Tuesday, April 21, 2009

Comment + thought = Stand-alone article

Posted by my bro in the comments of the post below, thought it worthy of an entry all on it's own:

My favourite take on the auto industry is how it's all the Union's fault that everything is going off the rails. It has nothing to do with GM's greed in needing a competitive vehicle in every single niche market, no matter how insignificant. Also, Chrysler needs to make vans and nothing else. Well maybe the Challenger, but not for $60k. It's not like it's a new design or even a new engine. 
GM released the Chevy HHR after playing catch-up to the PT Cruiser, but about 5 years too late to cash in on the trend. The HHR, much like the PT Cruiser is now D.O.A. and no one would be caught dead in one. This is an example of wasting huge development costs for a trend that's already dead by the time you get your crapwagon to market.

Labour costs are about 10% of the price of a vehicle. Take 10% off every vehicle and you still aren't selling vehicles because people are :
a) afraid they will lose their jobs
b) cannot get a loan from the bank
c) really don't need to replace their three year old car in the first place
d) waiting for the prices to drop.........waiting .......still waiting..........

Toyota had to lease an ocean liner to store unsold vehicles because they have run out of fields and warehouses to store new vehicles. As supply and demand tells us, this glut of unsold vehicles should mean lower prices, but instead government is stealing from us to prop up the Companies for another few days.

.....still waiting........

What's really inferior about north American cars is their design and engineering. But everyone targets the union people who put them together. There's something about a car assembled for minimum wage that would not make me comfortable at 130 kph on the 401, but that's just me.

At GM there are 5 retirees for every line worker. This is simply not the reality at the Japanese branch plants since they only began producing here in the 1980s.

What is inexcusable has been the quality lapse which is narrowing, but honestly should have been met or exceeded in the mid nineties. Japanese vehicles are clearly more reliable if one looks through the well regarded Consumer Report auto edition. If more people did this, GM and Chrysler would have been out of business long ago.

As you bid farewell to iconic manufacturers here in Ontario you need to realize a basic economic rule. Manufacturing creates wealth, and these Companies are the last gasp of big manufacturing here. Countless Ontario part makers will also fail along with the companies they supply. That will mean more unemployment and a lower standard of living for you and I eventually. And Dalton McGuinty, Premier for life, will respond as he always does, by raising taxes. Which further hampers any recovery and punishes anyone still trying to make a living honestly.

Also these parts suppliers are supplying Honda and Toyota here in Canada. If/when they fail, your Canadian made imports will be even more expensive since parts will be made everywhere else in the world but here.

I was on to the greedy business owning bastards as our manufacturing jobs were slowly sent offshore in the nineties, but no one else noticed. Now we cheer with glee as the last of the industrial revolution dies off, leaving service sector jobs and little else. You won't even be able to ask anyone if they want fries with that because there won't be any paying customers.

Professional analysts are saying that a depression will follow the collapse of the big two. This will be a nasty summer for Americans, who will protest violently as jobs evaporate faster than stimulus dollars, and people start to go hungry. I hope they are wrong.

At least my eight year old Ford is still running as I approach summer layoff. I might need to keep it a few more years, peeling paint and rusty bare spots not withstanding.

Tuesday, April 21, 2009 by K.R. Raven

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