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I work in the steel industry, not automotive, but there has been tremendous gains in productivity in the last 10-15 years. It used to take 1000 people to make 2 million tons of steel per year, now it takes 200 to make the same production. I can imagine the same 5:1 productivity gain ratio exists in automotive industry. I feel that the greatest reason for the fall of domestic car industry is the UAW. Why you ask?
Because UAW prevents Ford and GM from getting rid of people, people that are simply not needed in modern factories. Since GM and Ford cannot layoff extra workers and reduce labor costs, there is no incentive for domestic car industry to invest in labor saving machines and automation. Modern factories require very few "Workers". Modern factories require good engineers, electricians and mechanics to keep the machines running all of the time.
Its this simple UAW BS that Japanese companies take advantage of and that is why they are gaining market share.
I have lots of Fords, and a Lexus right now. There is no question the 4-runner is a great truck. But it can't honestly be compared with the Explorer IMO, because they are way different in design and intent. The Explorer has always been the "best of both worlds" SUV. It's loved by Women as a speed-bump traveler, and that's about as off road as they usually get. If you need one for snow and ice, I defy any other vehicle to do better. I've driven them all. If you have a dirt road to travel, you're in business. But if you want to really blaze a trail, the Explorer will do it, and get you home, but you'll scrape a lot underneath. The clearance isn't that great. The suspension is a little soft for serious off-roading as well. So many of them are sold, that some aren't perfect, but I've had 5 of them, and they've all been great.
The 4-Runner is much much more "trucky" than the Explorer. It's comfy inside, and nicely designed, I think prettier than the Explorer, but it lacks the Independent Rear Suspension that the Explorer has, and therefore, can't have the 3rd seat disappear into the floor. So, you have to leave it at the antique store when you take your table home, and come back for it later. The power bump on the hood is impossible to see over when you're doing some serious off-roading, which it handles quite well, other than the visibility thing. In town, it's bumpy, going over a speed bump will dislocate your back. Other than those three things, it's a great truck, and Toyota reliability is world renown, no argument there.
That's my analysis of the comparison - you really can't.
NV--------NEVER SAY NEVER!!!
2014 Malibu 2LT, 2015 Cruze 2LT,
So there is no way the Japanese Government or even the industry can have a "grand design" to suck jobs out of the US.
Now look at the Japanese steel industry (unionised, by the way) as a case study. Since Japan does not have iron ore, it imports both the iron ore and the coke to make steel, with very high fixed costs (labor and land both very expensive here), and thus in early 90s there was a feeling that this industry was destined to become extinct, particularly in face of competition from China, Brazil and India. And the Government turned a deaf ear to the steel lobby, since everyone believed that they were doomed anyway.
Fast forward to today - 2005 was the MOST profitable year ever for the Japanese steel industry. The reason is a) They consolidated (and reduced total head count by more than 50% in the last ten years); b) They improved the technology (they require half as much energy to product a ton of steel as compared to plants in China; c) They moved up the value chain (e.g. cold rolled sheets for high end autos).
So my point is a) Govt cannot help an industry which is fighting structural problems; b) The management and the workers need to work together to come out of it.
Good post. Someone said earlier that we shouldn't let GM go out of business because they pay health care costs for ten of thousand of workers.
That is about the poorest excuse I have heard. The General doesn't pay my health care costs. If they go out of business-or severely restructure, and the health care benefits have to be re structured, that's just tough twinkies...
I don't believe that.
Your wsj.com link doesn't work unless you're a subscriber. Why not post parts that you want us to read.
2014 Malibu 2LT, 2015 Cruze 2LT,
TOKYO -- Japanese Economy Minister Kaoru Yosano and Finance Minister Sadakazu Tanigaki expressed concern Thursday that U.S. economic imbalances, such as the bulging current-account deficit, could cause problems for the global economy.
"Some in the U.S. say that their imbalances may lead to a day of reckoning, and I think that this is a serious question that we face," Mr. Yosano told lawmakers in the financial-affairs committee of the Upper House of the Diet.
I don't believe that.
Well, I cant really change your beliefs. But think of it, Japanese labor or input costs like land or power are more expensive than US (The US "average salaries" look higher because of your high roller CEOs), so for a Japanese company to "import" jobs from the US would be possible only if it threw profitability out of the window. Now this may have been the case in 70s and 80s, but after a painful decade, Japanese companies (those who have survived) have moved up market, and 2005 was the most profitable year ever for Tokyo Stock Exchange listed companies. So if jobs are coming back to Japan (yes, some are), then it is only to industries where it is not competing on low prices (e.g. LCD TVs). As I have said in my previous mail, a lot of low value added jobs have gone (from Japan) to China or other Asian countries.
And actually that is what is happening in the US. But if Japan is running a surplus with the US, it is not due to exporting subsidized low value add products. On the other hand, if you look at some major Japan imports from the US (beef, orange juice, soybeans etc), well, are these not subsidized and low value add....?
I respect the competitive strength of US, but unfortunately it is not uniform across all industries.
That is about the poorest excuse I have heard. The General doesn't pay my health care costs. If they go out of business-or severely restructure, and the health care benefits have to be re structured, that's just tough twinkies..."
Chuck (scary as it is), I totally agree with your post. As cold hearted as it sounds, that's the only way things will be fixed. The tough decisions must be made and executed or the company will die, and then, so will the benefits. Either way - a government bail-out will only prolong the inevitable, just as it did with Chrysler.
The track record for Explorers has improved over the years and the '05 for build quality was better than its predecessors. The '06, so far, doesn't have any problems that I've read about, so I guess I'll just have to take my chances on the long-term durability. I'm not worried.
Bit---here is the issue. I had an '02 XLT (2WD) with the leather pkg, 6 CD changer, etc. The leather was a very poor quality, it would of needed replacement had I keep the vehicle.
This stuff (leather) was paper thin and was a common complaint on the mid-line model. The dealers acknowledged (at least most) that is was an issue, but forget warranty repair for it. The back body panel (underneath the rear window) cracked. Another common problem, fixed under warranty. The power window motor went out on the rear driver's passenger door (part on NATIONAL BACK ORDER-what does that tell you?) again, fixed under warranty. The rear-end would whine between 55mph and 65mph). The dealer said there was a whine, but most were worse. They denied warranty repair.
Transmission solenoid went bad (transmission shifting poorly) it was a common problem, fixed under warranty. So you see, I didn't get a bad vehicle, ALL THESE PROBLEMS WERE COMMON AS REPORTED ON THE EXPLORER BOARDS HERE ON EDMUNDS!!
And I won't even mention that on my XLT I had matching body colored door handles you can't even get on the XLT now. So you pay about 31K for an XLT, and you get black matte, ugly non-matching (as far as the rest of the vehicle) door handles.
WHY WOULD I GO BACK FOR MORE AFTER THIS EXPERIENCE?
Gee---I think this has happened--like twice!!!!!!!!!!!!
I think it's a good car. Really. Would I buy one? Not for me, but for one of my kids, yes, I would. But, price being the same, I'd get the Mazda 6. They're much better looking.
I can't compare the Toyoda 4under though, never had one of them. They looked too small to me.
You are exactly right in this assessment. Face it American Auto industry does not exactly attract the best and the brightest Americans. I mean if you are a good engineer or programmer, why would you want to work in a shrinking industry with limited rewards and living up north in Michigan. I grew up in Michigan and went to University of Michigan. After graduation I moved south where the weather is warm and the girls are pretty. So did many of my friends.
I have argued before that in the auto industry what we have is a competition between two of the best Japanese companies like Toyota and Honda and two very mediocre American companies like Ford and GM.
There are plenty of American industries and companies that are far better and more profitable then Japanies companies. American software and technology companies show more profits than Japanies companies. I would guess that Japanes construction companies are not exactly taking over the world either.
Ford and GM have to realize in what deep trouble they are in and stop blaming everybody from non-patriotic American consumers to Japanese cars imported from Alabama and Kentucky for their problems. There is nothing wrong with the world. There is something definately wrong with Ford and GM.
Mark.
Boy, I totally agree!
I saw one at the dealer recently for 45k?
What is Ford thinking? Are they going bananas?
My friend has a 2005 Pathfinder LE, fully loaded, and it was 10k cheaper than the exploder.
Nissan is a much better choice IMO.
I thought that's what India and China was doing,
The current Santa Fe is more of an Escape/CR-V/Rav4 competitor.
Mark.
The Sorrento is built on the Sedona (Minivan) chassis, it's unibody, front or all wheel drive, transverse motor, and won't tow more than a tent. It looks like the Lexus, but it's old tech, and heavy, and mileage isn't as good as it should be for the size of the vehicle. No 3rd seat option. If he does buy one, make sure the serial number begins with a "K". If so, it's built at the Hyundai plant in Korea, and should be an ok car. If it starts with a "V", it's make at the Kia plant in Viet Nam - whole different story. But now you know why it's so cheap.
The Santa Fe is the same essentially as the above, except they are all made in Korea, I believe. But, it's front or all wheel drive, mileage is dismal actually. No third seat option, towing is minimal.
The Explorer is a truck. You can get an V-8, and I recommend it. You can have full 4WD options, it's RWD otherwise like a truck should be. It's built body on frame, so it's tough, like his old one. You can have a good 3rd seat, that's actually usable, and folds flat into the floor with no removal necessary. It'll tow a considerable mass behind it with a class III hitch, and comes with a towing package on every one. With the class III, you get the extra oil, trans, and water cooling. In short, you get a tough little truck in the explorer, not a minivan with 5 doors that don't slide.
It's a huge difference, and therefore, a pretty good difference in price. Depends on what he wants, but he really shouldn't compare them. I'll speculate though, if he were t-boned in the Sorrento - he wouldn't still be driving it.
Does the AFA have that much influence on car buyers and dealers or how much of a threat are they to there being "a Ford in Your Future"?
AFA will probably have about as much effect on Ford's car sales as the people who tell consumers not to buy German or Japanese cars because of WWII...
These psycho fringe groups always make such threats, but they can't back them up, as the mainstream will punish the corporation for going along with the lunatics much harsher than the fringe group could dream of.
American Fanatic (Association)
2014 Malibu 2LT, 2015 Cruze 2LT,
So, I would think that Ford should sell cars to whoever has the $$$, and nothing else matters...their money is as green as mine...
The AFA needs to get a life...
Rocky
Mark.
These ads were not reinstated. Instead. Ford purchased ads at the corporate level featuring all of Ford's Brands.
Mark.
Your information explains why the American Family Association has renewed their appeal to boycott Ford.
The AFA is not an insignificant organization, but its members are Orthodox, Conservative, & don't usually participate in demonstrations. Perhaps the silent majority. They usually drive American pickups, Chevrolets, Pontiacs, Mercurys, and enjoy an excellent credit rating.
I suspect the religious nuts not buying the vans (along with everyone else due to the lacklustre nature of said vehicle) is less of a loss than gays and those against religious interference in business not buying Volvos and higher line cars...
Insignificant...or in a just society, I would hope. It's a disguised hate group.
If you want this nation to devolve into a corporate theocracy, give them more support. They are disgusting.
I love "tolerant" liberals - as long as you agree with them, otherwise you are a "hate" group.
This is a huge loser issue for Ford - the core customer is much more likely to be a midwestern family that is offended by the activities Ford is supporting through their funding grants.
And to even suggest that the AFA preaching this latest message is what makes them a disguised hate group is astounding. It's not what they are telling, it's the methods they are supporting, and the basic core of their existence - equal rights for all as long as you're a conservative straight christian. Everyone else is second class.
If Ford "didn't want anyone to know", they'd have been a little more cautious to begin with.
If the fundies don't like it, they are free to shop elsewhere. Ford shouldn't appease them. I've always seen them keeping GM alive more than anyone else, anyway. I've known some especially wacky Astro van drivers...
I believe they got those channels purged after lots of publicity. The media gives them publicity and helps them effect their goal.
The group would be amazed to know the special advertising and benefits that companies produce toward african Americans and women and other small, specific groups that catch business' eyes. Advertising Jags and Volvos was a good business move it would seem to me.
2014 Malibu 2LT, 2015 Cruze 2LT,