The walls are closing in on U.S. automakers.

GM's quaterly loss of over one billion dollars should be seen as the first step in an end game that signals bankruptcy in the near future.The same fate may also await Ford as it is expected to repeat GM's performance.

As a long time auto industry person, I think the business model on which both GM and Ford have thrived in the past has effectively ended.That model, which required near monopolistic domination of the market by these two domestic giants, made it possible for them to tool up for new models every three to five years, spending vast sums of money with no consideration for risk.By and large, they have been successful at that game for a long time.

In the past twenty years, that near monopoly has been gradually chipped away by foreign rivals.What that means is that the old game of simply tooling up with the expectation of being able to sell all vehicles you make poses huge downside risks.In the past three years, it has been all but impossible to sell passenger cars and sedans of Ford or GM without huge rebates.Now the trucks and SUVs which sustained the illusion of prosperity are also victims of George Bush's splendid war in Iraq.That leaves the two giants with no effective strategy in the marketplace which is fragmented by many nimble competitors who can survive on low volumes and depend on superior technology and quality to produce their profits.

GM and Ford are also victims of their mentality to belittle technology and quality in the past.Their image now is that of a stodgy old company producing cars that no one wants or likes even with their rebates.To me a breakup of GM into smaller boutique companies like Saab,Corvette,Saturn may well be the prescription.

That still leaves the millions of people throughout the Midwest working at GM or its parts suppliers without any recourse.And those who voted Republican can also expect,in their older years, without the safety net of Social Security or Medicare, thanks to the same managements of GM or Ford that waged a campaign on behalf of the Republicans.

Blowback is a bitch.

I've never driven a Ford or a Chevy that wasn't a lemon.

I've had great experiences with Toyota and Honda.

Sue

what the weather is going to be like in Detroit.

and have kept this last one 11 years and have no problems.

On the other hand, I wouldn't own a Toyota, a Honda or Nissan if you gave me one. Nissan's, especially, have electrical problems out the wazzoo.

they are better built. And, as you and I know, perception matters.

But I think that perception started in the generation just below me.
I'm 35 and all my friends (save the very rich one who drives a Lexus) all drive American-made cars because their parents did and so on.
(See my comment below about my area).

A Chevy built in Korea, or a Honda built in Ohio?

The lines are far too blurred nowadays regarding what is and isn't an 'American car'. Do you buy a Ford built overseas to support the corporate office, or do you buy a Toyota built in California to support the workers?

If you want to support domestically-produced cars, just take a good look at the VIN number. If the first digit is a '1', it was made in the USA. Or buy a pickup truck. Due to very old tariff laws, manufacturers don't have to pay through the nose if they produce all of their trucks in the U.S. Therefore, foreign manufacturers have opened up or reconfigured plants specifically for pickup trucks.

with no trouble at all. Still gets 26-28mpg. I've owned 3 chevy's, 1 VW, 2 Hondas and several Toyotas. Toyota beats everything and has my allegiance for life. 3rd gen Prius will be my next purchase. Ford and Chevy have improved a lot but are hopelessly behind the curve. If Ford would produce thier concept Bronco (and not ruin it like they did the new Mustang) I would definately get one. I liked the concept Stang but the production model is cheap looking. But Ford isnt that smart and will ugly the Bronco down if it gets produced (big if).

They haven't interfered with Volvo, and indeed are using Volvo platforms for many of their new designs. though I do have to say that their new designs (with the exception of the Mustang) are pretty bland.

GM, on the other hand, has turned SAAB into a kind of a Swedish Saturn. And killed off Oldsmobile just after bringing out the Alero, which was a car that had quite a few people who would never think of buying an Olds actually buying one.

But they kept Buick going. Brilliant.

Chrysler, I mean Daimler? I dunno. They maybe be headed for big trouble, given that everything new they come out with is promoted on mongo horsepower, above all else. Are they even thinking about making a hybrid?

I think you may be right, all in all.

Redstone

Of course, without a job, that won't be happenin' anytime soon.

and cars like the PT Cruiser and the retro T-Bird, you would think these folks could buy a clue?

... or at least a slightly used one, and it will probably be a PT Cruiser.

that the big auto makers have not been good at responding to customers looking for good gas mileage. The Japanese kicked their ass a few years back when everyone was buying for gas economy. Now that people are starting to look for gas economy again they have very little to offer. I wonder why.

These companies are setting up to pull the rug out from under their retirees. They want to screw the retirees out of their pension benefits and go offshore to start bringing in cars from China.

seen cars turn into commodities.Only the BMWs, Lexus,Toyotas, Hondas etc. will be able to command premium prices while the low end cars have to be given up to the Chinese and quite possibly the Indians in the years ahead.

I mean, I see people buying GMs and Fords all the time. Around here, owning a foreign car is akin to terrorism. I have a Ford, my parents both have Fords, my neighbors next to me have a Buick, a Ford and a GM truck. My neighbors behind me have a Buick and a Chevrolet (GM).

Other than some friends of mine who are younger than me, I don't know very many people who drive foreign cars. I'm sure this phenomonon is repeated in other working-class neighborhoods throughout the country (My engineer Dad pounded into our heads that buying American was noble - you know - and I'm sure he wasn't alone).

I don't think they're hurting so much as their CEO's want a new summer home in France or something.

American cars are now made largely in Mexico. It is the Japanese who are making more and more cars in the states.

insurance costs. do you thinkt the japanese,or koreans, or chinese come near that figure? the advantages the foreign auto makers enjoy in areas of regulation, environmental issues,and general governmental interference are huge. combined with cheap labor, these advantages are the reason for any percieved higher quality. the fact that the big three has competed so well is surprising. gm has billions of unfunded pension benefits.

national health care.

currency exchanges, "strong" dollar, huge federal debt, shortsighted thinking, are all big factors. i am a gm retiree, and, believe me, i'm not counting on my medical insurance or my pension lasting as long as i do.

When I left I took a buy-out for my medical benefits. I still have some pension money coming at some point but it's not much and it'll be hell collecting it I'm sure.

fought hard against "socilaized medicine" and for the disaster of privatized medical care.
They make bad products. Face it. Only Americans want to buy them and only because of some misguided patriotism, which is absurd since 'American made' is so meaningless now.

clueless, and could also care less, about their customers. I had a brand new Explorer in 1998, which was recalled twice in the 2 years I had it (I hated the thing). When I called the dealer to correct the recall problems, they said "we really don't make any money on correcting recall problems, so why don't you take the car to another dealer" - I kid you not. That did it for me; I bought a Toyota and service could not be better. I will never buy another car from the American car dealers, no matter where the car is actually made. They should take note from the Japanese on service because that's where people get soured on a car.

lowest in customer satisfaction, even though their cars are the best for reliability and satisfaction. Saturn has the highest customer satisfaction, if I recall correctly, according to CR.

Some ten years ago, a Toyota dealer mechanic told me I needed new brake cylinders; a friend looked at them for me and told me they were fine, as did a second shop. Of course, this kind of crap can happen anywhere.

no sympathy for the textile workers of the carolinas, none for the shoe-making industry, none for steelworkers, miners, farmers, for all the workers in america? many posters on this message board are angry about their push-button jobs being sent to india. i guess they do not deserve your sympathy. some lessons are finally learned when the chickens come home to roost. corproations, by rule, have no conscience, and they don't care about your sympathy. it is the worker that gets fucked, every time. the death of unions has led to the corporations ruling all of us. the only way to overcome corporate power is by all the common people acting together, and that will never happen in the materialist, selfish, greedy and self-righteous hell that is the u.s.a. culture today

All toyota pickups sold in the US are built in the US and they are every bit as well built as the toyotas built in Japan

Japanese pay more taxes than we do and they have a more environmentally sensitive public.

Besides, the so-called "foreign" manufacturers keep making more and more cars right here in the USA. It is Ford and GM that keep moving their assembly plants just over the Mexican border!!!!

and I don't doubt it - but can you elaborate any?

There are way too many angry, pissed-off people here already.

They are perfectly living out the classic definition of insanity: doing the same thing over and over again and expecting a different result.

opportunity. They could have served this country by producing energy efficient vehicles and simultaneously investing in retooling their industry by investing in developing technology which utilizes alternate energy sources. They chose instead to join the fossil fuel industry in trying to profit as much as possible before the glory days ended. They chose to market gas guzzlers and cars that are poorly crafted and fall apart. If they go down, they've earned it.

The reason that auto manufacturers resist mandatory technology upgrades is because they don't sell vehicles on margins, they sell to pricepoints.

The consumer has an "ideal" of what they will pay for a vehicle. It is also well rooted into financing what customers of certain income levels can afford.

The "game" is to sell a car at a pricepoint and make it as cheap as possible to produce. The industry PR that increasing gas mileage will raise the cost of the car is pure BS. They know damn well what they CAN sell a car for. They want to preserve their high price points and sell shit

Seatbelts, airbags, ABS brakes, its the same deal over and over. But once the market gets saturated with the technology the cost of these things drop.

These assholes can't see past the next couple of years. They don't care about the safety or well being of their customers. They don't care about the well being or life quality of their employees. The only thing they care about is gettin' theirs while the gettin' is good, and then gettin' out.

a Pontiac that was recalled because if you opened the hood while the engine was running, some gizmo could fly off and severe your head from your neck. We drive a 1993 Mercedes diesel S class, a gorgeous old car with fantastic gas mileage.

difficult for the monopolists at GM and Ford. That mindset says that no matter what we produce and what price we ask, the public will pay for it.Those days are over.

crisis.

Of course, the federal government was there to bail them out at that time. I don't know if the federal government will bail them out yet again.

Those who forget the past are cndemned to repeat it.

Seems we either subsidies or bail out too many industries as it is.

I now have a bottom of the line, (not even a radio), '94 Toyota pick-up that I paid $13000 for new. I have yet to put any money into repairs other than regular maintenance. It has a large dent in one side and a cracked windshield. It runs beautifully, has never failed to start, and everything works. My wife has a '91 Tercel with similar results (we did have to have the heater repaired).

My prerequisite for buying a car: Toyota or, at least, "Made in Japan".

that has 170,000 miles on it. anecdotal info such as is inconsequential.

I see the Japanese auto industry as a threat. The European automobiles are no value. Further, I think the perceived "quality advantage" that causes consumers to by Japanese is a manifestation of a consuming public who has no idea how to manage risk.

It is not worth thousands of dollars extra to buy a Japanese automobile just on the possibility that the American automobile may have an expensive quality problem. Longevity is a red herring also. It is not worth spending thousands more for a Japanese model just because one expects it will give you a return of a longer life in its 15th through 18th years.

j.d. power ratings. few people realize what these numbers indicate. they are number of defects per 100 cars. traditionally the japanese autos score about 107, and american models approximately 118. this means, on average , that an american car has about 0.11 more defects per car, and the ratings are screamed in the headlines as, "americans trail the japanese."

Toyota assembled in the U.S. versus a Ford or GM built in Mexico. :)

My daily driver is a 91 Camaro RS ... nearly 15 years of near flawless operation. Mileage ain't bad (compared to SUV performance, anyway.) This car has not been babied ... sadly, I neglected it for a few years there. It developed an oil pressure problem ... turns out the seal on the oil pressure sensor had developed a leak. $60 for the part. The car was 12 years old at the time.

So I can't say my experience backs up the conventional wisdom that foreign cars are better than American cars.

they go bankrupt so they can dump pensions and medical for the workers...i have a bad case of sceptisim...this is what has gone on in the airline industry first..;...i just don't trust this..this is a great way for GM and Ford to stop pensions and most medical for all their employees!

fly

with this economy who has the money to buy a new car???

Live in NM--and every night on TV it constant pounding about purchasing a new car---I cant believe that the car companies expect you do rush down and purchase a new car every week---its like everyone should own at lease 5 cars---and then you get the crap about our truck is bigger and more powerful then yours---like its everyday that you haul a load of bricks to work with you----or pull a load of horses to the convenience store----Now they are in deep shit---it serves them right---in El Paso, the car lots are bulging with trucks and cars which they cant get rid of and the banks are selling repos on the corner every week---

It dosent take a rocket scientist to figure out that this a coming disaster----then there is the fuel situation---with the price of diesel topping 2.50, who in the hell is going to run out and buy a truck to haul a load of bricks to work with him-----

The whole thing is unreal----the exec ts must be living in another world----OH yea, thats right, they belong to the rich class, the ones who drive the 200,000 dollar RV's and dont give a shit about gas prices----------and drag their super trucks behind their RV's---

I hate to say it----John Stossel said it----GIVE ME A BREAK---

..they simply trade in, put some more money down and live with a 500 dollar car payment. I know plenty of guys who are happier to make a car payment than a mortgage payment, and so live in modest rental apartment so they can drive a fancy ride.

when they realize they're not ready for retirement.

www.missionnotaccomplished.us (The.Day.WE.BEGIN............)

As teen I drove the crap out of an S-10, my father still has the truck and it was just never the same after I got my license that first year.

After that I had a ranger I got about 4 years later and I babied it. My dad bought it from me for his compute to work after I moved away, he has never had one repair on it besides oil and tires and that was from when I bought it at 50k miles to where it is now 140k.

My Mustang is a 99, V6 hardtop, paid off with 65k miles on it, drive it everday to work. Only money spent is fuel filter, air filter, oil changes and a set of brakes on the front. But I also baby this car and dont run it hard.. I get about 25mpg on it.

I see people at lights etc just slam their foot down like they are in a street race all the time, its my opinion no matter who makes the car they will not stand up long term to that kind of use.

busy producing the last decade - big gas guzzling behemoths that are now increasingly losing favor as fuel prices have skyrocketed. Boo hoo. As my mom would say, "Too damn bad about you."

To paraphrase President Clinton (oh for the good ol' days...)
Had several previous administrations, going back to post-WWII,
listened to the clear thinkers, not BIG oil and Detroit, US policy
would have been to develop very early on, both alternative
power sources and fuels for vehicles, and conservation principles, across the board. Electric generation, natural gas use, non-vehicle-use petroleum products, ad infinitum. The short-sighted, greedy corporations at the center of this problem/crisis are the root cause. And *especially* political leadership which didn't (to this day) have the vision to bring us along to embrace and demand an energy-efficient society. With the PNAC and Texas mafia on the dias, we are not going to make any progress in these areas.
Ask the airlines and SUV-jockeys about fuel efficiency and cost.
Europeans live quite well - better than us generally - and use, *per capita* about 1/3 of the energy we consume. Embarrassing.

GMs problem is the greedy, ammoral management with no regard for their customers or employees. All they are interested in is the bottom line this quarter and how much cash they can steal from the company.

This is American management.

Japanese management has a sense of honor. It would be shameful for them to produce a car the way GM does.

The engineering staffs are tops. But their bosses are ASSHOLES!!!!

Toyota and Honda are kicking ass because they make quality automobiles that people can rely upon.