Feb. 17th, 2009 10:04 pm My thoughts on the US auto indistry crisis I've been wanting to post about this for a few weeks already....
So, as everybody probably knows, Ford, GM and Chrysler are in big financial problems. Chevy and Chrysler asked for billions of dollars from the government to stay afloat, while FOrd has declined for now, but still has huge losses and debt.
I've heard time and again people (my friends, people in my LJ and people in general) that the (American) auto makers should be left to die, that if they want to survive they should stop making cars that nobody wants.
Now Chrysler... yeah, I think Chrysler could die based on the market alone. Chrysler makes cars that can't go 5 years without starting to need constant and often expensive repairs. Their cars tend to have awful fuel efficiency. They were a liability for Mercedes and as such they had to pay someone else to take them.
spikedpunch would probably disagree with me, he has a PT cruiser and loves it... but realistically his Hellcat appears to be a good example of what I'm talking about, he keeps having to put money into it.
GM. Geesh, I have mixed feelings about G.M... On one hand, they make the Hummer, and as so you could say they deserve whatever bad destiny fate brings them... But up until last year they were the #1 car manufacturer in the world (last year Toyota finally surpassed them). They make Opels/Vauxhals which are not bad cars. I honestly don't know much about their other brands, whether they're any good or not, their specs, gas consumption, etc....
Ford is the main target of my thoughts.
People often joke about Ford being an acronym for Fix Or Repair Daily. But I believe that's a dated stereotype.
Even after we personally had a bad experience with them initially, my mom's Focus spent more time its first month in the shop than with us... I saw it grow into an incredibly reliable car. I own a Focus now and I couldn't be happier. They are not the most powerful of cars, the most comfy or the most fuel efficient, but they are not crap.
There's a big distinction between Euro-Ford (Fords designed in Europe, mostly the UK and Germany) and Ameri-Fords. The trend would appear to have more Eurofords and less AmeriFords, and for a reason. It's easier to spot one from another because one looks like crap and the other doesn't. Eurofords are also more reliable
Up until a year or two ago they were #1 in sales in the UK (they may still be, I just haven't found a more recent statistic).
I think of my car as European, while made in the US (so are Hondas and Toyotas... or in Mexico); it was designed in Europe, which is probably what counts most. I know some friends consider this (calling a Ford European) sacrilege. People that like REAL European cars, like pepemapache. He has owned a number of VWs and Renaults (even though he did used to love to drive his brother's Astra, a GM)
So the point that "they should make cars people want to buy" argument doesn't really hold its weigh, with GM being the #2 car manufacturer and Ford #3.
It is certain that their sales have dropped. Toyota passed Ford in 2003 and GM in 2008. There is a reason.
Yes, the companies were greedy by focusing on SUVs instead of cars... but the profit margin is so much bigger in those, and they used to sell well in their largest market, the US market... Perhaps the biggest failure was the lack of ability to adapt and focus on other segments when the SUV market (luckily) began to lose momentum.
Anyway, despite that, with those sales these companies are making a LOT of money selling cars... so how can they be in so much trouble?
The unions.
Sadly the unions have a ton of power, so much that they don't even allow the companies emphasize (enough) the union's role in their woes. I feel it is the #1 problem and by a LOT.
Auto workers in the US have astronomical salaries and benefits, for their skills, comparable to people with a lot more education and generally better jobs, money not considered.
Perhaps it is the American dream? That an average Joe can work and make a good salary, even as a factory worker? At the very least it's an illusion that such a system is sustainable. An example of how ludicrous the system is, they get paid full salary for reporting to work duties even if they do nothing.
The unions were established under MUCH different conditions. The industry was growing, they didn't have as many employees and the world hadn't realized yet that generous benefits for people after they retired would eventually become unsustainable. Eventually they not only had to offer impossible benefits to a huge work force (without the chance to reduce that even for new employees after they had realized how hard it was), but also to big numbers of retired workers.
And if they had worked hard their whole lives, didn't they deserve it? Isn't that what this country is all about?
Well, possibly, even though that that "this country is all about" is more socialism than capitalism
I'm not saying the companies are without a fault. Car sales have dropped not allowing the luxury of such benefits to be awarded anymore, and beyond economies being weak, that also has to do with the cars they produce.
That may sound contradicting with the whole tone of this entry, however I don't believe it is. While they are selling a LOT of cars, it is a fact Toyota has surpassed them...
About Toyota.... Toyota makes better cars, yes. But if you've read about industrial design, there are other things that they're known for: Efficiency, automation.
I remember how it was described as a great achievement that Toyota had a factory with one (and only one) employee that showed up in the morning to turn things on and later shut them down in the evening. From what I've read that was an exaggeration, but in any case it is a very big difference to an industry like the American with a big workforce with outrageous benefits and a powerful union; unable to lay people off as they needed.
Whether companies should be able to fire people at will or not is absolutely debatable, but it is a luxury some brands enjoy and some don't.
And it's not just American brands that are cutting back. French auto makers (and some friends know I love French cars) are also receiving government aid. Toyota closed all of their factories in Japan but one...
Anyway, I'm starting to ramble, better wrap things up =P
These are my thoughts for the most part. My opinion. Feel free to pitch in your two cents or even to say I'm absolutely wrong.
Current Music: BBC radio in the background
location: My puppy's house
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