know what was happening to them, #1 for so long that no one working there could even imagine otherwise. Market share peaked in 1962, in the depths of a recession, when Studebaker was almost dead and Chrysler suffered from self-inflicted wounds. As each GM division, except Cadillac, demanded its own compact and intermediate cars, Chevy, Pontiac, Olds, and Buick overlapped way too much in size and price, even if styling and powertrains were still distinctive. By the late '60's you could option up a Chevy Caprice to sticker for more than a base model Cadillac (crank windows, no A/C, a model that should not have existed). Fast forward to the Roger Smith era and you couldnt tell one brand from the next at a distance. Cimmaron was the death of Cadillac, just as Mercedes, BMW, Audi, Volvo were going up-market in the US. At the low end, the cardboard interior Chevy "Shove-it" (and its Pontiac clone) was giving Honda and Toyota a giant boost, now that VW had also imploded.

 

Yes, I agree with this last part. That's my point. When these big executives are socking away tremendous salaries, is it acceptable that they don't know what's going on in their business or in their company? I think not. For all the many reasons I have to dislike Whitacre and SBC (now AT&T), I do have to give him credit for knowing how to run a profitable business. Whether he can even tell how many wheels are on the cars his new company produces, I am certain that he's a much more astute businessman that Wagoner or any of his predecessors from a long time back.

The issue with overlapping models that has been mentioned is a good point. When GM's market share was hovering near the 65% mark, they were on very thin ice re: attracting the unwanted attention of the Justice Department's Anti-Trust Division. GM handled that problem by more or less letting its divisions compete against each other.

The divisions were pretty separate to begin with: each division was set up according to Sloan's idea of a price pyramid and its reliance on snob appeal, causing each division to market to a different segment of the car buying public.

When the dealers wanted to make more money and expand their reach, they all wanted a compact car to sell to buyers of VWs in the 60s. It was only a matter of time before the Tempest, the F-85, and the Skylark would merge into very similar cars. Even the basic aluminum V8 block was shared between the car lines. The notion of getting a Chevy V8 in your Buick was not really so new at all.

When these lines between the old marketing scheme of a price pyramid were being blurred, are we to think that the "Captains of Industry" at GM could do nothing to avert this blurring in their product portfolio that would inevitably cause confusion to buyers -- to come up with different marketing schemes that would be effective against both domestic and foreign import competition?

No, there's no frog in the pot here. Simply out and out inbred corporate incompetence. They simply didn't know what they were doing.


Regarding Chrysler, they not only got Jeep, but they got the Kenosha stampling plant, which was then a money maker for AMC, chiefly because it was stamping parts for Chryslers, such as the 5th Avenues. Right there is a clue: Chrysler had finance troubles in 1932 -- what auto maker didn't? How many auto makers went out of business in the 30s? Chrysler's financial troubles in 1962 aren't hard to trace: from 57 on, their quality control was abominable and infamous. 318s would last 30,000 miles and bust crankshafts. Body panels wouldn't fit right and door gaps resembled those on gramp's outhouse door back on the farm. Chrysler made a big ballyhoo at the time about their 5 year 50,000 mile guarantee, compared to Ford's and GM's 2 year 24,000 mile guarantee. They hawked this as demonstrating their confidence in a superior product, but we all know it was to fix the public perception of Chrysler products being junk in the mind of the car-buying public.

Again, in 1979, is there any surprise that this happened? Chrysler again tried to pawn off junk cars during the 70s, and considering the stuff Detroit as a whole was turning out in those days, it is saying something that the public perceived 70s Chrysler products as junk in comparison with Ford and GM.

You will note that the same Aspen/Volare platform that gave such trouble in the 70s was still the platform being used for the 5th Avenue luxury model in 1987, when AMC was stamping the panels for that same car.

Need I mention the quality of the Omni/Horizon, or the fabulous "K Car?" All of these things were notorious junk, and Chrysler was saved only because of the Government loans and Iacocca's huckstering, not because of the technical superiority of the company's products.

(Just ask yourself, with all the money the Government pumped into GM , according to this Chrysler model, all they needed was an Iacocca to sell their junk, once the money was pumped into them before the election. But they didn't even have a flim flam man to save them -- just a bunch of culls.)

It's noted that Chrysler "had defense contracts at the time and the government loan guarantees were justified." This is an interesting point, since the first Chrysler bail out was not without precedent: Earlier in the 70s, the Government bailed out the huge defense contractor Lockheed (predecessor to Lockheed-Martin). If you get into the history of business, you will see that Lockheed was notorious both before and after the bailout for being an incredibly corrupt corporation. In other words, just like Chrysler didn't change its spots regarding making junk once it got a new lease on life, neither did Lockheed.

I can understand the bailouts from the point of American jobs and American industrial base. I don't understand why, when my tax money is used to prop up the bungling and boondoggles of people who are rewarded so highly, they are kept aboard under the notion that their expertise is needed.

That's why I was glad to see some brooms cleaning up at least some of these inbred corporate hillbillies this time around.