The Current State of the US Auto Market

tlong · August 2013

Probably better relations between workers and managers, it makes all the difference. Maybe less of a corporate socio-economic gap. See a German car factory for this, too.

Yes, working for Elon Musk rather than all those D3 years of toxic labor/management history has to be much more motivating.

tlong · August 2013

Aren't the shelves in a grocery divided up on a paid basis from the companies? In other words, to get my new Imidasoda onto the grocery shelf, I have to pay a fee to Kroger. The more I pay, the better placement for my product, i.e., shelf placement near the end or on an endcap even. Or higher rather than lower.

I don't know enough about the grocery business to comment; I'm sure there's some truth to that. I suspect there are many factors - perhaps the store gets discounts for carrying more of Brand X's line than Brand Y's, for example. But I'd suspect that the hottest products in demand from consumers have an effect as well.

Perhaps a better example is Best Buy (even though their business is in trouble). You can buy computers from Apple, Sony, Dell, Toshiba, Acer, Asus, etc... in one store. Same with TVs.

What we need is sort of a CarMax, but for new cars rather than used.

tlong · August 2013

Do robots cost jobs? Sure. Would you like to be replaced by a robot at your desk tomorrow?

Of course that's a simple look at the problem.

There weren't jobs for robotics programmers, robotics repairmen, automated shop floor transport design engineers, etc. when there were no robots, either. And those machines were made somewhere, likely many of them in the US. That didn't happen either when all the assembly line was manual labor.

If the US manufacturers don't do it, their competitors will. I'd rather be competitive than not (can anybody say "UAW Jobs Bank"?).

Think of all the farmers' jobs lost when tractors were invented. We don't seem to lament the loss of those jobs any more, although I'm sure it was disruptive at the time.

ohenryx · August 2013

What we need is sort of a CarMax, but for new cars rather than used.

I like CarMax. I've never bought a car there, but I recently sold them a truck. The staff is polite, friendly, and for the most part does not lie to you nor misrepresent what's going on. Compare that to the average new car dealer, and it's like night and day.

Most of the complaints you see about CarMax are related to repair issues, not the sales transaction. And there are always going to be repair issues with used cars.

uplanderguy · August 2013

Think of all the farmers' jobs lost when tractors were invented. We don't seem to lament the loss of those jobs any more, although I'm sure it was disruptive at the time.

Uh...not sure the tractor replaced the farmer, but the horse-drawn plow first and foremost.

uplanderguy · August 2013

The worst BMW drivers, buying new or used?

My only upclose experience to this is my brother-in-law. He has an older BMW 740 and also an older M-B Turbo Diesel. He is the stereotypical dart-from-one-lane-to-another guy. He is definitely a social climber, and is probably ADD by the way he looks everywhere around the room except at you when you speak to him. He bought both vehicles used.

I have many times noticed BMW's darting from lane to lane and cutting people off, though. I can't say I was surprised by the survey results.

circlew · August 2013

DETROIT (AP) -- General Motors Co. is recalling nearly 293,000 Chevrolet Cruze compact cars in the U.S. because the power-assisted brakes can fail.

The recall affects Cruzes made in Lordstown, Ohio, from the 2011 and 2012 model years that are equipped with 1.4-liter turbocharged gasoline engines and 6T-40 six-speed automatic transmissions, the company said Friday.

http://www.wcpo.com/dpp/money/general-motors-co-recalls-293000-chevrolet-cruze-c- ompact-cars-over-brake-issues

crkyolfrt · August 2013

Dealers will replace a switch in the power brake vacuum pipe assembly for free.

Perhaps, but if you don't think this issue has cost affected owners, consider that who is going to reverse the associated charges for being found-at-fault for these accidents that occurred that revealed the braking issue, and the inevitable insurance premium hits that resulted?

Possibly...just possibly, and with much agro and no sure-thing guarantee, an affected owner might be able to go after GM to pay back insurance premium hits and maybe even have charges reversed in some of those instances. Highly unlikely though and the costs to pursue that would be prohibitive without a guarantee of success.

Very unfortunate type of recall. I guess we should consider ourselves fortunate that none of the accidents involved a failure at a time which allowed the car to roll forward into a young mother with her baby carriage and other little ones in tow.

I think what irks me the most about this recall, is reading this:

GM spokesman Alan Adler said safety is a priority for the company. "The recalls are indicative of our dedication to making sure that problems that are spotted are fixed and customers can have complete confidence and peace of mind in driving," he said

The young driver who worked hard all through school and worked to have a job that paid enough to help them get into a used Cruze, and who was always diligent with their driving to keep their driving record clean so they could afford to insure their Cruze, and who had "complete confidence and peace of mind in driving", are now left on the hook for the fallout.

It's an unfortunate story, but GM's spokesman's idea of damage-repair leaves much to be desired.

crkyolfrt · August 2013

He might have a form of autism. Affected people take a mental snapshot of the face of people they interact with. In fact, thousands of snapshots in seconds and this is so distracting to them that they have found the best way to avoid this mental confusion, is to not look at others whom they interact with, in the eye.

Very unfortunate scenes have (and continue to) take place because you can picture a situation when a parent is trying to teach or discipline their child cuz they have been misbehaving, or so you felt, and you can picture them telling their child..."look at me when I speak to you"...
Which of course inadvertently exacerbates the mental torment for the child if they have autism.

All we can do is act on what we learn of so that growth prevails.

uplanderguy · August 2013

The Cruze recall is unfortunate, as it is pretty large and frankly, GM hasn't had a large recall in a good bit...unlike some of the other guys.

It's not that braking declined...pedal effort did, when cold.

While not ideal, I don't know how critical it is. If I start to push and I feel that I need more pedal effort, it's typically a split-second thing to do.

I know I had a new '81 Monte Carlo that would barely stop when cold, in reverse. I met another guy with a similar-era Cutlass Supreme who complained of the same thing. I rented a V6 Mustang, late eighties, that would idle 50 mph itself (no kidding). How these issues got away unmentioned in the press, I'll never know.

Mr_Shiftright · August 2013

All depends on how many cars were actually affected. It might be as small as a dozen that actually lost brakes, and so they drop the net and pick up any possible future candidates.

Mr_Shiftright · August 2013

I don't much cater to the argument that the corporation gets to do whatever it needs to do to make a profit but the unions can't do whatever they need to do to get a better piece of it.

Besides, only 7% of america's private sector workforce is union anymore. It's like beating a very dead horse for losing races, when it's not even running anymore.

crkyolfrt · August 2013

Yes, that could be. The thing is, as uplander mentioned, if you feel resistance then yes, human nature will push harder eventually, but it is that all very crucial WTH moment (also human nature) that uses up many feet depending on your speed, before the human nature to push harder, kicks in. If you are doing just a mph or two, as you pull up to a busy line up in a park where people are crossing in front of you between you and the next car, it doesn't give a person very much grace room if it picks that time to malfunction.

I know this from experience with a cracked vacuum line to my brake booster on my car. Took me awhile to find the culprit but there were times that the car moved on a grade before the engine became started right here in the privacy of my own front yard, (it's a stick and if we had lots of rain and then turned way below zero in a short time I sometimes don't use the parking brake) and if someone was walking behind to come around to say good bye or whatever, it gives you a start as the amount of pressure required with no vacuum boost is a lot more than one would think in that impromptu sorta situation.

In this GM case, I would like to think that this could have happened to any manufacturer, rather than it be due to some bean counter at GM who opted to purchase from a supplier who figured a way they could come in a bit less than the next guy...but who knows..

Mr_Shiftright · August 2013

Well sure, look at Porsche having to settle that huge class action for defective engines. That was just bad engineering--what a disgrace.

busiris · August 2013

As I kid growing up in South GA, almost every kid I went to school with was tied to agriculture. In grade school, my best friend's family at the time farmed several hundred acres, and had 72 employed field "hands". About a year or so ago, I was visiting my brother and met up with the guy again. His entire operation, including my friend, now farms more acreage with only 4 (he and 3 others) people. He gave me a "nickel" tour of one of his tractors. It has 4 screens/computers, sets rows via GPS, and calculates how to most efficiently lay out the field. It will quite literally run and drive itself.

And, not just any tractor jockey can hop into the cab and tool off down the field. It takes an educated person to run this thing.

Of course, his farm product output far exceeds the same acreage as it did when I was in grade school.

If nothing else, this is just another example of the disappearance of manual, uneducated labor jobs... Not just in the US, but around the world.

Mr_Shiftright · August 2013

I don't think you need a sophisticated education to run a tractor of this type, but you do need to be reasonably intelligent.

Look at modern aircraft carriers--these are enormously complex machines, and yet they get high school grads to run them, simply by breaking down the jobs into simpler components.

Besides you'll always need a labor force for service jobs.

uplanderguy · August 2013

Significantly-sized Hyundai recall of recent models:

http://www.edmunds.com/car-news/hyundai-recalls-239000-cars-for-corrosion-proble- - m.html

...and another; both just from yesterday:

http://www.edmunds.com/car-news/2014-kia-sorento-2013-hyundai-santa-fe-sport-rec- - alled-for-rollaway-risk.html

uplanderguy · August 2013

I guess what gets me...and I'm a Republican...is that farming didn't go away completely. Someone once on a forum here compared the loss of manufacturing jobs in the U.S. to the blacksmith's job, which to me is a very, very weak analogy.

In my hometown, railcars were built successfully for eighty years. Within two years of NAFTA, the plant closed and moved to Mexico. The first couple customer orders were hopelessly screwed up, but there they remain. It's not that railroad cars became an anachronism, but how could anyone be expected to build them for what workers in Mexico were paid?

Not everyone is cut out for college.

And while plumbers and handymen are always needed, not everybody that worked in manufacturing can become a plumber, either.

That's what gets me about our country's job situation today.

I make about three times what my Dad did in a management job at the post office when he retired 25 years ago. We're doing fine. And also, my wife is a schoolteacher. But I cringe when I think of today's manufacturing situation compared to only thirty or so years ago...'big picture', not just using this one area or that area as an example of otherwise.

fintail · August 2013

And then you look at first world areas that have kept domestic manufacturing and usually kick American butt when it comes to human development indices. And then people with economic ignorance whine about unions which represent a vast minority of workers, while the socio-economic gap hits levels of the Gatsby era and some wish for us to live in a Dickensian reality.

Free trade! Capitalism! Not oligocracy, nope.

fintail · August 2013

Yet those working for desk warming suits in first world Europe don't seem to have the toxic environment either.

Mr_Shiftright · August 2013

Real wages (adjusted for inflation) for middle class people have remained completely stagnant in America since the 1990s. You may be making 3X the money that your dad made but he was probably living just as well, if not better in some ways. I bet mom didn't work, and some middle class people back when even had a summer house.

busiris · August 2013

Modern Germany has proven a country can have non-antagonistic unions, a strong manufacturing base, and political stability... And along the way, provide a good standard of living for the country's population.

uplanderguy · August 2013

Not what we were talking about, but just this morning my wife was telling me she was reading that in Germany you must submit for approval the name of your newborn and it can be turned down. I don't have a link, but...WTH?

berri · August 2013

...and who subsidizes their GDP by paying for most of the defense of their energy supply from the middle east (while also plowing money into their economy from our NATO bases) - Uncle Sam and our military. Who paid for most of their defense during the cold war? Uncle Sam and our military. Europe has had a free ride for way too long on the military's back with our tax money. It's time for these stronger economies like Germany, Japan and China to take over the cost and responsibility of the oil wells and transportation lanes in the middle east. We don't get much oil from there anymore.

Mr_Shiftright · August 2013

The money the US spent to defend Germany was actually payment to Germany for being America's airbag system against about 500 Russian divisions.

We don't give money away as "favors", at least not as a government. Cheese and wheat sure, and our citizens are quite generous personally, but $$$? Nope, you have to dance if you want USA money.

fintail · August 2013

Things like that exist in many places, such as New Zealand, Netherlands, Denmark, and others. I think it is to prevent nutjobs from naming their kids Microsoft or Hitler etc. FWIW, give a kid a name like that here, and the authorities will work their butts off to remove custody.

fintail · August 2013

Unless it's Israel, then the US both dances and gives money. Think if the money given in direct and indirect aid to Israel, Pakistan, Egypt, et al, was used to support domestic industry/education/vocational programs etc. Not to mention the money used to defend Europe and developed Asia. None of those nations seek to have a base in every country, instead, they use the money to benefit their economy and people.

fintail · August 2013

We won't ask them. The omnivorous military-industrial cabal maintains an egoistic and sickeningly expensive pointless military occupation in Europe and Asia based on the last time they really won a war 70 years ago. It's only a free ride if they beg and the US submits.

I won't deny it is a subsidy though,and that it should stop. I don't see it happening, as fortunes are made in the industry.

Mr_Shiftright · August 2013

I thought we pay money to have other countries be our cops.

We paid GM money and the dance was "build better cars!"

Did it work?

uplanderguy · August 2013

Actually, they won't allow a name that can be used for either sex.

Guess that's one of the small freedoms enjoyed here that others don't have.

tlong · August 2013

Uh...not sure the tractor replaced the farmer, but the horse-drawn plow first and foremost.

Perhaps I didn't use the best example. Given that farmers were like 90% of the population a hundred or two years ago and they are well under 10% today(AFAIR something like 2%), it's automation that has enabled the agriculture of huge amounts of land with very little human labor.

tlong · August 2013

While not ideal, I don't know how critical it is.

I read that up to 27 accidents have occurred. Seems critical enough to have caused multiple accidents..

tlong · August 2013

In my hometown, railcars were built successfully for eighty years. Within two years of NAFTA, the plant closed and moved to Mexico. The first couple customer orders were hopelessly screwed up, but there they remain. It's not that railroad cars became an anachronism, but how could anyone be expected to build them for what workers in Mexico were paid?

Not everyone is cut out for college.

And while plumbers and handymen are always needed, not everybody that worked in manufacturing can become a plumber, either.

That's what gets me about our country's job situation today.

It seems that things are just complicanted, and there isn't (and never has been) a perfect match of population and aptitudes to jobs that are needed.

When farming was the profession of 90% of the US workforce, I'm sure there were a lot of people who were smarter than plowing fields all day -- but that was what was needed to survive. Today, as (hopefully) the US aspires to be the preeminent technological civilization in the world (and it seems that is rapidly changing) -- you'd expect a higher proportion of jobs to require substantial education. That mix of jobs is going to be tougher for certain semgments of the population. Just as the brilliant science minds might have hated plowing fields when farming was the preeminent occupation.

NAFTA isn't all one-way. I have a very good friend of Mexican birth who regularly visits family in Mexico. He's given me much of the "other side of the story". In Mexico they have lost many mom and pop farms to US farming. They can't compete with our high volume mechanized farming and the US taking production of certain agricultural items has put a lot of small farmers out of business. Now they probably don't hear about all the new jobs created by the railroad mfr moving to Mexico, etc. But then we don't hear about the things that have improved under NAFTA, either.

It seems that the real lesson of all this is that anybody who thinks things are going to be static for 10 or 40 years is kidding themselves. Adaptability is the key to continued success. Even for companies, as the D3 had to learn the hard way.

tlong · August 2013

We paid GM money and the dance was "build better cars!"

Did it work?

Their cars are better.

The real question is - are they good enough?

What is the GM market share versus pre-BK? How about change in the last year? Does anybody know offhand? Seems that those number trends would help answer whether their cars are "good enough".

Mr_Shiftright · August 2013

I think it actuallly fell a little bit after BK, but is predicted to hold steady at 17.9% for 2013, says Forbes. In historical terms, that in itself is significant, as GM's market share, if you look on a graph, only went one way year after year after year----DOWN. 2012 was GM's lowest market share in 88 years.

Of course, no automaker will ever even come close to the market share GM enjoyed in 1962 (51% !!)

fintail · August 2013

I haven't seen that one. Is it a real freedom, or a distraction? As they have more socio-economic freedom than Americans...

fintail · August 2013

I wonder what the real employment gain from NAFTA has been in the US vs Mexico. I'd wager actual workers in the latter have seen more benefits than those in the former, while should-be-punched execs in the former have cashed in at the expense of the masses. Those who are still kicking American butt in quality of life inputs have kept more domestic manufacturing.

A lot of people who preach adaptability don't seem to practice it much in their own work. Sounds like overpaid consultant-speak, like "synergy" and "paradigm shift" and the like.

fintail · August 2013

The US pays money to be the policeman for others. Who is our cop? USA is the policeman of the world.

GM is slowly coming around to building cars. I just hope it realizes that "better cars" is a moving target. Don't benchmark a 2013 Accord for a new model to be released in 2016.

tlong · August 2013

I wonder what the real employment gain from NAFTA has been in the US vs Mexico. I'd wager actual workers in the latter have seen more benefits than those in the former, while should-be-punched execs in the former have cashed in at the expense of the masses

Well the problem is that without hard data that's all just opinion. And even hard data isn't very trustworthy. So we don't know, people just have different "beliefs".

A lot of people who preach adaptability don't seem to practice it much in their own work.

...and yet a lot do, too. It doesn't matter anyway, as it's not a choice for most. It's an imperative and those who don't, probably won't end up well.

tlong · August 2013

GM is slowly coming around to building cars. I just hope it realizes that "better cars" is a moving target. Don't benchmark a 2013 Accord for a new model to be released in 2016.

Exactly. They're not going to get ahead by equaling their competitors. They need to out-innovate them.

fintail · August 2013

I see nothing to even begin to hint that the American workforce has gained more from NAFTA than it has lost. It's a race to the bottom masquerading as "free trade".

They'll end up well if employed in certain sectors (tenured managers, public sector types) or if they made theirs so people today can go pound sand. Some have to adapt more than others.

fintail · August 2013

It's what happened with the 97 Malibu. It benchmarked the 94 Accord - which is all well and good, but a year later there was a new Accord that was another degree more advanced, As you say, innovation needs to exceed the competition, not halfway meet it.

uplanderguy · August 2013

No offense, but as an American, I'm not really concerned with how Mexicans were somehow shortchanged by NAFTA.

uplanderguy · August 2013

"Real wages (adjusted for inflation) for middle class people have remained completely stagnant in America since the 1990s. You may be making 3X the money that your dad made but he was probably living just as well, if not better in some ways. I bet mom didn't work, and some middle class people back when even had a summer house. "

Our house is much larger and newer, and we own three cars compared to their one, but they didn't want a bunch of 'stuff', being depression babies. For some reason my Dad never wanted to own a home, but in their town (his hometown), they lived for over twenty years (their last) in a 1956-built ranch-style ('bungalow' to some), with a one-car attached garage and about an acre yard, for $200 a month rent at the time we moved Mom into assisted living in 1999.

Dad's one piece of personal enjoyment was buying a new Chevy about every three years, even though he only put about 6K miles a year on a car. He and Mom took a lot of bus trips (tours) and enjoyed that. They also loved Atlantic City and I'd cringe when I heard they dropped a grand in cash on a weekend. That was their only extravagance.

They put me through a state school. We're putting my older daughter through the most-expensive state school in OH, which is nearly ten times what my college costs were thirty-plus-years ago.

I know cars last longer, but so much of the enjoyment of buying is gone for me now. Cars look the same, colors and models diminished, options available only in 'groups' now. If you didn't experience it, you couldn't understand it. You could truly custom-order for individuality then. Back then, one could afford to trade every third year...resale values seemed higher. When something did break, it was usually something minor, unlike so often the case today (remove fascia to replace a parking light???!). I couldn't trade cars as often today as Dad could.

circlew · August 2013

Looks like cloak and dagger still exist at GM. Perhaps they need an audit?

General Motors (NYSE: GM) has 212,000 employees that produced over 9 million automobiles globally in 2012. Producing cars at such a scale causes problems, however; the company is planning to pull out of South Korea because of high labor costs and the competitive market there, for example.

GM made $6.1 billion in profit off of $152 billion in revenue last year. The company used creative accounting to get to that number, however. If you look at the company's financials, it reported a $27.3 billion "Unusual Expense (Income)" in order to avoid reporting an actual $30 billion loss. How did the company do it? It reported that income as future tax savings in order to display profitability.

Ford doesn't need to use accounting tricks to look profitable, either - it just is. Revenue was down a percentage point year-over-year to $134 billion in 2012, and income dropped 72% to $5.6 billion. 2011's $20 billion profit has been the best year the company has had in the past five years.

uplanderguy · August 2013

Good for Ford; hopefully they've got their quality and recall issues on new models at bay now.

imidazol97 · August 2013

Has toyota had any recalls lately on it's Camry and Lexus models, e.g.? Their Corolla is so old it makes the previous Impala look like a Spring Chicken?

How about Honda and it's acura lines? I keep seeing new posters complaining about the wonderful creative way Honda backs up their fault AC in the CRVs. GM would have changed the design after a significant failure pattern. Nope, Honda just keeps on selling $3000 replacements, same compressor, to the same Barnum and Baily buyers. Then there's the transmission problems at Honda. Not a lot of veracity there either. I am reluctant to consider a 4-cyl Accord for my next car because of the CVT. So many folks have complained about the CVT's in their various cars, and to trust _Honda_ to make one and be honest, and then to actually support when they fail, in or out of warranty, isn't going to occur based on their pattern of past history on AC and trannies.

We should give GM more money for development to assist a truly American company to come up with better designs if folks aren't happy with the current ones. Kvetching about the current status and trying to find quirks to *itch about, as if this reader cares, is wasting bandwidth. Do some checking into HyKia and toyota and Honda's records. Oh, wait. Can't do that because toyota wouldn't even talk about their unintended acceleration problems without it coming from Tokyo. Good luck at actually studying their bookkeeping across the ponds. LOL.

andre1969 · August 2013

My uncle recently bought a new Camry at CarMax, and the transaction went very smoothly. My uncle isn't the most business savvy in the world, and would probably be a bit easy to get taken advantage of, but I thought he got a great deal. The no-haggle price on the Camry was good, they gave him a good trade on his beat-up, POS '03 Corolla with ~230K miles on it, and, by some freak of nature, he even qualified for their 0.9% financing!

One of my friends bought a used '04 Crown Vic, and a used '09 Grand Marquis from CarMax. In his case, I thought he got a good deal on the new car, but didn't get squat for the trade. I remember he got $600 for a '95 Grand Marquis, but it had about 175,000 miles on it, the check engine light was on, and it had other issues. Probably would have run for years, but sort of like that old joke about old GM cars...they run bad longer than most cars run at all!

When it came time to trade the '04, it had about 232,000 miles on it, and had intermittent a/c issues. He only got about $300-400 in trade for it! But, its replacement, an '09 LS Ultimate with about 52,000 miles on it, in 2012, was only about $13K. So maybe they give you more in trade if you buy a more expensive vehicle?

berri · August 2013

I think you've got to give GM a couple of more years before you lock in their future potential. Ford was in the midst of new model final development when the big recession hit and the GM BK happened. GM is just now starting to put out the new stuff over the next few years. I know Warren Buffet has been buying a chunk of GM shares and the latest government offering was over subscribed by Wall Street, so maybe GM isn't as dead as some are proclaiming? Remember, Buffet is a value investor - buy cheap, early.

berri · August 2013

"Good for Ford; hopefully they've got their quality and recall issues on new models at bay now. "

I think MY Touch and Synch have the potential to hurt these cars value down the road. It's been how long??? and Ford is still struggling to resolve issues with them?

The Current State of the US Auto Market

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