Buying Domestic...does it matter anymore? [Archive]

SSLL

08-04-2005, 10:23 AM

U.S. carmakers see Midwest dominance fade
By Sharon Silke Carty, USA TODAY
BURLINGTON, Iowa — On the banks of the Mississippi River here, farmers and local business owners gather Thursday evenings in the summer to hawk fresh corn, grapefruit-size tomatoes and homemade soaps.
The farmers unload their goods from the backs of Ford (F), Chrysler (DCX) and Dodge pickups. Once the tables and pop-up tents are in place, it's like a tailgating party.

In the middle of it all is Terris Cooper, owner of T Coop's House of Bagels and Bistro, who sells baked goods from behind his white Toyota Avalon. His is the only foreign-branded car in the lot, which doesn't surprise him.

Foreign automakers with manufacturing plants in the USA
Plant location Vehicles made there
BMW
Spartanburg, S.C. X5 and Z4
Honda
East Liberty, Ohio Civic and Element
Lincoln, Ala. Odyssey and Pilot
Marysville, Ohio Acura TL and Accord
Hyundai
Montgomery, Ala. Sonata and Santa Fe
Mitsubishi
Normal, Ill. Eclipse, Endeavor and Galant*
Warren, Mich. Raider*
Nissan
Canton, Miss. Infiniti QX56, Altima, Armada, Quest and Titan
Smyrna, Tenn. Altima, Frontier, Maxima, Pathfinder and Xterra
Subaru
Lafayette, Ind. Baja, B9 Tribeca, Legacy and Outback
Toyota
Fremont, Calif. Corolla and Tacoma
Georgetown, Ky. Avalon, Camry and Camry Solara
Princeton, Ind. Sequoia, Tundra and Sienna

U.S. automakers with plants in Mexico and Canada
DaimlerChrysler
Brampton, Ontario Chrysler 300, Dodge Magnum and Dodge Charger
Windsor, Ontario Dodge Grand Caravan, Chrysler Town & Country and Chrysler Pacifica
Saltillo, Coahuila, Mexico Chrysler PT Cruiser and PT Cruiser convertible
Toluca, Mexico state, Mexico Dodge Ram quad, regular and megacab and Dodge Ram SRT10
Ford
Oakville, Ontario Ford Freestar and Mercury Monterey
St. Thomas, Ontario Crown Victoria and Mercury Grand Marquis
Hermosillo, Sonora, Mexico Ford Fusion, Mercury Milan, Lincoln Zephyr
General Motors
Oshawa, Ontario Chevrolet Impala, Chevrolet Monte Carlo, Buick LaCrosse, Pontiac Grand Prix
Oshawa, Ontario Chevrolet Silverado, Chevrolet Silverado SS, GMC Sierra, GMC Sierra Denali light duty
Ramos Arizpe, Coahuila, Mexico Chevrolet Cavalier, Pontiac Sunfire, Buick Rendezvous
Silao, Guanajuato, Mexico Chevrolet Suburban, GMC Yukon XL, Cadillac Escalade EXT, Chevrolet Avalanche, Cadillac Escalade ESV
Toluca, Mexico state, Mexico Chevrolet Silverado and Chevrolet and GMC commercial trucks
* — Shares space with Chrysler.
Source: USA TODAY research

"That's because I live in town. The rest of these guys are farmers," Cooper says, laughing. The farmers, he says, feel compelled to buy American cars out of a misplaced solidarity with blue-collar autoworkers. "They think you're hurting the working man by driving a foreign car." But his car was made in Kentucky, he argues. "Who am I hurting?"

Attitudes about buying American cars are changing in the Midwest, once easy pickings for domestic automakers. And that could spell trouble for Detroit.

General Motors (GM) and Ford Motor face tough times, with their North American auto operations losing more than $3 billion combined so far this year. The last time they were in such a crunch, in the early 1990s, "Buy American" became a rallying cry, and in the Midwest, it was almost taboo to drive anything else.

But now, it's hard to tell if many people care. "We don't have people marching down the street saying 'Buy American.' There's no collective group rally of people saying we need to do that," says Steve Delaney, editor and publisher of Burlington's daily newspaper, The Hawk Eye.

U.S. automakers' stranglehold on much of the Midwest is eroding. From 2000 to 2004, their share of the Midwest market fell from 78.6% to 71.2%, according to R.L. Polk & Co., which tracks auto registrations. Asian automakers' share went from 17.6% to 24.2%. The Midwest — North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri, Wisconsin, Illinois, Indiana, Ohio and Michigan — is Detroit's biggest market. On the East and West coasts, Detroit vehicles make up about 50% of sales; in the South, they make up about 60%.

The automakers say what's happening in the Midwest isn't much different from what's happened all across the country: Asian automakers are aggressively opening dealerships and entering new segments — most notably, SUVs and pickups.

George Pipas, Ford's director of sales analysis, says any time a competitor opens a dealership, it leads to a decrease in market share.

Stopping the fall-off in heartland sales won't be easy for U.S. automakers, which face two problems:

• Asian automakers have branded themselves as quasi-American companies that are creating jobs in the USA while Detroit automakers continue to cut them. The fact that one of the traditional domestic companies, Chrysler, is now part of German-owned DaimlerChrysler further confuses the issue.

• With the economy stagnant in many parts of the Midwest, feeding job-security fears, Japanese automakers' reputations for cars that have high quality and low-cost maintenance are a lure to buyers.

Fuzzy borders

For a long time, it was clear what an American-made car was: Ford, GM and Chrysler were based in Michigan, used unionized American labor and relied on homegrown suppliers for parts. But thanks to 1994's North American Free Trade Agreement — which made it easier for U.S. automakers to build cars in Canada and Mexico — and to a push by Asian automakers to build cars in the USA, the lines aren't as clear anymore.

William Ealey, a retired Caterpillar line worker and World War II veteran, is a Buick man. Volunteering to take tickets at a demolition derby at the Christian County Fair in Taylorville, Ill., Ealey wears a T-shirt emblazoned with the American flag and the slogan, "Taking Pride in the United States of America." He acknowledges a bias against German- and Japanese-made cars because of his time in the war, when both groups were unequivocally the enemy.

His definition of an American-made car: one manufactured within U.S. borders by American employees of U.S.-based companies. "The rest of that stuff, it's not American," says Ealey, who drives a 1999 Buick Century.

When told that his Century actually was made in Canada, Ealey is visibly surprised. He pauses a moment, sets his jaw and says it doesn't matter. "They're American. They've always been American."

But it's that kind of border crossing that makes buying an American car seem like less of a civic duty for many. Japanese companies, most associated with the auto industry, accounted for 94,000 jobs in Michigan and Ohio last year, according to Japan's consulate general in Detroit, and are growing at time when other companies are shrinking.

Toyota is planning a new technical center in suburban Detroit. South Korea's Hyundai is attracting attention for its new plant in Alabama, thanks in part to a massive ad campaign showing how red, white and blue the factory is.

What really makes a car American? "I don't know, because I don't understand the entire picture," says Jack Raleigh of Decatur, Ill., a domestic-car owner. "You look at the Hyundais made in Alabama and the Toyotas made in Tennessee, and those are American jobs. And the American automakers, they're closing plants and taking away jobs. So I don't know."

Says David Shepherd, a Ford, Chrysler, GM and Toyota (TM) dealer in Fort Scott, Kan.: "It's pretty hard anymore to identify the national origin of a product by its name. ... There really isn't a truly American-made and manufactured vehicle like there may have been at one time. That has changed attitudes."

"The whole identity of a product is much less clear than it used to be," says David Cole, chairman of the Center for Automotive Research. "It reflects a true global integration of the auto industry. We are in an integrated economy, and that's life." Cole doesn't think U.S. automakers will resort to flag-waving anymore. "They just don't think it's appropriate, they don't think it will resonate that well. I think they believe that day has passed."

Tight pocketbooks

Shepherd opened his Toyota dealership in Fort Scott in 1988, after he learned people were going to Kansas City to find cars that were more reliable than the domestics they were driving. In the heart of the Little Ozarks, Fort Scott's economy relies on the fluctuating farming and tourism industries.

People here tend to buy used cars because they can't afford new. When they do buy a new car, quality is an issue, Shepherd says.

While the domestic automakers are catching up in that arena, the message hasn't gotten through, he says. "When we became a Toyota dealer, there was a huge quality gap. That gap has closed dramatically to the point where, in some cases, probably the domestics have surpassed Toyota. But the psychological gap for many folks still exists."

In the Springfield, Ill., area, farmer Stan Schutte says money is tight. Smaller farmers are being squeezed out by international operations, and manufacturing jobs are hard to come by. Job uncertainty affects the way people approach buying a car.

"Sometimes, a car is the biggest purchase you'll make in your life," he says. People turn to Japanese cars because "they're cheaper, more reliable. That's just the way it is."

Paul Ballew, GM's director of global market and industry analysis, says it could take until the end of this decade for perception to catch up with the domestic automakers' quality gains. "To get that message along, it's a drip-drip-drip effect," Ballew says. "To break through, it takes awhile. You have to be patient. You have to stick to your message."

Because they tend to hang onto their cars for years, people in the Midwest have long memories.

More than a decade ago, Springfield resident Marilyn Ferry says she was backing out of her driveway in her nearly new Mercury Villager minivan when the engine sputtered to a stop. Ferry, who still had payments left, thought the problem could be fixed. She says the dealer said it could, but only if she paid for a new engine. The experience soured her on U.S.-made cars.

She bought a used Honda Odyssey minivan, which has lasted since 1995 with only regular oil changes and no other issues.

"It isn't that I'm anti-American. I just really wanted a stable car you can count on," says Ferry, who is relying on the Odyssey to last for at least another year. "I think American cars have improved, but I'm not sure I want to take that risk."

Ironically, Ferry's Mercury minivan was designed by Nissan and powered by a Nissan-made engine, but built at a Ford plant in Avon Lake, Ohio.

Spotty loyalty

At the fair in Taylorville, Miss Christian County makes a tour, stopping to pet a prize pig and giving a hug to an adoring 8-year-old fan. Tabitha Spinner, 20, arrived at the fair in an Oldsmobile Alero, not surprising, because only three cars parked on the dirt lot were foreign brands.

"I like American cars. I think everybody should drive American cars," she says.

It might seem like a bit of politicking, but Spinner lives in the heart of one of the remaining bastions for Detroit automakers. Christian County is populated with 11 times more acres of corn and soybeans than people. Folks here like their Ford, Dodge and GMC trucks. Anything else is considered unpatriotic and damaging to the American way of life.

That's how it used to be in most of the Midwest, even in the big cities. Neighbors would chide drivers of non-American-made cars, and small-business owners feared offending customers if they were seen in a Honda.

But that's changing.

Just 25 miles north of Taylorville in Illiopolis, Ill., the Prairieland Dance Club meets every Wednesday night for a couple of hours of line dancing and socializing. Dance club president Suzi Morrow and her husband have never felt compelled to buy a car simply because of where the parent company is based. Morrow's brother-in-law is a car salesman, so the family bought cars at a discount from wherever he worked. In the 1980s, Morrow was one of the few people in her neighborhood to own a Japanese car.

People talked.

"They would be critical," says Morrow. "They would act like the Ford or Chevy they were driving was a more reliable and better car. They would say things like, 'You drive a Jap car?' or some of the even more unsavory descriptions of people from Japan." It made her uncomfortable, even when people tried to act like it was all just good-natured ribbing.

Now, Morrow's Toyota Sienna minivan has plenty of company in the Prairieland parking lot. Of 21 cars, nine are foreign brands. She'd be surprised if anyone made a derogatory comment toward her or her car now. "I'm glad those days are over," she says.

What's the best deal?

Bill Shea, owner of Shea's Gas Station Museum on historic Route 66 in Springfield, says buyers are growing immune to a brand's national origin and are just looking for the best deal.

That might be true. According to J.D. Power, domestic market share bounced back significantly for the first half of the year, thanks to GM's "Employee Discount For Everyone" promotion. GM's program was so successful in June that Ford and DaimlerChrysler matched it in July. The employee-pricing plans were scheduled to end Monday, but Ford and GM are extending discounts on 2005 models until Sept. 6, and Chrysler is extending the deal indefinitely.

The gain in market share "is all based on incentive," says Tom Libby, Power's senior director of industry analysis. He expects a reversal of that trend after the promotions end.

The success of the employee-discount deals, like the growing popularity of foreign brands in the Midwest, would be no surprise to Shea. "People don't care what the name on it is," says the 83-year-old World War II vet. "You could put my name on it or your name on it, and they don't care. It's all about the price."

edluva

08-05-2005, 10:15 AM

it hasn't mattered for over a decade.

shortydee999

08-09-2005, 11:02 PM

It never matter to me.

Lost Island

08-15-2005, 04:48 AM

Wal-Mart doesn't even make any appearances as such anymore...

innov8

08-27-2005, 07:03 AM

As far as cars go... I always buy foreign.

subterranean

08-27-2005, 08:10 AM

personally, (and i'm from michigan), I find the foreign cars more appealing.

still, i think it's only a matter of time before things start leveling out. the big 3 had their reign. they'll dip for some years to come, but things will level out.

Jersey Mentality

09-05-2005, 07:13 PM

No its doesnt matter, especially with nearly all out industrial base moving overseas, the only industry here in the states maybe controlled by foreign companies.

SSLL

09-12-2005, 11:16 AM

'Foreign' cars rolling out of U.S. factories
Royal Ford
Boston Globe
Sept. 12, 2005 12:00 AM
Next time you see a new foreign-brand automobile, odds are it was made in America.

Toyota, Honda, Subaru, BMW, Mercedes-Benz, Hyundai and others - more than 40 models of foreign cars, minivans, SUVs and pickup trucks - are rolling off assembly lines at 15 plants in the United States so rapidly that last year brought a tipping point.

For the first time, more foreign-brand vehicles sold in the United States were built here - 3.7 million - than were imported - 3.4 million - according to the Center for Automotive Research, non-profit auto-industry analysts in Michigan.

That's a sea change from 20 years ago when 460,000 foreign-brand vehicles were built in the United States while 3.6 million were imported, according to the automotive forecasting wing of J.D. Power and Associates, a California information-service company.

The latest Power projections for 2005 estimate that 4.8 million of the 7.2 million foreign vehicles that will be sold here will be built here.

The evolution reflects automakers' strategy to build plants closer to buyers, the ever-growing popularity of foreign-brand vehicles and the blurring of what "made in America" means.

Is the wildly popular Chrysler 300C a foreign car because Chrysler now is owned by the German company DaimlerChrysler AG? What about a Honda Odyssey minivan, built by American workers and rolling off an assembly line in Lincoln, Ala., or the first big Toyota Tundra pickup to roll out the doors of a new plant in the heart of hard-trucking Texas?

To many people, it doesn't matter. "A brand's a brand, and people don't care where it originated," said Ron Harbour, president of Harbour Consulting, a Troy, Mich., manufacturing and management consulting firm.

"They can't tell you where it was built or even what country it was built in."

Lonnie Miller, director of industry analysis for R.L. Polk & Co., a Michigan auto information and marketing firm, said that a new generation of young buyers, increasing populations of Asian and Hispanic Americans, even increasing numbers of older buyers choose vehicles not based on brand loyalty or national fealty, but on "what car best fits their image, or the car rated most reliable or most fun."

He called the change "a fundamental shift to what the car is offering as opposed to the hood ornament."

The establishment of foreign plants in the United States gives their manufacturers the economic advantages of cutting huge overseas shipping costs and of protecting themselves from fluctuations in currency values.

The bulk of these plants are new, modern and more nimble than Detroit's facilities.

Foreign-owned plants offer the flexibility to build as many as four or five models in the same factory, nearly double that at many American plants. This is a critical advantage in an automotive age where runs of as few as 30,000 of certain models are all that are needed to fill a crucial niche in sales.

What's more, foreign brands use their American presence to persuade even loyalist American-only buyers that the vehicle they are buying is American-made.

Honda, with plants in Ohio and Alabama, is having success selling Americans that "even though it's a foreign brand, it's a domestic vehicle," said Mike Chung, an analyst for the automotive Web site Edmunds.com.

Toyota said one reason it is building its near-billion-dollar pickup plant, capable of producing 200,000 Tundras per year, in San Antonio is that it goes right to the heart of the American vision of trucking: big, wide open, rugged.

"It's the first time we chose a location for marketing reasons," said Dan Sieger, spokesman for Toyota Motors North America. "Texas is the biggest pickup market in the country, probably making it the biggest in the world, and to have a truck built by Texans can only make it better."

The culture change is dramatic. In the 1970s, more than 70 percent of the vehicles sold in the United States were American-made, but by last year domestic sales had fallen, to 58.6 percent.

On the East and West coasts, the split is almost even, according to R.L. Polk. The differences are wider elsewhere. Only the South (60.4 percent domestic) and the Midwest (71.2 percent) are keeping American manufacturers in the lead.

The gap continues to close. Polk's Miller noted that states the U.S. Census Bureau ranks among the fastest growing - Arizona, California, Florida, North Carolina and Texas - are hotbeds of growing populations of young and immigrant buyers who prefer foreign-brand vehicles.

The surge in gasoline prices certainly could close the gap further.

Any significant turn from SUVs and trucks, which burn more gas, easily could nudge Americans to foreign vehicles, which have a better reputation for fuel efficiency and quality.

COtoOC

10-06-2005, 09:09 PM

My parents always were and still are big on buying American cars. I also saw what pieces of crap they were even as a kid. My first couple cars were GMs and they were total crap. After buiyng a Japanese car and realizing that 3 year old cars don't have to cost $300 a month in repairs to keep them running, I've never had anything but foreign cars. Funny though, because my parents' Dodge and Chrysler were made in Mexico and Canada but my Nissan was made in the U.S.

I'll buy American when they can build a reliable car, but somehow I think GM will go out of business before that happens.

James Bond Agent 007

10-09-2005, 03:22 AM

SSLL

10-09-2005, 11:29 AM

Some of the new domestic cars are awesome, and a lot of them are really reliable.

edluva

10-12-2005, 07:49 AM

^
Why do so many people still think Detroit makes only crappy cars?

Has anyone looked at quality rankings lately (like JD Powers)? Detroit cars hold their own against European and Japanese cars these days.

there's an ocean of difference between mere quality, and refinement. just because american cars don't fall a part anymore doesn't mean they're going to be desireable.

James Bond Agent 007

10-12-2005, 08:03 AM

COtoOC

10-13-2005, 09:42 PM

^
Why do so many people still think Detroit makes only crappy cars?

Has anyone looked at quality rankings lately (like JD Powers)? Detroit cars hold their own against European and Japanese cars these days.

Because I've driven them and had family members who've driven them. I still see things like my parent's PT Cruiser that had a bad oil leak around 30K miles and someone at work who had to replace an entire engine in a 4 year old Malibu. I can also see how terrible GMs especially have aged. A 10-year-old GM usually has fading paint, broken parts and generally looks like crap. Granted it makes a difference if the car is garaged and well-driven. I also dislike the styling of pretty much any Chrysler product with their new "muscle car-ish" designs and many GMs look like 10-year-old styling, although they're starting to catch up on styling. I think the new Cobalt is a decent looking car (I'll only consider small, high-mileage cars) but I doubt if I'd buy one because I'd be afraid of getting burned when it starts falling apart in 3 or 4 years. Ford's styling isn't bad either.

Those quality ratings really don't tell you much. Most are based off how many of a certain model come back to the shop in the first 6 months or first year. To me the real quality is when you can hit 100K miles without anything other than expected maintenance. That's why I drive a Nissan.

Jersey Mentality

10-13-2005, 10:47 PM

^ yeah I just bought a Nissian myself, well my insurance did after my Buick got totaled. I never had problems with that Buick although it was a 2001 it ran good up until that accident.

James Bond Agent 007

10-14-2005, 01:44 AM

Well I had a Honda Civic once which had plenty of problems. Maybe it's just a matter of luck.

COtoOC

10-14-2005, 05:09 PM

Well I had a Honda Civic once which had plenty of problems. Maybe it's just a matter of luck.

I definitely think there's a "luck factor" involved. That and the way you drive and take care of your car.

edluva

10-18-2005, 06:45 AM

^
COtoOC's comment was about American cars not being "reliable." I merely was responding to that.

Obviously different people will have different stylistic tastes in cars, so if someone happens to like the designs of Nissans compared to Chevy's, there's no way to dispute that. But that's merely a subjective criteria.

I understood your point. I was merely pointing out that yes, while refinement is a subjective criterion, most people would be able to differentiate between a Saturn and a Lexus, despite the fact that JD Power says neither of them fall apart quickly. refinement counts, even if it's not quantifiable.

James Bond Agent 007

10-18-2005, 07:02 AM

Whatever . . .

edluva

10-18-2005, 07:11 AM

I'll take that as a reply then.

Evan

10-21-2005, 11:33 AM

I live only 35 miles from the Honda factory in Lincoln, Alabama and it has for the most part, saved this town. Our 2nd largest industry closed down a few years ago, putting 1800 people on the street. 900 people from my county now work at Honda, another few hundred people work at the numerous feeder/supply plants that sprang up in counties surrounding the factory, including my own. Luckily, the Honda plant was already about to open when Gulf States closed down, so people here just played the waiting game until the plant started hiring.

As for reliability, I own a Toyota 4-Runner, a little Ford Ranger for buzzing around town, and a Ford Mustang I've had since I was in high school.

The 4-Runner has been recalled twice, for small things, but it is hella reliable. It isn't driven as much now since gas went through the roof, but it is a good solid SUV that has caused me no real problems.

On the other hand, you could drive my little Ranger into the river, and it would still start up and run. It is a cheap little truck, but solidly built and it has 98,000 miles on it and i have had zero problems with it.

The Mustang has become more problematic, but it is nearly 20 years old and has over 160,000 miles on it, but overall, it has been an amazing auto, causing me very little trouble. It has taken me across the country twice without incident. I am really going to be sad when that car finally dies, because I have never loved a car like I love that one, but the body is going to fall apart long before the engine does.

I guess what I am trying to say is, yes Detroit has and still can build some shit, but I also have to be fair and say that my experience with American cars has overall been positive. I would not be afraid to go down and put my hard earned money on an American car. In the 70's no. They were shit. In the 80's they improved alot in reliability, they were just rather generic looking. These days though, I have no issues with most American cars.

Sorry for the long post.

pablosan

10-28-2005, 04:14 PM

How many foreign components are in American made products? At this point global industrialization has changed they way things are manufactured.

edluva

10-29-2005, 05:36 AM

^american auto is the still same same cash cow that produced junk two decades ago. it's just a lot more globalized. the way things are manufactured hasn't really changed all that much. gm and ford are still unable to innovate because they're still lagging in per-vehicle cost compared with foreign counterparts - their focus on the suv and truck segment has kept them afloat until now. the amount of liability inherited from organized labor and poor management are to blame. the origin of parts or labor has very little to do with it.

PA Pride

10-29-2005, 02:12 PM

Evan

10-30-2005, 11:55 AM

That article is ridiculous.... Why would anyone only buy American made products just because it's got a sticker of old glory on it? As a smart consumer, everyone should be buying the best quality item for the best value, no matter what country it's made in and that is what determines which company sells the most product. Do you think someone in Japan should only buy products made in their country? If a foreign construction company refused to buy Caterpillar machinery then people in the US working for Caterpillar would be losing their jobs.... It's been proven over and over that free trade among all the countries of the world is what creates compeitition and forces better quality merchandise to be made for the cheapest price possible. It's a win-win for EVERY economy. You can't have a protectionist attitude towards global trade or you will get left behind in economic competitiveness.

Why can't hillbillies understand how a global economy and a free market system work?

Does ANYONE agree with me?

Dude, I agree with you. I won't buy something just because it has a "Made In USA" sticker on it. If I do buy an American auto, it is because it suited my needs, like my truck did, but I don't base my buying decisions on where something was made. If that were the case, I would have no televisions, no DVD players, no VCR, blah blah and so forth.

The American mindset of many is still stuck in the 1970's when the entire country was pounding on the BUY AMERICAN tom tom, and running around slicing the tires on Japanese cars and throwing their Sony products in the river. That's some ig'nunt redneck bullshit that unfortunately, is still in pockets all around the country.

I buy what I need, and like most people I consider price, needs, and my situation when making decisions. I don't give 2 farts in the wind where something was made. Toledo or Toykyo. Evan doesn't care, just give me a good product at a good price and I'm happy.

I am every bit as likely to buy an American product as an imported one IF it suits my needs and my price range, and vice versa, but I won't buy something just because it was made in an American factory by American workers.

This is the real world not a fantasy land. Like I said in my post above, I have no issue with the reliability of American cars these days, but that doesn't mean I am going to run out and buy a shitty base model Chevy just because its American when I can get a shitty base model Toyota for the same and sometimes, even lower price.

There is such a thing as national pride of course, but there is also such a thing as just being a dumbass redneck thinking that if it wasn't made in America, then you don't want it.

phillyskyline

10-30-2005, 03:19 PM

I agree w/ both of you. I only buy foreign cars myself. My Dad is still driving his '93 Toyota Camary with 202K miles around with no problems! That is some ingenuity.

lost carolinian

11-20-2005, 05:27 PM

James Bond Agent 007

11-21-2005, 12:37 AM

My in-laws, on the other hand, still have that irrational will to buy domestic.
There's nothing irrational about it.

lost carolinian

11-23-2005, 02:17 AM

Actually, I can't really blame them. They've not had my luck with American cars, and Chevrolet seems to be on the better side of quality, as far as domestic alone is concerned.

After MY Saturn and Ford experiences, on the other hand, it would be highly irrational for ME to ever buy American again! Shame on me once and twice. Not about to repeat. ;)

edluva

11-23-2005, 02:36 AM

Shame on me once and twice. Not about to repeat. ;)

fool me once, shame on ... shame on you... if fooled i can't get fooled again

James Bond Agent 007

11-23-2005, 02:50 AM

To be honest, I don't really understand this "Japanese cars last longer" stuff. I see WAY more old American cars on the road than old Japanese cars.

edluva

11-23-2005, 03:12 AM

i thought you already established that american cars have caught up in reliablilty.

James Bond Agent 007

11-23-2005, 03:26 AM

lost carolinian

11-23-2005, 03:30 AM

To be honest, I don't really understand this "Japanese cars last longer" stuff. I see WAY more old American cars on the road than old Japanese cars.

What, like at Carlisle in September?

j/k

Define "old."

James Bond Agent 007

11-23-2005, 03:45 AM

^
Older than about 10 or 15 years.

I almost *never* see a Japanese car older than 15 years old still on the road.

But I still see old junker American cars on the road *all the time* - and I'm not just talking about collector cars.

For one example, last fall I used my boss' father's '78 Plymoth station wagon for about a month. Though it certainly had problems, it still ran and was in OK shape.

In contrast to that '78 Plymouth, I can't possibly remember the last time I saw a '78 Honda or Toyota still on the road.

lost carolinian

11-23-2005, 03:48 AM

^
That was my whole point.

In spite of the fact that I pointed that out, there's still a lot of people in this thread claiming that American cars break down easier and don't last.

But if that's true, then how come I still see so many Chevy's and Fords from the 60's, 70's and 80's on the road, but very few old Toyotas or Hondas.

When was the last time you saw a 70's or 80's Corolla still on the road? I probably haven't seen one for five or ten years.

On the other hand, I see old American cars on the road *all the time*

Ahh, that's your "old." That's in part because prior to the eighties the Japanese models WERE crap! According to my almanac, the US market for Japanese cars did not really pick up until the mid-eighties.

The real answer to your question, however, lies in the fact that domestic sales have always been greater than foreign. In 1985 for example, domestic sales were 8,204,542 units versus total import sales of 2,837,745. Simply more domestics on the road to begin with.

Japanese sales actually decreased steadily and consistently over time relative to domestics. Hmmm, could this be because Japanese cars LAST?!

A truly fair comparison would be percentage remaining on the road by class (dom., for.) and model year.

lost carolinian

11-23-2005, 03:55 AM

He heh. I bet in France all of the cars on the road are new because:

Quote: "On an average Saturday night in France, he said, youths burn about 100 cars."

http://www.cnn.com/2005/WORLD/europe/11/13/france.rioting.ap/index.html

Never mind the riots!

:haha:

James Bond Agent 007

11-23-2005, 03:57 AM

^^
I disagree. I don't know how old you are (I'm 41), but there were tons of people buying Japanese cars in the 70's and 80's . . . and one reason why people bought them was because they were purportedly of better quality than American cars. I had a 79 Honda Civic for a few years. But it had plenty of problems.

If there was about an 8:3 ratio of domestic to foreign cars sold in 1985, how come (aside from European cars), I *still* see FAR fewer foreign cars from around 1985 on the road than American cars? The ratio of American cars to Japanese cars from around 1985 that I still see on the road is more like 15:1, not 8:3.

Based on what I see on the road, I have no choice but to conclude that American cars last longer than Japanese ones. Start observing this yourself: Look around at all the old cars you see on the road, and notice how few of them are Japanese, and how many of them are American (and lots of European ones, too).

James Bond Agent 007

11-23-2005, 04:01 AM

Japanese sales actually decreased steadily and consistently over time relative to domestics.
No way!!!

You yourself just said that Japanese car sales started taking off in the mid-80's. Now you're saying that their market share has been declining????

If the Japanese market share has been declining, then how come GM is having to lay off 30,000 due to overcapacity and declining market share? (Ditto Ford)

lost carolinian

11-23-2005, 04:14 AM

James Bond Agent 007

11-23-2005, 04:40 AM

No way!!!

You yourself just said that Japanese car sales started taking off in the mid-80's. Now you're saying that their market share has been declining????

If the Japanese market share has been declining, then how come GM is having to lay off 30,000 due to overcapacity and declining market share? (Ditto Ford)

Pick up an almanac and look at the hard DATA. Share on the rise from 1980, peaked in 1986, on the decline from there.
Japanese market share is currently at an all-time high:
--> Click here (http://www.finfacts.com/irelandbusinessnews/publish/article_10003794.shtml) <--

You're basing your entire argument on your demographic area. I live in yuppie Volvo-land, and it's primarily Japanese and European where I live.

This is even more the case on the West Coast (where I live) than any other part of the country.

About half of the cars sold here are foreign - mostly Japanese. It's been like this almost ever since I moved here in '88.

And in spite of that, I *still* see far more old American cars on the road here than Japanese cars. I see very few Japanese cars from the 80's on the road anymore, while American cars from the same decade are still fairly common.

WRT your second comment, I believe that all boils down to good old supply and demand does it not?
Yes, it's supply and demand. Demand has been greater and increasing for Japanese cars, and declining for American cars. In other words, domestic makers' market share has been going down, and foreign (mostly Japanese) market share has been going up.

SSLL

11-23-2005, 10:26 PM

GM cuts jobs, will shut plants
It’s company’s largest reduction since 1991

By Rick Popely
Tribune staff reporter
Published November 21, 2005, 9:52 PM CST

General Motors Corp., confronting the biggest challenge in its history--survival--swallowed a bitter pill Monday and announced a massive plan to shrink itself.

The company that once dominated the global auto industry but is now hemorrhaging losses said it will reduce its North American manufacturing capacity by nearly 20 percent, or 1 million vehicles. It will close four assembly plants, one production line at another plant and four other production facilities by 2008, eliminating 30,000 jobs, most through attrition.

The decision represents the largest-scale cuts GM has undertaken since it closed 21 North American plants and eliminated 74,000 jobs over four years starting in 1991.

When the slashing is done, GM will be configured to build 4.2 million cars and trucks in North America, enough to supply as much as one in four vehicles that Americans buy. But it is almost certain that GM will never again dominate the industry as it did in the 1960s when it manufactured more than half of the vehicles on the road in the U.S.

"They absolutely had to do this," said analyst Rebecca Lindland of research firm Global Insight.

What's more, GM's decision to take significant capacity out of the industry is likely to level a devastating blow to the already struggling auto supply industry.

Several suppliers teetering on the brink may soon follow auto supply giant Delphi into bankruptcy, forcing the elimination of more manufacturing jobs while putting even greater pressure on the Midwest economy, analysts say.

Even after the cuts, GM will be in a position to be America's biggest automaker, but with a diminished margin over hard-charging Toyota. Of much greater significance is that the company hopes to post a profit on that scale of business, though its fortunes have fallen so far there is no guarantee the company will recover.

This year, GM is on track to lose at least $4 billion. Saddled with the high cost of union labor and facing intense competition by nimble Japanese and South Korean car companies, as well as an accelerating Chrysler Group, GM has seen its market share drop 4.6 points since 1997.

Adding to its woes, Delphi, its major auto parts supplier, is threatening to strike, possibly costing GM even more money if its supply line is disrupted. The situation is so bad that some analysts are counting GM's cash hoard--still a voluminous $19 billion--and calculating how long before America's most venerable manufacturer runs out of money and must file for Chapter 11 itself.

GM had signaled it was ready to take drastic action, but Monday's announcement was bigger in scope than expected. Originally the company was looking at cutting 25,000 jobs.

GM's plans were announced in Detroit by Chairman and Chief Executive Rick Wagoner, who has been under growing pressure to turn around the struggling automotive giant. The idea is to wring efficiencies by cutting production capacity until it is in line with sales.

Global Insight estimates GM's 30 North American assembly plants are running at 78 percent of capacity this year. With the closings, it projects GM will run at 95 percent by 2009, even as its U.S. market share shrinks to 23 percent from the 26.6 percent it had through September.

"This will get them more to where they need to be in production capacity," Lindland said. "The ideal situation is to run your plants 24/7."

GM held 31 percent of the U.S. market as recently as the mid-1990s.

"It's unrealistic to expect them to get back to 30 or 35 percent," Lindland said. "They're better off restructuring to 23 percent [market share]. Anything above that is a bonus."

If demand exceeds GM's reduced capacity, plants can work overtime or add third shifts, Lindland added.

Toyota No. 1 by '06?

Toyota's U.S. share has grown to 13.2 percent this year from 8.1 percent in 1997. As GM retrenches and Toyota expands, the Japanese company could overtake GM as the world's largest automaker, based on production volume, as early as next year.

GM has lost $3.8 billion so far this year, mainly in North America, and its credit rating has dropped to "junk" status, raising the question of future viability.

"These actions are necessary for GM to get its costs in line with our major global competitors," Wagoner said in a teleconference.

He did not give a timetable for GM to be profitable but said the cuts would reduce annual operating costs by $7 billion by the end of 2006--$1 billion more than a previous target.

Most of the 30,000 blue-collar job cuts will be made through attrition, but Wagoner said some would be through early-retirement buyouts. He said restructuring costs from buyouts and plant closings would be "significant" but gave no details.

Buyouts costly

J.P. Morgan analyst Himanshu Patel estimates that buyouts of union workers would average $80,000, and the tab could hit $917 million. "Other restructuring charges could equal or exceed this buyout amount," Patel said in a research note.

GM's restructuring sets up contentious contract negotiations in 2007 with the United Auto Workers, which decried the cuts as "extremely disappointing, unfair and unfortunate." The UAW represents 107,000 GM workers, nearly half of whom will be eligible for retirement in the next three years.

GM can idle plants before the contract ends in September 2007, but closings are negotiated as part of new contracts. UAW workers laid off next year will be placed in a "jobs bank" and receive most wages and benefits through the contract if there is no work for them.

The union and GM are in talks about plant closings and the fate of the affected workers, and GM is expected to press the UAW to eliminate the jobs bank. The union also fears that GM will import more cars from Daewoo, its Korean subsidy.

"Today's announcement clearly makes those negotiations much more difficult," UAW President Ron Gettelfinger said in a statement. "Workers have no control over GM's capital investment, product development, design, marketing and advertising decisions. But, unfortunately, it is workers, their families and our communities that are being forced to suffer."

Janesville plant spared

Several analysts had identified GM's Janesville, Wis., plant as a likely candidate for closing because it builds full-size sport-utility vehicles, whose popularity has taken a hit recently. But the plant, which opened in 1919, survived the cut.

Those assembly plants closing are located in Doraville, Ga., Oklahoma City, Ontario, Canada, and Lansing, Mich. One Saturn production line at Spring Hill, Tenn., also will close. Among the other facilities to be shut down are stamping and powertrain plants in Lansing, Pittsburgh, Flint, Mich., and Ontario.

Though it has prodded GM to take such drastic action, Wall Street was underwhelmed by the news. Merrill Lynch analyst John Casesa said that's because the cuts won't address GM's biggest problem: a lack of products that compel consumers to buy.

"Ultimately, to successfully restructure GM there will need to be a significant increase in product investment," Casesa said. "It is impossible for GM to cost-cut its way to sustainable profitability."

GM's shares fell 47 cents Monday to $23.58 in New York Stock Exchange trading. The stock had gained $2.95 Thursday and Friday after Wagoner told GM employees the company was not considering bankruptcy.

Ford Motor Co., which faces struggles of its own, expects to announce plant closings and job cuts in JanuaryPart of that plan emerged last week when workers were told in a company-wide e-mail that 4,000 white-collar jobs would be eliminated in 2006.

SSLL

11-23-2005, 10:27 PM

What bankruptcy would mean to GM

Plunging market share, huge layoffs and a copycat filing by Ford. Those are just a few of the likely outcomes if GM can't avoid bankruptcy court.

By Robert Walberg

Rick Wagoner, chief executive of General Motors, has tried to comfort investors by saying GM has no plans to file for bankruptcy protection.

Cold comfort, I'd say. The company's deeds, if not the CEO's words, point to an acute need for some sort of bankruptcy plan, even if just as a contingency. Consider: GM (GM, news, msgs) lost nearly $4 billion over the last year; its credit rating dropped to junk status; car sales plunged as GM built bigger cars and trucks just as gas prices skyrocketed; its cash horde has been cut nearly in half; and its leading parts supplier, already in bankruptcy, faces a possible strike that could shutter GM plants for weeks if not months.

It would be irresponsible of management not to at least have some bankruptcy plan in the works, so that if the worst-case scenario did play out, they would be ready with a recovery plan. Below, I'll outline what a GM bankruptcy might look like, and how it would impact workers and competitors.

No leadership, no vision
First, a quick look at what management is doing now. GM's main push in coping with its current troubles is to cut back production deeply enough to create a balance between supply and demand. To achieve this objective, management announced that it will be closing a total of 12 plants and support facilities and slashing 30,000 employees by the end of 2008.

Basically, this course is a tacit admission by management that it has no interest in developing a plan to increase customer demand for its cars. That would require real vision, real leadership and real innovation. These are not traits Wagoner has displayed to date.

lost carolinian

11-24-2005, 02:09 AM

Japanese market share is currently at an all-time high:
--> Click here (http://www.finfacts.com/irelandbusinessnews/publish/article_10003794.shtml) <--

Right, and in this case the market trend upward can be attributed to different reasons (as the articles describe).

I'll give you the benefit of the doubt that your observation about seeing more older American cars on the road in your area is valid.

One thing that occurred to me is that older American cars may be more appealing to work on than foreigns (??). I don't know. Just a guess. At some point any car is going to require repair in its lifetime. I have a 1970 Olds quietly rusting under a cover patiently waiting its one day restoration. Personally, tinkering on an '85 Civic wouldn't be as gratifying. Perhaps to someone else.

But a newer American car for day to day? Not for this customer.

edluva

11-24-2005, 08:04 PM

^^
Based on what I see on the road, I have no choice but to conclude that American cars last longer than Japanese ones. Start observing this yourself: Look around at all the old cars you see on the road, and notice how few of them are Japanese, and how many of them are American (and lots of European ones, too).

that is a faulty conclusion. there are cultural factors that might explain why people who were likely to purchase american cars during that time choose to keep their cars, while those who purchase japanese weren't. my 97 accord is running tip top at 190,000, but i'm already looking for a new car anyways. my neighbor tinkers with his 83 chevy all day long, but it's always been his baby.

also, you're going by personal observation. where you live might not be the case elsewhere. and the quality of japanese cars WAS superior to domestic in the 70s-80s. that has never been a controversy. even domestic auto admits it.

sequoias

11-24-2005, 10:25 PM

I have known that Japanese cars last longer on average than American from what I've seen, tho it depends how the owner takes care of the car and reliabity varies by mileage and owner.

My car has 80,000 miles on it and still runs fine, It's a 1994 Honda civic, too. I had a 1983 Honda Civic and it still ran fine with 210,000+ miles on it and broke down only ONCE because of the manual transmission went out and got it rebuilt and back up running again, during my mom had it and gave it to me. Also, my parents 1993 Honda Accord had 175,000 miles on it and still ran great, sold it and got a 2005 Honda Accord. Also, the 1986 Nissan truck they had had 138,000 miles on it and still runs solid.

Let me tell you this, I'm a bit surprised to hear my co worker has a 1986 Oldsmobile Cutlass with 500,000 miles on it and still runs, but beginning to fall apart. It's american...don't ask me how it still runs. :-P

My girlfriend has a 1991 Pontiac Sunbird, it breaks down almost all the time and has problems time to time.

SSLL

11-24-2005, 10:31 PM

Toyota is poised to race past GM
By Hans Greimel
THE ASSOCIATED PRESS
Wednesday, Nov. 23 2005

WHAT'S HAPPENING: General Motors could lose its title as the worldwide leader
in automobile production.
WHY: Toyota is increasing its production in the United States, while GM is
cutting its North America factories.
WHAT COULD CHANGE: GM is making gains in Asia, which could hold off Toyota's
claim.

TOKYO

Toyota Motor Corp. is quickening its quest to unseat ailing rival General
Motors Corp. as the world's biggest automaker with reported plans to start
manufacturing up to 100,000 Toyota vehicles at a Subaru factory in Indiana.

Word of Toyota's ramped-up production schedule comes only days after
money-losing GM said it will close 12 facilities by 2008 in a move that will
slash the number of vehicles it is able to build in North America by about 1
million a year.

The combined developments could help Toyota surpass GM in worldwide production,
although it's unclear if that would happen because Detroit-based GM is growing
rapidly in Asia.

Toyota expects to produce 8.1 million vehicles this year, while GM expects 9
million, according to Greg Gardner of Harbour Consulting, a manufacturing
consulting firm.

Toyota will also chip away at GM's lead with a new pickup plant scheduled to
open next year in San Antonio that will add 200,000 vehicles to Toyota's annual
capacity.

The Japanese company's output will be boosted by another 100,000 vehicles in
2008, when Toyota's new RAV 4 plant comes online in Canada.

Under the latest expansion plans, the world's No. 2 automaker has asked Fuji
Heavy Industries, maker of Subaru autos, to start building Toyotas in 2007 at a
Lafayette, Ind., factory operated by Fuji's wholly owned subsidiary, Subaru of
Indiana Automotive, the Asahi newspaper reported Wednesday, without identifying
its sources.

Company representatives were unavailable for comment on Wednesday, a national
holiday in Japan.

Ann McConnell, a spokeswoman for Subaru of Indiana, said Fuji Heavy Industries
and Toyota Motor Corp. have been in discussions, but that there has been no
word of a decision.

There are five to six candidate models for production, the newspaper said, with
the number manufactured annually to gradually increase to 100,000 vehicles.
Earlier reports have suggested that Toyota might produce hybrid vehicles at the
Fuji plant.

The Indiana plant produced nearly 120,000 Subaru models last year.

It wasn't immediately clear if Subaru production would be reduced or what the
factory's total vehicle output would be.

Fuji teamed up with Toyota in October after ending a five-year tie-up with GM,
which sold its 20 percent in the Japanese company. Toyota, based in Toyota City
in central Japan, bought an 8.7 percent stake from GM for about $315 million to
become Fuji's top shareholder.

Overall, GM lost almost $4 billion in the first nine months of this year, hit
by falling sales and rising health care costs. Its share of the U.S. market has
shrunk to 26.2 percent from 33 percent a decade ago.

GM's plant closings, which will entail 30,000 job cuts, are meant to chop $7
billion off its $42 billion annual bill for operations by the end of next year,
including a $3 billion cut in health care costs.

Toyota, by contrast, is on pace to set a fourth straight year of record profits.

Both GM and Ford Motor Co., the world's third-biggest automaker, are seeing
their U.S. market share shrink because of Toyota and other Asian competitors.
Toyota, Nissan Motor Co. and Honda Motor Co. all are reporting healthy earnings
bolstered by their reputation for well-built, fuel-efficient cars at a time of
surging gas prices.

GM's tie-up with Fuji was largely deemed a flop. But access to Fuji's plants
could help Toyota boost production at a time of soaring sales, analysts say,
although Fuji has only the one plant in North America, so additional capacity
will be limited.

Completed in 1988, the Indiana factory was built under a joint-venture
agreement between Fuji and Isuzu Motors Ltd. Fuji bought out Isuzu's share in
the venture and became sole operator of the plant in 2003.

After GM's latest cost cuts, the company will be able to build about 4.2
million vehicles a year in North America, down 30 percent from 2002. Toyota is
expected to have North American capacity of about 1.81 million cars by then, up
from 1.44 million vehicles last year, Toyota spokesman Dan Sieger said Monday.

China is one bright spot for GM, which said last month that sales there rose
27.8 percent in the first three quarters of the year to 472,468 vehicles.
Growth was fueled partly by a mini-vehicle joint venture with Shanghai
Automotive Industrial Corp. and Wuling Automotive.

GM and Toyota have a long-standing partnership to share environmental
technology, and they run a car assembly plant in California together, although
the ties do not involve holding stakes in each other.

Out of concern for GM's plight, and possibly to stave off an anti-Japanese
backlash by American consumers, Toyota Chairman Hiroshi Okuda suggested earlier
this year that Toyota should raise the price of car models in the United States
to level the playing field. Toyota raised prices soon after, but denied the
move was to placate U.S. automakers.

SSLL

11-24-2005, 10:33 PM

I would like to mention my parents have driven their '94 Taurus to the ground, and it still drives. They also had an '83 Chevy Caprice Classic that only was retired in 2002! I don't really care the make of the car being Japanese, but it's also nicer if they're built in the US or Canada.

James Bond Agent 007

11-26-2005, 01:36 AM

edluva-

As I said, here in Washington state, Japanese cars have constituted about half of the cars sold here almost since I first moved here in '88. And yet, the percentage of old (>10 or 15 years) cars I see on the road that are American cars far outnumbers the old Japanese cars I see on the road.

If Japanese cars really did last longer than American ones, and since the Japanese-domestic ratio here has been about 50-50 for at least 15 years, it would stand that I would see more old Japanese cars on the road around here than American ones, because they originally numbered about the same as domestic makes, and they supposedly outlast American cars.

But that's not what I see - what I see on the roads is the opposite of what you would expect to see if Japanese cars really did outlast American makes.

Let me tell you this, I'm a bit surprised to hear my co worker has a 1986 Oldsmobile Cutlass with 500,000 miles on it and still runs, but beginning to fall apart. It's american...don't ask me how it still runs. :-P
This is exactly what I'm talking about - this car is almost 20 years old with 500K miles and it is STILL on the road!

Of course a 20-year-old car with half a million miles on it is going to have some problems!! But at least it's still on the road! I rarely see any 20-year-old Japanese cars on the road at all!

The more I read about these stories of people's old cars, the more I'm beginning to think that this Japanese-cars-last-longer thing is largely an urban myth.

Last Chance

12-19-2005, 07:15 PM

I grew up in Mid-Michigan. Not far from Buick City. We always drove GM cars. I flew back there two months ago and rented a car at Detroit Metro airport. There was one Hyundai in the whole lot. It was parked up front with the mid-size cars, and the rep said,"That one has problems, you don't want to rent it."

GM cars are like couches on wheels. When you have roads like Michigan, that freeze and thaw all the time, you need a comfortable ride. A milder climate allows for a stiffer, sportier suspension.

How many people in the Pacific NW like Airbus planes? How many people in St. Louis drink Corona? How many people in Vermont put Aunt Jemima syrup on their waffles? How many Apple computers are there in Austin, TX where Dell and IBM employ over 22,000 people? Don't expect the midwest to have any less regional pride. Their friends and neighbors have jobs there. It still matters in that part of the country - always will.

SSLL

12-31-2005, 09:39 PM

December 31, 2005

Poor year is closing for Big 3
U.S. automakers lost market share in 2005
By Sarah Karush
Associated Press
December 31, 2005

DETROIT -- A lackluster December is expected to cap a dismal year for U.S. automakers, who saw Asian competitors eat away at their market share throughout 2005.
Analysts are forecasting a weaker month than December 2004, as the impact of traditional year-end deals was muted by deep discounts during the summer. However, the month's sales are likely to be vastly improved from the autumn slump that followed the end of the summer's promotions.
Automakers are scheduled to report December results on Wednesday.
Full-year sales are expected to be essentially flat, but with market share losses for the Big Three, whose best sellers -- gas-guzzling trucks -- fell out of favor.
General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group had a combined U.S. year-to-date market share of 57 percent at the end of November, down from 60 percent two years before.
Robert Barry, an analyst with Goldman Sachs, estimated their December market share at 54.5 percent, down from 58.1 percent last year.
Early numbers released mid-month indicated that sales got off to a slow start in December, traditionally a time of brisk sales thanks to year-end deals. U.S. sales were down 14 percent for the first 11 days of the month, according to the Power Information Network, a division of the marketing research and consulting firm J.D. Power and Associates.
Though the pace picked up later, analysts John Murphy, of Merrill Lynch, and David Healy, of Burnham Securities, both predicted December sales would be 5 percent below year-ago levels.
GM, Ford and Chrysler saw sales soar to near-record levels this summer with discounts that let consumers pay the employee price. But sales plummeted as soon as the discounts expired in October.
The automakers returned to incentives at the end of the year, though after the summer's deals they had less effect than in previous years.
Analysts said the biggest change in 2005 was a shift toward cars and away from trucks.
"This shift has been especially prominent in (the) last four months as September's hurricanes and $3/gallon gasoline served as a turning point in consumer preference," Murphy noted, adding that if it continues, the trend could accelerate the market share loss of GM, Ford and Chrysler. The domestic Big Three rely on SUVs and other light trucks for the majority of their sales.

Nutterbug

12-31-2005, 10:14 PM

edluva-

As I said, here in Washington state, Japanese cars have constituted about half of the cars sold here almost since I first moved here in '88. And yet, the percentage of old (>10 or 15 years) cars I see on the road that are American cars far outnumbers the old Japanese cars I see on the road.

If Japanese cars really did last longer than American ones, and since the Japanese-domestic ratio here has been about 50-50 for at least 15 years, it would stand that I would see more old Japanese cars on the road around here than American ones, because they originally numbered about the same as domestic makes, and they supposedly outlast American cars.

But that's not what I see - what I see on the roads is the opposite of what you would expect to see if Japanese cars really did outlast American makes.
Could it be that people are more hesistant to replace their big old American cars, because there are no new replacements on the market for them now, whereas with the Japanese cars, they were compact then and they are now, so people feel they might as well do with the newer models?

Also, could it be there's more of an export market for used Japanese cars to foreign, poor countries, since they don't use up as much gas and have the reputation to last?

James Bond Agent 007

01-01-2006, 02:49 AM

Could it be that people are more hesistant to replace their big old American cars, because there are no new replacements on the market for them now, whereas with the Japanese cars, they were compact then and they are now, so people feel they might as well do with the newer models?

Also, could it be there's more of an export market for used Japanese cars to foreign, poor countries, since they don't use up as much gas and have the reputation to last?
Not all of the old American cars I see on the road are big ones. I still see a fair number of 80's Cavaliers kicking around, for example. But I *don't* see very many 80's Corollas kicking around.

Don't know anything about the export market for used cars.

James Bond Agent 007

01-01-2006, 02:57 AM

BTW, I'm renting a 2006 Nissan Sentra this weekend which had a paltry 1,100 miles on it. I've also rented Ford Focus', Chevy Malibus and a Kia Rio in the past several months.

The automatic transmission on the Rio was just awful - don't even think about going up a hill and retaining your sanity. ;)

The Malibu was nice. Had no complaints about it at all. So was the Focus.

The Sentra I'm now renting is nice, too. However, I really don't sense any qualitative difference between it and, say, the Focus, which is a direct competitor. Some Japanese car-snobs would have you believe that to sit down in a Japanese car would make one cum in their pants from its excellent-ness, and that sitting down in an American car would make it fall apart instantly. Or something like that.

But the Sentra I'm renting now is really no different than the Focus. It's nice, but I don't see anything to get so excited about.

Frankly, of all the cars I've rented recently, the one I liked the best was the Malibu.

SSLL

01-01-2006, 04:19 PM

I have seen lots of old late '80s early 90's Japanese cars though, much more than US cars. Civics, Corollas, Camrys, etc.

James Bond Agent 007

01-02-2006, 03:59 AM

^
Well, that's not what I see.

That's not to say I don't see any Japanese cars from the 80's and earlier, it's just that the overwhelming majority of the cars from that era I see still on the road are American cars.

SSLL

01-07-2006, 03:34 PM

GM surpasses VW to become top-selling foreign automaker in China last year
CHRISTOPHER BODEEN
Thu Jan 5, 1:49 PM ET
SHANGHAI (AP) - General Motors Corp. became China's top-selling foreign automaker last year, surpassing Germany's Volkswagen AG, after seeing its sales grow 35.2 per cent to 665,390 vehicles, according to company figures released Thursday.

South Korea's Hyundai and Japan's Honda also reported strong growth, while Volkswagen, the former market leader, saw its sales decline in 2005.

GM, which is looking to growth in China to make up for its shrinking market share in the U.S., said sales were driven by the continuing popularity of its Buick brand, led by the Excelle sedan and hatchback.

It sold 105,000 of those two models through September, according to the China Auto Industry Association, although GM (NYSE:GM - news) gave no figures for the entire year.

Sales of the Buick GL8 luxury passenger van also recorded steady growth, while newly introduced Chevrolet and Cadillac models also did well.

The sales growth gives GM, the world's largest automaker, about 11.2 per cent of the Chinese market, up from 9.4 per cent in 2003, the company said.

Nearly all GM cars sold in China are made domestically.

The company has opened a second plant in Shanghai last year and added three new Chevrolet models in 2005, the Sail compact car, Epica intermediate sedan and Aveo hatchback. That pushed China sales for the brand past the 100,000 mark for the first time, establishing China as Chevrolet's fourth-largest global market.

"We have no intention of letting up on the accelerator," Kevin Wale, president and managing director of the GM China Group, was quoted as saying in the release.

Volkswagen, which once had more than half of China's car market, said overall sales declined for the second straight year, falling about 15 per cent to 564,306.

Annual sales at its flagship Shanghai joint venture fell 19 per cent to 287,000 vehicles, said a company official speaking on condition of anonymity. Its other joint venture, China Volkswagen Automotive, saw sales edge up just 3.2 per cent to 277,306 units from 268,000 in 2004.

VW has seen its market share drop sharply from over 50 per cent in the 1990s. Hoping to regain lost ground, it has slashed prices and announced plans to introduce up to 12 new models in China by 2009 while cutting costs and improving service.

Hyundai Motor Co., meanwhile, reported annual sales of 233,668 cars produced by its Beijing Hyundai Motor joint venture, up 62 per cent from 2004, spokesman Sun Zhenjie said.

Growth came mostly from its Elantra model, the mainstay of Beijing's taxi fleet and the mainland's second best selling sedan after China's own Xiali.

The Korean company aims to boost production and sales by about 30 per cent in 2006 to 300,000 units, Sun said. Targets call for China production capacity of 600,000 units by 2008.

Japanese carmaker Honda Motor Co. reported a 19.1 per cent rise in sales to 255,500 units in 2005, public relations manager Masaya Nagai said. Production in China last year rose 24.4 per cent to 266,500 units, he said.

The company aims to raise sales 38 per cent this year to 353,000 cars and boost production 41 per cent to 375,000 units, Nagai said.

Meanwhile, GM's flagship joint venture in Shanghai, Shanghai General Motors Corp., sold 325,429 vehicles, up 28.7 per cent from the previous year, the company said in a release.

Minivans and small trucks sold under the Wuling brand - made at the GM's joint venture in southwestern China, SAIC-GM-Wuling Automobile Co. - benefited from strong sales in rural China and cities in the relatively poorer interior, it said. That joint venture sold 337,188 units, up 43.4 per cent from 2004.

New models under the Buick, Chevrolet and Cadillac brands will be introduced this year to keep up with what Wale predicted would be 10 and 15 per cent growth in the Chinese vehicle market.

GM gave no figures for profits in its China operations.

But in July-September quarter, GM earned $176 million US in Asia while losing $1.6 billion in North America. In 2004, GM sold 4.7 million cars and trucks in the U.S. and 4.3 million elsewhere.

SSLL

01-07-2006, 03:34 PM

Chevrolet surpasses Ford as No. 1 brand in U.S. sales in 2005
January 4, 2006 - 18:21
By DEE-ANN DURBIN

DETROIT (AP) - Chevrolet was the best-selling brand in the U.S. market in 2005, outpacing Ford for the first time in 19 years, General Motors Corp. said Wednesday. But that was where the good news ended for GM and other U.S. automakers, who continued to lose ground to foreign rivals.

Japanese automakers Toyota Motor Corp. and Nissan Motor Co. and South Korean automaker Hyundai Motor Co. all reported sales increases of nine per cent or more for the year. Toyota, whose U.S. sales were up 10 per cent over 2004, said its Camry sedan was the best-selling car in the United States for the fourth year in a row, while its Lexus nameplate was the best-selling luxury brand.

Meanwhile, 2005 sales fell four per cent at both U.S. industry leaders GM and Ford Motor Co., while DaimlerChrysler AG's Chrysler Group sales rose five per cent.

U.S. automakers also reported disappointing results for December despite a new round of holiday discounts. GM's December sales were down 10 per cent, Ford fell 8.7 per cent and Chrysler was down five per cent as payback from strong summer sales continued.

Asian automakers fared better in December, in part because they didn't offer employee-discounts over the summer. Toyota's December sales were up eight per cent, while Hyundai's were up nearly 16 per cent as customers snapped up the 2006 Sonata. Honda Motor Co.'s December sales were off three per cent while Nissan's were off one per cent.

GM's sales decline for the year included a seven per cent decline in car sales and a two per cent decline in sales of trucks and sport utility vehicles. Although Chevrolet sales slipped slightly from last year to 2.6 million, they outpaced Ford by around 21,000 vehicles thanks to strong pickup sales and enthusiasm for GM's new HHR crossover.

Paul Ballew, GM's executive director of market and industry analysis, said the year-end totals were below the company's expectations. But he said the win for Chevrolet gives the world's largest automaker an important boost. GM lost nearly $4 billion US in the first nine months of 2005 as it struggled with high costs and falling U.S. market share.

"It does confirm our ability to produce industry-leading vehicles," Ballew said.

Ford's sales drop for 2005 reflected lower consumer demand for trucks and sport utility vehicles in the face of high gas prices. Chrysler's rise for the year was due to hot-selling models like the Chrysler 300 sedan and the Town & Country minivan, which both saw sales increase more than 25 per cent for the year.

Japan's Honda reported an increase of five per cent over 2004 sales. Honda's car sales were flat but the automaker's truck and SUV sales rose nearly 14 per cent, largely on the strength of the Honda Pilot small SUV and Honda's new Ridgeline pickup. Honda said it was the company's 12th consecutive year of U.S. sales increases.

It was a tumultuous year for automakers, who enjoyed near-record sales thanks to employee-pricing discounts over the summer but watched large SUV sales plummet when gas prices spiked after hurricane Katrina. Ford's U.S. sales analysis manager George Pipas predicted SUV sales will stabilize in the coming year as long as gas prices remain lower than $3 a gallon.

"This is still a big segment, this is still a popular segment that meets the needs of many consumers," he said. "The wild card is gas prices."

But Pipas also said there is a definite consumer trend away from SUVs in favour of cars and crossovers, which are car-based SUVs. Ford, the second biggest automaker after GM, said 2005 car sales rose five per cent for its Ford, Lincoln and Mercury brands, but truck and SUV sales fell eight per cent. Pipas said it was the first year since 1981 that cars gained market share against trucks.

Ford also said sales of its crossover vehicles rose 28 per cent. The company predicted crossover sales will continue to outpace all other categories through the end of the decade.

Automakers expressed optimism about 2006. Ballew said the economy is expanding just as new vehicles are hitting the pipeline.

"It's not the perfect backdrop because energy prices are higher than people anticipated, but the overall backdrop for this industry is not that poor," Ballew said.

Sales figures were adjusted for the number of sales days. There were 307 sales days in 2005 and 308 sales days in 2004.

GM shares rose 51 cents to close at $19.41 on the New York Stock Exchange while Ford shares rose 18 cents to end at $8.01 and DaimlerChrysler's U.S. shares lost 24 cents to $53.51. Toyota's U.S. shares fell 26 cents to close at $106.59 on the NYSE.

SSLL

01-07-2006, 03:35 PM

New Ford executive Mark Fields emphasizes brand's American identity
January 4, 2006 - 18:13
By TIM MOLLOY

LOS ANGELES (AP) - Ford Motor Co.'s new president of the Americas on Wednesday aggressively promoted the brand's U.S. identity and charged that foreign competitors were posturing as American.

"In terms of economic and social influence there is no other company that's had a greater impact on the lives of people in this country and in the 20th century than Ford," Mark Fields said in a speech at the L.A. Auto Show.

Fields said that "many brands want to be American" and he specifically pointed to Toyota Motor Corp. as "desperately trying to cast itself as an American brand."

"Toyota is trying to be American because they realize the market potential is huge," he said.

Fields' comments came as Ford and other U.S. automakers are losing billions of dollars as well as U.S. market share to Toyota and other Asian carmakers. Fields was named president of Ford's Americas division in September and is developing a restructuring plan expected to include plant closings and job cuts that is scheduled to be announced on Jan. 23.

He was formerly executive vice-president of Europe and the Premier Automotive Group, the London-based company that oversees sales, distribution and other services for Ford's high-end brands like Aston Martin, Jaguar and Land Rover.

As he was talking to the audience in Los Angeles, Ford was reporting its sales dropped four per cent in 2005 as consumer demand for trucks and sport utility vehicles fell in the face of high gas prices. General Motors Corp.'s Chevrolet surpassed Ford as the best-selling brand in the U.S. market in 2005 for the first time in 19 years. GM is the biggest U.S. automaker and Ford is second.

Responding to Fields' remarks, Toyota spokesman Mike Michels said, "We view ourselves as the customers' brand, nothing more and nothing less."

Toyota has advertised its manufacturing in the United States "to make sure people are informed about the positive economic impact that we have here," Michels said.

"In the end," he added, "all automakers are international brands."

Fields told the Los Angeles audience the days of the Big Three - GM, Ford and DaimlerChrysler AG's Chrysler Group - were over and have been replaced by a "Big Six" in which everything is up for grabs.

Using such phrases as "red, white and bold" and "bold, American and innovative" to describe Ford's new strategy, he said, "It's time to play offence" to preserve Ford's market share.

Fields said Ford's strategy would include a new emphasis on crossover vehicles that include many of the comforts and conveniences of sport utility vehicles but handle more like cars than trucks and have better fuel economy than SUVs.

Fields described what he said was his company's unique relationship with consumers, saying Ford had most success in the areas where it best knew its customers, including the market for the aggressive 550 horsepower V-8 Ford GT.

"Ford vehicles from the Model T to the Mustang are in our national consciousness," he said.

Art Spinella, president of CNW Marketing Research, a Bandon, Ore., auto research firm, said Field's remarks reflect fears that foreign automakers will break into the full-sized truck market in the mountain states and southeast, where loyalty to American trucks is high.

Ford was particularly threatened by Toyota opening a truck plant in Texas because it could diminish customer loyalty there to American automakers, Spinella said. The company is trying to hold onto its 45 per cent share of the full-size pickup market, he said.

Foreign automakers "don't have a very big slice of large trucks, but once they didn't have a large slice of the car market either," Spinella said.

In his remarks, Fields dismissed the "much talked about new competition" for Ford's F-Series trucks without naming specific competitors.

SSLL

01-07-2006, 03:36 PM

Thursday, January 5, 2006
Welcome mat's out for Toyota
No plans for new plant, but Ohio ready anyway

By Mike Boyer
Enquirer staff writer

Toyota says it has no immediate plans to build another North American assembly or engine plant, but Ohio Gov. Bob Taft wants to be ready just in case.

In response to a reporter's question Wednesday, Taft said the state has offered the automaker a free site and annual grants of $2 million for 15 years should it locate in the Buckeye State.

"We are definitely competing aggressively for that project," Taft said Wednesday during a bill-signing ceremony in Columbus for the Jobs for Ohio bond issue.

Victor Vanov, a spokesman for Toyota's North American manufacturing headquarters in Erlanger, said there were no current plans to build new facilities, but that could change if sales stay strong.

And a spokesman for the Ohio Department of Development said the automaker "has no specific expansion plans," but the state and Toyota are constantly talking about potential plant sites, including three in Southwest Ohio.

"The reality is Toyota is a year or more away from making any decision,'' department spokesman Merrel Madrid said.

Michigan, already reeling from planned or impending cuts by General Motors and Ford Motor Co., has been aggressively wooing Toyota, said David Cole, director of the Center for Automotive Research at the University of Michigan.

"Toyota's a smart company,'' he said. "They're particularly concerned about their impact on traditional manufacturers."

While sales by the Big 3 have been declining, Toyota's North American sales have been growing. Toyota said Wednesday that North American auto sales topped 2.26 million units in 2005, up 10 percent from 2004.

But Toyota, which has 11 assembly and parts plants in North America and is building new vehicle plants in San Antonio, Texas, and Woodstock, Ontario, probably isn't looking for additional assembly plants, Cole said.

Toyota's agreement last month with Fuji Heavy Industries to use excess capacity at its Lafayette, Ind., assembly plant eases its need for additional assembly capacity for the near future, Cole said.

Yet Toyota, which will unveil its new hybrid Camry at the Detroit Auto Show Monday, may need additional engine-plant capacity within the next year or two, he said.

Toyota's largest plant outside Japan is the 7,000-employee Georgetown, Ky., factory, which is marking its 20th year and will begin assembling the first hybrid-powered Camry.

Toyota officials have said they are unlikely expand in Kentucky.

They cited the size of their operations already in the commonwealth.

Workforce is key

Toyota typically seeks plant sites of a couple hundred acres with access to rail. But Cole said the most critical element is access to plenty of trainable workers.

"They typically want eight or 10 applicants for every job,'' he said. "And they want to be the highest-paying employer in the area.''

The popular perception is that Toyota and other foreign-owned auto makers seek communities without heavy union activity. But Cole said, "That's not necessarily the case. Their joint venture with General Motors Corp. in California is a plant represented by the United Auto Workers.''

Possible sites include areas in Clinton, Fayette and Preble counties, according to an Oct. 19 letter Taft sent to Seiichi Sudo, president and chief executive officer of Toyota's North American manufacturing headquarters in Erlanger.

Those southwestern Ohio sites are accessible to Toyota's current network of suppliers and offer immediate access to skilled auto workers, Taft said in the letter.

Brown County, east of Cincinnati, is another possibility, said Madrid.

Car makers wanted

Taft personally escorted Hyundai executives to Mount Orab and other sites in Southwest Ohio in 2002, when the South Korean automaker was considering Ohio and Kentucky for an assembly plant that was built outside Montgomery, Ala.

A decade earlier, Mount Orab was briefly considered by Toyota for the pickup truck plant that was subsequently built in Princeton, Ind., near Evansville.

Toyota is operating beyond its current North American plant capacity, with 1.45 million cars and trucks built in the United States through November, up from 1.41 million for all of 2004.

SSLL

01-08-2006, 05:13 PM

January 8, 2006
Is There a Future in Ford's Future?
By MICHELINE MAYNARD
DEARBORN, Mich.

MARK FIELDS has no time to waste - and no time to become acquainted with employees at Ford Motor, where he is the new president of its American operations.

That is why Mr. Fields, who recently returned to Ford's headquarters here in October after three promotions that had taken him to Argentina, Japan and England in the last eight years, has been firing off "Dear Team" e-mail messages to employees, outlining the steps that he thinks the company needs to take, and serving as host for internal Webcasts.

Borrowing tips from the business books he devours as late-night reading, Mr. Fields has also written long lists, which he keeps in a binder that sits on a shelf behind his desk, of what he expects from his staff - and what they should expect from him. He displayed them last week in his first interview since his promotion; the lists cover topics like the way he wants to run meetings (no secret BlackBerry surfing, no wall-sitters who do not take part in decision-making) and his personal values (candor, humility and a sense of humor). He wants reports on white paper, and memos delivered ahead of meetings - so that executives know what they will discuss. And he wants managers to wear enameled pins bearing the blue Ford oval insignia.

All of those might seem like the latest executive whims at a company that has been through every management trend to hit the business world in the last 25 years, from Japanese-style quality circles to global development teams. But Mr. Fields has an enormous challenge ahead in fixing the sickest part of Ford - its sprawling operations in the United States - and he does not want employees to spend months figuring him out. The detailed instructions are necessary to speed up his acclimatization, he said, because "they can't read my mind." Indeed. But no one can misread Mr. Fields's challenge.

The difficulty of his task was underscored just last week, when Standard & Poor's cut Ford's credit rating an additional two notches deeper into junk status, moving the company even further away from regaining the top investment grade rating it had used as a competitive tool throughout much of the 1980's and 1990's.

After meeting with Ford officials last month about the turnaround plan that Mr. Fields is drafting, S.& P.'s analysts warned that Ford could also be swamped in the event of a bankruptcy filing by General Motors, which is grappling with its own radical restructuring program. G.M. would be able to cut its labor and other costs under court protection, giving it an advantage.

Further crowding Mr. Fields's plate is the strength of Toyota, which is poised to pass G.M. this year as the world's biggest auto company, and which, at one point last year, came within a hair's breadth of catching Ford to become the second-biggest auto company in the United States market.

When William Clay Ford Jr., the company's chairman and chief executive, was asked what he wants from Mr. Fields, he replied bluntly: "I want him to turn the place around."

JUST five years ago, the talk in Detroit was about whether Ford could eventually outsell G.M. Now the talk is about which of these two companies is worse off.

Dealing with G.M. is particularly treacherous these days for Ford, which is about a third smaller in the United States. G.M. proved again last summer that it was still willing to sacrifice long-term performance for short-term gain, offering consumers the deep discounts it usually reserves for employees.

Ford and Chrysler were forced to match the deals, which caused sales to soar. But sales crashed just as quickly when the offers ended, and the gimmick did little to help G.M. or Ford stave off the threat posed by Toyota. By contrast, Ford found a way in the mid-1980's to confront Toyota, by introducing the Taurus sedan, which initially outsold Toyota's Camry.

"It feels like a lot of obstacles hitting a weakened company when the competition is moving from strength to strength," said John Paul MacDuffie, an associate professor of management at the Wharton School of the University of Pennsylvania.

Today at the North American International Auto Show in Detroit, Mr. Fields will take a big step in trying to reverse that momentum by introducing the first of Ford's next wave of new vehicles aimed at recapturing at least some of its lost sales. They include a crossover vehicle called the Edge - no relation to the U2 guitarist - as well as the MKX, a replacement for the Lincoln Aviator sport utility, and an eye-catching concept car, the Ford Reflex, whose low-slung lines and rear-hinged, flip-up doors are meant to show that Ford believes a small automobile can still be imaginative.

The tougher - but equally crucial - job comes later this month. On Jan. 23, he will give the details of the Way Forward, a name he chose for his turnaround plan at one of his earliest meetings after his arrival in Dearborn. The plan is expected to include plant closings, thousands of job cuts, new brand images for the Ford and Lincoln-Mercury divisions and a renewed effort to streamline the company by paring expenses and eliminating white-collar workers.

"He's got a lot of things to do," Mr. Ford said in an e-mail interview last week. "But I believe he can do them."

The details that Ford executives shared on the plan did not convince S.& P.'s analysts, who issued their downgrade last Thursday, nearly three weeks before Ford officially introduces the program.

While S.& P.'s veteran analyst, Scott Sprinzen, declined to discuss the plan's details, he said that Ford had to overcompensate for anything G.M. might do as it worked out its own strategy for survival. "G.M. is one factor in the marketplace that Ford has to consider in setting its own restructuring plan," Mr. Sprinzen said. According to news reports, G.M. will soon announce extensive price cuts on its cars and trucks. Rick Wagoner, G.M.'s chief executive, declined to comment on the reports.

Many of the elements in the Way Forward were part of Ford's last comeback, deployed in 2002, soon after the company's chairman, Mr. Ford, ousted Jacques Nasser as chief executive and took the job himself. In that turnaround, Ford cut billions of dollars in costs, shut factories and returned to profitability. But its market share in the United States, which Mr. Nasser had once pushed above 25 percent, kept falling as the S.U.V. lineup that Mr. Nasser had championed faded in popularity.

Ford ended 2005 with just 17.4 percent of the American market, its lowest level since the early 1980's. And for the first time since then, Chevrolet beat the Ford division last year as the top-selling brand among Detroit companies. "In some ways, Ford never recovered from the woes of the Jacques Nasser era," Professor MacDuffie said.

Now comes Mr. Fields, who owes Mr. Nasser some of his reputation as a rescue artist, albeit one who has historically been sent someplace else before he could see his plans fully bear fruit. Mr. Fields, a former I.B.M. manager whose first job was selling Selectric typewriters, was running Ford's operation in Argentina when Mr. Nasser phoned in 1998 and convinced him to transfer to Japan to help run Mazda, of which Ford had gained management control.

Four years later, Mr. Fields was on the verge of introducing an entire new lineup of Mazda vehicles when he received another phone call from Dearborn, this one asking him to move to England to run the Premier Automotive Group, the collection of luxury brands including Volvo, Jaguar and Land Rover that Mr. Nasser had assembled in hopes of expanding Ford's profits.

Mr. Fields was still in the midst of a turnaround effort at Jaguar last year, when Ford was hit by a wave of executive departures, including those of seven senior managers who retired or quit. That turbulence resulted in his latest promotion, which sent him back to Ford's home office for the first time in more than a decade.

There, the woman who became his No. 2 executive, Anne L. Stevens, the chief operating officer in the Americas, was already in place. Trained in manufacturing, Ms. Stevens had never before worked with Mr. Fields. But they shared two things: a mentor in James J. Padilla, Ford's president and chief operating officer, who had worked with both in different parts of the world, and a fondness for New York-ese.

Both Mr. Fields, who was born in the Canarsie section of Brooklyn and raised in Paramus, N.J., and Ms. Stevens, a Pennsylvania native who has lived in Manhattan and Hoboken, have the same "you gotta problem with that?" chemistry that allows them to cut through red tape and get to the point. No need for any black binders here: the pair can sit down, "talk fast, have a drink and talk New York," said Ms. Stevens, who was in charge of Ford's operations in Canada, Mexico and Latin America before her own promotion last year. The executives have become inextricably linked with each other; Mr. Ford refers to them in one breath as "Mark-and-Anne" and calls their skills "a great fit."

Mr. Ford wrote in an e-mail message: "In some ways, they're so much alike. They're both tough, but personable. Their skills are very complementary. He's very strong in sales and marketing, and she's strong in manufacturing and product development."

And they have become the latest celebrities in Detroit, a city where senior automotive executives are akin to Hollywood stars.

"Now it's the Mark-and-Anne show," said James P. Womack, the author and expert on manufacturing efficiency, who has studied the company for 25 years.

People are watching closely, to the point where many Ford executives have taken to wearing blue rubber inspirational wristbands like those prominently sported by Mr. Fields and Ms. Stevens.

Recently, The Detroit News breathlessly described Mr. Fields, with his jet-black hair, as "movie star handsome," although his slightly rough-edged demeanor may be best suited to a Martin Scorsese film or an episode of "The Sopranos." ("You don't sound professional when you say 'uh' all the time," one employee said in an anonymous e-mail message to Mr. Fields during a recent company Webcast.)

That's all fine, Mr. Womack said, but given the drain of executive talent and the mounting problems at Ford, Mr. Fields and Ms. Stevens still have to prove that they are more substance than style. "The history of Ford is that nobody is able to make any decisions, and they go down all kinds of irrelevant cul-de-sacs," he said. "Within the next year, an awful lot of this has got to get resolved."

Mr. Fields has to do that with an admittedly skeptical work force. Privately, Ford executives said they were alarmed when a proposal that would make modest cuts in the company's health coverage for blue-collar workers was barely approved in late December by members of the United Automobile Workers union. Last week, three union members said they would demand a recount, although U.A.W. officials have said they stand behind the results.

While Mr. Fields does not have direct responsibility for union relations, he will have to develop relationships with union leaders, including the U.A.W.'s president, Ron Gettelfinger; contract talks loom in 2007.

That is where his time overseas is a drawback, said Brett D. Hozelton, an analyst at KeyBanc Capital Markets and a former financial analyst for Ford. "The U.A.W. is going to look at Mark and say: 'Mark, you're a whiz-bang guy. You may even be a likable guy. But frankly how do I know that if you tell me you're going to close this plant, that will be the last one?' " Mr. Hozelton said.

Mr. Fields, however, said he had had experience with unions elsewhere in the world and did not consider dealing with the U.A.W. a daunting prospect. He added that he had received hundreds of e-mail messages of support for his efforts, although Ford's salaried staff, which was already reduced under Mr. Ford's first turnaround effort, is also seeing its benefits cut.

Mr. Fields acknowledged that Ford's business is "under stress," but both he and Ms. Stevens expressed a resolve to restore Ford's profitability. Details are scant, though determination is not. "There is no 'can't,' " Ms. Stevens said, a touch sternly, when asked last week if the pair had a backup in case the Way Forward did not pan out.

Mr. Fields can take heart from the turnaround at Chrysler, which was the only Detroit company to increase its sales and market share last year. After two waves of job cuts and cost-cutting programs this decade, the comeback at Chrysler has taken wing, largely on the strength of a single car: the eye-catching 300 sedan, which has made the company seem hip again.

"There is a formula that can be very, very effective," said Jeremy P. Anwyl, the chief executive of Edmunds.com, a Web site that offers car-buying advice to consumers. "You have to decide what you are going to be." He said that Ford had good products, notably the new Fusion midsize sedan, but added that they had been ill-served by its lackluster marketing efforts, which have failed to create a clear image for the company or its products.

IN a speech last week, Mr. Fields vowed that that would change. Ford, he said, wants to be known as "red, white and bold," stressing its American heritage and its latest emphasis on innovation. Mr. Fields said that the phrase, which is embossed on the company's blue wristbands, "is not about wrapping ourselves in the American flag." But Ford, he said, cannot escape the fact that Ford, Lincoln and Mercury are American brands - even if the industry in which they were born has inextricably changed.

Like Dieter Zetsche, the former Chrysler chief executive who recently took the helm at its German parent, DaimlerChrysler, Mr. Fields said he believed that the Big Three's years of dominance were over - as were Ford's chances of getting back to one-quarter of the domestic market. "Those days are gone," he said. "We have to act like a smaller company - not necessarily be a smaller company. But we have built up the bureaucracy of a company that once had 25 percent, and we don't any more."

To him, the market is the Big Six - G.M., Ford, DaimlerChrysler, Toyota, Honda and Nissan - and to think otherwise is foolhardy. "This is not a cyclical change," he said of G.M.'s and Ford's decline. "This is a secular change."

And Mr. Fields does not expect it to be easy. On one of the sheets in his black binder is a definition of "what a turnaround feels like." The sensation, Mr. Fields told his managers, is "uncomfortable and exhilarating at the same time."

Depending on whether the Way Forward actually is a way forward, Mr. Fields may end up wondering when the second part of that description begins.

Last Chance

01-11-2006, 07:29 AM

Well, it sure was nice to see the new Camaro and Challenger at the Detroit auto show. I'm not trading in my truck for the Camaro, but it's nice to see some style come back to GM.

SSLL

01-14-2006, 01:28 PM

Foreign Carmakers in the Passing Lane as GM, Ford Sputter
By Sholnn Freeman
Washington Post Staff Writer
Saturday, January 14, 2006; A01

DETROIT -- While the two largest U.S. automakers are in a painful fight for their financial well-being, surging foreign rivals are dealing with more refined issues.

This week at the North American International Auto Show, Japanese auto giant Toyota Motor Corp. rolled out a Camry with seat fabric coated with moisturizer gleaned from silkworms and an air-conditioning system that removes odors and bacteria.

Toyota's luxury Lexus line showcases a new LS sedan that parallel-parks almost entirely on its own. There are a back massager, a leg rest and reclining seats in the back. The LS will be the first car in the industry with a gas-electric-hybrid-powered V-8 engine, a technological breakthrough designed to merge horsepower with fuel efficiency. Both Toyota models are due this year.

Toyota and other foreign automakers are using the auto show, the biggest annual U.S. display of products, buzz and insight into the mind of the globe's automakers, to capitalize on Detroit's weaknesses. As big U.S. automakers grapple with union contracts, the bankruptcy of a major parts supplier and shareholder unrest, Toyota is rolling out new models and new technology in a bid to knock General Motors Corp. from its 75-year perch as the world's No. 1 automaker, perhaps as soon as this year.

The prospects of such a realignment have energized the auto world and given new momentum to competitors from South Korea, Europe and China. It promises to feed another round of sticker wars, with automakers offerings rebates and price cuts to win over fickle customers.

All told, the world's automakers will introduce 27 redesigned and 23 new models in the coming year, according to J.D. Power and Associates. "The world is converging," said Michael Robinet, vice president of vehicle forecasting at CSM Worldwide, an auto industry research firm. "Trade is becoming freer, no matter how many trade hawks are on the horizon. We are down the road to freer trade, and it will not end. The quicker countries and governments accept this, the better off they will be."

The fierce competition comes as the top two U.S. automakers, GM and Ford Motor Corp., struggle to put 2005 in the rearview mirror.

Later this month, Ford will release its restructuring plan, expected to contain tens of thousands of job cuts and other draconian cost-slashing measures. GM lost nearly $4 billion in its North American operations in the first nine months of 2005. The company is laying off 30,000 workers, shutting down or scaling back at 12 plants and scrambling to cut billions of dollars in overhead costs. But even that isn't enough for some. Billionaire Kirk Kerkorian, who owns 7.8 percent of GM's shares, is demanding that the company move into "crisis mode" and pare back operations even further, suggesting that GM sell off its Hummer and Saab brands.

Under questioning by analysts in Detroit yesterday, GM chief executive G. Richard Wagoner Jr. said the automaker could not forecast when its North American operations will again be profitable.

Wagoner said GM is on track to cut $6 billion in costs by the end of this year, but he added that the company's outlook remains clouded by a number of uncertainties. At the top of the list is parts supplier Delphi Corp., which is under bankruptcy protection and seeking relief from GM, its former parent, as well as concessions in pay and benefits from the United Auto Workers. "For 2006, our focus is very clear: The absolute top priority for me and the entire GM team is to turn around the North American business," Wagoner said.

GM and Ford are seeking help from Washington. Ford wants tax cuts and subsidies for the industry so U.S. companies can catch up with Toyota's lead in technology. GM says the industry needs relief from health care expenses, pension bills and other "legacy" costs that are a result of promises made to workers when GM had more than 50 percent of U.S. market share. By 2005, that share had dropped to 26 percent.

DaimlerChrysler AG's U.S. division has been alone among the Detroit automakers in holding its ground. Chrysler has already been through a wrenching overhaul at the hands of its German parents. The automaker's U.S. share grew slightly last year, and it had a lively show in Detroit with a number of new vehicle showings, including a Chrysler Imperial that looks like it borrowed more than a little from a Rolls-Royce Phantom.

As if Detroit didn't have its hands full with operational problems and rivals from Japan and Korea, analysts see a second wave of Asian automakers storming the U.S. market in the future, perhaps including an entrant from India or China. This year, Geely Automobile Co. became the first Chinese automaker to exhibit at the Detroit auto show, displaying a snappy little sedan. The automaker says it plans to enter the U.S. market in two years, though it faces significant distribution and regulatory hurdles.

Automakers from around the world are taking a page from Toyota's playbook, fueling their charge into the U.S. market with vehicles built at U.S. factories. In recent years, auto plants have been popping up in Southern states, including a Hyundai Motor Co. plant in Alabama and a Nissan Motor Co. plant in Mississippi. Toyota is finishing a new factory in Texas that will pump out thousands of pickup trucks this year. The world's automakers are increasingly looking beyond Detroit as competition heats up. For example, Robert F. Cosmai, Hyundai's U.S. president, mentioned Lexus and BMW sport-utility vehicles as chief competitors to the Hyundai Santa Fe, failing to name a single American rival.

Then there is the latest vehicle from Hyundai.

"The scariest picture in town is the Hyundai Sonata," said Sean P. McAlinden, chief economist at the Center for Automotive Research, a nonprofit auto industry watcher. "It's the best value in the automotive market. It has everything that a Honda Accord and a Toyota Camry has, and it's built in Alabama."

McAlinden called the Sonata "an embarrassment to Detroit." "Why haven't we done that in the last 30 years when they've done it in four?" he said.

McAlinden says he expects U.S. sales to grow to 20 million by the end of the decade, up from 17 million last year. He expects market share for Detroit automakers to slip to 50 percent, from 56 percent today. "Maybe we ain't that big no more," he said. "It's hard for us to swallow around here, even for me."

The American automakers play down such gloom and doom and say they are not cowed by the competition. GM, Ford and Chrysler all rolled out rosters of new models this year. And in some cases, they hope to find a bit of their future in their past, when Detroit was king.

GM showed a futuristic version of the Chevrolet Camaro, its classic pavement burner. Chrysler wheeled out a Dodge Challenger concept, its design paying homage to the venerated early 1970s model. Ford promised more iterations of the made-over Mustang that went on sale last year and proved popular. With the throwback designs, U.S. automakers say they are trying to reignite passion and interest in the car brands that they hope could translate to other cars in their lineups.

At the auto show, GM's Wagoner vowed that his company will continue to parry with new vehicles. He said GM officials recognize that they can't fix the business by solely by cutting costs and closing plants.

"We're going to keep bringing out new cars and trucks. We've got to do that for success," Wagoner said. "We are in the very early stages of the soccer game. A lot of time is left and we're going to be ready to play."

SSLL

01-18-2006, 09:13 PM

Tuesday January 17, 06:37 PM
Toyota has no plans to overtake GM in volume: exec

DEARBORN, United States (AFP) - Japanese automaker Toyota Motor Company has no intention of overtaking its US rival General Motors in terms of global sales volume, a senior executive said.
"We're not interested in seeing GM declining," said Jim Press, President and Chief Operating Officer of Toyota Motor Sales USA. "We have no intent on being number one. We don't think it is going to happen."

Toyota recently announced plans to build 9.06 million vehicles in 2006, a move which prompted many analysts to speculate that it was vying for the position of the world's largest automaker.

GM, which posted multibillion dollar losses following a sharp drop in sales in the US market, has vowed to reverse its declining market share at home. The Detroit-based automaker recently reported global vehicle sales totaling nearly 9.2 million during 2005.

Speaking at an auto industry trade conference in a suburb of Detroit, Press said if Toyota Motor Co. decides it needs to add engine capacity in the United States, Michigan would be considered as a potential location for the facility.

He said the Japanese automaker would make a decision "in the short-term" as to whether it needs to add engine capacity in the United States.

The added capacity would be needed to feed two Toyota plants under construction in the United States and Canada.

The automaker will open its San Antonio, Texas, truck plant in the fourth quarter, capping an 800 million dollar investment plan.

Additionally, Toyota is investing 800 million Canadian dollars in a manufacturing plant in Woodstock, Ontario, Canada, which will begin assembling the RAV-4 sport-utility vehicle in 2008.

"We need to have engine (capacity) very close to our plants. There is no reason why we wouldn't consider Michigan," Press said, adding Toyota's Woodstock plant would be within close proximity to Michigan, if the automaker chose the state for an engine manufacturing plant.

Earlier Monday, Toyota said it had produced a record 1,558,828 vehicles at its North American manufacturing facilities in 2005.

GM has yet to announce production figures for 2005.

SSLL

01-24-2006, 09:11 PM

Patriotism doesn't sell cars today

By Rick Popely and Deborah Horan
Tribune staff reporters
Published January 24, 2006

When domestic automakers had their backs to the wall 25 years ago, they could count on a "Buy American" sentiment to keep some customers from defecting to fuel-efficient foreign cars.

Today, many loyal domestic vehicle owners say they would be comfortable buying an import.

Chuck Sonne, a Country Club Hills electrician, drives a 1997 Chevrolet pick-up and has owned two Fords in the past, but asked if he would only buy an American vehicle in the future, Sonne said, "No, whatever runs better and is cheaper."

As Ford, which announced a massive restructuring Monday, tries along with struggling GM to regain market share in the U.S., it faces an uphill climb. Asian rivals, such as Honda, Toyota and Hyundai are luring buyers with a relentless supply of new and compelling models.

But while the competition has intensified, the comforting old idea for Ford and GM that Americans will make patriotic purchases carries less and less weight.

For one thing, it isn't even clear anymore what "Buy American" means when it comes to cars and trucks. Many of those new models from Toyota and others are built in places like Kentucky, Indiana and Alabama, while the Chevrolet Aveo is imported from South Korea. Meanwhile, some Dodge Ram pick-ups are built in Mexico. Dodge, of course, is a domestic brand, but it's owned by Germany-based DaimlerChrysler.

This blurring of vehicle origin means that Ford or GM can't rely on a "Buy American" marketing campaign.

Art Spinella, president of CNW Marketing Research, says the confusion over national origin means consumers are less likely to try to help fellow Americans by buying a domestic vehicle.

"Basically, they throw their hands in the air and just buy what they like," Spinella said.

Different world

The lack of stigma attached to buying a foreign product goes beyond the auto industry.

Compared to the early 1980s, consumers face shelves stocked with foreign-made products--from televisions to running shoes. Often they don't notice the origin of what they purchase.

When CNW surveyed shoppers coming out of Wal-Mart stores, 75 percent said they preferred to buy American, yet an inspection of their purchases found that 90 percent were made in China.

"They don't even look to see where the stuff is made anymore. It's the price that matters," Spinella said.

For about one-third of car shoppers, where a vehicle is built may be moot because they don't include domestic brands on their shopping lists, according to CNW's research.

That's undoubtedly due in part to lingering perceptions about quality problems as well as styling issues.

"There's no real American product I want, except maybe the Chrysler 300C," said Chicagoan Curtis Patterson while browsing new models Monday at an Orland Park Acura dealership.

Patterson said Ford doesn't offer anything that excites him.

"They're not as aggressive in product design for people my age," the 36-year-old security officer said. "It's not contemporary to me. Even GM has a little more style."

Dan Gierlowski, a 19-year-old student at Moraine Valley Community College, is more blunt, dismissing Ford's products as "garbage" while eyeing an Acura RSX, made by Japan-based Honda. "I like sporty compact cars. If you drive one of these you will want one," Gierlowski said. "They're fun little toys, small and fast."

What about a sporty car like the Mustang, one of Ford's hottest sellers last year?

"I don't want to be associated with any of them," he said of Ford. "I don't like the retro style. The new Mustangs have the old look."

Innovation is the key

Though domestic brands get on the shopping lists of two-thirds of car buyers, Spinella said 20 percent of those people wind up buying an import because of better styling, a lower price or a unique feature.

For example, when Honda got into the pick-up market last year with the Ridgeline, the truck came with a novel lockable trunk in the cargo floor that holds a 72-quart cooler or three sets of golf clubs.

"Ford has been building pick-up trucks for a hundred years, yet no one thought to do that," Spinella said.

The only way Ford and GM can combat their Asian rivals is with innovative features like that, or with exciting models like the Chrysler 300, which looks like a Bentley luxury sedan.

"They just need to build some products people want to buy, something that people are excited about," Spinella said.

Ford has such a hit with the Fusion, a new midsize sedan that attracts one-third of its buyers from Asian and European brands, according to CNW, and GM's Pontiac division is attracting attention with the stylish Solstice, a two-seat sports car.

Ford and GM have steadily closed the quality gap with the leading Japanese brands in owner surveys like J.D. Power and Associates' initial-quality study, yet consumers are still leery.

"You can generate interest and excitement with styling and new products, but when it comes time to purchase, people demand a higher level of confidence and security," said Alexander Edwards, chief executive of Strategic Vision, a San Diego consulting firm.

That is one reason the Toyota Camry is America's favorite car, despite frequent criticism that it is bland. Consumers have confidence in the car and "trust in the brand," Edwards said, while domestic brands have failed to build similar trust.

Ford may have improved its quality in recent years, but it won't be enough to win back the business of Mary Jane Quinn. Her last Ford was a 1989 Taurus that frequently died at toll plazas and wouldn't restart.

"I have a total dislike for Ford. It's kind of like, you get burned once you're not going to do it again," said Quinn, 57, of Oak Forest, who now drives a Subaru Forester.

But Donald Wayne, a Chicago engineer shopping at a Home Depot in Orland Park, said he tries to help other American workers keep their jobs. Wayne owns a Ford pick-up and Chevrolet Blazer.

"I try to buy American first," said Wayne, 48. "I live in America, so why not."

Wayne was laid off from Wisconsin Steel in 1980 and sympathizes with autoworkers who are losing their jobs.

"I can feel for them," he said. "We've got to work."

James Bond Agent 007

01-24-2006, 09:36 PM

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SSLL

01-25-2006, 10:17 PM

Posted on Wed, Jan. 25, 2006

Can Ford, GM really change enough to matter?
Asian competitors, a strong union, and entrenched corporate cultures leave some analysts doubtful.
By Dee-Ann Durbin
Associated Press
DETROIT - "Change or die" is the mantra of Mark Fields, the Ford Motor Co. president who crafted the automaker's latest restructuring plan. But with Asian competitors seemingly a step ahead in introducing models that consumers want, and a powerful union that will fight to protect jobs and benefits, some question how much Ford and other U.S. automakers can really change.

Ford announced a plan Monday to cut up to 30,000 jobs and close 14 plants in North America by 2012. The plan echoed General Motors Corp.'s restructuring effort announced in November, which will cut 30,000 jobs and close 12 North American plants by 2008.

GM's shares fell after analysts said its plan did not go far enough. Ford's shares rose, but several analysts were unconvinced the plan would make the company's North American division profitable by 2008, as promised.

"Ford's restructuring plan was widely anticipated, but was more vague and protracted than we expected, which is disappointing," Goldman Sachs analyst Robert Barry said in a note to investors. "We also see sizable North American share-loss continuing, weighing on earnings and offsetting many restructuring benefits."

GM and Ford announced the plans as their combined U.S. market share fell to an unprecedented low of 43 percent in 2005, down from 52 percent five years earlier. By contrast, Asian brands enjoyed a surge and now control nearly 37 percent of the U.S. market.

So far, there is little indication that is changing. Sales of GM and Ford vehicles were down 25 percent in the first two weeks of January, while Toyota Motor Corp., Honda Motor Co., Nissan Motor Co. and Hyundai Motor Co. all had gains, according to the Power Information Network, a division of J.D. Power & Associates.

The losses are taking a huge financial toll. Ford said Monday that it lost $1.6 billion in its North American operations in 2005, and GM is expected to announce an even larger loss tomorrow.

GM and Ford say they are going to the core of their businesses to turn things around. They are vowing to work more closely with suppliers to cut costs, a tactic borrowed from Japanese rivals. They expect to save billions in development costs by sharing components globally and making plants more flexible, and they are promising to rely less on costly incentives.

"At both companies, they're very much attacking the culture of the organization," said David Cole, chairman of the Center for Automotive Research in Ann Arbor. "I think they've got real possibilities."

Ford says it is taking on a top-down corporate culture that has stifled innovation. It is developing an appeals process to make sure employees' ideas are heard, even if they are rejected by a manager, and it will judge employees on innovative thinking in performance reviews. Yesterday, it cut four positions from its staff of 53 corporate officers.

But some analysts express doubts. Most of the plant closures and job cuts Ford and GM are planning must be negotiated with the United Auto Workers in 2007, when the automakers and the UAW draft a new contract.

Others are not sure GM and Ford will be able to attract consumers, despite new vehicles. GM has put lower sticker prices on most of its vehicles and is retooling its marketing. Ford plans to make more distinction between its Ford, Lincoln and Mercury brands and will stress its American heritage.

James McTevia, a Detroit-area restructuring consultant, says it is unclear that Ford's tactic will work. "I don't know what Ford is going to be able to do to convince the domestic auto buyer that 'Made in America' is a significant factor when they're buying an automobile," McTevia said. "The competition out there has been building in America for a long period of time."

SSLL

02-13-2006, 10:56 PM

Ford: New data show it's No. 1 in U.S.
Automaker uses registration stats; GM standing by its numbers
08:08 AM CST on Monday, February 13, 2006
/ Associated Press

ORLANDO, Fla. – Ford Motor Co. told dealers Sunday that new data show the Ford brand outsold the Chevrolet brand in 2005, contradicting General Motors Corp.'s claim that Chevy came out on top.

Ford said it will ask GM to stop referring to Chevrolet as the nation's No. 1 brand in its ads, but GM said it's standing by its numbers.
Full-year sales results released by both GM and Ford last month showed Chevrolet was the best-selling brand in 2005, outselling Ford by about 21,100 vehicles.
But Ford spokesman Jim Cain said Sunday that new data from R.L. Polk & Co. shows Ford beat Chevrolet by 5,000 in the number of new vehicle registrations. R.L. Polk, of Southfield, Mich., collects and interprets automotive data.
Mr. Cain said Ford planned to contact GM as early as today. He said Ford has no plans to run similar ads, saying the company is thinking beyond competing with GM. If the new numbers hold, Ford can claim to be the best-selling brand in the nation for 18 consecutive years.
Registration numbers may not match sales because a vehicle could be sold in one year and registered to an owner the next, GM spokesman Jeff Kuhlman said. He said sales figures – not registrations – give a more accurate picture.
"I know 100 percent that our numbers are accurate," Mr. Kuhlman said.
The spat showed the intense competition dealers are facing in a market that is growing increasingly crowded. Earlier this week, Ford Americas President Mark Fields said there will be 300 nameplates in the U.S. market by the end of the decade, up from 215 in 2002.
Ford released the numbers at a meeting with hundreds of dealers Sunday at the National Automobile Dealers Association's annual convention. Both Ford and General Motors sought to reassure dealers that their businesses are on the right track despite billion-dollar losses and continued declines in U.S. market share last year.

SSLL

02-19-2006, 06:21 PM

Fact check: Are American cars really that bad?
Take a good look at vehicle reliability data and the answer may surprise you.
By Peter Valdes-Dapena, CNNMoney staff writer
February 3, 2006: 12:19 PM EST

NEW YORK (CNNMoney.com) - With all the bad news coming out of Detroit these days, many have a disarmingly simple suggestion: Ford and General Motors should simply build better cars.

"I read that Ford plans to cut about 30 000 jobs in North America alone," one CNNMoney.com reader wrote. "How about building better cars instead?'

A perception of poor quality certainly isn't the only reason Ford and GM cars can have trouble in today's market. But it's a factor.

We looked at J.D. Power and Associates Long-term Dependability Surveys to get a sense of where American cars rank in terms of reliability and how much they've improved. That survey measures the number of problems vehicle owners have after 3 years of ownership.

We also checked with Consumer Reports to see what they thought about GM and Ford's performance in terms of reliability.

The answer is that, overall, GM and Ford cars are not that bad. In fact, depending on which survey you believe, they may even have become pretty good.

The problem is that "pretty good" has become "not quite good enough" in a world where quality standards have been raised so high and which many consumers still have bad memories of General Motors and Ford cars that have failed them in the past.

Reliability by the numbers
If you believe J.D. Power's surveys, the story for American luxury brands -- Lincoln, Cadillac and Buick -- is particularly striking.

Of those three brands Lincoln performed best in the 2005 survey, ranking third of all brands -- behind Lexus, as always, and Porsche -- with a score of 151. Buick was fourth overall with a score of 163, matching a score that earned Lexus a top ranking just two years earlier. Cadillac was fifth with 175 problems per 100 vehicles.

Nissan's luxury brand, Infiniti, ranked sixth on the survey while Honda's luxury brand, Acura, ranked 10th, lower than the American luxury brands.

In fact, Lincoln, Cadillac and Buick all out-scored Toyota's Toyota-branded and Honda's Honda-branded vehicles in the same 2005 J.D. Powers survey.

GM and Ford's non-luxury brands didn't do quite as well but the Ford brand and GM's Chevrolet came out above average.

See the table for the details but, as it turns out, a lot of Japanese brands -- everything from Mazda right down to Isuzu -- came off worse in the survey than the worst GM brand, Pontiac.

The nature of the problems reported has also changed markedly over the years, said John Tews, a spokesman for J.D. Power. Major problems, things that would actually make a vehicle not drivable, are rare today, he said. "Problem" now usually means a squeak, a rattle or a stuck knob or switch.

Another view
But the people at Consumer Reports don't have quite as good a view of Ford and GM products as J.D. Powers' survey.

In Consumer Reports predicted reliability ratings, brands like Toyota, Subaru and even Suzuki rank higher than Pontiac, which has average predicted reliablity in Consumer Reports' estimation.

Lincoln, the top-ranked American brand in the J.D. Power survey, is seen as having below average predicted reliability by Consumer Reports.

Still, agreed Michael Quincy, automotive content specialist for Consumer Reports, the quality of Ford and GM cars has improved greatly in recent years.

Looking at Ford in particular, that company's American-branded cars are about average in long term reliability. Again, though, today's "average" is a lot better than the "average" of years gone by.

"It's not like it was in the '70s when 'Ford' did stand for 'fix or repair daily,'" he said, recalling an old joke once commonly hurled against America's No. 2 carmaker.

Some Ford cars are actually "above average" in reliability, according to Consumer Reports own surveys, Quincy said. The Ford Escape Hybrid SUV is "better than average," for example, and the closely-related Mercury Mariner SUV is "much better than average" in reliability.

Still, some other Ford cars aren't so bullet-proof.

The Ford F-150 pick-up, the largest selling vehicle in America, has "below average" reliability according to Consumer Reports. And, Lincoln's performance on J.D. Power surveys notwithstanding, the Lincoln LS sedan and Navigator SUV are both rated as "much worse than average" in reliability by Consumer Reports according to its own surveys.

GM brands, according to Consumer Reports, have mostly average predicted reliability. Hummer and Saturn are seen as below average.

Why are we so sure they're bad?
Given J.D. Power survey results, and even the "not bad" showings in Consumer Reports data, why do Americans seem so sure that American cars are dross?

Three possible reasons:

Reputation: Toyota has, by now, had a lifetime to cement its reputation among American consumers for nearly fool-proof quality. GM (Research) and Ford (Research) spent nearly as long honing a reputation for not caring much about quality. Things may have improved, but it takes a long time for that to sink in.

Recalls: GM, in particular, has had a problem with headline-making recalls. It's a big company, it sells a lot of vehicles and they share a lot of components. When one of those parts goes wrong, eye-popping numbers of vehicles can be affected. That doesn't mean the vehicles are unreliable. Recalls are a different sort of problem. But it does cause concerns.

Reviews: GM and Ford vehicles haven't always exuded the quality that may have been hiding in there somewhere. Cheap-feeling interior materials, raspy-sounding engines and gap-filled construction didn't give potential buyers the feeling of confidence that even lesser Japanese brands manage to carry off.

Both GM and Ford are making strides in this area, too. Some recent GM and Ford products should go a long way to correcting the image of throwaway construction.

GM and Ford deserve credit for what they've done so far. But American consumers have shown they still need lots more proof.

subterranean

02-20-2006, 08:37 PM

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buy it, read it

SSLL

03-04-2006, 01:26 PM

Posted on Thu, Mar. 02, 2006
Japan sweeps magazine's top 10
Honda, Toyota, Nissan, Subaru fill out best of Consumer Reports
DEE-ANN DURBIN
Associated Press
DETROIT -- For the first time in nine years, all of the top picks in Consumer Reports' annual vehicle guide are made by Japanese automakers.

The Honda Civic is the magazine's top small sedan, while the Toyota Highlander Hybrid is the top mid-sized sport utility vehicle, according to results released Wednesday. Vehicles from Nissan Motor Co. and Subaru, a division of Fuji Heavy Industries Ltd., round out the top picks in 10 categories.

Asian brands also fared best in the magazine's survey of vehicle reliability. Toyota Motor Corp.'s Lexus brand was first, while Honda was second and the Toyota brand was third. Ford Motor Co.'s Mercury brand was the only domestic nameplate to crack the top ten.

Consumer Reports' rankings are important to automakers, even though companies can't use the ratings in their advertising. Consumer Reports spokeswoman Lauren Hackett said the April auto issue is consistently the magazine's most popular, selling more than 300,000 copies at newsstands. That's twice as many copies as its second-most popular issue, the November electronics issue.

Consumer Reports named its top picks based on road and track tests, evaluations of comfort, convenience and fuel economy, crash protection ratings from the government and insurance industry and readers' reliability rankings. The magazine said it recently tested more than 200 vehicles to come up with its top picks.

Honda had the most winners, snagging top picks in five of the ten categories. The Honda Odyssey was the top minivan and the Honda Ridgeline, which is Honda's first entry in the pickup market, was the top pickup.

Toyota and Subaru each had two winners, including the Subaru Forester for small SUV and the Toyota Prius for "green car." Nissan had one, the M35 luxury sedan, which the magazine called "an excellent balance of performance, comfort and handling."

Winners by Category

Consumer Reports released its 2006 rankings of top vehicles on Wednesday. Consumer Reports bases its rankings on a series of tests as well as crash performance data and reliability surveys. The magazine didn't choose a winner in the pickup category in 2005.

SSLL

03-13-2006, 10:40 PM

More foreign automakers building cars in North America.
From: http://www.nytimes.com/2006/03/13/business/13auto.html?pagewanted=print
____________________________
March 13, 2006
Kia to Build Its First Auto Factory in U.S.

By REUTERS
SEOUL, Monday, March 13 — The Kia Motors Corporation, South Korea's second-largest automaker, says it will invest $1.2 billion building its first American factory, in Georgia.

Kia is seeking ways to move more production abroad to shield itself from its surging currency and also to take a bigger share of the United States market.

Kia also said it expected its sales in the United States and Canada to rise 15 percent to 350,000 vehicles in 2006 and to grow to 800,000 by 2010.

The carmaker said Monday that it expected the new plant to begin production in 2009, employing about 2,500 workers and producing up to 300,000 vehicles a year. The plant will be located in West Point, on the western edge of the state.

The Hyundai Motor Company, the parent company of Kia and South Korea's top carmaker, opened its first United States plant in Alabama last year.

SSLL

03-25-2006, 08:26 PM

Can GM stop the slide?
Automaker is taking steps to become a much leaner company

By DEE-ANN DURBIN
Associated Press
3/24/2006

Some analysts warn that GM is unwisely seeking to cut its way to prosperity rather than investing in its vehicles to reverse sliding market share.
DETROIT - General Motors Corp. has big plans to become a smaller company, and tried to prove it this week by offering buyouts to more than 100,000 workers and selling a majority stake in its commercial mortgage division.
While some analysts say those moves show the world's largest automaker is making progress in restructuring after losing $10.6 billion last year, others warn GM is unwisely seeking to cut its way to prosperity rather than investing in its vehicles to reverse sliding market share.

GM controlled about half the U.S. market 50 years ago, but that has slipped to less than 25 percent. The automaker's sales rose just 1.3 percent in the first two months of this year, largely due to increased fleet sales. That compares to a 6.9 percent increase for Asian brands and a 9.2 percent increase for European brands, according to Autodata Corp.

To compound GM's problems, the buyout plan will add retirees to the company's already bloated pension rolls even as market share is shrinking, Merrill Lynch analyst John Murphy said in a note to investors.

"Until GM stabilizes market share, rationalizes capacity at every point in the value chain and invests heavily in product, its restructuring actions will only allow it to tread water at best," Murphy said.

Still, GM is forging ahead with its restructuring efforts. GM said Thursday its finance arm, General Motors Acceptance Corp., has sold a 78 percent stake in its commercial mortgage business in a deal worth $9 billion. GM could get a share of that profit as loans or through its annual dividend from GMAC. The automaker is still in negotiations to sell a controlling stake in GMAC.

GM's buyout plan, one of the largest corporate buyouts in the last decade, offers between $35,000 and $140,000 to GM's 113,000 U.S. hourly workers. GM expects the buyouts will bring it close to its goal of cutting 30,000 U.S. hourly jobs by 2008.

GM also said it will bankroll early-retirement buyouts at Delphi Corp., its former parts division and major supplier. Delphi said in a court filing that up to 17,000 workers - or half its U.S. hourly work force - could be eligible for a $35,000 payment to retire. Also, up to 5,000 Delphi workers will be eligible to return to GM under the deal.

And more cuts are on the way. Workers at GM's technical center in Warren have heard rumors GM will cut engineering jobs at several technical centers next week.

GM spokesman Robert Herta said Thursday the company won't respond to rumors, but he said GM has made no secret of its plan to cut 7 percent of its U.S. salaried work force this year. GM currently has around 36,000 U.S. salaried workers.

Burnham Securities analyst David Healy praised GM's efforts, saying the buyout offer was far larger than expected and will accomplish GM's job-cutting goals.

"It's well-executed. It's expensive, but they can afford it," Healy said.

But Murphy said the buyout deal was disappointing because it didn't spell out what will happen to the 17,000 Delphi workers who aren't eligible for the buyouts.

Delphi wants to cut its wage and benefit rates and has set a deadline of March 30 to reach an agreement with GM, the United Auto Workers and other unions. If no agreement is reached, Delphi could ask a judge to cancel its union contracts, an action that could lead to a devastating strike.

Delphi will ask the court separately to approve its buyout plan on April 7. It already has an agreement in place to buy out 13,000 UAW-represented hourly workers, but is still negotiating with its other unions.

Delphi spokesman Lindsey Williams said the company expects to have agreements for those 4,000 workers by April 7.

Another big question is whether workers will take the buyouts. GM expects workers to begin retiring June 1, while the target date for the 5,000 Delphi workers to return to GM is Sept. 1.

JPMorgan analyst Himanshu Patel estimates as many as 39,000 GM workers could take the buyouts by the end of this year, which would cost GM around $4.2 billion but allow the company to accelerate attrition that was expected to take two years longer.

If all 13,000 UAW-represented Delphi workers retire and 5,000 return to GM, the automaker's costs could be close to the $5.5 billion GM has estimated for Delphi restructuring costs, Patel said.

As more workers enter GM's retiree ranks, GM's biggest problem could be soaring health care costs, Patel said. GM already has 2.5 retirees for every active worker, putting it at a significant disadvantage to companies like Toyota Motor Corp., whose U.S. work force is much younger.

GM and the UAW reached an agreement last year that would make retirees pay more for their health care, a plan expected to save GM $1 billion each year. A federal court judge is expected to approve or reject that agreement by April 1. But a new health care battle will come in 2007, when GM and the UAW negotiate a new contract.

SSLL

04-05-2006, 10:16 PM

Buick China's cup of tea
GM, yes GM, motors ahead of VW to become the No. 1 automaker in world's 2nd-largest market

By Evan Osnos
Tribune foreign correspondent
Published March 26, 2006

SHANGHAI -- In the storm of losses and layoffs at General Motors Corp. in the U.S., a different recent announcement drew little notice: For the first time, GM has overtaken Volkswagen as the No. 1 automaker in China.

While U.S. carmakers roll out behemoth SUVs that are out of step with gas-conscious Americans, GM in China is microtailoring cars to Chinese tastes in details as fine as horns, dashboard clocks and tea cup holders.

With 13,000 employees and at least $2 billion invested in China, GM is betting big on a nation of 1.3 billion consumers where barely 14 people out of 1,000 have ever owned a car. And with good reason: China has vaulted ahead of Japan to become the world's second-largest market, and is on track to overtake the U.S. by 2020.

"Over 50 percent of the total growth in the automotive world in the next decade will be in Asia," said Troy Clarke, president of GM Asia Pacific.

"We just know there is tremendous demand, tremendous potential, and we have to be positioned to take advantage of that growth," Clarke said.

It is about to get much harder.

GM faces growing challenges from rivals such as Toyota and Nissan while more than 100 ambitious new Chinese brands also look for an edge--including, in one case, unveiling a look-alike GM model that the American automaker called a case of intellectual property theft.

"It's going to get much tougher for everyone," said Kevin Wale, president of GM China. "It used to be a couple of competitors out here having a slugfest. Now it's like 10 of them out here having a slugfest."

The center of China's car market is changing--from bloated government fleet purchases to thrifty private buyers--and that puts added pressure on automakers to cut costs and raise fuel efficiency.

"The transition is from urban elites with tremendous wealth to more sustainable, typical middle classers. That's where the growth will come," said Michael Dunne, president of Automotive Resources Asia, a consulting firm.

"The winners will be those with low-cost cars of good quality," Dunne said.

Behind China's broadening car market is a cultural shift no less than that of the U.S. in the early 20th Century, when a family car became the signpost of an aspiring middle class, and a growth-hungry government built roads at a breakneck pace. In 1987 China did not have a single expressway. Today it has 21,000 miles of them.

History gave GM an improbable head start.

Long before Chinese consumers could buy cars, they knew that Sun Yat-sen, the father of modern China, had driven a Buick, lending it a more refined, prestigious image than it enjoyed at home.

GM has ridden the Buick nameplate to pull ahead of Volkswagen, which had enjoyed a two-decade run as China's multinational leader.

Take Hu Xiangen, 42, who had never bought a car before he paid $16,250 in cash for a Buick Excelle the other day.

Like many Chinese consumers, Hu chose cautiously, bringing friends and relatives to a range of dealers before eventually concluding that the Volkswagen was "too old."

"We considered performance, price, and appearance, " Hu said.

GM has only been in China since 1997. It entered the country through a joint venture with Shanghai Automotive Industry Corp., then took over Korean automaker Daewoo.

That saved time over building a new factory and unlocked a supply of inexpensive, fuel-sipping models, suited to China's new consumers.

Likewise, GM wisely bought a stake in a popular, ultra-low-cost mini-van, the Wuling Sunshine, which costs $5,000, gets over 40 miles to the gallon, and is selling out as fast as it is produced.

For GM the new products took some getting used to. In 2001 Joseph Y.H. Liu, a sales and marketing veteran at GM China, envisioned a simple low-cost wagon called the Buick Sail as a prime chance to tap into China's burgeoning family-car market. He suggested they emphasize its anti-lock brakes, dual air bags and low price as a new family-friendly "recreational vehicle."

"I still remember that when I reached the idea, my partner said, `no forget it,'" Liu said.

But Liu was right. Sales soared, and "that Sail marketing became a legend," said Yale Zhang, a Shanghai-based analyst for auto consultant CSM Worldwide. Today, with the price of oil at around $60 a barrel, the pressure to find ever more value dominates GM's China operation.

"The top three priorities are fuel economy, fuel economy, fuel economy," said Raymond Bierzynski, president of PATAC, GM's joint-venture design firm in Shanghai.

But for success in China, looks are proving no less critical. Design director James Shyr and his staff of 80 consider themselves the "foot soldiers of marketing," making small local adaptations, based on surveys of Chinese tastes.

On a Buick Regal, for instance, that means adding more air-conditioning controls for guests, fancier details, and the seat-back DVD screens that China's image-conscious middle class cherish to convey a wealthy image to backseat visitors.

GM also has tailored its Buick GL8, a plush mini-van, for chauffeur-driven Chinese executives and officials.

GM's Chinese designers scrapped the U.S.-standard cup holder and replaced it with a tall, narrow silo: the exact specifications of the tea bottle toted by millions of Chinese drivers every day.

Forget the Big Gulp; in the cutthroat battle for China, a simple jar of tea can be a kingmaker.

SSLL

04-12-2006, 09:51 PM

From: http://www.ajc.com/business/content/shared-gen/ap/Finance_General/Auto_Show_Saturn.html
_______________________
April 11, 2006 - 7:28 p.m. BDT
GM Hopes to Revitalize Saturn Brand

By DEE-ANN DURBIN
AP Auto Writer
DETROIT — Saturn, the General Motors Corp. brand launched in 1990 as a "different kind of car company," aims to differentiate itself once again with four new vehicles that will debut this week at the New York Auto Show.

At a press preview Wednesday, GM plans to introduce a trio of production-ready vehicles as well as a crossover concept. The company hopes sophisticated features will set the vehicles apart, from projector-beam headlights that wrap around the vehicles to matching leather on the seats, shift knobs, steering wheel and door panels of the 2007 Saturn Aura sedan.

The mid-size Aura, which goes on sale this summer, has won praise for its bold styling. The vehicle shares a platform — and many design cues — with GM's Opel Vectra, which is sold in Europe. The Aura will come with a standard 3.5-liter V-6 engine and a more powerful 3.6-liter V-6 with a performance-oriented, six-speed automatic transmission, GM said. A hybrid version of the Aura also will be released later this year.

The 2007 Saturn Outlook crossover offers three rows of seating for up to eight adults but drives like a sedan. The Outlook shares many of the Aura's design elements and its premium feel, GM said. It also has a sliding second-row seat to make it easier to reach the third row. The Outlook will go on sale later this year.

Saturn is giving its Sky roadster a boost of power with the Sky Red Line, which goes on sale this fall. The Red Line has a 260-horsepower, 2-liter Ecotec engine, GM's first direct-injection offering in North America. The standard Sky has a 177-horsepower engine.

Finally, GM will debut the Saturn PreVue concept, a three-door crossover with a dramatically sloped roof and the muscular stance of a sport utility vehicle. The PreVue, first shown as the Opel Antara GTC concept at last year's Frankfurt Auto Show, continues the close collaboration between Saturn and Opel. GM said the PreVue gives a glimpse of its plans to update the Saturn Vue crossover.

Saturn has fallen on hard times since its debut because its ho-hum designs couldn't draw in buyers despite consistent praise for Saturn's no-haggle pricing. Saturn's sales were down 2 percent in the first quarter of this year. GM is determined to change that, in part because it desperately needs to turn around lagging U.S. sales.

"Saturn's new products demonstrate that GM is committed to raising the bar on product execution as part of our North American turnaround plan," Mark LaNeve, GM's vice president of sales, service and marketing, said in a statement.

Erich Merkle, director of auto industry forecasting with Grand Rapids-based consulting company IRN Inc., said it's not too late to revitalize Saturn.

"Saturn is really starting from scratch," he said. "It's almost as though it's a new car company because there's nothing there."

Merkle credits GM vice chairman and product guru Bob Lutz for giving Saturn the attention it needed. Merkle said Lutz wanted to make Saturn the stylish Opel of North America and take advantage of the brand's large and loyal dealer network. GM spent an estimated $3 billion to revitalize Saturn's lineup.

Merkle said Saturn may finally have the right mix of products to take on Japanese imports and make the brand what GM always hoped it would be.

"They're not going to be Chevrolet, which is all things to all people, but they can be a very good niche brand for GM," Merkle said.

edluva

04-14-2006, 05:31 AM

007 is still trying to prove that quality is synonymous with refinement, and that Saturn is equivalent to Lexus; basically, he's stating a foregone conclusion: that a mountain cavern is a more reliable dwelling than a suburban bungalow - that if we were to extrapolate his theory, GM and Ford's woes are ultimately due to the consumers' collectively skewed bias, and not as consumers and Ford/GM execs themselves purport, to an inferior product. there, that should save us some bandwith.

fflint

04-15-2006, 10:34 AM

Honda Accord? Made in the USA.
Toyota Camry? Made in the USA.
Ford Fusion? Made in Mexico.

Which is the "domestic" choice and why would it matter anyway?

James Bond Agent 007

04-16-2006, 03:27 AM

007 is still trying to prove that quality is synonymous with refinement,
WTF?

I said no such thing - I said that "refinement" is such an ambiguous, immeasurable and ill-defined term it is practically worthless as a measure to determine whether a certain car is "high quality" or not. Nor does it have anything to do with whether a car is "reliable" or not (which was the original point of discussion anyway).

I've said nothing in this thread for months. What is the need for you to suddenly re-hash an argument that I've said nothing about since November?

and that Saturn is equivalent to Lexus; basically, he's stating a foregone conclusion: that a mountain cavern is a more reliable dwelling than a suburban bungalow - that if we were to extrapolate his theory, GM and Ford's woes are ultimately due to the consumers' collectively skewed bias, and not as consumers and Ford/GM execs themselves purport, to an inferior product. there, that should save us some bandwith.
LOL, what crap.

SSLL

04-17-2006, 01:56 PM

From: http://www.buffalonews.com/editorial/20060416/1049007.asp
____________________
Detroit is losing customer loyalty

Too many models, too little innovation

By SHOLNN FREEMAN
Washington Post
4/16/2006

http://www.buffalonews.com/graphics/2006/04/16/actualsize/0416autobox.jpg
As recently as a generation ago, brand loyalty meant something for U.S. car buyers. You were a Ford man or a Plymouth family.
The first car for legions of young men was a Chevy. As Americans increased in age and wealth, they climbed the General Motors Corp. status ladder, up through the Pontiac, Oldsmobile, Buick and, ultimately, Cadillac brands.

But today, consumers have a broader range of choices, as foreign automakers have poured vehicles into the U.S. market. Further, three decades of disappointment with the reliability of U.S. vehicles has combined with Detroit's on-again, off-again commitment to building innovative passenger cars. The result: Brand loyalty has continued to slip away.

With that, a run of job cuts, plant closings and model-line paring has emanated from Detroit automakers, the most recent coming last week.

The Big Three have confused car buyers by inundating them with poorly defined brands and too many models. And, compared with their Japanese rivals, U.S. automakers have often shown less interest in upgrading cars after their high-profile rollouts, analysts say.

By contrast, for instance, the Toyota Camry has gone through five redesigns since its 1982 rollout as an economy sedan; America's top-selling car received continuous horsepower upgrades and now has features found on higher-priced luxury vehicles.

As the reliability and sex appeal of certain brand names have waned, Detroit automakers have had to rely more heavily on incentive-laden pricing to lure customers.

GM has tried hard in recent years to recoup some brand loyalty but has had difficulty in wooing customers back. Once at more than 50 percent, GM's market share now stands at 24 percent.

In a recent J.D. Power and Associates survey tracking owners who had traded in their vehicle for one of the same brand, U.S. brands occupied seven of the 10 slots that showed the greatest drop-off in brand loyalty between 2004 and 2005. Four of the top five gainers were Japanese; Jeep was the lone American.

This year - as Ford and GM close all or part of 26 factories and terminate several models - car buyers will watch as a blur of familiar and obscure names begin exiting the market, replaced by a raft of new and retooled models.

All told, the world's automakers will introduce 23 new and 27 redesigned models to the United States this year. Hello to the Honda Fit subcompact, Saturn Aura sedan, Volkswagen Eos ragtop and new SUVs from Dodge, Mercedes-Benz and Jeep.

Goodbye to the Lincoln LS, which caught the eye of enthusiasts such as information-technology manager Ron Browne at the end of 1999, when car magazines began hailing the new luxury performance sedan as an "American BMW." Motor Trend magazine named the LS Car of the Year at its debut.

Browne, who lives in Laurel, Md., bought a 2000 model for $33,000 - about $15,000 less than a comparable BMW. He bought a second one in 2002. But Ford Motor Co., Lincoln's parent, did little to keep the car fresh as the years passed. In January, Ford said the LS would be one of several vehicles to be discontinued by 2008.

"They came out with a great product," Browne said, "but they let the competition surpass them."

Goodbye to some iconic names - the Pontiac GTO and Ford Thunderbird. And goodbye to the Ford Taurus. In its day, the Taurus was hailed as the great American import-fighter in the mid-size car category. Ford sold hundreds of thousands of them before the car bottomed out, bypassed by continually updated, glitzier foreign rivals. The Taurus became, for a time, the quintessential American rental car.

The plants scheduled to end production include a factory that builds GM's entire line of poor-selling minivans, including the Chevrolet Uplander and Buick Terraza. Also on the plant hit-list are factories that build low-volume but high-profile vehicles from Ford and Chevy, including the Ford GT and the Chevy SSR - a retro-styled truck that was a favorite of GM executives.

Some plants are scheduled to close soon; others, by 2008. Automakers assure owners of the discontinued vehicles that parts and service will continue to be available.

Some investors and analysts have suggested that GM and Ford haven't gone far enough - they've questioned whether signature brands such as Lincoln or Mercury should even exist anymore. Billionaire investor Kirk Kerkorian, GM's largest individual shareholder, wants GM to drop the Hummer and Saab brands it acquired in recent years.

Charles Hughes, a former president of Mazda North American Operations and the founder of Brand Rules, based in Newport Beach, Calif., agreed that GM and Ford have far too many brands compared with rival automakers. Both automakers oversee eight brands. DaimlerChrysler AG has three American brands - Dodge, Jeep and Chrysler - and Germany's Mercedes-Benz.

By comparison, Toyota Motor Corp. has three brands. Honda Motor Co. and Nissan Motor Co. each have two.

Detroit's product jumble among cars extends beyond mere brand confusion. Basic quality issues - which U.S. automakers have worked hard to improve but seem unable to entirely resolve - still drive buyers away from U.S. offerings, even consumers who want to buy American.

The National Highway Traffic Safety Administration has received numerous complaints about electrical problems with GM minivans.

In Consumer Reports' recently released annual vehicle reliability report, GM's Uplander, Terraza, Relay and Montana were rated as the least reliable of all U.S. vehicles. A GM spokesman said the company remains committed to building quality vehicles.

As for the soon-to-be-discontinued Lincoln LS, the sports sedan captured a loyal following early on, including the LS Owners Club www.llsoc.com. Brian Gowing, of Canyon Lake, Calif., started the club, which grew from 30 members to 850 across the country, and to Puerto Rico, Japan and Korea.

In 2004, members of the club drove from California to Ford's headquarters in Dearborn, Mich. The caravan started out in Irvine, Calif., and picked up members along the way, cruising through Nebraska 30 cars deep. Hosted by Ford in Dearborn, the club learned about Lincoln's history of technological innovation and standout styling.

Gowing said initially everyone in the group had pride in the car. They had the feeling that the LS was a toe-to-toe competitor with the BMW 5 Series or Cadillac CTS, he said. But then other carmakers pumped up horsepower and added new features while the LS stayed the same. Now, Gowing says of Lincoln, "they seem to be OK at being mediocre."

bmorescottamanda

04-18-2006, 06:01 AM

Honda Accord? Made in the USA.
Toyota Camry? Made in the USA.
Ford Fusion? Made in Mexico.

Which is the "domestic" choice and why would it matter anyway?

What the ford fusion is made in mexico. That's is crazy :jester:

bmorescottamanda

04-18-2006, 06:02 AM

Ford and GM will stay the biggest car companys in the world.

edluva

04-18-2006, 10:11 AM

I said no such thing - I said that "refinement" is such an ambiguous, immeasurable and ill-defined term it is practically worthless as a measure to determine whether a certain car is "high quality" or not. Nor does it have anything to do with whether a car is "reliable" or not (which was the original point of discussion anyway).

If refinement is worthless as a measure, I guess you're suggesting that it means refinement doesn't exist. Because consumers can only percieve what can be measured, right? Are you suggesting nothing in this universe exists that can't be reliably measured?

So by your defintion, a "dish" from McDonalds is equivalent in quality to one from Patina Bistro because even though 97% of us opted for the latter, as long as we can't quantify the value judgement behind our decision, the existence of that value judgement has been negated.

and regarding a car's origin, just because a car is built by mexicans, it doesn't follow that it was conceived, funded, engineered, and designed by a mexican firm. the problem with american cars lie in their conception - everything before the actual assembly.

Evan

04-18-2006, 10:22 AM

I still say that what is killing American autos isn't their mechanical quality, it's the fact that most of them look like generic econo-blobs that have virtually no character or personality whatsoever. Not all of them of course, but the largest percentage of them. GM puts out some models that are so boring and plain jane you won't even notice them going down the street.

Mechanically though, I have had good luck with American cars built from the 90's on. *knock on wood* The lack of style, and the antiquated ways American automakers do business is killing them. GM and Ford still act like they think it's the 1950's. They haven't kept up very well with modern assembly processes, they are hemmoraging money because they have outdated factories and old equipment. There are some factories that use robotics, but overall, the assembly process is in most of their North American plants are old.

edluva

04-18-2006, 10:42 AM

^and again, mechanical quality goes skin deep with what ails our industry. management also has to ensure marketing, refinement, technology, styling, engineering/performace all hit their targets - the consumer. the big 3 simply aren't doing that.

If they were street-legal, I can try to sell a tank, but even a superior mechanical quality won't find many buyers if the numerous other dimensions of true "quality" aren't met. It'd be myopic to assume consumers only want a car that doesn't shed it's rear bumper at 65k, or that cloth and leather are perfect substitutes so long as both materials have identical reliability according to JD power. And that's where 007 oversimplifies things.

bmorescottamanda

04-18-2006, 11:38 AM

When people say american cars dont last that is so funny to me. I have a mustang with 285,000 miles on it, with the same engine. other people I know has GMs with over 200,000. And people that buys american cars dont pay a arm and a leg for them. Its find with me if there are a few more things wrong with them over the life of the car than an import because you still save money after you pay more at frist for the same kind of car in an import.

fflint

04-18-2006, 12:26 PM

^Quality Japanese and German cars cost more up front--but you recoup much of that with their strong resale values.

James Bond Agent 007

04-18-2006, 05:22 PM

If refinement is worthless as a measure, I guess you're suggesting that it means refinement doesn't exist. Because consumers can only percieve what can be measured, right? Are you suggesting nothing in this universe exists that can't be reliably measured?

Let me put it this way: Beauty exists, just as "refinement" does. That does not mean either beauty or refinement can be measured, because they can't. Both are entirely subjective.

You are claiming that Japanese cars are "better" because they are more "refined." That is the equlivalent of saying that Japanese cars are "better" because they are more "beautiful." These are not objective measures of "better" but are, rather, subjective measures.

I have driven both Japanese and American cars. I don't find Japanese cars to be any more "refined" than American ones. So, as I said, your perception about the "refinement" of Japanese cars is 100% subjective, and not everyone will agree with you. You are trying to state something as if it were a fact ("Japanese cars are more refined") when it is impossible for it to be a fact.

and regarding a car's origin, just because a car is built by mexicans, it doesn't follow that it was conceived, funded, engineered, and designed by a mexican firm. the problem with american cars lie in their conception - everything before the actual assembly.
Where the hell did I say anything about who built or designed what????

And once again, why the hell did you resurrect a topic which I said absolutely nothing new about since November?

SSLL

04-18-2006, 10:01 PM

From: http://www.stltoday.com/stltoday/emaf.nsf/Popup?ReadForm&db=stltoday%5Cbusiness%5Cstories.nsf&docid=4731EB393768E80586257154000A0C95
____________________________
Toyota says it's good for America
By Dan Sewell
ASSOCIATED PRESS
Monday, Apr. 17 2006

CINCINNATI — In the 1950s, the saying went, what was good for the country was
good for General Motors -- and what was good for GM was good for the country.

Now, Japanese automaker Toyota Motor Corp. has a new promotional campaign that
says it's good for America, too.
Billboards along highways in areas of the country such as the
Cincinnati-northern Kentucky region, where Toyota employs about 8,800 people,
tout the company's economic impact in the United States.

The messages highlight numbers, such as 13 -- "Donuts in a baker's dozen;
Toyota's U.S. investment, in billions," and 386,000 -- "Kilometers to the moon;
U.S. jobs created by Toyota."

The billboards are in 24 U.S. markets where Toyota has factories or supplier
operations, from Fremont, Calif., where Toyota partners with GM at an
automaking plant, to Huntsville, Ala., where Toyota makes engines.

"Our intent is to raise awareness of our growing U.S. presence," said Patricia
Pineda of Toyota Motor North America. "Our research tells us that consumers
want to learn more about Toyota's U.S. presence."

She said Toyota highlights its U.S. investments and "level of commitment" to
the country in a campaign that began last month and also includes local radio
spots and airport advertising.

Toyota, on its way to passing GM as the world's largest automaker now has about
13 percent of U.S. vehicle sales. While GM and Ford Motor Co. are facing major
restructuring with plant closings and job cuts, Toyota says it wants to expand
car output in the United States, such as recently announced plans to make up to
100,000 Camrys a year in Lafayette, Ind.

Toyota's message is generally warmly received in Kentucky, where it has
provided a major economic boost to the state and employs 7,000 workers at its
plant in Georgetown.

"I think most people, particularly in this area, like Toyota a lot," said
Kenneth Troske, who heads the University of Kentucky's Center for Business and
Economic Research. "They bring a lot of things to the community."

However, the billboards can be irritating to U.S. workers with an uncertain
future.

"We're not real happy about it," said Tony Currington, vice president of United
Auto Workers Local 696, with members facing possible closure of a Dayton brake
plant by Delphi Corp., the largest auto parts supplier for GM, its former
parent.

"As a result of us losing market share to the foreign imports, we're losing
American jobs. It just hurts our economy here," Currington said, adding that
the UAW has been weakened by Toyota's mostly nonunion operations.

"It's not the Japanese who are causing the market share decline," said Bruce
Belzowski, an auto analyst at the University of Michigan's Transportation
Research Institute. "It's Americans buying the Japanese vehicles."

GM was the U.S. market share leader in March sales with about 24 percent,
according to Ward's AutoInfoBank. Ford was second at about 19 percent, but
Toyota and Chrysler each had about 14 percent. For all of 2005, GM lost 1.3
percent and Ford lost 1.1 percent of market share, compared with the previous
year, while Chrysler gained one-half percent and Toyota jumped to 13.3 percent
from 12.2 percent in 2004.

Belzowski said Toyota's latest campaign underlines that "they build where they
sell."

General Motors Corp. spokeswoman Ryndee Carney said the company usually doesn't
comment on competitors' advertising. But she noted that GM has launched its own
new advertising this month, with print ads describing GM's restructuring, price
cuts and new products.

The ads' tag line: "At the global car company that's proud to be American."

In a speech last week to the Swiss American Chamber of Commerce in New York,
Robert Lutz, GM's vice chairman, cited statistics about GM, Ford and
DaimlerChrysler AG's importance to the U.S. auto industry and economy, saying
they account for 4 percent of the U.S. gross domestic product and 11 percent of
manufacturing shipments.

"People who think it doesn't matter who owns our auto industry are flat wrong,"
Lutz said.

But the days of Japan-bashing and "Buy American" appeals have mostly faded,
said Gordon Wangers, head of Los Angeles-based Automotive Marketing Consultants
Inc., which has done work for Toyota, GM and other companies.

"I think today's consumers, especially in our global economy, are not
particularly moved by it the way they once were," he said. "I think they're
moved by a good product at a good price," he said.

bmorescottamanda

04-22-2006, 04:34 AM

^Quality Japanese and German cars cost more up front--but you recoup much of that with their strong resale values.

yea if you are the kind of person that sales there car every couple of years.

edluva

04-22-2006, 10:33 AM

So, as I said, your perception about the "refinement" of Japanese cars is 100% subjective, and not everyone will agree with you. You are trying to state something as if it were a fact ("Japanese cars are more refined") when it is impossible for it to be a fact.

that's where your strict reliance on one small aspect of a broad concept falls short. I can choose to approach this from an economic perspective - preferences. And from an economic perspective, demand is all I need to tell you about what value refinement poses to measures of "superiority". From this standpoint, you're wrong in saying that a directly immeasurable quality such as refinement is 100% subjective - it's not. There is a discrete, measurable consequence to an economic good, even if that economic good itself can't be put in quantifiable terms - it's comes in the form of money, surveys, consumer behavior, election outcomes. To deny this is to deny the *real* quantifiable effects that subjective efforts like campaign, marketing, and managerial decisions have on intended, primarily quantifiable outcomes.

So following this idea, any given administrative or strategic policy can have measureable economic consequences. The ability of japanese auto to, as you would probably put it, "trick the consumer" into thinking their cars are more refined, is a measureable economic good produced by japanese auto. I really believe you understand this, and see your attempt to discount the value of anything outside of JD Power as a conscious effort to deny it

edluva

04-22-2006, 10:39 AM

PS - Sorry but we didn't get a chance to beat this horse dead. Reason for the hiatus is I forgot this thread awhile back, but the debate continues...

fflint

04-22-2006, 11:51 AM

yea if you are the kind of person that sales there car every couple of years.
Value of a top of the line 2005 Honda Accord family sedan (non-hybrid)--$29,300
Value of a top of the line 2005 Toyota Camry family sedan--$25,805
Value of a top of the line 2005 Ford Taurus family sedan--$22,980

How about after five years?

Value of a top of the line 2001 Honda Accord family sedan in good condition--$13,394
Value of a top of the line 2001 Toyota Camry family sedan in good condition--$12,209
Value of a top of the line 2001 Ford Taurus family sedan in good condition--$6,983

How about after ten years?

Value of a top of the line 1996 Honda Accord family sedan in good condition--$6,367
Value of a top of the line 1996 Toyota Camry family sedan in good condition--$6,454
Value of a top of the line 1996 Ford Taurus family sedan in good condition--$2,630

Source: http://www.edmunds.com

SSLL

04-22-2006, 01:04 PM

^That sure says a lot about the reliability of Japanese brands. But a lot of those Japanese cars are now built in Canada and the US.

James Bond Agent 007

04-22-2006, 09:09 PM

that's where your strict reliance on one small aspect of a broad concept falls short. I can choose to approach this from an economic perspective - preferences. And from an economic perspective, demand is all I need to tell you about what value refinement poses to measures of "superiority". From this standpoint, you're wrong in saying that a directly immeasurable quality such as refinement is 100% subjective - it's not. There is a discrete, measurable consequence to an economic good, even if that economic good itself can't be put in quantifiable terms - it's comes in the form of money, surveys, consumer behavior, election outcomes. To deny this is to deny the *real* quantifiable effects that subjective efforts like campaign, marketing, and managerial decisions have on intended, primarily quantifiable outcomes.
If "refinement" is not 100% subjective, then prove to me that Japanese cars are more "refined" than American cars.

Citing sales figures won't prove this, because that's like saying that Japanese cars are objectively more aesthetically pleasing simply because their sales are growing while American car sales are stagnant.

That said, American cars still out-sell Japanese ones (in America). So, if I were to use your own economic criteria, I could say that Americans still think American cars are more "refined" than Japanese ones (or are more attractive, or whatever other subjective criteria we want to try to objectify).

So following this idea, any given administrative or strategic policy can have measureable economic consequences. The ability of japanese auto to, as you would probably put it, "trick the consumer" into thinking their cars are more refined, is a measureable economic good produced by japanese auto. I really believe you understand this, and see your attempt to discount the value of anything outside of JD Power as a conscious effort to deny it
I have no doubt that a lot of Americans, for some reason, get some warm and fuzzy feeling from Japanese cars, which they don't get from American ones. I'm merely trying to say that that warm and fuzzy feeling is an emotion, subjective one. On a more objective level, the differences between Japanese and American cars aren't that great anymore.

bmorescottamanda

04-23-2006, 07:12 AM

Value of a top of the line 2005 Honda Accord family sedan (non-hybrid)--$29,300
Value of a top of the line 2005 Toyota Camry family sedan--$25,805
Value of a top of the line 2005 Ford Taurus family sedan--$22,980

How about after five years?

Value of a top of the line 2001 Honda Accord family sedan in good condition--$13,394
Value of a top of the line 2001 Toyota Camry family sedan in good condition--$12,209
Value of a top of the line 2001 Ford Taurus family sedan in good condition--$6,983

How about after ten years?

Value of a top of the line 1996 Honda Accord family sedan in good condition--$6,367
Value of a top of the line 1996 Toyota Camry family sedan in good condition--$6,454
Value of a top of the line 1996 Ford Taurus family sedan in good condition--$2,630

Source: http://www.edmunds.com

That’s not true a Honda cost like a 1,000 bucks after 10 years. And if anyone paid that much for a 10-year-old car they need help. And a Toyota Camay might cost that much after 10 years but how much did you spend in those over price parts.

SSLL

04-23-2006, 06:06 PM

From: http://www.latimes.com/business/la-fi-gm23apr23,1,7767731,full.story?coll=la-headlines-business
________________________
If GM Fails, Then What?
The carmaker says it has no intention of entering Chapter 11, but some analysts say a bankruptcy filing in the next few years is a definite possibility. The ripple effects on the economy would be huge
By Tom Petruno and John O'Dell, Times Staff Writers
April 23, 2006

Ponying up more than $100,000 of their own money, three dozen General Motors Corp. dealers nationwide this month bought full-page newspaper ads imploring the public to give GM a chance.

"For the good of everyone, they must succeed and they need our help," the ad read. "We pledge ours. We hope you will do the same."

For most of GM's 98-year history, that kind of plea would have been unimaginable. But now, the company long synonymous with U.S. industrial might is scrambling to avoid something else once unimaginable: bankruptcy.

GM executives, including Chief Executive Rick Wagoner, say they have no intention of filing for bankruptcy protection, and no need to do so.

On Thursday, the company reported a $323 million first quarter loss, a sharp improvement from recent quarters and an "important milestone" in the automaker's turnaround plan, Wagoner said.

But some veteran industry analysts say GM's fundamental problems of high labor costs and falling market share are so severe that there is a serious risk that the auto giant will enter Bankruptcy Court in the next few years. Any number of events could be the tipping point — another surge in oil and gasoline prices, a recession brought on by rising interest rates or a strike by GM's main parts supplier, which already is operating under Chapter 11 of the U.S. Bankruptcy Code.

For the world's largest automaker and its vast constituencies, the prospect of a bankruptcy filing is so daunting that even many of Wagoner's critics hope his revival program works.

A GM bankruptcy filing would be the largest in history, challenging Wall Street, organized labor, politicians and the legal system to deal with the fallout.

GM's 147,000 workers in the U.S. and 460,000 retirees would face the prospect of their pension plans' being dumped on the federal government and of seeing their future benefits reduced.

Stock and bond markets could be upended, at least temporarily. GM shareholders, including billionaire Kirk Kerkorian, who owns 9.9% of GM, could lose every penny of their investments in the carmaker. Meanwhile, the company's bondholders, banks and other creditors would face unknown losses on $33 billion of debt.

Almost certainly, a GM bankruptcy filing would have enormous repercussions for the entire U.S. auto industry, which still directly employs about 1 million Americans, many of them in the Midwest.

Several big auto parts suppliers already are in financial reorganization. If GM joined them, it would raise the possibility of a domino effect of additional failures throughout the industry — including Ford Motor Co., some analysts say.

Although the public has witnessed some colossal corporate busts in recent years, "I would not underestimate the effect on the American psyche" of GM in Chapter 11, said Steven Roach, an economist at brokerage Morgan Stanley in New York.

The shock effects would ripple through the economy, from assembly lines to auto insurance offices, from Midwest shopping malls to global financial capitals.

For GM's 7,300 U.S. dealers, an immediate worry would be that sales might halt.

GM in bankruptcy would be "really uncharted territory," said Leonard Renick, owner of Renick Cadillac in Fullerton.

In terms of his ability to keep customers coming through the door, "It couldn't be good," Renick said. "I think it would be pretty devastating."

For all of its problems, GM still accounts for about 1 of every 4 passenger vehicles sold in the U.S. Its worldwide sales were $193 billion in 2005, ranking third on the Fortune 500 list.

But GM lost $10.6 billion last year, and Asian rivals have been taking market share from the company for decades.

Since last fall, GM has been trying to shrink its way back to health by closing a dozen plants and offering cash buyouts and retirement incentives to all 113,000 of its U.S. hourly workers, hoping to get a large number of them off the payroll. The company also has struck a deal with the United Auto Workers to trim retiree healthcare costs. Even so, by some estimates GM is draining $13 million a day.

"The current path is simply unsustainable," said Sean Egan, managing director of credit-rating firm Egan-Jones Ratings Co. in Haverford, Pa. He predicts GM will be in Bankruptcy Court within two years.

Chapter 11 is designed to give a troubled company breathing room while it restructures. Debts are instantly suspended, and the company operates under court oversight and protection while it tries to work out its problems.

In that sense, a filing by GM might seem a logical step for a business that is battling to reinvent itself. Major airlines and telecommunication firms have sought bankruptcy protection in recent years, and their customers have stuck with them.

But apart from a home, a car is the most expensive item most consumers buy. They expect big-ticket goods to last for years and for the manufacturer to be around to service them. In bankruptcy protection, GM would have to convince consumers that it wasn't going away.

Renick, the Fullerton dealer, said he would expect to tough it out if sales withered initially because of a GM Chapter 11 filing. His dealership, which his father founded as a Packard franchise in 1952, employs about 80 people.

But he wasn't sure what GM's strategy would be to lure people back into the showrooms. "Would GM be willing to slash prices? I doubt it. They've already done it across the board," Renick said.

Roy Adler, a marketing professor and consumer-attitude specialist at Pepperdine University, said it would be hard to overcome peoples' fears.

"The quality of most cars is really close now, so if I've got $25,000 and there are four or five other carmakers with competing products and they aren't in bankruptcy, then I've got a lot less risk going to one of them" instead of a company in Chapter 11, he said.

The stigma of bankruptcy would affect used GM cars too, said Maryann Keller, an independent auto industry analyst in Greenwich, Conn. "Every owner of a GM car would suffer an immediate loss of value," she said.

GM would be forced to drop sticker prices to draw customers, Keller said.

"There's only one way to compensate consumers for the risk, and that's by cutting the price," she said.

GM also would need to project a hopeful message in its post-bankruptcy advertising, Adler said.

"They would have to avoid the B-word," he said, "and craft a pretty dramatic message that said they were going to be stronger than ever with the streamlining they were doing."

Adler suggested that GM might take a page from South Korea's Hyundai Motor Co. and provide a 10-year service warranty on cars and trucks, with the funding to back up those warranties held in a trust by a large financial institution.

In addition, Adler said, the company "would have to promise exciting new cars were coming soon, and show some examples, and they'd have to promise an expanded commitment to serving GM owners."

Lee Iacocca did that for Chrysler Corp. in the late-1970s and early-1980s, after it avoided bankruptcy with a $1.5-billion federal loan guarantee. "He was able to keep sales from faltering by wrapping himself in the flag, going on TV and pitching those cars," Keller said.

But that was a different era, she said, when manufacturing was a larger part of the U.S. economy and Chrysler's woes struck a patriotic nerve. Today, Japanese cars outsell GM's models in the U.S.

"Rick Wagoner couldn't do what Iacocca did," Keller said.

Much of what might happen to GM in bankruptcy will happen in any case, many analysts say. One way or another, "The old GM is going away. It will be a totally different company," said Sean McAlinden, an economist at the Center for Automotive Research in Ann Arbor, Mich.

But for GM workers and their families, bankruptcy could instantly intensify uncertainty about their future. No job would be safe, because the shape of a new GM wouldn't be management's decision alone. Creditors would have to agree to the company's reorganization plan, and a Bankruptcy Court judge would have final say-so.

Wagoner, who has been GM's CEO for six years and has been widely criticized for not dealing with the company's problems sooner, says the game plan to stay solvent is to continue hacking expenses. The company says it is on track to reduce North American structural costs — including union labor expenses — by $7 billion a year.

GM also is raising capital by selling long-held stakes in foreign auto makers such as Fiat and 51% of its profitable financing subsidiary, General Motors Acceptance Corp.

But cost cutting alone won't save GM, many analysts say. In recent months, sales have continued to decline despite the company's restructuring moves.

In or out of bankruptcy, Wagoner must decide which GM car and truck brands to keep, which plants to close and how much the company can profitably afford in wages and benefits.

Last year, GM Vice Chairman Robert Lutz called Pontiac and Buick "damaged brands." Since then, they frequently have been mentioned as divisions that GM might shed. A bankruptcy filing could speed up the process.

GM now has eight brands, and "that's just too many mouths to feed," said Eric Noble, president of CarLab market research in Orange.

That analogy also applies to GM's workforce.

As so-called legacy costs for retirees' pensions and healthcare expenses have mounted over the last 20 years, GM's competitive disadvantage compared with foreign rivals has ballooned.

Its U.S. labor costs averaged $74 an hour in wages and benefits last year, compared with $48 for Toyota's U.S. labor force. GM said it spent $5.4 billion last year on healthcare alone.

If GM and the auto workers union can't agree on how to cut labor costs so that GM can be consistently profitable, and bankruptcy follows, a federal judge ultimately will make the decision.

On that issue, Delphi Corp. may be a prelude to how a GM bankruptcy would unfold.

Delphi, an auto parts supplier spun off by GM in 1999, filed for Chapter 11 protection last October. Delphi wants to slash hourly union wages by 40%. The auto workers union has balked. Two weeks ago, Delphi took the radical step of asking the Bankruptcy Court's permission to void its labor contracts and modify retiree benefits.

The union warned that if the court agreed to Delphi's request, it would sanction a strike. A judge is expected to rule by June.

So what would happen if GM sought to cut its pension benefits by, say, 20% to 40%?

"I might as well shoot myself," said 65-year-old Linda Ruth Jones, who retired in 1996 after 34 years as a GM assembly worker and inspector at plants in Flint and Pontiac, Mich.

Jones retired to the rural community of Harrison, Mich., about 300 miles north of Detroit. If her GM pension was cut by even 20%, Jones said, she couldn't continue making her $350 monthly mortgage payment.

Recently, Jones protested a GM-union agreement made last fall to begin imposing extra costs on retirees for health insurance. She says that the automaker is breaking a promise that kept her working hard for more than three decades.

"I didn't go to work at GM for the wages," she said. "I went for benefits for my two children, whose father wouldn't support them, and for myself when I retired. I paid a baby-sitter every day so I could work for GM."

In return, she said, the company promised a certain level of benefits "and now they are forcing things on us that we shouldn't have to face at this time of our life. They signed a contract with us at retirement, and they should be made to stand by that contract."

For the auto workers union, GM's financial woes are forcing bitter choices: how to apportion financial pain among former workers who draw healthcare and pension benefits and the workers currently on the shop floor.

Paul Krell, a spokesman for the union in Detroit, said its goal in reducing pay and benefits "is to spread the sacrifices as broadly but as thinly as possible."

The issue of legacy costs "creates a real conflict between existing workers and retired workers," said Jeff Werbalowsky, a reorganization specialist and co-chief executive of financial advisory firm Houlihan Lokey Howard & Zukin in Los Angeles.

That conflict could deepen in bankruptcy, because under Chapter 11 the automaker could try to dump its $95-billion pension plans onto the federal Pension Benefit Guaranty Corp. If the Bankruptcy Court agreed, many GM workers could face sharply reduced benefits, because the federal agency is limited in what it can pay.

Even if GM didn't seek to hand its pension funds to the agency, many analysts say the company undoubtedly would use that threat as a key bargaining chip to wring other cost savings from the union.

Moreover, the auto workers union faces the likelihood that whatever deals it strikes with GM, they would be models for the rest of the auto industry.

"We expect that any concessions that GM got out of the UAW, Ford and Chrysler would expect to get as well," said Mark Oline, head of corporate debt at credit-rating firm Fitch Ratings in Chicago.

The implications of a new round of labor cost cutting in the auto industry, however, could go far beyond that business.

What is happening at GM, many analysts say, is a microcosm of the rest of the country. The question it poses: In the age of globalization, can U.S. companies, state and local governments and the Social Security system really afford the healthcare and retirement benefits they have promised their workers?

Politically, that issue has been too hot to touch.

In bankruptcy, however, some obligations ultimately go unpaid.

"The one thing that a bankruptcy makes clear is that, this is the size of the pie, and that's all there is," Werbalowsky said.

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(INFOBOX BELOW)

Largest U.S. bankruptcies

With $160 billion in assets in its automotive operations, General

Motors would rank as the largest U.S. bankruptcy in history if the company filed for reorganization — a move that GM says it is not contemplating.

Largest U.S. bankruptcies, ranked by pre-bankruptcy assets (in billions)

Company Year filed Assets
1. WorldCom 2002 $103.9
2. Enron 2001 $63.4
3. Conseco 2002 $61.4
4. Texaco 1987 $35.9
5. Financial Corp. of America 1988 $33.9
6. Global Crossing 2002 $30.2
7. Pacific Gas & Electric 2001 $29.8
8. Calpine 2005 $26.6
9. UAL (United Air Lines) 2002 $25.2
10. Delta Air Lines 2005 $21.8
11. Adelphia Communications 2002 $21.5
12. MCorp (Texas bank) 1989 $20.2
13. Mirant 2003 $19.4
14. Delphi 2005 $17.1
15. First Executive 1991 $15.2

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Source: New Generation Research

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Skidding marks

For decades GM has lost sales to Asian and European automakers. Here's a look at the company's shrinking slice of the U.S. market over the past four decades.

Share of U.S. auto sales

1965

General Motors: 50%

Ford: 26%

Chrysler: 14%

Total imports: 5%

Other American: 4%

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1985

General Motors: 41%

Total imports: 24%

Ford: 21%

Chrysler: 12%

Other American: 2%

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2005

Total imports: 43%

General Motors: 26%

Ford: 17%

Chrysler: 14%