Quote:
Originally Posted by Imperator
Yes, the journal did a cross country article on suv sales..
Ford which forecast profitability this year is taking it in the neck, primarily due to suv sales slump...looks like they need their own K car and the smaller ecologically efficient designs are on the drawing board again in earnest ala the early 80's faster than they forecast. This also will be reflected in price point and cost per unit build, which is still 20% higher than your average Honda plant in Tennessee for instance. The fact that the dollar buys less and less and they must negotiate the harsh math of labor costs and requests for lower benefits etc. is one vicious cycle is it not?
If I recall that was one of the major reasons Japan ala Honda etc. got a foothold here...then they ratcheted up quality. Detroit refused to design and market cars with better efficiency and quality control. The rest is history.
|
Correct, after the '70s gas lines anything and everything that said economy was selling for thousands above sticker and there were year-long waiting lists. The Japanese automakers chose that direction and simply continued improving products they knew would always be in demand. Then came the oil glut in the '80s/90s and US automakers became lazy and decided they'd again tell the public what to drive, producing pieces of crap unequaled in poor quality and inefficiency. What Detroit missed was Kenny Lay and Enron convincing current administration (I'm sure it took a lot of arm-twisting) to eliminate US oil futures regulation in 2000, allowing any speculator to by oil futures on margin. 16-1 leverage goes a long ways in that industry and with that Detroit's SUV ego ruined them.
For the final shot to the head, a convenient regulation exception granted by current administration in January 2006, the ICE (formerly the International Petroleum Exchange) futures trading of US energy futures is not regulated by the Commodities Futures Trading Commission (CFTC), even though the ICE Futures US oil contracts are traded in ICE affiliates in the US. Detroit's hide was effectively nailed to the wall and they began selling assets to remain going concerns.