What can US automakers do to turn it around?

[Thanos]

Sure the easy answer is to build better cars.But what is Detroit not doing ? While the Germans and Japanese are gaining more and more US marketshare.

[LeesburgSkinFan]

They need to bring back that employee-discount-to-all-customers deal they were doing last summer.

[AlexRS]

imho they have to focus resources on improving their product.

[HOF44]

Build better cars at a cheaper price. Much easier said than done. Then it will take years of that before perception changes of the US quality versus the foreign quality.

Not saying there are not some fine US autos because there are. It's just accross the board the quality/warranty is not as good as alot of foreign makes.

[Destino]

Take all the people currently designing cars for them and fire them all.

Park a honda/toyota and it's american counterpart (price model) next to eachother and open them up. You'll notice right away that the problem is not the guy putting them together as people like to claim. US cars (talking low to mid prices) are generally uglier, less reliable, and have worse gas mileage then their japanese counterparts.

[Captain Chaos47]

Get rid of the unions that are driving costs up.

[iheartskins]

From today's Wall Street Journal

Ford Will Shed

28% of Workers

In North America

Car Maker to Close 14 Plants

As It Joins GM in Overhaul

Of Detroit's Business Model

By JEFFREY MCCRACKEN and JOSEPH B. WHITE

Staff Reporters of THE WALL STREET JOURNAL

January 24, 2006; Page A1

DETROIT -- Ford Motor Co. has made it official: Detroit is ditching its business model of the 1990s, and the cost now totals more than 60,000 jobs at Ford and rival General Motors Corp.

Ford yesterday announced plans to close 14 North American factories, including seven assembly plants, and slash up to 34,000 North American jobs over the next six years. About a month ago, GM rolled out plans to cut almost as many jobs by 2010. Both companies will emerge from these retrenchments smaller, slugging it out in a crowded U.S. auto market. Underscoring the gravity of the situation, Ford yesterday also announced a $1.55 billion loss at its North American operations for 2005.

The question now is whether the cuts at Detroit's giants are the beginning of a new, more competitive era, or just the beginning of the end. "We cannot play the game the old way," Ford Chairman William Clay Ford Jr. said in an interview.

For years, Ford and GM relied on making a lot of money on a few products -- mainly large pickup trucks and sport-utility vehicles -- to cover losses or bolster slim profits on small and midsize cars. The old way, as Mr. Ford said, took the approach that "if you build it, they will buy it." That meant building vehicles even when sales were slow simply to keep factories running and avoid paying wages to idled workers, as required by union contracts.

"Our product plans for too long were defined by our capacity," Mr. Ford said in a speech to investors, reporters and Ford employees gathered in a Ford design studio yesterday. "From now on, our vehicles will be designed to satisfy the customer, not just fill a factory."

For both companies, the transition will be painful and expensive -- but essential. The overall U.S. auto industry remains relatively robust, with sales close to record levels and employment at about one million people, roughly the same as in 1990, according to a recent Congressional Research Service report. The difference between then and now: About a fourth of all U.S. auto jobs are now with foreign-owned manufacturers, the report found.

Indeed, the restructurings highlight the divide between Asian and European manufacturers, which are profitable and adding jobs in the U.S., and GM and Ford, which are struggling with the cost burdens piled on over decades during which they had little real competition. Now, as GM and Ford resize for profitability, Japan's Toyota Motor Corp. stands ready to push past GM to become the world's No. 1 auto maker in terms of world-wide vehicle sales, perhaps as soon as this year.

Ford estimates that the "Way Forward," as its restructuring is dubbed, will cost $470 million this year as it buys out worker contracts and writes off closed plants. Ford Chief Financial Officer Don LeClair said the company could incur $500 million in additional costs this year for other buyouts, including workers at auto-parts plants that were part of Ford's former Visteon Corp. unit.

Costs will also rise as Ford adds more workers to the JOBS Bank -- a program negotiated with the United Auto Workers union under which workers receive full pay and benefits if their jobs are eliminated. Ford has about 1,100 workers in its JOBS Bank already, and the company estimates that each UAW member in the JOBS Bank costs it about $130,000.

[Chopper Dave]

Yeah iheart, I was just about to say, do what Ford is doing.

If you mix Ford and GM's strategies, i.e. cutting domestic jobs and turning out a more innovative product line, then you have what you need to do.

[Burgold]

I think the only way really is they have to come up with some innovation. Because of unions and other factors, price control can only go so far, therefore, you have to beat you competition by bringing out something new... something that the other guy doesn't have. I don't know what it would be, but water powered automobiles would do the trick. Perhaps, hovercraft so that traffic jams would be eliminated. We would just all drive home at different levels. That Jetsons car into a briefcase trick would be damn popular to everyone, but parking garage owners too.

[Kilmer17]

It's all a simple economics problem.

It costs American Auto makers more to make a car than they make selling the car. And since demand is declining, the solution is to cut costs.

Stop paying ridiculous wages and benefits to workers and the problem is solved.

[J3553]

what some of you may not realize is that american car makers don't want to make good cars. take ford for example. the average life expectancy on a 2005 ford vehicle is four years. FOUR YEARS. it's not because they don't have the resources to make great vehicles. they just don't want you to have a car for more than four years. the automobile market is too important to the american economy. most american cars are great while they last, but they don't last long at all. they are made that way on purpose. some flagship american vehicles will last a while (mustang, corvette, f-150, etc.". they make those a little better for obvious reasons.

i've also heard that you should never buy an american vehicle that was manufactured during hunting season. when you think about it, that makes a lot of sense.

[heyholetsgogrant]

:drool: :drool:

Make more cars like the new Challenger, but offer a less gass guzzling V6 thats supercharged...and make cars that can take a few dings in the parking lot..NO MORE CHEAP PARTS!

-Grant

[Sarge]

1 Break the unions

2 Do what Regan did to save Harley Davidson. Slap a tarriff on imports, at least until domestic car makers recover

3 I think Destino said they need to fire their designers. With that I agree

[HOF44]

1 Break the unions

2 Do what Regan did to save Harley Davidson. Slap a tarriff on imports, at least until domestic car makers recover

3 I think Destino said they need to fire their designers. With that I agree

Agree except for #2. From Ihearts article above "About a fourth of all U.S. auto jobs are now with foreign-owned manufacturers, the report found."

That would hurt the US worker and the foreign company.

[Raub]

what some of you may not realize is that american car makers don't want to make good cars. take ford for example. the average life expectancy on a 2005 ford vehicle is four years. FOUR YEARS. it's not because they don't have the resources to make great vehicles. they just don't want you to have a car for more than four years. the automobile market is too important to the american economy. most american cars are great while they last, but they don't last long at all. they are made that way on purpose. some flagship american vehicles will last a while (mustang, corvette, f-150, etc.". they make those a little better for obvious reasons.

i've also heard that you should never buy an american vehicle that was manufactured during hunting season. when you think about it, that makes a lot of sense.

Do you really believe the garbage you just typed? Stuff isn't necessarily true just because you read it on the intardnet.

American auto makers really need to work on their design and quality control. Simple stuff like ergonomics make a huge difference. I bought 2 brand new vehicles in the past year, one US, one German. The difference between the 2 is like night and day. While everything in the German vehicle is laid out thoughtfully and everything fits well.....the stuff in the Ford looks cheap, fits poorly, and doesn't look like any real attention was paid to making it convenient to use.

The Ford I bought was the first US vehicle I had owned in about 10 years. It will probably be another 10 years before I take another chance on buying one. The quality is poor, they're butt ugly, and the designs look like they're 3-4 years behind foreign competitors.

[rictus58]

what some of you may not realize is that american car makers don't want to make good cars. take ford for example. the average life expectancy on a 2005 ford vehicle is four years. FOUR YEARS. it's not because they don't have the resources to make great vehicles. they just don't want you to have a car for more than four years. the automobile market is too important to the american economy. most american cars are great while they last, but they don't last long at all. they are made that way on purpose. some flagship american vehicles will last a while (mustang, corvette, f-150, etc.". they make those a little better for obvious reasons.

i've also heard that you should never buy an american vehicle that was manufactured during hunting season. when you think about it, that makes a lot of sense.

:doh: :doh:

This is a ridiculous post. I own a jeep(my second). It is TEN years old. The otherone crapped out at 175k miles and loads of abuse. I used to drive a ford escort, it lasted for 10 years as well. Did you know that Ford shares products and manufacturing plants with Toyota? In todays economy there is no such thing as a "japanese" car. All auto manufacturers share technology and parts with each other.

What you get out of a car is what you put into it. The only thing that sets auto companies apart from each other for the most part is styling.

[Destino]

American auto makers really need to work on their design and quality control. Simple stuff like ergonomics make a huge difference. I bought 2 brand new vehicles in the past year, one US, one German. The difference between the 2 is like night and day. While everything in the German vehicle is laid out thoughtfully and everything fits well.....the stuff in the Ford looks cheap, fits poorly, and doesn't look like any real attention was paid to making it convenient to use.

The Ford I bought was the first US vehicle I had owned in about 10 years. It will probably be another 10 years before I take another chance on buying one. The quality is poor, they're butt ugly, and the designs look like they're 3-4 years behind foreign competitors.

Exactly! I see people complaining about economics all the time but I've never met someone that bought a Honda or a Volkswagon because it was cheaper....they are usually more expensive. They buy the foriegn make because it looks better and will last longer. They are willing to pay MORE because of this.

[The Evil Genius]

The unions aren't the only one at fault. Blaming the assembly line worker making $40 grand a year and not the executives making millions who are driving up the costs seems a little shortsided to me.

I wonder if the asian business model still calls for proportional salaries (even the head honchos) and not the ridiculous top heavy salaries going to hundreds of VP's.

While the unions are at fault - they aren't the only one's driving up the $'s that a company spends on its employees.

[heyholetsgogrant]

1 Break the unions

2 Do what Regan did to save Harley Davidson. Slap a tarriff on imports, at least until domestic car makers recover

3 I think Destino said they need to fire their designers. With that I agree

Sarge is a Union Scab....Thinking just the unions are at fault is luadacris...probably ever read a book like Blood on the Forge, The Jungle, or Fast Food Nation...

-Grant

[Cdowwe]

not pay outrages wages/benefits to its workers

[heyholetsgogrant]

not pay outrages wages/benefits to its workers

Ok what are the Outrageous benefits/wages?...

-Grant

[J3553]

:doh: :doh:

This is a ridiculous post. I own a jeep(my second). It is TEN years old. The otherone crapped out at 175k miles and loads of abuse. I used to drive a ford escort, it lasted for 10 years as well. Did you know that Ford shares products and manufacturing plants with Toyota? In todays economy there is no such thing as a "japanese" car. All auto manufacturers share technology and parts with each other.

What you get out of a car is what you put into it. The only thing that sets auto companies apart from each other for the most part is styling.

lots of older american vehicles are great and will last a long time, but most domestic cars made in the last ten years or so aren't very good. i know that the parts in almost every car on the road were made in different parts of the world. the difference is quality, level of innovation, and as you said, styling. it's the same in the electronics industry.

[Busch1724]

Obviously they need to look at how they spend their money on wages, benefits, research and design. The business model of having hundreds of millionaires on the payroll is stupifying.

One thing that was mentioned only once here was alternative methods of power. I'm by no means an environmentalist, conservative, or liberal; however to do something truly innovative and get people excited about American manufacturing; the auto makers need to cut their ties with oil companies/government and spearhead a revolution that will force foreign competition to follow suit. By doing this they will have a couple years in development on the foreign companies and in the mean time look for something else to be even more innovative. We have some of the best technology in the world and some great inventive minds and they need to work for the auto industry if they want to succeed, not for drug companies.

The only way for Amercian based automobile companies to turn profits and regain excitement in our auto industry to make something that will get people excited about the money they can save paying for ways to power their automobile. However I don't know that our government would be happy about that. I guess that's a whole different discussion...

[J3553]

Do you really believe the garbage you just typed? Stuff isn't necessarily true just because you read it on the intardnet.

American auto makers really need to work on their design and quality control. Simple stuff like ergonomics make a huge difference. I bought 2 brand new vehicles in the past year, one US, one German. The difference between the 2 is like night and day. While everything in the German vehicle is laid out thoughtfully and everything fits well.....the stuff in the Ford looks cheap, fits poorly, and doesn't look like any real attention was paid to making it convenient to use.

The Ford I bought was the first US vehicle I had owned in about 10 years. It will probably be another 10 years before I take another chance on buying one. The quality is poor, they're butt ugly, and the designs look like they're 3-4 years behind foreign competitors.

i actually didn't read that on the net. i don't find many net sources credible. my friend works for chevrolet and that's what he told me. i trust him because he's my friend and he works for chevy (you'd think he'd be biased...?). what you said is right as well, but i was talking about longevity and you are commenting on ergonomics.

[Drockvb]

We need quality built cars. The Japanese have been making cars that keep going year after year. Why can't any U.S. auto makers do the same? Most people want a car that will last. I can buy a Ranger cheaper than a Tacoma, but the Tacoma will outlive the Ranger. Build a better car and tap the $ market.

Right now they are generally marketing to the people without alot of money--

"Buy this cause it's cheaper". Build a better car for a little more cash and many Tacoma buyers might be interested in buying the U.S. made auto instead. Tapping into a different market would help big time. There are a ton of foreign made cars on the streets right now. :2cents: