i’ve owned a subaru, a honda and a gm/toyota prism. I now own my 2nd Ford Taurus, it’s as good or better than the previous cars i’ve owned.
Buddy – The big change in demand from SUVs to small cars occurred 6 months ago, which is too fast to launch new models or retool truck plants to make cars. The japanese have been better at building more flexible plants, but most of them work on a single platform for their cars, US auto makers tend to have 3 car (small, med, large) and 3 truck platforms, it’s tough to build multi platform.
Also the latest GM SUV’s have been hybrids. The Escalade has a mileage est of 22 mph, in city, 21 on highway compared to 14/16 for non-hybrid. Since these were their most profitable vehicles for the last 10 years and it takes 36 to 48 months to launch a new model it certainly was a good business decision when it was made.
Gooner: the GM and Ford are actually burning about $2.5 to $3 billion in the 3rd quarter, so it’s even worse.
This crap about the unions is BS,
1. the % of union jobs in the US is at it’s lowest level since world war II, so their influence.
2. GM will have lower labor costs in the next few years which will reduce Toyota’s advantage at US plants by 80%, because all the older, more expensive union workers have/are retiring, new workers come in at a lower pay rate. Toyota, which started building US plants less than 20 years ago are now facing an older, more expensive work force, with higher medical costs, despite the fact that they are non-union.
People would probably be happy to work for half of what Toyota pays, so what? There is always someone with a crappy job or no job is always willing to undercut other people.
Finally the germans were doing fine selling cars, despite the fact that their cost are even higher than US UAW workers.
When i worked at Ford (as contract programmer) they lost over $1000 for each Each one sold. They needed to sell at a loss, to meet US mileage standards and avoid fines. So the detroit automakers never could sell small cars profitably, but continued to make and push them to help offset all the SUVs. Had government standards that not been an issue, there would be no ford focus today, which is the only thing really selling well now.
AIG – the part of AIG that was bailed out was the CDS business, not their property and casualty insurance, those companies are not in trouble and are profitable. If you start dropping events to support your sales affilaites then that business will be the next to fail, as the best employees leave for better deals.