Detroit's in Trouble...

[seldomawake]

We've heard about how terrible the trouble Detroit is in. Let's have a quick recap:

• Plummeting house values...
  
• GM gasping for its very life (they just sold Allison Transmissions, heard about that? Look it up, it's a fun[ny] story)...
  
• Chrysler about to be devoured for its finance arm and dealer network (they'll be importing China's Cherys soon!

Comments

[anvilchorus]

Detriot has problems because they produce subpar cars. When they do get a car that people want, they dont produce enough of them. They have a terrible reputation compared to their foreign counterparts (a reputation that doesnt hold true anymore, but people dont recognize that), and their manufacturing processes are terrible. They own way too many nameplates that basically sell the same car.

And I'll make a bet that that 134k isnt straight compensation, but totally inflated by the healthcare costs that they're forced to pay out. I'll also venture that they're including the 7.5% employer portion of payroll taxes. In the end, I can almost guarantee they dont have a take home pay of 134k a year. Its probably closer to 60 or 70k.

[seldomawake]

Here's the original post from the good professor's blog:

http://mjperry.blogspot.com/2007/07/uaw-pricing-themselves-out-of-market.html

It seems that it's average "wages and benefits," which _probably_ includes healthcare costs. That would in fact have an affect on the comparison...

...but there's no excuse for the comparison with Toyota, Honda and Nissan.

[anvilchorus]

If this is the case though, you'd find that American cars are outpricing themselves out of the market. but they're not. I looked up the invoice price range for 3 domestics, and three foreigns

[seldomawake]

I agree with you 100% on the relative quality issues. I remember driving over 20 (nearly 40, in fact) and the only notable domestics were the Mustang and the 'vette.

I agree that they would stop hemorrhaging money if their cars were better (and agree, btw, that this is the primary reason that they're tail-spinning into chapter 11 or equivalent).

Even if they made excellent cars, however, their cost control would suck. Mind you, excellent cars would probably justify the extra cost -- you don't see anyone complaining that Porsche spends a lot on labor -- but what I think is that we see both bad products and bad cost-management.

Shame, really. I really, really want to drive up in a 'vette and park next to a next-gen Camaro. Instead, I drive up in my tiny RSX-S and park next to a Jag and a BMW 6-series. There's almost no domestics in our company's parking lot.

[seldomawake]

Don't I wish. RSX-S. That's me up in the North GA mountains, on one of my joy-rides.

[anonymous]

Gotta love Honda with its pilfering of design details...witness '96 Civic Coupe trunklid rake vs '93 BMW 3-series. Not that Honda is alone in its guilt though, *cough Bangle butt appearing everywhere.

[seldomawake]

Heh. It's not even that the bangle-butt is pretty. I mean, Acura's been making the best looking BMWs for years.

The new [3|5|7]-series shows promise, though. The 1 series should be interesting also...