Make no mistake about it, the end times are near for the Big Two.Give or take ten years,the two will be downsized out of existence.The crux of the problem is that,in the new world of international competition and the multiple choices available to the consumer, their old business model of monopoly capitalism no longer works.In the new world of genuine market competition, the nimble,the technologically savvy and high quality,low cost producers thrive.The dinosaurs die.
In a way the market last year has already given the last rites to the dying giants.When it is necessary to give a $3-5,000 rebates to move your cars off the dealer lots, you are being told that your cars are not appealing.Even with the rebates.
So, what do the Big Two do for an encore? They produce more of the same gas guzzlers that were rejected by the market,of course! After having wasted nearly ten years without investing in hybrid car technology, Ford now wants the government to subsidize the development of hybrid car components.That investment and research has already been made by Toyota and Honda.They stand on the brink of delivering a knockout blow to the Big Two.
Even with this prospect staring at them,the Big Two act as though they are still the Kings of The Hill.Many new technologies will be midwifed by the hybrids and this will bypass the clueless Big Two:Plug-in Hybrids,fast charge batteries,drive by wire concepts,collision avoidance systems and many more.
Like other revolutions before it, the automotive revolution will also not be televised.
the smell of death hangs over Honda, Toyota and Nissan, too. You just cant smell it yet.
Death and destruction are the wellsprings of human advancement, both in industry and in souls.
I was commenting on what is an avoidable disaster.The big two or more precisely their managements simply avoided making the painful decisions that were necessary more then two decades ago to develop the kind of cars the public wants.If they had had the foresight, the pain and suffering many people in the Midwest feel now could have been avoided.To say that death and destruction are inevitable is to resign ourselves to external forces when we have the power to control them.That to me is inexcusable.
I am sure a time will come when Honda and Toyota and Nissan will also become bloated with pride and fall.It looks like at this time it is the turn of the Big Two.
Your logic doesnt follow. Death and destruction (in all things) IS inevitable.To be believe otherwise is excusable, but foolhardy. Whether you resign yourself or not is beside the point. Blaming people for not having foresight is like blaming people for being people. Its like blaming me for not being smarter than I am.
BTW, I drive an old Jeep and am quite happy with it. Very dependable and sturdy. Gas mileage sucks but I dont drive it around that much.
The big two or more precisely their managements simply avoided making the painful decisions that were necessary more then two decades ago to develop the kind of cars the public wants.
I’m afraid I have to quibble with you on this point. Which public wanted these kinds of cars? Certainly not the one driving around in the Peterbilt Behemouth SUVs? Sure, they want fuel-efficient cars now, and they briefly wanted them in the late seventies during the last gas crisis, but as long as gas was relatively cheap, the public was perfectly thrilled to opt for big and cushy and gas-guzzling. And it’s always going to be most profitable for manufacturers to give the public what the public wants. The problem was that, once Reagan took office, the policy-makers abrogated their responsibility and did absolutely nothing to steer either the consumers or the manufacturers in any other direction.
Ideally, the manufacturers should have seen this coming, but my experience has been that manufacturers have a hard time seeing beyond the next quarterly report. If our goal as a nation was to have our major auto manufacturers producing fuel-efficient vehicles, that impetus needed to come from the government. “The Market” will likely only get us there in the kind of dinosaur-snuffing catastrophe I’m afraid we’re about to see.
I am constantly surprised by the way Japanese carmakers are able to see the trends coming and take steps to be prepared for any eventuality while our managements, responding to the next quarter’s results and missing the long term outlook.They missed the trend to small cars in the late seventies and eighties;now they are missing the hybrids.
There is no question that our economic system, based on market forces, makes it impossible for managements to do anything other than be a slave to Wall Street.Disaster is only one quarter away.
You are largely correct, I think. (Though Ford has an outside chance of surviving.)
The current crisis in the American auto industry is a bitter pill for those corporations to swallow – and a very bitter pill for the U.S. economy. Between WWII and the end of the Vietnam debacle, we saw the wunderkind of American industry – e.g. the likes of Robert S. McNamara – leading the auto industry into domination of the world’s transportation. But it ended with America being what Britain was to the railroads: many gauges, several incompatible systems, a sluggish, entrenched bureaucracy that assumed because of world leadership, that everyone would continue to follow the leader. (These guys left the auto industry to help out the government with things like Vietnam. They messed that up, also). Obviously, the rest of the world didn’t step in line behind the U.S. They took what we had and improved it dramatically.
Here in Detroit, the auto execs see a warped world daily: more domestic cars on the road here than anywhere, I’d guess. Company employees have to buy their own products, new ones every couple of years. A huge section of the daily press is devoted to “sales”, actually leases, with pricing aimed specifically at automotive industry employees. And on our streets, you see the biggest array of huge autos and trucks. Even people in quite modest jobs often drive enormously expensive, gas-guzzling vehicles.
I think seeing the huge preponderance of larger U.S. made models day after day leads many in GM and Ford to miss what’s going on in the rest of the world. Unfortunately, their learning will be at our expense as well as theirs.
I am sure that even the diehards in Detroit are aware of what is going on elsewhere and how people who own Japanese and German cars rave about the quality, fit and finsih and all the rest.They are locked into buying the junk made by the Big Two for self preservation reasons and also because they would become targets of disapproval,to state mildly, if they did buy a foreign car. So, they let their wives and kids buy the foreign cars and get the guilty pleasure of driving them on weekends or on errands after work.
As it stands,the lead being built by the Japanese and Germans and Koreans in automotive technology is rapidly becoming insurmountable for GM and Ford.And this lead is going to strengthen the perception of the public that they are dinosaurs.
I blame the managements of Ford and GM for this debacle. I hope many of us with friends and relatives in the auto industry will wish these fine folks a safe harbor in the transplants that are setting up shop throughout the country.Toyota, Nissan, Honda, Hyundai, Daimler may very well find these people worth hiring.Given a strong and innovation driven management, they are known to perform very well. Why else would Toyota and Honda perform well with American workers, the same ones condemned as no good by GM and Ford?
Yes, they know it, but do they really believe it? I’m not so sure. They’ve devoted so many bucks to working to keep congress away from mandating things that would have helped them overcome some of their inertia. There is a blinding context that hits people and warps their viewpoints (I’m a psychologist, so I’m thinking about some social psych research on this sort of thing.) Even when people know what’s going on, they still tend to let what they see affect their judgments, and they resist change even when in their own best interests.
A good example of what you have described is the opposition to Universal healthcare paid for by taxes.It is clear that would remove one of the biggest albatrosses on the necks of all our corporations and, yet, we have all manner of ideologies invoked to stop this fundamentally decent proposal, one that the Europeans and Japanese do not even have a quarrel with.
If that were in place,GM and Ford may have a fighting chance for survival, but in the end the outcome still rests on the ability of their managements to see things clearly and take action before calamity raises its head.