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GM, Chrysler goin' under.....(maybe).....
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Originally Posted By: XS650
Reread what Bret said. The CEO's job isn't to follow the herd. His job is to position the company for future success, The auto CEOs have failed at that, largely because they responded to immediate demand rather than positioning their companies for long term success.
Of the 3, only the Ford CEO has shown some competence.
It's easy to see this in hindsight. But it would have been very difficult if not impossible for them to shift most of their resources from engineering and building vehicles that were selling profitably at a given point in time ie: trucks and SUV's, to small cars with small profit margins.
I doubt they could have survived it. And their current US cost structure doesn't allow them that ability in any case.
Those companies can engineer and build small cars and sell them at a profit. They do it every day in markets outside of the US. They just can't do it here.
Reread what Bret said. The CEO's job isn't to follow the herd. His job is to position the company for future success, The auto CEOs have failed at that, largely because they responded to immediate demand rather than positioning their companies for long term success.
Of the 3, only the Ford CEO has shown some competence.
It's easy to see this in hindsight. But it would have been very difficult if not impossible for them to shift most of their resources from engineering and building vehicles that were selling profitably at a given point in time ie: trucks and SUV's, to small cars with small profit margins.
I doubt they could have survived it. And their current US cost structure doesn't allow them that ability in any case.
Those companies can engineer and build small cars and sell them at a profit. They do it every day in markets outside of the US. They just can't do it here.
Originally Posted By: Johnny
The problem is we live in a what's in it for me society. The top brass wants what's best for them, the UAW workers want what's best for them, and neither could care less about what's best for the rest of us.
Exactly.
This is something that separates us from the Japanese. The Japanese tend to understand that everything affects the bottom line, and the bottom line affects everyone. Accountability extends from the very bottom to the very top. Everyone has their job and does their part.
Japanese workers at failed companies keep their factory clean and do their best at all times, right until the very end of their last day on the job. Japanese CEOs of failed companies have cried on public TV, begging their competitors to hire their workers. Tell those stories to most Americans, and they'll look at you like you've grown a second head.
Here, everyone wants credit when things go well, but don't even want to admit they were involved when things go badly. It's like they can't see past their own noses.
No one can reasonably say Japan doesn't have problems, but it's really no wonder Japan's auto industry is in better shape. I won't hold my breath, but let's hope the American businesses and the UAW have learned their lesson.
The problem is we live in a what's in it for me society. The top brass wants what's best for them, the UAW workers want what's best for them, and neither could care less about what's best for the rest of us.
Exactly.
This is something that separates us from the Japanese. The Japanese tend to understand that everything affects the bottom line, and the bottom line affects everyone. Accountability extends from the very bottom to the very top. Everyone has their job and does their part.
Japanese workers at failed companies keep their factory clean and do their best at all times, right until the very end of their last day on the job. Japanese CEOs of failed companies have cried on public TV, begging their competitors to hire their workers. Tell those stories to most Americans, and they'll look at you like you've grown a second head.
Here, everyone wants credit when things go well, but don't even want to admit they were involved when things go badly. It's like they can't see past their own noses.
No one can reasonably say Japan doesn't have problems, but it's really no wonder Japan's auto industry is in better shape. I won't hold my breath, but let's hope the American businesses and the UAW have learned their lesson.
Originally Posted By: XS650
Reread what Bret said. The CEO's job isn't to follow the herd. His job is to position the company for future success, The auto CEOs have failed at that, largely because they responded to immediate demand rather than positioning their companies for long term success.
Of the 3, only the Ford CEO has shown some competence.
So, another way of saying this is that it's the CEO's job to tell the consumer what they want.....isn't that what the Big 3 have been accused of when they rammed gas-thirsty SUV's down the poor consumer's throats?
To paraphrase an article I recently read even the Japanese didn't see $4+/gallon gas coming to the US.
Reread what Bret said. The CEO's job isn't to follow the herd. His job is to position the company for future success, The auto CEOs have failed at that, largely because they responded to immediate demand rather than positioning their companies for long term success.
Of the 3, only the Ford CEO has shown some competence.
So, another way of saying this is that it's the CEO's job to tell the consumer what they want.....isn't that what the Big 3 have been accused of when they rammed gas-thirsty SUV's down the poor consumer's throats?
To paraphrase an article I recently read even the Japanese didn't see $4+/gallon gas coming to the US.
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Not to mention that it's been the consumer that demanded SUV's and Hummers all these years, then whined that Detroit didn't have any fuels-sippers on the line when gas shot up....
+1
Now guess what is going to happen with $1 gas.
Not to mention that it's been the consumer that demanded SUV's and Hummers all these years, then whined that Detroit didn't have any fuels-sippers on the line when gas shot up....
+1
Now guess what is going to happen with $1 gas.
It was not a matter of shifting resources from profitable truck programs to not-so-profitable small car programs. What should have been done was take some of the profits from truck sales and use them to develop small cars and drivetrains. The D3 didn't do that. Instead, they took the profits and bought back shares, handed out larger and larger dividends, boosted earnings per share, and created large bonus plans for managers and executives. It was all about the money, all about gettin PAID, and not about the product or the company or advancing new technologies.
What is happening to the D3 now has been manifesting itself for 25 years. There has been too much focus on "what's making us money today", too much power held by the finance geeks and too little influence from engineering and product development. While Honda was making engines more powerful and more fuel efficient, the D3 was grinding out the same ol' crummy engines. Why? Because doing that was more profitable. It looked better on a balance sheet and the numbers sounded great on the quarterly earnings call with Wall St analysts.
It is not vision when you keep doing the same things 90 days at a time, because that's all you care about, hitting your quarterly numbers so your stock price looks good. The consumer doesn't know what they want, they're sheep. You need to TELL THEM what they want, then deliver it. The D3 went after easy profits because that's all they cared about. The consumer wanted what they wanted until they didn't want it anymore.
You simply cannot build a successful business focusing only on short term profit and relying on a compulsively selfish customer base.
What is happening to the D3 now has been manifesting itself for 25 years. There has been too much focus on "what's making us money today", too much power held by the finance geeks and too little influence from engineering and product development. While Honda was making engines more powerful and more fuel efficient, the D3 was grinding out the same ol' crummy engines. Why? Because doing that was more profitable. It looked better on a balance sheet and the numbers sounded great on the quarterly earnings call with Wall St analysts.
It is not vision when you keep doing the same things 90 days at a time, because that's all you care about, hitting your quarterly numbers so your stock price looks good. The consumer doesn't know what they want, they're sheep. You need to TELL THEM what they want, then deliver it. The D3 went after easy profits because that's all they cared about. The consumer wanted what they wanted until they didn't want it anymore.
You simply cannot build a successful business focusing only on short term profit and relying on a compulsively selfish customer base.
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compulsively selfish customer base.
That is who you are selling to, you don't have much choice. They were simply providing what people wanted.
SUV's and trucks made them more money. They would have been absolute fools not focus on a product that made them more money.
Gas shoots to $4 in a matter of months and all of a sudden the CEO "lack vision" to see it coming.
Now gas has plummeted to less than $2. Lots of the same people complaining about the CEOs "vision" didn't see that happening either.
Quote:
"what's making us money today"
If your business is on the tipping point, then you had better be thinking about this.
compulsively selfish customer base.
That is who you are selling to, you don't have much choice. They were simply providing what people wanted.
SUV's and trucks made them more money. They would have been absolute fools not focus on a product that made them more money.
Gas shoots to $4 in a matter of months and all of a sudden the CEO "lack vision" to see it coming.
Now gas has plummeted to less than $2. Lots of the same people complaining about the CEOs "vision" didn't see that happening either.
Quote:
"what's making us money today"
If your business is on the tipping point, then you had better be thinking about this.
Quote:
SUV's and trucks made them more money. They would have been absolute fools not focus on a product that made them more money.
As I said, the mistake they made was not taking some of the money from SUV profits and developing better small cars. That error in mgmt judgment stems from their lack of vision and leadership. Their competition was doing it, seems to me the D3 could have too.
Quote:
Gas shoots to $4 in a matter of months and all of a sudden the CEO "lack vision" to see it coming.
Now gas has plummeted to less than $2. Lots of the same people complaining about the CEOs "vision" didn't see that happening either.
Don't take my words out of context. I never said, implied or inferred that. My point was (again...) that the current problems the D3 are experiencing have been manifesting themselves for 25 years. It wasn't $4.00/gallon gas that killed them, it was a generation of lousy executive decisions going back to Roger Smith, John Ricardo and Phil Caldwell. The D3 have had decades to get it right, but here we are and they still don't have it down quite yet.
Quote:
"what's making us money today"
If your business is on the tipping point, then you had better be thinking about this.
When you're not making enough to cover your costs, agreements and contracts, what difference does it make? I've worked for large and small companies that have been in the same position and they're either no longer in business or were sold. What's happening to the D3 is hardly unique but they still messed it up anyway.
SUV's and trucks made them more money. They would have been absolute fools not focus on a product that made them more money.
As I said, the mistake they made was not taking some of the money from SUV profits and developing better small cars. That error in mgmt judgment stems from their lack of vision and leadership. Their competition was doing it, seems to me the D3 could have too.
Quote:
Gas shoots to $4 in a matter of months and all of a sudden the CEO "lack vision" to see it coming.
Now gas has plummeted to less than $2. Lots of the same people complaining about the CEOs "vision" didn't see that happening either.
Don't take my words out of context. I never said, implied or inferred that. My point was (again...) that the current problems the D3 are experiencing have been manifesting themselves for 25 years. It wasn't $4.00/gallon gas that killed them, it was a generation of lousy executive decisions going back to Roger Smith, John Ricardo and Phil Caldwell. The D3 have had decades to get it right, but here we are and they still don't have it down quite yet.
Quote:
"what's making us money today"
If your business is on the tipping point, then you had better be thinking about this.
When you're not making enough to cover your costs, agreements and contracts, what difference does it make? I've worked for large and small companies that have been in the same position and they're either no longer in business or were sold. What's happening to the D3 is hardly unique but they still messed it up anyway.
Kestas
Staff member
Originally Posted By: d00df00d
Haven't the CEOs already agreed to work for $1/yr and no benefits?
Can someone clarify this? I don't know if they voluntarily declared $1 salary or $1 compensation. Big difference. Salary can be a small fraction of their compensation. Being paid with stock options - depending on terms - can still be very fair in this case.
Haven't the CEOs already agreed to work for $1/yr and no benefits?
Can someone clarify this? I don't know if they voluntarily declared $1 salary or $1 compensation. Big difference. Salary can be a small fraction of their compensation. Being paid with stock options - depending on terms - can still be very fair in this case.
bretfraz said:Quote:
When you're not making enough to cover your costs, agreements and contracts, what difference does it make? I've worked for large and small companies that have been in the same position and they're either no longer in business or were sold. What's happening to the D3 is hardly unique but they still messed it up anyway.
It's not unique. What is unique is the entitlement attitude these companies have and their belief that the rest of the country should be on the hook to bail them out.
I work for a very small company and we had a terrible time in the late 80's/early 90's. Every person in the place took pay and benefit cuts. We survived to fight another day.
They can tough it out and do the same either by choice or by order of a bankruptcy court. That's how the system is supposed to work.
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As I said, the mistake they made was not taking some of the money from SUV profits and developing better small cars. That error in mgmt judgment stems from their lack of vision and leadership. Their competition was doing it, seems to me the D3 could have too.
Some of their competition was taking money from small cars and developing trucks and SUVs because they saw the money the Big 3 was making on them and wanted part of the action.
Pretty good indication that there is demand for these large vehicles in the market place. Where is all the bashing of Toyota and Nissan for investing in trucks?
Also:
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That’s because car manufacturers still haven’t figured out how to produce hybrid and plug-in vehicles cheaply enough to make money on them.After a decade of relative success with its hybrid Prius, Toyota has sold about a million of the cars and is still widely believed by analysts to be losing money on each one sold.U.S. lawmakers want the companies to produce automobiles of the future, using advanced technologies and featuring hybrid or plug-in vehicles.But there’s no guarantee that the new business model would be any more viable than the current one.
http://kenhoma.wordpress.com/2008/11/26/how-much-profit-does-toyota-makes-on-a-prius/
So the notion that if they had invested in all of these econo box cars it would have saved them is highly suspect. GM is going to get $7500 in subsidies just so they can sell their overpriced, government mandated, Volt.
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it was a generation of lousy executive decisions going back to Roger Smith, John Ricardo and Phil Caldwell
What did they do wrong? Give in to the UAW too often? Make cars that the government mandated they make?
As I said, the mistake they made was not taking some of the money from SUV profits and developing better small cars. That error in mgmt judgment stems from their lack of vision and leadership. Their competition was doing it, seems to me the D3 could have too.
Some of their competition was taking money from small cars and developing trucks and SUVs because they saw the money the Big 3 was making on them and wanted part of the action.
Pretty good indication that there is demand for these large vehicles in the market place. Where is all the bashing of Toyota and Nissan for investing in trucks?
Also:
Quote:
That’s because car manufacturers still haven’t figured out how to produce hybrid and plug-in vehicles cheaply enough to make money on them.After a decade of relative success with its hybrid Prius, Toyota has sold about a million of the cars and is still widely believed by analysts to be losing money on each one sold.U.S. lawmakers want the companies to produce automobiles of the future, using advanced technologies and featuring hybrid or plug-in vehicles.But there’s no guarantee that the new business model would be any more viable than the current one.
http://kenhoma.wordpress.com/2008/11/26/how-much-profit-does-toyota-makes-on-a-prius/
So the notion that if they had invested in all of these econo box cars it would have saved them is highly suspect. GM is going to get $7500 in subsidies just so they can sell their overpriced, government mandated, Volt.
Quote:
it was a generation of lousy executive decisions going back to Roger Smith, John Ricardo and Phil Caldwell
What did they do wrong? Give in to the UAW too often? Make cars that the government mandated they make?
Originally Posted By: jsharp
I work for a very small company and we had a terrible time in the late 80's/early 90's. Every person in the place took pay and benefit cuts. We survived to fight another day.
and that's why every UAW worker should be disgusted with their representation. When they closed up the place I worked for, never once did the union ask what they could do to save the place. Apparently the UAW believes it is better to be jobless rather than do their part in hard times.
I work for a very small company and we had a terrible time in the late 80's/early 90's. Every person in the place took pay and benefit cuts. We survived to fight another day.
and that's why every UAW worker should be disgusted with their representation. When they closed up the place I worked for, never once did the union ask what they could do to save the place. Apparently the UAW believes it is better to be jobless rather than do their part in hard times.
The huge problem of "sense of entitlement" in this country isn't coming from the CEOs, it comes from the american people. People expect to graduate from high school and make as much or more as their degree'd counterparts. Everyone seems to forget what freedom means in this country. It should mean you are free to succeed w/out anyone unfairly holding you back or interfering, and on the flip side you should be free to fail on your own.
Originally Posted By: Johnny
The Secrete Service...
I'm almost afraid to ask what this agency does and who it does it to...
The Secrete Service...
I'm almost afraid to ask what this agency does and who it does it to...
Originally Posted By: Tempest
Some of their competition was taking money from small cars and developing trucks and SUVs because they saw the money the Big 3 was making on them and wanted part of the action.
Pretty good indication that there is demand for these large vehicles in the market place. Where is all the bashing of Toyota and Nissan for investing in trucks?
When Toyota fails because of having the wrong product mix for the US market you will hear about it. Toyota did the right thing, they covered their primary market but didn't ignore the rest of the market.
That is a concept a person who only sees black and white with no shades of grey would be incapable of grasping.
Some of their competition was taking money from small cars and developing trucks and SUVs because they saw the money the Big 3 was making on them and wanted part of the action.
Pretty good indication that there is demand for these large vehicles in the market place. Where is all the bashing of Toyota and Nissan for investing in trucks?
When Toyota fails because of having the wrong product mix for the US market you will hear about it. Toyota did the right thing, they covered their primary market but didn't ignore the rest of the market.
That is a concept a person who only sees black and white with no shades of grey would be incapable of grasping.
Agreed. The Japanese have been very methodical in targeting model development. They never really abandoned their core model lines, Honda in particular.
The Prius was losing Toyota money, but they stuck with it. GM or Ford would have killed it. The market eventually proved Toyota right.
The Prius was losing Toyota money, but they stuck with it. GM or Ford would have killed it. The market eventually proved Toyota right.
Unfortunately Johnny, you may be correct.
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That is a concept a person who only sees black and white with no shades of grey would be incapable of grasping.
Care to expound on that?
Quote:
When Toyota fails because of having the wrong product mix for the US market you will hear about it. Toyota did the right thing, they covered their primary market but didn't ignore the rest of the market.
So you are saying that the big three should have invested even more money into less profitable vehicles?
Can you explain?
That is a concept a person who only sees black and white with no shades of grey would be incapable of grasping.
Care to expound on that?
Quote:
When Toyota fails because of having the wrong product mix for the US market you will hear about it. Toyota did the right thing, they covered their primary market but didn't ignore the rest of the market.
So you are saying that the big three should have invested even more money into less profitable vehicles?
Can you explain?
Originally Posted By: dhise
Originally Posted By: jsharp
I work for a very small company and we had a terrible time in the late 80's/early 90's. Every person in the place took pay and benefit cuts. We survived to fight another day.
and that's why every UAW worker should be disgusted with their representation. When they closed up the place I worked for, never once did the union ask what they could do to save the place. Apparently the UAW believes it is better to be jobless rather than do their part in hard times.
Actually the average UAW worker is scared to death at the prospect of being unemployed. The majority of the people that I used to know that worked the Detroit assembly lines were by and large uneducated, unskilled, and functionally illiterate. Getting Unionized into an autoplant was the best thing that ever happened to them. Nowhere else on Earth will they make the kind of money that they make at GM/Chrysler/Ford assembly lines.
You're possibly looking at thousands of unemployed workers that are used to making around a 100,000k a year, if they have any tenure. Where are they going to go? They'll be lucky to make 12.00 an hour at other assembly plants. LUCKY. A more realistic scenario is that they'll end up in your local drive-through window asking you if you'd like fries with your meal.
Unskilled labor is not worth 60.00/hr under any circumstance. It's going to be quite the culture shock when these people end up making minimum wage. They should be out crucifying their Union Bosses right now, settling for the "paltry" 40.00 an hour that Congress is pushing. And be da*n grateful to get it.
Originally Posted By: jsharp
I work for a very small company and we had a terrible time in the late 80's/early 90's. Every person in the place took pay and benefit cuts. We survived to fight another day.
and that's why every UAW worker should be disgusted with their representation. When they closed up the place I worked for, never once did the union ask what they could do to save the place. Apparently the UAW believes it is better to be jobless rather than do their part in hard times.
Actually the average UAW worker is scared to death at the prospect of being unemployed. The majority of the people that I used to know that worked the Detroit assembly lines were by and large uneducated, unskilled, and functionally illiterate. Getting Unionized into an autoplant was the best thing that ever happened to them. Nowhere else on Earth will they make the kind of money that they make at GM/Chrysler/Ford assembly lines.
You're possibly looking at thousands of unemployed workers that are used to making around a 100,000k a year, if they have any tenure. Where are they going to go? They'll be lucky to make 12.00 an hour at other assembly plants. LUCKY. A more realistic scenario is that they'll end up in your local drive-through window asking you if you'd like fries with your meal.
Unskilled labor is not worth 60.00/hr under any circumstance. It's going to be quite the culture shock when these people end up making minimum wage. They should be out crucifying their Union Bosses right now, settling for the "paltry" 40.00 an hour that Congress is pushing. And be da*n grateful to get it.
I'm not sure but isn't it true that the union simply didn't want to be singled out by the republicans in congress?
In other words, I'm not sure they aren't willing to make concessions, but I'm sure they don't want to be labeled as the sole reason GM is in trouble.
In other words, I'm not sure they aren't willing to make concessions, but I'm sure they don't want to be labeled as the sole reason GM is in trouble.
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