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Less Regulation NOT MORE! GM/Chrysler a Cry for Help

Old 10-22-2008, 09:51 AM
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Default Less Regulation NOT MORE! GM/Chrysler a Cry for Help

Is this true? I didnít know some of this but it makes sense.

These negotiations are about one thing: creating a political last stand of American auto making that a Democratic Congress and president won't be able to resist bailing out.
Why don't the auto makers limit themselves to paying competitive wages and benefits in line with what workers could earn elsewhere? Because, in the 1930s, Congress passed the Wagner Act with the nearly explicit purpose of imposing a labor monopoly on Detroit to keep wages at higher-than-competitive levels.
Why doesn't Detroit rationalize its musty brand lineups and dealer networks? Because, in the 1950s, legislatures across the country imposed franchising laws, including the federal "dealer day-in-court clause," to make such rationalization prohibitively expensive.
Why don't the auto giants do as Whirlpool and other manufacturers have done, and move their production to cheaper offshore locales? Because, in the 1970s, Congress enacted fuel economy rules to penalize homegrown auto makers if they don't build the lion's share of their cars in high-wage, UAW-staffed domestic factories.
No, Detroit's troubles don't arise because its executives are morons.
Look today at the desirable, fuel-efficient cars that GM and Ford sell in large numbers in Europe. Does anybody imagine the U.S. public derives any benefit from keeping these cars out of our country? Yet they are kept out to preserve the amour propre of the regulators who enforce our emissions and safety standards, however trivially different from Europe's standards.
Any rescue mounted today in Washington won't be so much a "rescue" as a final admission that the industry can no longer bear its regulatory burdens
Read the Jenkins article and please comment. It makes sense to me.
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Old 10-28-2008, 04:37 PM
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Default RE: Less Regulation NOT MORE! GM/Chrysler a Cry for Help

From a lot of what I have heard, most of this is infact the truth. My uncle used to work for Ford and has confirmed a lot of these things. The one point that I think is inaccurate though is that the Big Three suffer from a conventional wisdom issue with the last category. I refuse to believe that the Big Three can't make a competitive compact. The Neon was competitive when it first came out. The fuel economy for the manual versions were among the best in its class, the acceleration was towards the top, the styling was good for the time, and it was affordable. The reason why the popularity waned was the fact that it had quality issues and they neglected the car in not keeping up with the current technology to remain competitive. If they had updated the engine with the VVT technology that Honda and Toyota offered, offered an updated gearing and transmission technology, the increased weight would not have killed its fuel economy advantage. It strikes me as ironic that they had the funding for things they arguably didn't need like the 2.7L V6 replacing the 3.3L because it was oh so outdated (never mind the fact that was a good reason why to low ball up to the 3.5L offering), or the 3.2L V6 which they dropped for no real reason after four years of production. They had the money for the 4.7L V8 which they have barely used which was barely an improvement for the 5.2L offering slightly less torque and slightly more hp and slightly better mileage.

GM had it once with the original Saturn S-series. Then they abandoned the cars that were popular despite their flaws because they were practical and affordable, to have more flawed, uglier, gas hog, compacts that begged the question on why to bother being uncomfortable and having an ugly car if it got no better fuel economy than a standard mid-sized car.

The issue is the profit level is generally lower on these cars; however, there is always demand for them. The issue is they need to figure out a way to make them profitable. The problem that they have is they think the only way to sell these things is to sell them through Chevrolet, Ford, and Dodge. While I'll say that in Chrysler's case since they killed off Eagle this might not be as easy to pull off, GM and Ford should make premium compacts that aren't an embarrassment to the mid-brand nameplates. Here is my proposal:

GM: the Cobalt is not going to be a profit maker, that is something GM needs to learn about their ENTIRE Chevrolet line-up; therefore, cut the funding to it and divert it to the other divisions.
The G5 should be the one with the turbocharged offerings, infact it should probably receive a 2.4L version of the 2.0L turbo and receive a AWD version, it should be aimed at the Lancer & Mazda 3. Feature the six-speed auto with the G5. GM should either make a more premium compact in either the Saturn division or Buick division to aim at the Volkswagen Jetta with a focus on high quality interior, a comfortable ride, well appointed cushioned seats, feature a diesel option, and share the turbo 2.4L AWD version, feature a 6-speed auto and Direct Injection in all variants. This version should attempt to be higher tech and lack nothing that the larger models feature.

Ford: Ford should scrape the Focus and the nameplate. That name sounds dull and makes me think of what you do to a screen for seniors that have trouble seeing it. Ford has a big enough issue with this image. Go with something exciting. Since they like F-words, go with Formula. Give it the Focus International styling or something close to it. Offer a 2.5L I4 option and a 2.5L I4 turbo AWD in an SVT model. Offer a Mercury version but use something other than an M-word as that is all they have currently and it is too confusing. They should spare no expense on the interior, feature a six-speed automatic, Direct Injection, offer a quite, smooth ride, a diesel, and offer high tech features.

Chrysler: They need to either revive Plymouth to play the part of the cheap car for people who care only about the price tag, or revive Eagle. Make a new compact basic compact that is meant to be cheap and depending on whether it is a Dodge or Plymouth apply the level of performance as needed. Then for the more premium one in either Dodge or Eagle nameplate (if chosen to revive Eagle), feature higher quality interior, Direct Injection, Dual clutch transmissions, comfortable seats, quite smooth ride, a diesel, and the best performance possible.

The past attempts GM and Ford have made in this strategy were pretty pathetic. They thought that giving it uglier styling, adding fake chrome, wood, or tortoiseshell, and slapping Oldsmobile, Buick, or Mercury would be enough to pull this off. The lesson is they need to make the entire experience different from their other models. Make it seem less like a stereotypical compact and more like the experience found in their competitions offerings. A friend bought a Jetta despite higher price tag and lower fuel economy because it was a very livable car to use as a commuter. The fact that it was comfortable, had sufficient room, was quieter, had a better suspension, and higher tech interior was what made it worth while to him.

I don't think there is any argument that less regulation helps a business out when it is sensible. I'm not a fan of the idea of shipping production overseas though. I think that would hurt them more than it would help them. I would rather see them have the option to move their productions to other states that are not as focused as the Japanese have been able to do and not have to hire workers. This way the jobs are still here in the US.
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