CaptainJJack

Popular Mechanics Gets It Wrong on Buick Hybrid

This was article was helpful, although I have to admit that I start with a bias that favors the conclusion that the GM VOLT is all about marketing hype.

GM always seems to want to come out with software engineers might call "killer app vaporware". It starts with being far behind in some new technology or trend because it wasn't thought up at GM.

Then there is the prototype stage where all the off the wall, exotic technologies are promoted suggesting that GM is really making a bold leap.

Finally, there is the reality, which is so disappointing and usually a total failure.

For example, consider GM's fore ray into small cars. First, they scoffed at Toyota and Honda suggesting that small cars were a toy and that the American consumer would always want big and beautiful boats.

Then after the oil crisis hit, we saw all kinds of futuristic designs at car shows, suggesting even electric cars might be on the drawing boards (later we saw the EV in testing).

Finally, we get the Vega, followed by the front wheel drives of the 1980s and 1990s (Remember Roger Smith telling Fortune that GM's front wheel manufacturing will be so far ahead of the competition, with its massive robotics, that nobody will be able to touch their production efficiency?).

In the end, a business professor at Dartmouth figured that GM has spent far, far more than the US spent getting a man to the moon trying to develop a small car, even though unlike the moon shot, GM could go out and buy a Toyota Corolla and use it as a working prototype.

GM finally gave up and started the Nummi plant in a joint venture with Toyota. As I remember it, Toyota became GM's partner in large part to offset the backlash developing against buying Japanese cars.

Let the Detroit Automakers Fail

Knowing one of the auto CEOs personally, I can tell you that the LAST thing on his mind is trying to keep his job.

Normally, I would say, "let them fail". But I had also said that AIG and Lehman should fail, and I think, in hindsight, that was very shortsighted. If we would have had an AIG failure, we would be heading for a depression, right now, and as it is, the Lehman failure took a very bad situation and made it much, much worse.

Letting the big three fail will cost this economy an enormous number of WHITE collar jobs. For all the talk of how efficient the foreign auto companies are, where are they designed and engineered?

We need to have industries that actually make something, and the one thing about a car industry is that if you can make cars, you can make just about anything.

In any event, if you see GM go under, expect a 6000 Dow because an ENORMOUS number of jobs and income will go with it. FAR more than just the big three.

$25 Billion, or even more realistically, $50 Billion is PEANUTS given the stimulus needed to get this economy going. Even Martin Feldstein is talking about $500 Billion++.

It will be a lot better to save the jobs, in the short run, until the economy gets back on its feet.

Once it does, though, I say, let them go if they cannot compete, and while I am not happy to have sent the bailout money down a rat hole, and would still be much happier than if we did not spend the money.

Ford Celebrates, GM Scratches Its Head

@Paul8756

The one thing I can assure you is that Ford understands where their future lies.

They are spending BILLIONS of dollars converting three truck plants into car operations. The WHOLE POINT of Mulally's world platform is to get more fuel efficient, competitive cars into the US.

The main problem with NGV is size and range. You either have bigger vehicles, or they do not go as far, and that is why even Boone Pickens is pushing replacing the truck fleet with natural gas, and not the car fleet.

The ultimate vision at Ford is electric vehicles, but the battery technology is not good enough yet. The batteries are too expensive and they do not have the range.

The decision to start up the truck line is a pretty simple one. You have idle capacity and elastic demand. EVERY truck they sell over their marginal cost reduces the loss.

It is a no brainer. Further, there will ALWAYS be a truck market even if it is much smaller than now. Again, Ford understands the realities.

Mulally had geared Ford for a 14% market share in a world of 14 million cars sold in the US. They now see are world of 10 to 12 million cars, at least in the short run, and they have adjusted production.

The one thing Ford did that the others did not do was go out in 2006 and 2007 and borrow as much as they could possibly borrow. This was as much due to the fact that Ford people view themselves as car people, not finance people, and they want to get the money issues out of the way so they could focus getting the cars right.

In a normal world, Ford would be thriving right now, as they were last year before the downturn.

Right now, though, the future is not as much in their hands as it is in the hands of the economy gods.