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jerryguru69 (93.33)

CSI: Detroit, the Autopsy

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June 17, 2009 – Comments (2) | RELATED TICKERS: TM

Bob Brinker had an automotive journalist on his Saturday talk show. I found it quite illuminating to get the perspective of someone who knows cars, rather than folks like TMF and myself who pour over 10K’s. I heartily recommend you get ahold of this interview.

His guest was not optimistic: “humpty-dumpty” and “pretty bad”. A few of the more interesting points I heard:

*        Management incompetence. They are the ones who said yes to the UAW and signed the contracts.

*        The ones in charge are businessmen, not the engineers who know how to make a good car.

*        Detroit ceded the car market to the imports, but continued to make pretty good trucks and SUV’s. A small car may make a bit less money, but if you make a good one, you will sell lots of them.

*        Not only Detroit, but also Honda and Datsun and German cars are playing catch-up to Toyota’s hybrids

*        Dumb electric car, GM’s EV1, should never have been made. Sadly, he did not elaborate as to why.

*        Chevy Volt has a small gasoline engine (which kicks in when the rechargeable battery gets low), but the gasoline engine runs an electric generator, which, in turns, powers the electric motor. “Interesting”, but does not have enough range or versatility. Cost will be about $40K. Are Americans going to pay 40 grand for a car that goes 40 miles?

*        Bio-diesel hybrid? Not in US or Japan. Maybe Europe. But environmental concerns and regulations?

*        Not all parts for foreign cars are imported and just assembled domestically. Many parts for foreign cars are also manufactured right here in the US.

*        Cafe standards are 30mph. But, you have to make people but these puny, lightweight cars, and the only way to do this is $5 per gallon gasoline. When gas goes this high, we roll our eyes and say: disaster, horror, bad oil company-bad oil company.

2 Comments – Post Your Own

#1) On June 17, 2009 at 11:49 PM, checklist34 (99.80) wrote:

detroit has always had better design talent, imo, than the imports.

think about it.  they have easily the best and most popular trucks DESPITE UNION LABOR PUTTING THEM TOGETHER and thusly leaving them iwht what?  3x, 4x the assembly costs and 1/2 of the care in assembly as a japanese maker would have here in the US?

So the japanese can build car factories in the US, but american car companies have to build in mexico to escape the union's death ray. 

Skipping the rest of the rant...  at this point I think GM has about the best car/truck on the market at many price points and market niches.

And to achieve that against the epic sweeping tide of union labor must imply that some significant design talent exists there.

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#2) On June 20, 2009 at 12:49 AM, CamaroBob (< 20) wrote:

To me the best part of GM are their newer generation vehicles such as the Cadillac CTS, new Camaro, Mailbu, Aura, and Vue. However the best vehicles were those derived from Europe such as the last vehicles that I listed (Germany's Opel and Australia's Holden). I disagree with those who blame and demonize Unions. The Toyota Corolla and Matrix / Pontiac Vibe are made by UAW workers in Fremont, CA. GM was a structural Cruise ship which was very bloated and didn't respond very fast.

Overpaid and overfed managers are the real ones to blame for Detroit's problems. They were slow to change and tried to live off of the high profits of loaded SUV's without really reinvesting in the future. And those complaining about the pay and benefits of Union workers cry foul when stockholders complain about pay, bonuses, and golden parachutes for those executives who show poor performance.

Neither Chrysler nor GM has the labor excuse anymore. With post-bankruptcy restructuring, the pay and benefits are on par with their non-Union Japanese North American counterparts.

 

 

 

 

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