Why does US auto industry have so much trouble competing?

I think there is too much panicking going on here, GM and Ford are going nowhere, it is not like they will disapprear in the thin air. They still have good operations going on globally, their problems are mainly in the NA market, which obviously is where they sell most of their vehicles.

Volume wise, they don't have problems in selling cars, they just need to figure out a way to be more profitable selling their cars, not SUVs/Trucks, in this age of expensive fossil fuel adn rising Chinese and Indian consumer markets.

 

The problem is that GM has a HUGE legacy workforce in America of people who receive big pension benefits, but no longer work for the company.

Their pension payouts are killing them.

It doesn't have much to do with current employees.

 

The problem is that GM doesn't sell enough cars, but if the big 3 are lobbying for a nationalized health care & pension system like Germany and Japan have, those ideas might be worth exploring.

 

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was there some button rearrangement upstairs? I keep accidentlly hitting reply and not edit..

 

I'd agree with many on here that the Unions certainly don't help.

I wonder if the internet (easier to get quotes from several dealers without being hassled too much) has cut down on the margins much? I know sales are down, and I could be dead wrong but I'm betting all the companies have lost some (potential) revenues just by customers having easier access to prices.

 

Anytime I drive off the Hertz lot, I'm laughing at the cheapness of the interior. Last week, I rented a Chrysler Sebring while on vacation. The thing was an absolute POS. The dashboard had a fake metallic silver finish that was nothing more than a piece of plastic.

Recently, I had a Pontiac Grand Am as a rental. The knob on the radio fell off, and interior panels were peeling off. What a piece of junk. The fit and finish on these cars is absolutely horrible. Why on earth anyone would take a Pontiac or Malibu over a similarly priced Accord or Camry is beyond me.

 

Because they are NOT the same price (don't be fooled by the MSRP, most of the times you can get those cars for $3000-$4000 below the sticker price, not true with Hondas and Toyotas), and because American cars are usually backed up with better, longer-term warranties (My younger brother had a crappy Cavalier with 5 yrs/60000 miles bump2bumper warranty). The max I ever got for a Jap car is 3 yrs/36000 miles. I think Mitsu is the only Jap company that provides a long term warranty now that matches what GM offers.

Also, some of the newer vehicles from GM (Cobalt, G6) have a cleaner look on the inside and use higher quality material. I think GM/Ford should start adapting the same Japanese strategy for making cars: copy everything the Germans make, and try to do it better.

But overall, yes, you are right, American companies have for far too long ignored their mid-size/smaller sedans and have fallen behind the Japanese competition.

I think they need to pay more attention to their cars and less attention to gaz-guzzling SUVs.

The future of the automobile industry in NA seems to be more geared towards car-based SUVs and sedans. I just don't think large truck-based SUVs will make a strong comeback to the market, because I don't believe we will EVER see low gas prices again in this country; if anything we will likely see prices higher than these for the next few years.

 

Well there's an obvious reason why they are 3-4 k cheaper than their Japanese counterparts and, of course you already stated it, it's because of the reliability and the quality of the product. Why do US automakers start giving out longer warranties just recently (they NEVER had long warranties like they did now)? Because not only were they losing customers to Toyota and Honda on the "quality and reliability" factor, but then some customers went to the "bang for your buck" factor in Hyundais and Kias (the original automakers with 10 year/100k warranties). So they were in a bind and had to do something.

Americans invent the car > Japanese improves on the car > Germans perfects the car. JUST MY OWN OPINION.

 

I own an American built car that I expect to get 200K miles on, spending very little on maintenance. Its styling is middle of the road but what the heck. All in all, I am very glad I bought my Camry.

 

excellent point. nissans are made in smyrna, tennessee. not a very large asian population there, as i understand it.

 

They have. I don't remember the specifics, but GM and Toyota co-own an American plant and spit out the same model of cars but rebadge them with different names. American consumers still prefer the Toyota name.

GM and other American companies have to win back the perception of quality with their sedans and smaller vehicles.

 

Many Japanese cars are manufactured in the U.S. and Canada, but have better qualities than the American cars. Why?

Possible reasons: 1. The parts may be made in Japan. 2. The Japanese designs are better. 3. The Japanese managment is better.

 

This is my take as well. American workers can build a quality car. But those workers do not decide the manufacturing process, automotive design, acceptable quality levels, etc.

 

German manufacturers are actually having a worse time of it than American manufacturers. I know a couple of auto plants either shut down or were threatening shutdown because the workers wouldn't even talk with managment about concessions.

The problem with the auto industry is a mirror of the Airlines. Durring "The Golden Age" they negotiated a number of deals which were based on the economics of that time. Only now does the cost of the relevant pension plans come due. The auto companies failed in forsight by defering funding until they couldn't afford to do so.

People use the failure as an excuse to blame labor unions, but these were the result of negotiations between labor and management that management agreed to at the time, and could have funded at the time. Instead, they were more interested in what could boost the bottom line at the moment, and how it would look in the 10k if they acutally payed their bills instead of creating false increases in the per share profit margin.

The trend of allowing companies to foist these costs at a later date on the US Government because they failed to properly prepare for predictably forcastable costs is sad, in that suggests that you can make future agreements and simply ignore them. The fact these companies are then using their own failures as an excuse to pile on unions is something that just makes me annoyed at these crass people and the dupes who help them spread their false blame.

 

This the dumbest thing I have ever read. Ever wonder why the average American can make so much money compared to the rest of the world and still have so much debt?

Consume for the sake of consuming, I guess.

Me? I'll drive my old yet reliable vehicles, and not pay a car payment.

 

Actually many people keep their cars for longer than five years. As a matter of fact, according to the book "The Millionaire Next Door" buing a reasonable car (the book says most "next-door millionaire's drive Ford F-150's) and keeping it for 10 years is something next-door millionaires have in common (i.e. don't spend too much on your car and keep it longer to avoid constant car payments).

My wife and I are both planning on keeping our cars for at least 10 years before we purchas replacements. She has an 8 year old Saturn and I have a 5 yeard old Dodge Dakota.

We aren't keeping our cars because we especially like them or because we are broke (when we buy my wife's next car in a couple of years we can afford to pay $20,000 in cash). We keep them because buying a new car every 5 years doesn't make economic sense.