How Ford's dealing... without government help.
11-14-2008, 08:09 PM
#31
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Outside of my view that GM can not be allowed to fail, that GM have a damn good plan to turn itself around, and have a detailed investigation that results with heads in baskets, my thinking is pretty fluid on this subject (meaning my thinking isn't in concrete, and I'm open to other thoughts on this).
I know that GM can not today or tomorrow cut Pontiac-Buick-GMC. However, does anyone disagree that GM has seemingly starved the group and made questionable decisions with it? How did the G3 (Aveo) even make it into the equasion? How can a few large rustbelt Buick dealers wreck a good GM plan to make the division relevent to the other 2/3s of the country?
My view is that GM either needs to invest in making Buick the American road car division promised and Pontiac the performance division promised, or kill them off and redistribute the cream of the lineup to other divisions.
I know that GM can not today or tomorrow cut Pontiac-Buick-GMC. However, does anyone disagree that GM has seemingly starved the group and made questionable decisions with it? How did the G3 (Aveo) even make it into the equasion? How can a few large rustbelt Buick dealers wreck a good GM plan to make the division relevent to the other 2/3s of the country?
My view is that GM either needs to invest in making Buick the American road car division promised and Pontiac the performance division promised, or kill them off and redistribute the cream of the lineup to other divisions.
Just as one idea, GM could consolidate down to a single "GM" dealership channel that carries Chevrolet/Pontiac/Buick/GMC with no overlapping models. They would have a full line up of Chevys with a handful of complimentary Pontiac/Buick/GMC speciality models. This would allow them to really focus those secondary brands -- so for example Pontiac really could be "performance" and Buick could be purely "luxury", and GMC only "professional grade".
GM could then do a market-by-market review to pick the best dealerships, and shut down the rest, so that the sales/service experience at a GM dealer was always superior.
Once they had their models and dealerships "right-sized", they could afford to keep their models updated and class-competitive, and their brand management focused. With no more making three versions of the same car, or leaving old crusty models in production forever i.e. no more G3s and 4-speed LaCrosses.
(edit: Since the topic is Ford, I should mention they have the same problem to a lesser extent, but it seems like the long term plan is to phase out Mercury.)
11-14-2008, 08:24 PM
#32
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I don't think the problem is too many brands per-se. It's too many models and too many dealerships with hungry mouths to feed.
Just as one idea, GM could consolidate down to a single "GM" dealership channel that carries Chevrolet/Pontiac/Buick/GMC with no overlapping models. They would have a full line up of Chevys with a handful of complimentary Pontiac/Buick/GMC speciality models. This would allow them to really focus those secondary brands -- so for example Pontiac really could be "performance" and Buick could be purely "luxury", and GMC only "professional grade".
GM could then do a market-by-market review to pick the best dealerships, and shut down the rest, so that the sales/service experience at a GM dealer was always superior.
Once they had their models and dealerships "right-sized", they could afford to keep their models updated and class-competitive, and their brand management focused. With no more making three versions of the same car, or leaving old crusty models in production forever i.e. no more G3s and 4-speed LaCrosses.
(edit: Since the topic is Ford, I should mention they have the same problem to a lesser extent, but it seems like the long term plan is to phase out Mercury.)
Just as one idea, GM could consolidate down to a single "GM" dealership channel that carries Chevrolet/Pontiac/Buick/GMC with no overlapping models. They would have a full line up of Chevys with a handful of complimentary Pontiac/Buick/GMC speciality models. This would allow them to really focus those secondary brands -- so for example Pontiac really could be "performance" and Buick could be purely "luxury", and GMC only "professional grade".
GM could then do a market-by-market review to pick the best dealerships, and shut down the rest, so that the sales/service experience at a GM dealer was always superior.
Once they had their models and dealerships "right-sized", they could afford to keep their models updated and class-competitive, and their brand management focused. With no more making three versions of the same car, or leaving old crusty models in production forever i.e. no more G3s and 4-speed LaCrosses.
(edit: Since the topic is Ford, I should mention they have the same problem to a lesser extent, but it seems like the long term plan is to phase out Mercury.)
In most cases, an automaker can't just come in a say to a dealership (an independent business) that you can't sell our vehicles anymore or that you have to sell all our nameplates, etc...unless the manufacturer owns the dealership or has an very strong dealership agreement in place that allows them to do such things, a manufacturer simply can't do it.
One advantage of a Chapter 11, if GM could do one, is that a Federal judge could dictate some of these things.
I understands when Scott laments the enormous costs involved of GM divesting itself of nameplates/dealerships it doesn't need any longer...where I think the argument breaks down is the idea that continuing down the same path for some unspecified amount of time is an answer. Eventually this is an alligator GM has by the tail that it is going to have to let go of and deal with head on and it isn't going to get any less expensive by waiting.
One of the things Toyota has done better than any just about any other manufacturer is its strongly structured dealership agreements...they mostly retained the power to run a tight ship.
Last edited by Robert_Nashville; 11-14-2008 at 08:28 PM.
11-14-2008, 08:50 PM
#33
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Posts: 1,502
Yup, shutting down dealers can only be done under duress (Chapter 11 or some sort of legal rights extended by the government), or they have to be bought out.
I believe the commonly accepted figure for shutting down 2,000 Oldsmobile dealers was $2 billion. However GM must have saved at least that much by not having to develop 5 new Oldsmoblies (that weren't selling), and keeping them updated through the last decade.
Except instead of continuing to cut costs by consolidating their model lines, after shutting down Olds, GM actually expanded their lineup by launching Hummer and reinventing the "New Saturn". Thus making the problem worse instead of better.
I believe the commonly accepted figure for shutting down 2,000 Oldsmobile dealers was $2 billion. However GM must have saved at least that much by not having to develop 5 new Oldsmoblies (that weren't selling), and keeping them updated through the last decade.
Except instead of continuing to cut costs by consolidating their model lines, after shutting down Olds, GM actually expanded their lineup by launching Hummer and reinventing the "New Saturn". Thus making the problem worse instead of better.
Last edited by flowmotion; 11-14-2008 at 08:56 PM.
11-14-2008, 08:53 PM
#34
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Location: Santa Clara, CA
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On the whole, they're not as good.It's also reasonable to assume that, left to its own, the marketplace will/would correctly determine the "correct" wage for a given job (that is how it works for most jobs after all) so assuming that a union will always get you more money is not necessarily a valid assumption.
The transplants have had plenty of opportunities to vote on unionizing with the UAW...to date, not a single transplant facility (that I'm aware of) has ever voted in the union...in the last vote held at Nissan, the UAW lost by 3 to 1. All that to say, a lot of folks have looked at what the UAW has to offer and apparently decided it didn't offer enough to justify their monthly dues.
The transplants have had plenty of opportunities to vote on unionizing with the UAW...to date, not a single transplant facility (that I'm aware of) has ever voted in the union...in the last vote held at Nissan, the UAW lost by 3 to 1. All that to say, a lot of folks have looked at what the UAW has to offer and apparently decided it didn't offer enough to justify their monthly dues.
Btw, I do not assume that a union will always get you more money. But they usually do.
11-14-2008, 09:46 PM
#35
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Yeah, but you can look to see what manufacturing workers make in other industries, or even what Delphi was offering. There's obviously no way to know for sure, but Nissan has to be aware that if they offered 25% less in the hourly rate, that while they'd still have plenty of applicants, there would be a much greater chance of a pro-union vote.
Yeah, free Japanese language instruction On the whole, they're not as good.
On the whole, they're not as good.
Hmm. Let's see what happens when Nissan opens up a plant in Highland Park, instead of the south, shall we?
There is also the weather to consider...being from the North, I can say I like the weather here much better!
11-15-2008, 03:53 AM
#36
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Location: Santa Clara, CA
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Even though I understand everyone's actions, I don't like losing the American auto companies, just as changes to nearly even things out are happening. There's something wrong with a country when the end result is the advantage to foreign companies operating on your soil. At the end of this, I think that's why I favor a bailout of some sort to the auto companies. But I need to see some concessions from all parties concerned at GM, and I need to see a business and economic plan that shows how and why GM will be able to take on Honda, Toyota, and Nissan head on in the small car arena. I hope this is possible.
I'm spoiled by California weather. Ironically, the Toyota (okay, Nummi, but they build Toyotas, even if some have a Pontiac badge) plant nearby in Fremont is a UAW plant, I think. Probably the only one they have. I wonder how the financials are on that plant.
11-15-2008, 07:57 PM
#37
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GM has proven time and time again that it can't successfully manage all of its divisions. Why on earth is there an aveo based pontiac? It would be one thing if it actually had a performance aura (tight handling, quick) but it's just a rebadged aveo. The cobalt based G5 is the same thing. The G6 is hardly sporty.
GM could manage things by having each brand include only a few select models in line with the brand itself, but it CANNOT fight the urge to give every one a full line up. Hence, the G3, G5, 34 iterations of the trailblazer platform (and now its replacement, Chevy traverse, etc.). I could go on and on. All this results in is products that compete with themselves and a company that cannot provide every model he marketing and financial support it needs to be successful.
It seems clear that GM will continue to waste billions mismanaging all of it's brands until it has just 2-3 to focus on.
They really need to replace their entire management team, and the board as well, since they sat by for the last several years and let this happen.
GM could manage things by having each brand include only a few select models in line with the brand itself, but it CANNOT fight the urge to give every one a full line up. Hence, the G3, G5, 34 iterations of the trailblazer platform (and now its replacement, Chevy traverse, etc.). I could go on and on. All this results in is products that compete with themselves and a company that cannot provide every model he marketing and financial support it needs to be successful.
It seems clear that GM will continue to waste billions mismanaging all of it's brands until it has just 2-3 to focus on.
They really need to replace their entire management team, and the board as well, since they sat by for the last several years and let this happen.
11-15-2008, 09:34 PM
#38
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Location: Racine, WI
Posts: 389
GM needs to focus on their core brands. Hummer and Saab should be sold asap. GM has never made a profit on Saab. US Saab sales were only around 33k a year recently. Chevy sell more Corvettes that that. Lutz even called Saab GM's Crown Jewel on his fastlane blog, while starving volume Buick and Pontiac of product and overseeing the stupid model renaming of those brands (3 JD Power Initial Quality Award winning vehicles were cancelled in the process). These two brands were mismanaged and run into the ground by someone with a MBA in MARKETING!!!!
Saab has a terrible parts distribution system in the US, while this area is usually one of GM strengths. With the 9/7X done in December, Saab will be down to two models. What is GM smoking totally stopping Trailblazer production soon?
With a rumored $40,000-45,000 window sticker, the Chevy Volt reminds me of another much hyped Chevy-SSR. With a 25k Toyota Prius already on the market, Volt will be nothing more than an expensive niche product. Which brings up another question, why the expensive ad campaign for Volt? Can GM afford a huge loss leader given their financial state?
Give Mulally credit, he understands marketing. His counterparts at GM dont have a clue.
Saab has a terrible parts distribution system in the US, while this area is usually one of GM strengths. With the 9/7X done in December, Saab will be down to two models. What is GM smoking totally stopping Trailblazer production soon?
With a rumored $40,000-45,000 window sticker, the Chevy Volt reminds me of another much hyped Chevy-SSR. With a 25k Toyota Prius already on the market, Volt will be nothing more than an expensive niche product. Which brings up another question, why the expensive ad campaign for Volt? Can GM afford a huge loss leader given their financial state?
Give Mulally credit, he understands marketing. His counterparts at GM dont have a clue.
Last edited by gtjeff; 11-15-2008 at 10:18 PM.
11-15-2008, 10:43 PM
#39
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Join Date: Mar 2001
Posts: 1,943
GM needs to focus on their core brands. Hummer and Saab should be sold asap. GM has never made a profit on Saab. US Saab sales were only around 33k a year recently. Chevy sell more Corvettes that that. Lutz even called Saab GM's Crown Jewel on his fastlane blog, while starving volume Buick and Pontiac of product and overseeing the stupid model renaming of those brands (3 JD Power Initial Quality Award winning vehicles were cancelled in the process). These two brands were mismanaged and run into the ground by someone with a MBA in MARKETING!!!!
Saab has a terrible parts distribution system in the US, while this area is usually one of GM strengths. With the 9/7X done in December, Saab will be down to two models. What is GM smoking totally stopping Trailblazer production soon?
With a rumored $40,000-45,000 window sticker, the Chevy Volt reminds me of another much hyped Chevy-SSR. With a 25k Toyota Prius already on the market, Volt will be nothing more than an expensive niche product. Which brings up another question, why the expensive ad campaign for Volt? Can GM afford a huge loss leader given their financial state?
Give Mulally credit, he understands marketing. His counterparts at GM dont have a clue.
Saab has a terrible parts distribution system in the US, while this area is usually one of GM strengths. With the 9/7X done in December, Saab will be down to two models. What is GM smoking totally stopping Trailblazer production soon?
With a rumored $40,000-45,000 window sticker, the Chevy Volt reminds me of another much hyped Chevy-SSR. With a 25k Toyota Prius already on the market, Volt will be nothing more than an expensive niche product. Which brings up another question, why the expensive ad campaign for Volt? Can GM afford a huge loss leader given their financial state?
Give Mulally credit, he understands marketing. His counterparts at GM dont have a clue.
11-16-2008, 02:32 AM
#40
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Location: Melbourne, Australia
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Do some of you have any idea what Ford is releasing in the next 2 years???
You all talk like the F150 is the last product that Ford is releasing.
January 2009: New Fusion, Milan, MKZ, and Hybrid models
March 2009: New Mustang
June 2009: New Taurus
July 2009: V6 Ecoboost engines (MKS, Taurus, Flex, etc)
Sometime 2009: Transit Connect
Late 2009: New Edge, MKX
January 2010: New Fiesta
June 2010: New Global Focus
Somewhere in there, there is also the possibility of the Ka. The Global Ranger is supposed to be somewhere in there also.
Ford is working to move up many of the timelines also.
Do understand that much of this involves retooling factories. The tooling has been bought for much, which has been a large cash drain. However, if the gov ever figures out how to distribute the loan program that they already approved, Ford will get money out of it. 4 truck plants are being converted to cars, or car based vehicles.
I know that there are things that I missed in there.............. like the Mercury cars.............. but I am not sure of the timeline for those.
This is Fords plan, and they are sticking to it. When they are done, they will have a full range of cars, from tiny to large.............. crossovers, from tiny to large............. and trucks, from small to large.
Thus, they will be ignoring no segments, and will have fully up-to-date, and highly competitive products in all segments.
You all talk like the F150 is the last product that Ford is releasing.
January 2009: New Fusion, Milan, MKZ, and Hybrid models
March 2009: New Mustang
June 2009: New Taurus
July 2009: V6 Ecoboost engines (MKS, Taurus, Flex, etc)
Sometime 2009: Transit Connect
Late 2009: New Edge, MKX
January 2010: New Fiesta
June 2010: New Global Focus
Somewhere in there, there is also the possibility of the Ka. The Global Ranger is supposed to be somewhere in there also.
Ford is working to move up many of the timelines also.
Do understand that much of this involves retooling factories. The tooling has been bought for much, which has been a large cash drain. However, if the gov ever figures out how to distribute the loan program that they already approved, Ford will get money out of it. 4 truck plants are being converted to cars, or car based vehicles.
I know that there are things that I missed in there.............. like the Mercury cars.............. but I am not sure of the timeline for those.
This is Fords plan, and they are sticking to it. When they are done, they will have a full range of cars, from tiny to large.............. crossovers, from tiny to large............. and trucks, from small to large.
Thus, they will be ignoring no segments, and will have fully up-to-date, and highly competitive products in all segments.
What I'm getting at is that Ford will eventually burn through their pile of cash in much the same way as GM now if the buying public fail to embrace Ford's new offerings.
I'm in no position to feel warm and fuzzy about Ford based purely on one's speculation regarding the success of Ford's future products. We've seen these kinds of promises before... and the rest of the automotive world doesn't stand still.
11-17-2008, 12:43 AM
#41
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Location: Payson, AZ USA
Posts: 1,181
Any automaker will burn through all of the cash that they have, if the buying public fails to embrace their new offerings.
There are no sure things in this world.
Also SS, do reread my post.............. nowhere did I speculate about the success or failure of any model. I only reported what they have in the pipeline............ due to a poster basically saying that they have nothing coming out.
The only thing that is for sure, is that Ford is doing what they have to do to have a complete balanced portfolio of products. How can you fault them for that???
There are no sure things in this world.
Also SS, do reread my post.............. nowhere did I speculate about the success or failure of any model. I only reported what they have in the pipeline............ due to a poster basically saying that they have nothing coming out.
The only thing that is for sure, is that Ford is doing what they have to do to have a complete balanced portfolio of products. How can you fault them for that???
11-17-2008, 07:51 AM
#42
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Location: Melbourne, Australia
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Thus, they will be ignoring no segments, and will have fully up-to-date, and highly competitive products in all segments.
11-17-2008, 02:45 PM
#43
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I said "up-to-date" and "highly competitive."
Nowhere does that guarantee the success or failure of any particular, or group of products. That is up to the buying public to decide.
That said, do remember that Ford no longer, and has not for a while, expects "home runs" on anything. They know that is a fools game, that you can never win, due to the saturation in the market. Thus, they have very modest sales goals on all of their products................. with making a profit a priority.
How can you say that what they have coming up is not good or highly competitive??? Are you privvy to all of these upcoming models???
In other words, to write off their upcoming models, before they are in the marketplace, is also a fools game. I'm not going to sit here and say that the Cruze is going to suck............ because............. because.............. I said so, thats why. I have no experience with the car, thus, I can not make any "educated" guesses.
Nowhere does that guarantee the success or failure of any particular, or group of products. That is up to the buying public to decide.
That said, do remember that Ford no longer, and has not for a while, expects "home runs" on anything. They know that is a fools game, that you can never win, due to the saturation in the market. Thus, they have very modest sales goals on all of their products................. with making a profit a priority.
How can you say that what they have coming up is not good or highly competitive??? Are you privvy to all of these upcoming models???
In other words, to write off their upcoming models, before they are in the marketplace, is also a fools game. I'm not going to sit here and say that the Cruze is going to suck............ because............. because.............. I said so, thats why. I have no experience with the car, thus, I can not make any "educated" guesses.
11-17-2008, 08:43 PM
#44
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Join Date: Feb 1999
Location: northeast Miss.
Posts: 2,887
About a year ago they borrowed by putting up their physical assets as collateral. However, I suspect they've burned through most of that (or nearly so).
It's likely that most of their current cash on hand has come from the sales of Jag and (the other nameplate escapes me at the moment).
It's likely that most of their current cash on hand has come from the sales of Jag and (the other nameplate escapes me at the moment).
Everyone keeps blindly going on about how good of a shape Ford is in but the amount they just borrowed is about the amount of cash they have.
11-17-2008, 10:25 PM
#45
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Location: Commerce, mi, USA
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Whoa there. I'm not normally one to toot the horn for Ford; but I think most objective consumers can see that Ford has more competitive offerings than just the F's and Mustang. In the span of 30 seconds, four come to mind - the new MKS, the Focus, the Flex and the Escape Hybrid. Ford's got it's share of Big Three troubles... but has a pretty good product mix at hand and a lot more on the way.