It was interesting, I participated in this marketing study, I think hosted by A-B. They were test-marketing some ad campaigns that focused on the whole American ownership angle, since Budweiser is the only big brewer left here.
Any how, response from the whole group was nearly universal - people could care less about the ownership. They wanted to know where the beer was brewed, and if it was brewed here, they still consider Coors and Miller Lite as very much american.
The campaign bombed so badly in marketing tests that they decided to shelve it, basically.
So IMO (and the groups) Buy American is fizzling a bit, and where the assembly line matters more than which filthy rich stock holder gets the profit.
"Don't you love how talk of beer lightened the mood in here?"
I can just see us all sitting around a bonfire, hoisting frosty mugs of our favorite fermented hops and barley, and singing Kumbaya.
Of course, rocky would be crying over the sale of Miller to a bunch of dern feriners and wondering which mericun brewers used union brewmeisters.... :P
America's Oldest Brewery since 1829! Brewed in Pottsville, PA in the heart of Schuylkill County! Philadelphia used to have quite an number of breweries - Schmidt's and Ortleib's were the most well-known.
Now, there's nothing wrong with wanting to buy stuff made by unions. Rocky will be glad to know that my Hyundai Accent was built by union workers, South Koreans instead of Michiganers but still a union nonetheless. (South Koreans know how to go on strike. Instead of walking around carrying signs and mumbling lyrics from the IWW songbook; they get drunk, march through the streets, engage in pitched melees with riot troops for a few days, then go home, sleep it off, and come back to work and build cars that win JD Power Initial Quality surveys.)
A reporter with The Associated Press is doing a story today (5/5) on incentives and how people might be waiting for new incentives this summer before they buy. If you fit the bill, please send an e-mail ASAP with your daytime phone number to jfallon@edmunds.com indicating what make and/or model you're considering. Thanks!
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"...they get drunk, march through the streets, engage in pitched melees with riot troops for a few days, then go home, sleep it off, and come back to work and build cars that win JD Power Initial Quality surveys."
Oh, c'mon.
Michiganers know how to do that too - but they don't call that a 'strike'. They call that a 'party' after a Pistons championship! :P
"Toyota provides work for 300,000 Americans! Yay! GM goes under and 1,000,000 Americans lose their jobs. "
GM employs 1 Million Americans? Where did THAT number come from?
I'm sure you're counting suppliers as well. And you're making the grand LEAP of logic that ALL of those suppliers ONLY supply materials for GM (and not, perhaps, Toyota as well), and that NONE of those suppliers would find another manufacturer to partner with?
There is absolutely nothing wrong with someone wanting to buy from union companies, but self-righteousness directed at people who choose to buy from other manufacturers gets tiring. My Honda Pilot is pretty thoroughly an "American" vehicle -- it isn't made anywhere else, it isn't sold anywhere else, etc.
I think it is pretty obvious that "Buy American" (implying the big 2.5) is a euphemism for "Buy UAW."
My wife and I had a chance to tour GM-Arlington here in the DFW Metroplex during a recent open house. The assembly line was interesting, but the stamping plant was even moreso -- the number of robots back there was amazing. All this handwringing about jobs lost due to competition ignores the fact that a big majority of factory jobs are going away because of technology.
On page I-11 of GM's 2005 10-K (annual report), GM employed about 173,000 people in its North American operations as of 12/31/2005.
That figure includes employees in Canada and Mexico. And it doesn't include all of the people who will no longer be working for the company due to the various buy-outs and layoffs.
Per the 10-K:
As of December 31, 2005, approximately 75% (106,000) of GM’s U.S. employees were represented by unions. The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) represents the largest portion of our U.S. employees who are union members, representing approximately 102,000 employees.
Of course, 173,000 jobs is a fair quantity. But it's well short of this bogus one million figure that apparently was pulled out of thin air. Why make things up when the truth is readily available for all to see?
It's important when reading the internet to make sure that we use reliable sources. You can argue in circles forever based upon "data" that people simply made up, but don't fall for it.
Don't believe it? Don't believe me, just read the annual report for yourselves: GM 2005 10-K
...a Stroh's brewery outside of Allentown, PA. Don't know what's made there now if there is still a brewery. It's a fairly modern building with a big glass front proudly displaying the giant brewing vats.
Well, as of April US employment was around 143 million according to the Bureau of Labor Statistics.
If GM goes bankrupt, that doesn't mean they go away. Regardless I don't see how in a worse case scenario losing 1 million jobs (big if since GM employs no where near that number and you assume they take many suppliers with them) takes the whole country with it. Just more doom and gloom that's so typical of this forum.
From 2001-2003 the US has somewhere around 1.2million net job losses. Hmm, last I checked there wasn't mad riots and looters running about.
Hey, just give John Kerry a call, he said if he was elected he would create nearly 10 million jobs.
You seem to insist that GM employs more than 3x the numbers employed by Toyota? (1 million vs. 300k and now 173k vs. 51.9k)
Where is the basis for this assumption? And of the 173k, what % are 'mericuns vs. the % of the Toyota N.A. workforce who are 'mericuns.
And what make you think that if GM were to completely shut down tomorrow, throwing ALL 173k out of work, that NO other automakers would step into that gap and HIRE many of those same workers?
Bottom line - which company is DOWNSIZING it's American workforce (while upsizing it's 'furrin workforce to sell cars in the U.S.) and which company is UPSIZING it's American workforce?
You want to keep putting this whole discussion on which company is better for the American workforce, but it's the DOMESTICS which are downsizing on the American workforce and it's the IMPORTS which are constructing new factories HERE.
So we should reward this behaviour (on both 'sides') by NOW supporting the 'Domestics' and shunning the 'Imports'? What kind of message does THAT send?
I don't trust his knowledge. He said on Meet the Depressed that Bush had missed chances to get bin Laden. Wasn't it his predecessor, Kerry's friend in the White House, who was given 3 chances to get bin Laden before 911 and passed on them!!!
Don't think I'd trust Kerry on employment unless Heinz is expanding here instead of the plants they build overseas.
I agree with you 100%, I made the comment because, well because I'm a smart###.
You seem to insist that GM employs more than 3x the numbers employed by Toyota? (1 million vs. 300k and now 173k vs. 51.9k)
To be fair, Toyota's annual report indicates that as of 3/31/2005, Toyota had 31,543 employees in North America. I would presume that this number has increased during the thirteen months that have since passed, but that's a fair bit below GM's figure.
That being said, the trend is unmistakable: the transplants are adding employees in the US, while the Big 2.5 are pushing obvious plans to move jobs out of the US and Canada. We can debate why this is, but it is happening and there's no reason to believe that these trends are going to change.
So here's the point: If you spend a dollar with Toyota, chances are good that a fair portion will be invested back into the US. They are happy to hire Americans and build plants here because they have no problem with paying high wages in exchange for a workforce that can build products of consistent quality and that is close to the markets that they serve. Toyota's underlying business assumption is that if it builds a quality product that serves customer needs, it can be sold at retail, which will produce high profits and cover its higher expenses.
In contrast, if you spend a dollar with GM, DCX or FoMoCo, don't be shocked if it results in less US employment, and more employment abroad. GM remains a highly cost-focused operator, that will generally choose the cheaper worker above all else. It will continue to look outside the US for low-cost facilities in an effort to improve its margins via cost reductions, rather than improved product quality or features. A very different mindset that results in a very different business model which makes its jobs less secure.
I fully expect that GM will be leading the push to export cars built in China to be sold in North America and Europe. Others will be joining them to be sure, but if you want to look to leadership in this area, I would place my bets on the General.
One thing that will NOT happen is for the detroiters to walk away from the truck/SUV market here. It's beyond huge in profitability. Ditto Caddy's
Going with the above figures if GM for example employees 173K people and it suddenly walked away from it's small/medium auto business or imported every one of them the company would have profits that were out of sight. The small/medium autos drain a tremendous amount of time, energy, cash and profitability from the good parts of GM/F/DC.
Now import every one of these smaller auto's and the burden of unemployment etc falls on Mexico, Korea and Europe. Not here. If the vehicles don't sell then Koreans are put out of work in GM plants there.. ditto Mexico.. ditto Sweden.
In the US the core workforce making the hugely profitable trucks and SUV's stays working as long as fuel doesn't go to $5+/gal.
The next major trend: Watch when ULSD becomes the norm next year. This market will be flooded with highly efficient diesel trucks from Ford, Nissan and Toyota as well as autos from nearly everyone in Europe. Ford, GM, VW, Toyota, MB, BMW, etc.
Umm, might not be wise to base the ENTIRE company's future on that premise. Perhaps the intelligent thing to do would be to figure out how to COMPETE in the small/median auto business rather than continuing to abandon segments because the competition is 'too tough'.
Besides, Toyota is continuing to improve their own full size truck/Suv line. I don't think it's wise to assume that GM will ALWAYS enjoy a huge market superiority there either.
Regardless of WHAT segment GM (or Toyota for that matter) dominates: no automaker can achieve dominance and then rest on their laurels assuming that they'll ALWAYS have dominance.
...Toyota only employs 51,900 Americans - well short of 300,000.
Well the Toyota trend is UP. The GM trend is DOWN. Do you buy GM because they employ more, even though the money you spend goes to building overseas plants? Or do you buy Toyota because they're spending more of their money building MORE plants in the US, which will employ more US citizens?
LOL, that just goes to show what manufacture gets it, it seems like the general is always behind the times. And now with record high gas prices they want to promote and spend all of there money on gas hungry SUV's and pickup's.
Going with the above figures if GM for example employees 173K people and it suddenly walked away from it's small/medium auto business or imported every one of them the company would have profits that were out of sight.
This I differ with. GM's problem isn't centered in its operating costs, but in its inability to sell vehicles at high prices.
Take the Chevy Aveo, built with low-cost offshore labor and sold at a low price, slotting it even below Hyundai and Kia. Despite high fuel prices and a competitive price, GM still can't sell these losers because they don't meet market needs. (My guess is that the styling exercise is a failure, the build quality is mediocre enough to make higher cost alternatives seem reasonable, and the miserable fuel economy misses the mark with likely buyers.) The low cost isn't helping GM at all here.
With fuel prices as they are and more efficient alternatives being available, the truck market may very well be about to take a huge hit. Small businesspeople may continue to need them, but the casual commuter who simply wanted one for the sake of it will increasingly take a pass. And I fully expect Toyota to do a full-court press on this market, which will hurt GM's market share and probably inspire greater discounting.
These margins could shrink considerably with very little change. I would not be inclined to put all of my eggs in this basket.
I was thinking more along the lines of the trucks/SUV's would be 'free' of the drag of the auto's that GM has to sell because they can't get out from underneath the union burden until sometime next year.
Envision if they had only one subcompact imported vehicle, one imported compact car, one imported midsized car, one large family vehicle and one sporty vehicle and one dealership called Chevy that sold them all. Call them: Fit - imported Corolla - imported Accord - imported Avalon - made by Cadillac Corvette - made in Bowling Green
and a luxury division called Cadillac.
This sounds like a formula that might work here. Imagine all the layers and redundencies that would be eliminated. Marketing could focus on very narrow victories and intensive cost cutting.
Add this to the GMC division that sells all the trucks and SUV's at huge margins
Side note: efficiencies of scale - As of 12-31 this year there will be just one V6 engine for the entire Lexus/Toyota line including trucks, SUV's, vans and autos.
There was a recent article posted several weeks ago just before the Camry came out where Bodine Aluminum under Toyota's direction took $1000 in cost out of the cost of it's engine making production.
$1000 x 1 million engines is $1 Billion in cost savings every year from now on. This is they type of savings GM could do if it was more focused. It's spread too thin and focus is lost at every step, except in trucks and SUV's.
Envision if they had only one subcompact imported vehicle, one imported compact car, one imported midsized car, one large family vehicle and one sporty vehicle and one dealership called Chevy that sold them all.
Absolutely agree, that is a similar business model to what I've been advocated. We can quibble about the badge (I am thinking that Chevy is no longer a good badge to slap onto passenger cars, perhaps "GM" would be better), but in essence, a simpler line-up would eliminate these brand conflicts, eliminate numerous costs, and (hopefully) create some razor focus on making a few products exceptionally good and promoting them very well, instead of numerous products that don't inspire anyone and that lack decent marketing.
There was a recent article posted several weeks ago just before the Camry came out where Bodine Aluminum under Toyota's direction took $1000 in cost out of the cost of it's engine making production.
$1000 x 1 million engines is $1 Billion in cost savings every year from now on. This is they type of savings GM could do if it was more focused. It's spread too thin and focus is lost at every step, except in trucks and SUV's.
Actually, I posted that article. (Knowing you, you understood immediately the lesson to be gained from this.) Toyota focuses on creating efficiencies where they count most, which is why they can continue to make money with high labor costs and some costly R&D programs. Instead of improving the production process, GM management nickels-and-dimes suppliers, which only slows quality improvements and creates friction in what should be cooperative relationships. It's the mentality that's the real problem and that is going to be hard to change with the current management team at the helm.
You: " LOL, that just goes to show what manufacture gets it, it seems like the general is always behind the times.
Me: The Camry has been the no 1 or 2 selling car for over 10 years, when the price of gas wasn't on anyones radar screen except for a few spikes here and there.
You: "And now with record high gas prices they want to promote and spend all of there money on gas hungry SUV's and pickup's."
GM has been promoting SUV's and Trucks for over a decade. IT hasn't started "now". They've promoted them for years because that's what they make money from and from a sales total perspective Americans feel GM Suv's and Trucks are as good as Japans.
Bill Ford believes this same nonsense, that somehow if FORD can get better mileage Americans will flock as if most Americans will place mpg on some phony moral values plane and ignore the rest of thier cars shortcommings. Yeah sure. The only American product I would ever consider is an SUV because they make good looking ones that are of decent quality.
As for minivans we have a Sienna and no American minivan was even on my list. As for passenger sedans there is no rational reason on earth to buy a domestic like a G6, Impala, Lacross etc over a Camry, Accord or Maxima/Altima. BTW a Montego commercial just boasted about the car getting 29 mpg. Look Jill Wagner is hot and 29 mog is sweet but that ain't making me run out to get that bland, underpowered car.
1) Ridicule from others from others for making a poor choice. 2)Seeing more of your sedeans on the rental lot than in owners driveways. 3) huge gaps in body panels, misalgined body panels. 4) awful plastic interiors. 5) unispired syling. 5) poor resale value. 6) outdated platforms and motors 6) less technology 7) rattles and squeaks. 7) inferior fit and finish.
GM employs 1 Million Americans? Where did THAT number come from?
I'm sure you're counting suppliers as well. And you're making the grand LEAP of logic that ALL of those suppliers ONLY supply materials for GM (and not, perhaps, Toyota as well), and that NONE of those suppliers would find another manufacturer to partner with?
''Unless it stops hemorrhaging money, it will have to be towed into bankruptcy court — a move with consequences that could cascade through the American economy, threatening up to 1 million jobs and changing the dreams of American workers.
GM has one of the most generous plans in America and provides it to 1.1 million people — retirees, workers and their dependents — at a cost of $6 billion a year. That's more than any other company in America.
It's a cost most of GM's foreign competitors don't have
"Everybody knows General Motors is the horse that pulls our cart," says Steve Flood.''
And in the process, you misquoted those figures and grossly overstated the size of GM's workforce, by more than 800,000 people. The best source of data like this is generally going to be the companies' annual reports.
In any case, GM need not go away if it simply simplifies its lineup, makes better cars and creates a few home runs that would put money in the bank and restore confidence it its products. But if the best thing Wagoner can sell is the PR offensive against the workforce, instead of good cars, then it's probably best for the employees to look for new jobs and customers to buy different wheels.
1) Ridicule from others from others for making a poor choice.
Really? If a guy buys a new car and I ridicule him for it, either I'm a jealous moron or I have no life. I've seen guys buy cars for which I didn't care, but I didn't bust on them for their choice.
2) Seeing more of your sedans on the rental lot than in owners driveways.
Really? I see about four domestic sedans in my own driveway as well as at least one in many others. I also see a lot of imports on rental car lots as well. You can get a nice 1 year-old Maxima from National's old fleet.
3) Huge gaps in body panels, misalgined body panels.
Yeah, right! I can stick my whole fist between those body panels. Nice use of hyperbole. The only cars I've seen with such huge gaps and misaligned panels are those that have been in serious accidents regardless of whether they were foreign or domestic.
4) Awful plastic interiors.
Like everybody elses!
5) Unispired syling.
Oh wow! Those Toyotas make Corvettes and Ferraris look stodgy. I love how Lexus copies the last generation S-Class.
5) Poor resale value.
CARS ARE NOT INVESTMENTS!!! I could care less if my domestic sedan was worth $0 resale value. I keep them a l-o-n-g time. Good God, if those imports are all that, why do you want to get rid of them so quickly that resale value is a factor? If a Camry is so great, I should manage to make one last for fifty years or more. Buying a car I don't like just because it's got better resale value is still throwing away money in my book!
6) Outdated platforms and motors
Really? Just because it's proven technology that works, I've got to discard it for the newfangled unknown that does the job no better? I guess I should just shoot my dog because he's old.
6) Less technology
Less to go wrong. At least whatever technology my Cadillacs and Buicks have, it works. My brother-in-law's Mercedes S430 is full of electrical gremlins.
7) Rattles and squeaks.
Really? Both my 1988 Buick Park Avenue and 1989 Cadillac Brougham have NO squeaks or rattles after nearly 20 years and 150K+ miles.
8) Inferior fit and finish.
Shoot, all my cars still look great - even my beater car. The fit and finish on my girlfriend's LaCrosse could rival that of a top-of-the-line Lexus. The new Lucerne looks even better!
Get over it dude! It isn't 1981 anymore. There is very little difference between foreign or domestic cars other than false perception. All imports are not flawless masterpieces and not all domestics are piles of junk.
You GM fans need to realize that the lengthy efforts to make excuses will not help the company. They are losing money precisely because the fans make excuses, rather than focusing on what's wrong and fixing it.
-If the cars have such a poor reputation in the marketplace that there is a stigma to buy them, then this is a problem that needs to be fixed. Branding is critical to success in auto sales, and a bad brand is a poison that will kill the company. Meet the customer's needs -- making excuses won't help.
-Since too many rental market sales create stigma, then those excessive sales are a bad thing that need to be stopped. The fleet sales are a widely recognized problem that harms resale and branding. Meet the customer's needs -- making excuses won't help.
-If the body panel gaps and assembly are too large for customer tastes, then they are a problem that needs to be fixed. Whatever the customer doesn't like is a bad thing, whether or not it is of paramount importance to a few diehards. Meet the customer's needs -- making excuses won't help.
-If the styling is unappealing to customers, and it prevents them from buying the product, then the styling is a problem. Meet the customer's needs -- making excuses won't help.
-If customers want strong residuals, and the cars are depreciating more quickly than customers are willing to tolerate, this will hurt sales and needs to be stopped. Meet the customer's needs -- making excuses won't help.
-If the platforms, motors and technologies are too crude or unsophisticated to please customers, then they are inadequate and need to be improved. If the customer prefers the competitors' technology, he will buy the other product, which helps the rivals and harms GM. Meet the customer's needs -- making excuses won't help.
-If the fit-and-finish is below the norm, then it will harm sales, because customers tend to prefer superior fit-and-finish. Meet the customer's needs -- making excuses won't help.
You should be seeing a pattern here. It is consumers who determine what is important and what isn't, and consumers are clearly voting against GM. If you want to win them back, you need to do things that please them enough to spend their money on GM products.
There's no reason for a customer to "get over it." They are "getting over it" by purchasing other products. So, what are you willing to do to get your beloved General to see the light, and do something that will earn the company money?
Well, a lot of people I'm sure know about when Cadillac rebadged a cavalier in the 80's, and they (rightfully) got a lot of bad press for it. Well, today I was sitting at a stop sign, and saw what I thought was a Civic drive by the road perpendicular to me. However, I noticed something very odd about it. The front emblem was a gold Acura A, and on the back it said, also in gold, Acura 1.6 EFI, or something like that, I don't remember it exactly, and the tail lights looked like those on a Civic, but flipped upside down. At first I was shocked at this car, and didn't know what to make of it. Now what I can't possibly understand is how Acura can get away with selling this rebadged Civic as an Acura in 1997 (my guess is it was around a 1997 model), yet when Cadillac does a better job, although not a good job, of rebadging the Cavalier in the 80's, they get very publicly criticized.
What Acura can "get away with" is entirely irrelevant as it relates to GM.
What counts for GM is what GM needs to do to be successful. And since GM has made so many badge engineering mistakes over the last few decades, consumers will need to be really impressed to be won over. That's just how it is, and if GM wants to make money, it had better get used to it, stop whining, and step up to the plate.
By the way, there is no Acura badge-engineered Civic in the US, but there is one in Canada. In any case, badge engineering is only a problem if it hurts public perception of a brand. Some companies have an easier time pulling it off than do others.
Comments
Please don't tell me Sam Adams is not American.
Wrists exposed...Razor poised.....
Don't you love how talk of beer lightened the mood in here?
-juice
Any how, response from the whole group was nearly universal - people could care less about the ownership. They wanted to know where the beer was brewed, and if it was brewed here, they still consider Coors and Miller Lite as very much american.
The campaign bombed so badly in marketing tests that they decided to shelve it, basically.
So IMO (and the groups) Buy American is fizzling a bit, and where the assembly line matters more than which filthy rich stock holder gets the profit.
-juice
I can just see us all sitting around a bonfire, hoisting frosty mugs of our favorite fermented hops and barley, and singing Kumbaya.
Of course, rocky would be crying over the sale of Miller to a bunch of dern feriners and wondering which mericun brewers used union brewmeisters.... :P
Then again, Chrysler is German controlled, but that was more widely publicized so everyone knows.
-juice
(brownie points for bring up beer to cool things down)
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Oh, c'mon.
Michiganers know how to do that too - but they don't call that a 'strike'. They call that a 'party' after a Pistons championship! :P
GM goes under and 1,000,000 Americans lose their jobs. "
GM employs 1 Million Americans? Where did THAT number come from?
I'm sure you're counting suppliers as well. And you're making the grand LEAP of logic that ALL of those suppliers ONLY supply materials for GM (and not, perhaps, Toyota as well), and that NONE of those suppliers would find another manufacturer to partner with?
I think it is pretty obvious that "Buy American" (implying the big 2.5) is a euphemism for "Buy UAW."
My wife and I had a chance to tour GM-Arlington here in the DFW Metroplex during a recent open house. The assembly line was interesting, but the stamping plant was even moreso -- the number of robots back there was amazing. All this handwringing about jobs lost due to competition ignores the fact that a big majority of factory jobs are going away because of technology.
For fun, I was trying to translate that into car terms...
That figure includes employees in Canada and Mexico. And it doesn't include all of the people who will no longer be working for the company due to the various buy-outs and layoffs.
Per the 10-K:
As of December 31, 2005, approximately 75% (106,000) of GM’s U.S. employees were represented by unions. The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) represents the largest portion of our U.S. employees who are union members, representing approximately 102,000 employees.
Of course, 173,000 jobs is a fair quantity. But it's well short of this bogus one million figure that apparently was pulled out of thin air. Why make things up when the truth is readily available for all to see?
It's important when reading the internet to make sure that we use reliable sources. You can argue in circles forever based upon "data" that people simply made up, but don't fall for it.
Don't believe it? Don't believe me, just read the annual report for yourselves: GM 2005 10-K
When I was in college I met a distributor for them. I complained that we could not get Kegs in College Park, MD.
Nice guy - he sent several cases for us, FREE. It was quite a party. :shades:
-juice
If GM goes bankrupt, that doesn't mean they go away. Regardless I don't see how in a worse case scenario losing 1 million jobs (big if since GM employs no where near that number and you assume they take many suppliers with them) takes the whole country with it. Just more doom and gloom that's so typical of this forum.
From 2001-2003 the US has somewhere around 1.2million net job losses. Hmm, last I checked there wasn't mad riots and looters running about.
Hey, just give John Kerry a call, he said if he was elected he would create nearly 10 million jobs.
You seem to insist that GM employs more than 3x the numbers employed by Toyota? (1 million vs. 300k and now 173k vs. 51.9k)
Where is the basis for this assumption? And of the 173k, what % are 'mericuns vs. the % of the Toyota N.A. workforce who are 'mericuns.
And what make you think that if GM were to completely shut down tomorrow, throwing ALL 173k out of work, that NO other automakers would step into that gap and HIRE many of those same workers?
Bottom line - which company is DOWNSIZING it's American workforce (while upsizing it's 'furrin workforce to sell cars in the U.S.) and which company is UPSIZING it's American workforce?
You want to keep putting this whole discussion on which company is better for the American workforce, but it's the DOMESTICS which are downsizing on the American workforce and it's the IMPORTS which are constructing new factories HERE.
So we should reward this behaviour (on both 'sides') by NOW supporting the 'Domestics' and shunning the 'Imports'? What kind of message does THAT send?
Don't think I'd trust Kerry on employment unless Heinz is expanding here instead of the plants they build overseas.
I agree with you 100%, I made the comment because, well because I'm a smart###.
To be fair, Toyota's annual report indicates that as of 3/31/2005, Toyota had 31,543 employees in North America. I would presume that this number has increased during the thirteen months that have since passed, but that's a fair bit below GM's figure.
That being said, the trend is unmistakable: the transplants are adding employees in the US, while the Big 2.5 are pushing obvious plans to move jobs out of the US and Canada. We can debate why this is, but it is happening and there's no reason to believe that these trends are going to change.
So here's the point: If you spend a dollar with Toyota, chances are good that a fair portion will be invested back into the US. They are happy to hire Americans and build plants here because they have no problem with paying high wages in exchange for a workforce that can build products of consistent quality and that is close to the markets that they serve. Toyota's underlying business assumption is that if it builds a quality product that serves customer needs, it can be sold at retail, which will produce high profits and cover its higher expenses.
In contrast, if you spend a dollar with GM, DCX or FoMoCo, don't be shocked if it results in less US employment, and more employment abroad. GM remains a highly cost-focused operator, that will generally choose the cheaper worker above all else. It will continue to look outside the US for low-cost facilities in an effort to improve its margins via cost reductions, rather than improved product quality or features. A very different mindset that results in a very different business model which makes its jobs less secure.
I fully expect that GM will be leading the push to export cars built in China to be sold in North America and Europe. Others will be joining them to be sure, but if you want to look to leadership in this area, I would place my bets on the General.
Going with the above figures if GM for example employees 173K people and it suddenly walked away from it's small/medium auto business or imported every one of them the company would have profits that were out of sight. The small/medium autos drain a tremendous amount of time, energy, cash and profitability from the good parts of GM/F/DC.
Now import every one of these smaller auto's and the burden of unemployment etc falls on Mexico, Korea and Europe. Not here. If the vehicles don't sell then Koreans are put out of work in GM plants there.. ditto Mexico.. ditto Sweden.
In the US the core workforce making the hugely profitable trucks and SUV's stays working as long as fuel doesn't go to $5+/gal.
The next major trend:
Watch when ULSD becomes the norm next year. This market will be flooded with highly efficient diesel trucks from Ford, Nissan and Toyota as well as autos from nearly everyone in Europe. Ford, GM, VW, Toyota, MB, BMW, etc.
Umm, might not be wise to base the ENTIRE company's future on that premise. Perhaps the intelligent thing to do would be to figure out how to COMPETE in the small/median auto business rather than continuing to abandon segments because the competition is 'too tough'.
Besides, Toyota is continuing to improve their own full size truck/Suv line. I don't think it's wise to assume that GM will ALWAYS enjoy a huge market superiority there either.
Regardless of WHAT segment GM (or Toyota for that matter) dominates: no automaker can achieve dominance and then rest on their laurels assuming that they'll ALWAYS have dominance.
Well the Toyota trend is UP. The GM trend is DOWN. Do you buy GM because they employ more, even though the money you spend goes to building overseas plants? Or do you buy Toyota because they're spending more of their money building MORE plants in the US, which will employ more US citizens?
I know my answer.
I heard a radio commercial in the last few days from Toyota. Emphasis on mpg. (announcer) "Camry - 30 mpg....Corolla - 40mpg...Prius - 60 mpg".
Later the same day I heard another couple of radio commercials from GM:
"Lexus ES330 doesn't even have a V8.... Lucerne V8, starts at $29,900"
and
(catchy tune) "Baseball, hot dogs, apple pie, and Chevrolet"
This I differ with. GM's problem isn't centered in its operating costs, but in its inability to sell vehicles at high prices.
Take the Chevy Aveo, built with low-cost offshore labor and sold at a low price, slotting it even below Hyundai and Kia. Despite high fuel prices and a competitive price, GM still can't sell these losers because they don't meet market needs. (My guess is that the styling exercise is a failure, the build quality is mediocre enough to make higher cost alternatives seem reasonable, and the miserable fuel economy misses the mark with likely buyers.) The low cost isn't helping GM at all here.
With fuel prices as they are and more efficient alternatives being available, the truck market may very well be about to take a huge hit. Small businesspeople may continue to need them, but the casual commuter who simply wanted one for the sake of it will increasingly take a pass. And I fully expect Toyota to do a full-court press on this market, which will hurt GM's market share and probably inspire greater discounting.
These margins could shrink considerably with very little change. I would not be inclined to put all of my eggs in this basket.
Envision if they had only one subcompact imported vehicle, one imported compact car, one imported midsized car, one large family vehicle and one sporty vehicle and one dealership called Chevy that sold them all.
Call them:
Fit - imported
Corolla - imported
Accord - imported
Avalon - made by Cadillac
Corvette - made in Bowling Green
and a luxury division called Cadillac.
This sounds like a formula that might work here. Imagine all the layers and redundencies that would be eliminated. Marketing could focus on very narrow victories and intensive cost cutting.
Add this to the GMC division that sells all the trucks and SUV's at huge margins
Side note: efficiencies of scale - As of 12-31 this year there will be just one V6 engine for the entire Lexus/Toyota line including trucks, SUV's, vans and autos.
There was a recent article posted several weeks ago just before the Camry came out where Bodine Aluminum under Toyota's direction took $1000 in cost out of the cost of it's engine making production.
$1000 x 1 million engines is $1 Billion in cost savings every year from now on. This is they type of savings GM could do if it was more focused. It's spread too thin and focus is lost at every step, except in trucks and SUV's.
Absolutely agree, that is a similar business model to what I've been advocated. We can quibble about the badge (I am thinking that Chevy is no longer a good badge to slap onto passenger cars, perhaps "GM" would be better), but in essence, a simpler line-up would eliminate these brand conflicts, eliminate numerous costs, and (hopefully) create some razor focus on making a few products exceptionally good and promoting them very well, instead of numerous products that don't inspire anyone and that lack decent marketing.
There was a recent article posted several weeks ago just before the Camry came out where Bodine Aluminum under Toyota's direction took $1000 in cost out of the cost of it's engine making production.
$1000 x 1 million engines is $1 Billion in cost savings every year from now on. This is they type of savings GM could do if it was more focused. It's spread too thin and focus is lost at every step, except in trucks and SUV's.
Actually, I posted that article. (Knowing you, you understood immediately the lesson to be gained from this.) Toyota focuses on creating efficiencies where they count most, which is why they can continue to make money with high labor costs and some costly R&D programs. Instead of improving the production process, GM management nickels-and-dimes suppliers, which only slows quality improvements and creates friction in what should be cooperative relationships. It's the mentality that's the real problem and that is going to be hard to change with the current management team at the helm.
Me: The Camry has been the no 1 or 2 selling car for over 10 years, when the price of gas wasn't on anyones radar screen except for a few spikes here and there.
You: "And now with record high gas prices they want to promote and spend all of there money on gas hungry SUV's and pickup's."
GM has been promoting SUV's and Trucks for over a decade. IT hasn't started "now". They've promoted them for years because that's what they make money from and from a sales total perspective Americans feel GM Suv's and Trucks are as good as Japans.
Bill Ford believes this same nonsense, that somehow if FORD can get better mileage Americans will flock as if most Americans will place mpg on some phony moral values plane and ignore the rest of thier cars shortcommings. Yeah sure. The only American product I would ever consider is an SUV because they make good looking ones that are of decent quality.
As for minivans we have a Sienna and no American minivan was even on my list. As for passenger sedans there is no rational reason on earth to buy a domestic like a G6, Impala, Lacross etc over a Camry, Accord or Maxima/Altima. BTW a Montego commercial just boasted about the car getting 29 mpg. Look Jill Wagner is hot and 29 mog is sweet but that ain't making me run out to get that bland, underpowered car.
Thanks.
I'm sure you're counting suppliers as well. And you're making the grand LEAP of logic that ALL of those suppliers ONLY supply materials for GM (and not, perhaps, Toyota as well), and that NONE of those suppliers would find another manufacturer to partner with?
''Unless it stops hemorrhaging money, it will have to be towed into bankruptcy court — a move with consequences that could cascade through the American economy, threatening up to 1 million jobs and changing the dreams of American workers.
GM has one of the most generous plans in America and provides it to 1.1 million people — retirees, workers and their dependents — at a cost of $6 billion a year. That's more than any other company in America.
It's a cost most of GM's foreign competitors don't have
"Everybody knows General Motors is the horse that pulls our cart," says Steve Flood.''
That's where I got my figures, from these quotes in this article:http://www.cbsnews.com/stories/2006/03/30/60minutes/main1458483.shtml
As for the Toyota figures, I got them from a Toyota advertisement.
And in the process, you misquoted those figures and grossly overstated the size of GM's workforce, by more than 800,000 people. The best source of data like this is generally going to be the companies' annual reports.
In any case, GM need not go away if it simply simplifies its lineup, makes better cars and creates a few home runs that would put money in the bank and restore confidence it its products. But if the best thing Wagoner can sell is the PR offensive against the workforce, instead of good cars, then it's probably best for the employees to look for new jobs and customers to buy different wheels.
Really? If a guy buys a new car and I ridicule him for it, either I'm a jealous moron or I have no life. I've seen guys buy cars for which I didn't care, but I didn't bust on them for their choice.
2) Seeing more of your sedans on the rental lot than in owners driveways.
Really? I see about four domestic sedans in my own driveway as well as at least one in many others. I also see a lot of imports on rental car lots as well. You can get a nice 1 year-old Maxima from National's old fleet.
3) Huge gaps in body panels, misalgined body panels.
Yeah, right! I can stick my whole fist between those body panels. Nice use of hyperbole. The only cars I've seen with such huge gaps and misaligned panels are those that have been in serious accidents regardless of whether they were foreign or domestic.
4) Awful plastic interiors.
Like everybody elses!
5) Unispired syling.
Oh wow! Those Toyotas make Corvettes and Ferraris look stodgy. I love how Lexus copies the last generation S-Class.
5) Poor resale value.
CARS ARE NOT INVESTMENTS!!! I could care less if my domestic sedan was worth $0 resale value. I keep them a l-o-n-g time. Good God, if those imports are all that, why do you want to get rid of them so quickly that resale value is a factor? If a Camry is so great, I should manage to make one last for fifty years or more. Buying a car I don't like just because it's got better resale value is still throwing away money in my book!
6) Outdated platforms and motors
Really? Just because it's proven technology that works, I've got to discard it for the newfangled unknown that does the job no better? I guess I should just shoot my dog because he's old.
6) Less technology
Less to go wrong. At least whatever technology my Cadillacs and Buicks have, it works. My brother-in-law's Mercedes S430 is full of electrical gremlins.
7) Rattles and squeaks.
Really? Both my 1988 Buick Park Avenue and 1989 Cadillac Brougham have NO squeaks or rattles after nearly 20 years and 150K+ miles.
8) Inferior fit and finish.
Shoot, all my cars still look great - even my beater car. The fit and finish on my girlfriend's LaCrosse could rival that of a top-of-the-line Lexus. The new Lucerne looks even better!
Get over it dude! It isn't 1981 anymore. There is very little difference between foreign or domestic cars other than false perception. All imports are not flawless masterpieces and not all domestics are piles of junk.
-If the cars have such a poor reputation in the marketplace that there is a stigma to buy them, then this is a problem that needs to be fixed. Branding is critical to success in auto sales, and a bad brand is a poison that will kill the company. Meet the customer's needs -- making excuses won't help.
-Since too many rental market sales create stigma, then those excessive sales are a bad thing that need to be stopped. The fleet sales are a widely recognized problem that harms resale and branding. Meet the customer's needs -- making excuses won't help.
-If the body panel gaps and assembly are too large for customer tastes, then they are a problem that needs to be fixed. Whatever the customer doesn't like is a bad thing, whether or not it is of paramount importance to a few diehards. Meet the customer's needs -- making excuses won't help.
-If the styling is unappealing to customers, and it prevents them from buying the product, then the styling is a problem. Meet the customer's needs -- making excuses won't help.
-If customers want strong residuals, and the cars are depreciating more quickly than customers are willing to tolerate, this will hurt sales and needs to be stopped. Meet the customer's needs -- making excuses won't help.
-If the platforms, motors and technologies are too crude or unsophisticated to please customers, then they are inadequate and need to be improved. If the customer prefers the competitors' technology, he will buy the other product, which helps the rivals and harms GM. Meet the customer's needs -- making excuses won't help.
-If the fit-and-finish is below the norm, then it will harm sales, because customers tend to prefer superior fit-and-finish. Meet the customer's needs -- making excuses won't help.
You should be seeing a pattern here. It is consumers who determine what is important and what isn't, and consumers are clearly voting against GM. If you want to win them back, you need to do things that please them enough to spend their money on GM products.
There's no reason for a customer to "get over it." They are "getting over it" by purchasing other products. So, what are you willing to do to get your beloved General to see the light, and do something that will earn the company money?
So, what should GM do to improve its sales? You seem to think that everything is fine, but the company obviously isn't fine. So what would you do?
What counts for GM is what GM needs to do to be successful. And since GM has made so many badge engineering mistakes over the last few decades, consumers will need to be really impressed to be won over. That's just how it is, and if GM wants to make money, it had better get used to it, stop whining, and step up to the plate.
By the way, there is no Acura badge-engineered Civic in the US, but there is one in Canada. In any case, badge engineering is only a problem if it hurts public perception of a brand. Some companies have an easier time pulling it off than do others.
I heard a radio commercial in the last few days from Toyota. Emphasis on mpg. (announcer) "Camry - 30 mpg....Corolla - 40mpg...Prius - 60 mpg".
Later the same day I heard another couple of radio commercials from GM:
"Lexus ES330 doesn't even have a V8.... Lucerne V8, starts at $29,900"
and
(catchy tune) "Baseball, hot dogs, apple pie, and Chevrolet"
Now why would a BUICK commercial say baseball, hot dogs, apple pie and CHEVROLET???? Something in your info seems slightly off.
No, I didn't
Toyota likes to brag about the fact that it provides something like 300,000 jobs in America. Well guess what, GM provides over a million.
Sorry, that is false. I provided the accurate employment figures from the company's annual report. Not even close.