Will US Car Companies Survive?

R

RRocket

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The Harbour Report was recently released, and it reports on the overall production efficiency of carmakers. To come up with the figures, they add up the actual hours worked, including overtime (this applies to every employee in each plant, including management and union staff), and then divide that total by the number of cars and trucks produced. This is a simple explanation, but you get the idea. The US companies look horrible compared to the Japanese companies. Keep in mind that the Japanese companies employ the same US citizens as do the American companies. Are the Japanese companies really that more efficient? I was told these figures are BEFORE incentives are figured in:

PROFIT PER VEHICLE

Company 2001 2002

Daimler-Chrysler -$1,679 +$226

Ford -$1,913 +$114 (in 2000, it was +$1,486!!)

GM +$337 +$701 (not too shabby!)

Honda +$1,661 +$1,581

Nissan +$1,289 +$2,069 (WOW!!)

Toyota +$1,182 +$1,214


So what are your thoughts? These all employ Americans. The Japanese pay the same wages (in some cases higher) than the American companies. Less management? Better line efficiency? I don't have all those answers....
 
RE: Will US Car Companies Survive?

The only way that US car companies (GM & Ford) will survive is to change the USA's dumb-public collective minds that anything made by a domestic company is no good. It's NOT the product, nor the manufacture, nor the employee pay, nor the productivity ~ it's the decades old mindset of the typical "car-dumb" buyer who looks at cars like a bottle of wine - in that IMPORTED is waaay better than domestic. Due to their lack of car-knowledge they buy on 'preception' of what their co-worker (equally dumb) will think...

When I bought my Mark VIII 2 or 3 people asked what I paid for it. I told them $40,000 and the first comment was, "Geez - you coulda had a Lexus for THAT kinda money" to which I replied, "Why would I want a Lexus"? and then the "LOOK" ~ 'ya know the one I mean.....Like, Sandy you must be kidding! Funny, I never missed the elegant Toyota !\

Perception.....it has nothing to do with the truth, BUT everything to do with the sales charts. :(
 
RE: Will US Car Companies Survive?

I am only venturing a guess, but is it possible that the jap auto makers build all of their cars on only a few platform's compared to the american's that have many platforms which would require more tooling and labor costs? Do the U.S. builders offer more color's and option packages?

example: The honda accord would only come in three trim packages with set options. The buick lesabre would also come in 3 trim level's, but you could add and delete options such as leather, power windows, locks, mirror's as you like from each of the trim levels. If this was the case, it would cost considerably more to produce the car as the builder would continually have to refer to a build sheet. In the honda's case, you could have 3 lines going, one for each trim level with set options. You would never have to look at a build sheet becouse all of the cars would be the same.

Other area's to look at would be color of cars. The more color's you offer, the more expensive it get's to paint the cars. You are no longer changing between 3 or 4 color, but rather 12-15. This would increase down time between switching colors as well as more poeple mixing paints.

I have no evidence to back this up and am only taking stab's in the dark at potential issues that may not have been noticed. I made up the numbers, so please don't argue about my accuracy. Been working 18 hours. Time to get a little sleep.
 
RE: Will US Car Companies Survive?

The reason is the pension plans. All of the big three have huge pension commitments on their retired employees. The foreign automakers who haven't been making cars in this country as long, and have been building their factories in states with no unions, don't have that problem.
 
RE: Will US Car Companies Survive?

Sleeper - as usual - you are 100% correct! It's the Pension Plans!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
 
RE: Will US Car Companies Survive?

Was told this does not take into account Pensions. This is basically wage and number of vehicles produced. Found out today that overtime is a huge, crippling factor in determining this profit. For example, Chrysler knows this and reduced their overtime by a staggering 800,000 hours last year!! (do the math..lotsa $$$$) It would seem the Big 2 + Chrysler do much more overtime to complete the same amount of work. And the the Big 2 + Chrysler have more repair work. (repair work is when vehicle has a defect from the line). Vehicles with faults are allowed to continue down the line and will be "fixed later"...likely with great overtime. It seems GM number are fairly competitive. I wil have the complete Harbour Report within the next week or so, so I can give you other facts and figures about competitiveness between the car companies...
 
RE: Will US Car Companies Survive?

I hope that the man in THAT article is correct, and THAT it INDEED does turn around. He is more promissing than I can be - at this time in history. The "average" American knows 3% of what we "gear-hears" know about cars.
The "average" one working in an office enviornment that is "looking" (that term kills every salesman with laughter) for a new car does NOT turn to Road & Track, Motor Trend, Car & Driver, AutoWeek, Automobile Magazine, Automotive News or any other car-based Pub. No.....They turn to Consumer Reports, who (as we know) HATES anything on wheels made by GM Ford or Chrysler. They read that, and then ask their co-worker for his/her advice, ('ya know... the "Maven") {"Expert" in Hebrew}. 'Ya the expert on everything automotive.....Mr. Computer Programer who owns a Civic ! The freakin' car has 701 parts, so it's more reliable than my Town Car with 4,013 parts.....Hey, it should be, right? (Odds are in the Civic's favor)!
So, I hope this guy in the above article is correct, but I am not holding my breath!

Look, Toyota is making Chevrolet & Pontiac BADGED cars right now. The Prism & the Vibe. GM has recently announced they will be buying MORE engines FROM Japan! Ford will follow, to be price competitive. Chrysler is Foreign owned. Grey clouds linger.
 
RE: Will US Car Companies Survive?

The last paragraph should help explain the difference in the numbers:

U.S. automakers improve efficiency, study will show
By Jeffrey McCracken
KNIGHT RIDDER NEWSPAPERS

DETROIT - Detroit's three automakers will show they are getting more efficient at building vehicles with fewer labor hours in a closely watched study of North American auto-plant productivity.

The annual Harbour Report shows General Motors, Ford Motor Co. and DaimlerChrysler AG's Chrysler Group have closed the gap substantially but not entirely on Asian rivals, which are expected to slip. Asian automakers, including Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. Ltd., almost always finish at the top in the Harbour Report, a bellwether plant survey published annually since 1989.

This year, Toyota and Honda will slip in the study, while General Motors and Chrysler make big improvements, said people familiar with it. Ford will also show a modest improvement after slipping the previous three years.

Toyota, Honda and Nissan will also come under criticism in the report for not fully reporting manufacturing information at all their plants, said several sources. Toyota has long been rumored to have withheld information from the report about manufacturing problems at its Princeton, Ind., truck plant.
 
RE: Will US Car Companies Survive?

Sandy,

But "consumer perception" has nothing to do with profit per vehicle and efficiency. Perception has to do with sales. This study was not about sales. We all know the Big 2 + DC outsell most imports. And if indeed, as you claim, most every automotive consumer is a dumb-ass, then we can again blame the Big 2 + DC for not advertising/campaigning properly to educate these doorknobs into "perceiving" that American companies produce better cars. My other beef with the US carmakers has been the price of entry level vehicles. You want to get people "hooked" on your product (I don't need to tell you about return customers..you know all about it firdshand!!). Well the price of the domestic entry level cars is certainly higher.(most of em) So the kids buy foreign. Then when the want to buy another more expensive car, they go where they are comfortable...to the dealer that has been servicing/selling them their previous cars. Perhaps it is different in the US, but the foreign entry level cars here are WAY cheaper. To put it into perspective, Trish's mom works for GM. Even with low financing, employee discount the domestic car was almost $4000 more!! $4000 goes a long way (especially with a child in university). So she bought foreign. Now if someone working for GM feels like their being gouged, what do you think a kid thinks? My BEST friend Dennis bought a $52,000 Ford Explorer Eddie Bauer. Full load. 2003. That truck has been in the shop more than a dozen times for the same problem. They have replaced so many parts (some several times each!!) it's insane. He tried to get them to take the truck back (it was a month old)..tough luck they told him. Oh..the truck would stall EVERYTIME you came to a stop if the weather was below 50 degrees. So he goes for arbitration to get them to take it back. Remember, $50K plus truck. Not acceptable. In the mean time, he still asking them to take truck back. He just wants another truck the same, or he'll lose a little and get a top-notch Escape. Whatever. He just wants out of this POS truck. They keep jerking his chain. He gets these HUGE letters made up for his truck for the LH and RH sides, and for the back window that say "FORD LEMON". Letters to dealership, to Fords head office. Still getting jerked around. Has been going on 4 months now. Says he's buying Japanese next time, and he means it. But here's the kicker: He works for Ford!! Skilled trades. A Heavy Machinery Mechanic in the casting plant! So no more Ford vehicles for him. I mean there's loyalty and all, but getting jacked around for 4 months can sour your experience of anything. So if Ford's would do this to one of their "own", imagine if you some weenie off the street. Yikes. That's not to say you won't get jacked around at an import lot. But the point is Ford has lost a customer who they should never, ever have lost. I mean an employee? Sheesh...
 
RE: Will US Car Companies Survive?

Your friend has an inept bumbling ignorant dealer. Ford themselves are idiots NOT to write that truck off, and give the guy an identical 2003. WHAT are they thinking? Look at him, a Ford employee walking around telling everyone what a POS he bought and that he's buying Jap next time! Geez. Ford can be dumb!
Perception has everything to do with sales!!!
Toyota sold 300,000 cars in the USA in 2002. All 300,000 felt that Toyota deserved their dollars, based upon their perception of what Toyota stood for. Now - imagine - - What if 1/2 of them or 150,000 percieved that a better buy would be an Oldsmobile - say an Alero, and 150,000 bought an Alero. Perhaps.....Olds would NOT be going out of business a year from now :)
Perception = a sale or a NO SALE. Just ask Plymouth :)
 
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