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GM and Chrysler Pushing for Merger

You are assuming that there will be ANY manufacturing here, should Japan Inc win. The only reason they bothered to build factories here was to avoid the union-organized backlash that happened in the early '80s. Should Ford and/or GM fail, what's to stop the rest of the manufacturers from shuttering their North American plants, too? Toyota has already wound down its 1.3 billion dollar truck plant in Texas and is re-thinking its new Woodstock plant, due to changing market conditions. They have 'free' healthcare in Japan and are a lot less exposed to pension/healthcare issues.

I am skeptical that all manufacturing will simply be moved offshore after the Japanese automakers beat out their American counterparts. That's a rather alarmist point of view. Just like I am skeptical that you will see a total demise of the the big 3. They will simply become stable at lower market shares.

FYI, the Cobalt/G5 twins are the #2 selling vehicles in Canada right now. GM has had to add a 3rd shift in its plant to keep up with demand. The newly redesigned Aveo/G3 are now being built in Mexico, at an all new plant, to keep up with demand, as the Korean plants now focus on Europe and Asia. The Chevy Astra is the #1 selling small car in Europe.

If that's the case, then why the crisis? I guess the big 3 don't need help after all.

However, the fact that they make more fuel efficient cars now still does not explain the decline in CAFE in the 90s.

Google Toyota Tacoma and see all about Toyota quality. Dealers are quietly buying up the Tacomas because the frames are SNAPPING in half. The FRAMES. The strongest part of the truck. Even Consumers Reports finally issued an apology last year, after problems with the V6 Camry, Avalon and Tundra forced them to admit that in the past they have given Toyota a free pass on the quality front. When GM farts, it is on the front page; when Toyota has diarrhea, it's buried int he business section.

Sure Toyota has quality problems. Nobody here is giving them a free ride. However, what's also neglected is things like service. Toyota/Lexus routinely rank near the top for service. They don't hassle you on warranty, etc.

As for quality of the big 3. That's a story as of late. They had their issues in decades past and that's what dented their reputation. If Toyota keeps up, they will get the same labels in a few years.

Nobody failed to adjust to any reality. Wall Street is very unforgiving. Toyota and Honda do not have to answer to Wall Street.

No but they do have shareholders at home in Japan. IMHO it's the difference in American and Asian corporate cultures. Asian leaders just take a longer view. American leaders look at quarterly earnings. Hence the push on SUVs in the 90s and the returns for shareholders instead of r&d into more efficient vehicles. The way I see it, this is simply a hang over from their party in the 90s.

What marketing planner could have made a business case for the Aveo in 2000 when GM and Ford were building every truck they could. Interestingly, the Cavalier/Sunfire outsold everything, including the Civic, right up until their cancellation in 2005.

Again, if that's the case, then why do they need help? Sounds like they are doing alright...


WardsAuto.com did a wonderful piece in April '06, entitled Tyranny of the Enthusiasts, which illustrates the point exactly: Road and Track, Motor Trend and others have been setting the tone for decades: their clear disdain for economy cars succeeded in convincing consumers that we 'need' 300 horsepower minivans.

On this I agree, though I still don't see what stops companies from offering smaller engines. I drive an IS 300. I was saddened to see that in Europe an IS 200 is available. I would have gladly bought that if it was offered.

Likewise, for the dearth of diesels among the big 3 (changing only recently...). And now that they do offer diesels, how many of them are cars? And I won't even mention how much they are lagging behind on hybrids.
 
Google Toyota Tacoma and see all about Toyota quality. Dealers are quietly buying up the Tacomas because the frames are SNAPPING in half. The FRAMES. The strongest part of the truck. Even Consumers Reports finally issued an apology last year, after problems with the V6 Camry, Avalon and Tundra forced them to admit that in the past they have given Toyota a free pass on the quality front. When GM farts, it is on the front page; when Toyota has diarrhea, it's buried int he business section.

Don't forget about the faulty oil pressure sensors that crack open, allowing the oil to escape while not bothering to signal that pressure is low.

That one cost me 4K for a complete rebuild on my old Rav4. How about sludge problem? In Japan, because of cultural 'pride', there is a history of hiding embarrassing problems.
 
People often buy hybrids because it makes them feel good. They believe that they are doing something positive for the environment when driving a hybrid. It's successful marketing.

It's similar to how many people feel that they are safer driving an SUV. They've been sold on the idea that operating the bigger vehicle is much safer - whether they need such a large vehicle or not.
 
People often buy hybrids because it makes them feel good. They believe that they are doing something positive for the environment when driving a hybrid. It's successful marketing.

It's similar to how many people feel that they are safer driving an SUV. They've been sold on the idea that operating the bigger vehicle is much safer - whether they need such a large vehicle or not.

Very true.
 
The media is also complacent in perpetuating the myth that Japanese and even European cars are more reliable. Yet that is not the case. I laughed at a friend of mine whom would not buy a NA auto because they weren't reliable so she bought a Rover LR3 (probably the most unreliable new vehicle).

http://www.jdpower.com/autos/ratings/dependability-ratings-by-brand

Outside of their up market (Caddy, Lincoln) badges, GM/Ford/Chrysler were clearly out done by Honda and Toyota.
 
There is an easy way out of this for the big 3. Show leadership. Look at what Toyota did with the Prius. They created a market where there was none. When all the naysayers said that a hybrid would not sell, they plowed ahead anyway. The big 3 should do that with diesel and hybrids. Bring their diesels over from Europe and expand their hybrid offerings. For example, would they think of selling a Cadillac in Europe without a diesel? They simply need to expand customer choice. Also, they should take the hit on profitability and increase standard features on their cars. That should really hit foreign automakers.
 
I think GM is trying to pull a Prius with the Volt.

Plug-in hybrids are a great idea--I hope they succeed.
 
I think GM is trying to pull a Prius with the Volt.

Plug-in hybrids are a great idea--I hope they succeed.

Meh, that's a terrible strategy. The volt just keeps on getting delayed and pushed back. And the cost is targeted to be between 35-40k. Hardly a volume car. Why can't they use the drive and batteries developed for the Volt to get a cheaper hybrid (non plug-in) asap? That would be more effective for sales....
 
Nothing is stopping them from doing that.

And Keith, electricity is so much cheaper than gasoline that it will make the lifecycle cost of a $35,000 car more palatable.

The Prius was also low volume when it was first released, Don't worry, as they iron out the bugs, they'll deploy the drivetrain in more models and the cost will go down. Really, a moderate volume car makes sense from a rick POV. If anything is substantially wrong with the first few model years, it would be catastrophic if they had sold hundreds of thousands of them. There are also issues with ramping up the manufacturing capacity for components (batteries especially).

It's a reasonable strategy.
 
Plug-In Hybrid Cars are truly a wave of the future, my hope is for them to be as common as a gas only car within 10 years.
 
Nothing is stopping them from doing that.

And Keith, electricity is so much cheaper than gasoline that it will make the lifecycle cost of a $35,000 car more palatable.

The Prius was also low volume when it was first released, Don't worry, as they iron out the bugs, they'll deploy the drivetrain in more models and the cost will go down. Really, a moderate volume car makes sense from a rick POV. If anything is substantially wrong with the first few model years, it would be catastrophic if they had sold hundreds of thousands of them. There are also issues with ramping up the manufacturing capacity for components (batteries especially).

It's a reasonable strategy.

Keep in mind the GM CEO said 35 000 was the low end of the price they were aiming at. Even at that range though, LCC will still be high if somebody drives more than 40 km a day. For example most parking spots don't have plugs to charge. So commuting from say Oshawa to downtown would probably require gas on the way back at least. If its a 30-40k car, then fuel becomes a smaller part of the LCC. And the folks who buy cars in that range are less sensitive to fuel costs.

That's not to say I don't like the Volt. I am excited to see this come out. But as far as a business strategy goes, I think they would have had more immediate benefits come out of taking the drive train and the batt and slapping it on to a colt. If Honda can make a Civic Hybrid, here's the response.

Lastly, they still insist for some idiotic reason on putting their eggs in one (the hybrid) basket. They have diesels in Europe. In fact as someone pointed out, American cars are huge in Europe and parts of Asia. But they refuse to bring the diesels to North America for fear of it not selling. That to me shows an utter lack of courage and leadership. Imagine if Toyota had thought that way with the Prius. And diesels sell. Here in Ottawa, VW has sold out the Jetta till March!
 
Plug-In Hybrid Cars are truly a wave of the future, my hope is for them to be as common as a gas only car within 10 years.

Even the automakers don't have that ambitious a goal. At the most hybrids share of the total fleet will rise 1% a year.....
 
Lastly, they still insist for some idiotic reason on putting their eggs in one (the hybrid) basket. They have diesels in Europe. In fact as someone pointed out, American cars are huge in Europe and parts of Asia. But they refuse to bring the diesels to North America for fear of it not selling. That to me shows an utter lack of courage and leadership. Imagine if Toyota had thought that way with the Prius. And diesels sell. Here in Ottawa, VW has sold out the Jetta till March!

Well, I wouldn't call an Opel/Vauxhall Astra an "American" car. There are quite a number of European car critics, most notably of CAR magazine, who would take great offense at this.
 

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