mycargets52mpg

Does America Want to Buy Fuel Efficient Cars?

Americans react as rationally to price signals as anybody. Exhibit A: Full-size SUV sales and resale values during last year's gas price spike. The main point to keep in mind is relative fuel efficiency. Skipping the Suburban for an Equinox will save money at the gas pump. That Equinox will of course not do everything a Suburban does, but at some point the additional fuel cost will force needs and priorities to be reassessed. When gas hit $4, that point was clearly reached, and many consumers made rational decisions. An Equinox will of course be less efficient than a Civic, but that comparison probably was not valid at $4, given the underlying needs assessment. GM, Chrysler, and Ford had clearly banked on behavior as described by rstrader, but the evidence shows otherwise. At least Mulally and Lutz had the guts to openly endorse higher gas taxes to support their investment in fuel efficient vehicles.

How Trucks and Tariffs Contributed to GM, Chrysler Failures

Hey Master Jimmy,
I drive a 9-year old German-engineered car, built in Mexico. New, it was cheaper than most full-size pick-ups, yet unsubsidized. As a trained economist, I follow the industry for a living. Your screaming fails to disprove my case, and how your post is supposed to enlighten anybody with some superior insight is a mystery to me. Please try and distinguish customer preferences from regulatory framework, and we may even have a meaningful discussion. Please try and filter your own biases and preconceived notions before you talk about "industry insight" because otherwise nobody will take you seriously.

How Trucks and Tariffs Contributed to GM, Chrysler Failures

Tom, I agree with your conclusion that this is a story about greed, and let me add, stupidity. Not surprisingly Jenkins, once again, is completely unhinged. Nobody forced Detroit to skimp on quality and features in their passcars. However, by going down that slippery slope, they first painted themselves into a corner and then lost credibility when they belatedly realized that pick-ups, etc. are not the road to salvation. How building crap is a forced outcome of any type of legislation is Jenkins' secret, however obsessed he might be with "government is evil". Other OEMs operating under the exact same set of rules decided otherwise, and are not sorry wrecks. His legislator rant is an insult to the reader, especially since Jenkins keeps listing all the flavors of idiocy GM, Chrysler, Ford engaged in. If that isn't management incompetence, than what is?

Looks Like GM, Chrysler Are Goners

Doug,
here is a little trick I call math: First, check GM's inventory days. You know, the number of days it takes to deplete inventory levels as of a certain day, at a given sales volume. For the sake of simplicity, let's say GM's inventory is at 100 days right now. About 65 could be considered normal, even if you concede that GM is incapable of managing its production and distribution, which they are. (By comparison, Toyota typically carries about 35 days.) Now, Doug, stop production for nine weeks. Note that nobody said to stop sales for nine weeks. If no new product replaces sold units for nine weeks, inventories will in fact go down. It's likely not 1:1 as in 9x7=63 days less inventory after nine weeks of doing nothing, because GM may have stocked its distribution with vehicles nobody wants, but we already established their ineptitude. However, your claim that inventory will miraculously remain "APPROX. THE SAME" (your emphasis) simply ignores the very easily grasped mechanisms laid out above.

Holman Jenkins' WSJ Editorial Shreds the Administration's Auto Policy

Let me try to understand this. Decades of lunacy are irrelevant as long as you think you can blame a president for what went wrong. Never mind that this one has only been in office for, what, three months now? Consider that the previous president three years ago told Wagoner to produce "relevant product", or else risk becoming irrelevant. Bondholders likewise have had three years to contemplate becoming irrelevant stakeholders in this enterprise, had they only read the papers. Nobody forced them to hold worthless scraps of paper, for that is what they have been for quite some time now. Kind of like the loser fat kid playing musical chairs blaming the adult cutting the music. How all of their stupidity is somehow Obama's fault is beyond me. But what else to expect from a journalist hack paid by the WSJ. They railed against the google IPO as well, because their buddies on the Street didn't get a cut of the action.

Obama's Auto Task Force Lacks Expertise

Whatever may have counted for "expertise" in the US has gotten us here in the first place, so I for one am glad the task force isn't staffed with bubbleboys from Detroit. And - this isn't rocket science, as much as the Detroit bubble likes to believe the contrary.

Oh, and talking about expertise, I suggest googling "Bush_relevant_product... They have had 3 years since then to devise "relevant product", and look at the results. Detroit must be populated by a horde of inbred, dimwitted bozos running these klippjoints for the business to have become as pathetic as it currently stands.

Auto Industry Rescue Delays the Inevitable

B2B: Born to bozo
B3B: Big three Bozos
B4B: Bailouts for Bozos
B10B: Beaten Bozos

The Case for Making Bigger Cars

6 years ago, the B3B (Big 3 Bozos) were likely planning gasoline as of 12/31/08 to be what is was back then, about $1.60 per gallon Regular. That would have given them the confidence to keep producing whatever made money at the time. Their BoDs would have demanded nothing less. Now, even though it looks like the B3B couldn't plan their way to the men's room, their gas price assumption is dead-on.

Funny how you can be right and end up dead after all.

It would have taken extraordinary leadership skills to move the Fs, the GMs, the DCXs in a way as to position them for what we now know. Exactly that kind of leadership is what they get the $20M annual compensation for, right? They have, to a bozo, failed. Their vaunted leadership skills? Insert favorite hand gesture here.

On their epic road trip to DC, I hope they have had time to not only admire the scenery outside Detroit, but also to note how little space their products occupy on roads once they leave their little bubble-world. They are not half as important to this country as they think they are.

Sick and Tired of Financials, Carmakers Blaming Everyone but Themselves

It is widely known that the Great Pumpkin is to blame. Its appearance coincides with the new model year which is about to fall flat on its nose, again.

Chrysler's Rebadging Plan: Strategic Blunder for Nissan?

It may be more than simple Prizm/Corolla-style rebadging, at least one would hope. Using the Altima/Maxima "platform" with a Chrysler interior/exterior design might still flop, given their utter loss of styling direction, but if done right, could save the company. There's no reason to be ashamed about utilizing good engineering. For instance, VW is so good at this game that its Czech subsidiary Skoda builds a Jetta-sized vehicle (the Octavia) that is better, and lots cheaper, than the Jetta, but with mostly the same mechanicals. That strategy effectively saved Skoda, and allowed VW to spread the cost of its engineering over more units.

One more point - after the Talon/Laser came the moderately popular Sebring/Avenger, again built off the Mitsu Eclipse platform. Did anyone know, or care? I didn't think so, either.

Impact of GM Destroying the EV1

Re: Fuel cells, about 8 years ago Chevron teamed up with GM to work on a hydrogen infrastructure that used petroleum (of course) as feedstock to produce hydrogen and sell it through Chevron's distribution network. Basically the dark side trying to protect itself from obsolescence. To their credit, GM eventually must have concluded that Chevron rope-a-doped them into this lunacy, and deep-sixed the plan.

GM Slashes Benefits: One Bad Decision After Another

Many posters here seem to believe that GM still matters to the US. It doesn't, and get over it. Even our President said that GM needs to sell relevant product if it wants to remain in business. Pretty simple insight, huh?

Last time I checked, GM's market cap equalled that of Bed, Bath & Beyond, which basically sells frilly junk from China. For all you GM faithful, that should be cause for concern.

GM Slashes Benefits: One Bad Decision After Another

Pretty soon GM and Ford will be too insignificant to bother tracking their CEOs' latest lunacies. Their operations manual seems to consist of 1. Point gun to foot. 2. Shoot. 3. Repeat.

Anyway, how does GM's valuation compare with the net book value of its assets? Are we there yet?

Challenge for Ford and GM: To Stay in Business

If GM and Ford seriously sat down and met the fuel rule, they might finally be ahead of the curve instead of way behind. By dragging their feet, and trying to lower the bar, all they are doing is fooling themselves. Consumers will choose better, not worse fuel efficiency, as the market can attest to. GM and Ford are sadly mistaken if they think they have a choice in this. In that case, the sooner they go, the better.

Death of the SUV

Choice is good. You can choose to spend all the money you want on gas. After all, you have to do something with all that cash from the tax cuts, rebates, etc. But don't come crying like a 4-year-old because you suddenly realize you made a really stupid choice. Suck it up. Do you really think a gas tax holiday will help? Sounds more like a holiday from common sense to me.