$14 per hour: The new auto dream job

In My Humble Opinion
61

[QUOTE=Balthisar]
You’re right of course, but my understanding was that you meant that American designs weren’t well-received overseas, but as you said yourself, that’s because there’s no exposure other than niche vehicles. There’ve been different designs for regional markets for decades and decades. It’s only within the last decade that there’s been a huge drive to try to leverage global designs. There’ve been early test cases here and there (e.g., the Ford Contour / Ford Modeo). This reduces a huge amount of redundancy, and eases up the supply chain. You can still tailor to the local markets by changing trim, tophat details, chassis configurations for the various markets.
[/QUOTE]

Well, I was also talking about non-niche vehicles that were introduced to overseas market - the Pontiac Tempest (a rebadged Chevy Corsica for the Canadian market) was released in Europe and the ME and did horribly, despite lots and lots of marketing dollars.

I have to admit that the “global platform” initiative that Ford, GM, Volkswagen and Fiat adopted in the 90s has gone some way toward changing this trend.

That said, there are very, very few cars that have done equally well this way in the US and abroad; Ford Mondeo, smash hit - but Contour/Mystique, bit of a flop.

I think one of the problems is that “car people” know that they’re really looking at a rebodied car. I was quite amused to see that Pontiac had chosen to “honor” the legacy of the GTO by slapping a Pontiac badge on a Holden Monaro. That said, badge engineering seems to fool about 99% of American car buyers - just look at the Escalade.

You couldn’t do the same thing in Europe; even Volkswagen, which has managed to build something like 50 different models using just three floorplans, ensures that each model has a very distinct identity from the others.

62

[QUOTE=Uncommon Sense]
They’ll probably cause a ripple in similar industries, but Japan started it wayyyy back when Toyotas first started becoming cheap and reliable. It’s a market correction, without which, we’d all be in more trouble in the long run.
[/QUOTE]

Those cheap Toyotas you reference are available where again?

And this market correction of which you speak, when would you project that we will see those cheap, reliable Ford, GM, and Chrysler vehicles in the showroom? I know I will feel much better about it in the long run after I see that.

63

[QUOTE=ASAKMOTSD]
Those cheap Toyotas you reference are available where again?

And this market correction of which you speak, when would you project that we will see those cheap, reliable Ford, GM, and Chrysler vehicles in the showroom? I know I will feel much better about it in the long run after I see that.
[/QUOTE]
That already happened: Suzuki Vitara, a.k.a. Chevy Tracker. Durable, comfortable, and cheap as beans. Unfortunately, GM has more recently gone over to the larger Theta platform.

64

[QUOTE=Really Not All That Bright]
That said, there are very, very few cars that have done equally well this way in the US and abroad; Ford Mondeo, smash hit - but Contour/Mystique, bit of a flop.
[/quote]

I’m missing something here. There’s no Mondeo in the United States, and never has been, so it’s impossible to say that it’s a smash hit in the US. In fact as much as the internet people go ga-ga over them, I’ve driven one for a year (05 model). As an American consumer, it’s not at all satisfying: It’s small, cramped, and underpowered. Perfect for the market where it is successful, though. Consumer tastes and priorities are different. (Note: I’ve not driven the current, award winning model, although I hope to do so the week after tearing some to shreds). Instead, we get a re-engineered (and enlarged) Mazda 6 as the Ford Fusion. As an American consumer, it’s sufficiently spacious, has fun driving dynamics and even the I4 has plenty of power. Introducing a car that’s perceivably in the same segment (the Mondeo) would just confuse people. Perhaps the Fiesta will be the first real, global test of an all-or-nothing, true global car, with only minor modifications for each target market, from an American company.

65

It maybe somewhat debatable, but IMO this has already happened, for Ford and GM, at least. The new Ford and GM offerings are just as good as any of their competitors (and their only real competitors are American cars made by Japanese car makers). In the future, if GM plays its cards right, Buick and Pontiac may very well be worthwhile competitors to the European makes too. GM has already released two near luxury and luxry models, the Buick Park Avenue and the Cadillac SLS to good receptions in China, where both Buick and Cadillac have excellent reputations as prestige labels, and will compete nicely with the Europeans. Chrysler’s future looks less bright, but as soon as they go under, their share of the truck/SUV market will mostly go to the other two Detroit makes.

66

[QUOTE=ASAKMOTSD]
And this market correction of which you speak, when would you project that we will see those cheap, reliable Ford, GM, and Chrysler vehicles in the showroom? I know I will feel much better about it in the long run after I see that.
[/QUOTE]

Oh, reliable American cars? Like Buick, Caddillac and Mercury?
Read it and weep, Buick tied Lexus for vehicle dependability for 2007.
I would also note that Delphi home of the sub middle class work for which you are so concerned supplies GM with many parts. So those poor poor workers are helping to create two out of the top five most dependable cars.

67

[QUOTE=Balthisar]
I’m missing something here. There’s no Mondeo in the United States, and never has been, so it’s impossible to say that it’s a smash hit in the US. In fact as much as the internet people go ga-ga over them, I’ve driven one for a year (05 model). As an American consumer, it’s not at all satisfying: It’s small, cramped, and underpowered. Perfect for the market where it is successful, though. Consumer tastes and priorities are different. (Note: I’ve not driven the current, award winning model, although I hope to do so the week after tearing some to shreds). Instead, we get a re-engineered (and enlarged) Mazda 6 as the Ford Fusion. As an American consumer, it’s sufficiently spacious, has fun driving dynamics and even the I4 has plenty of power. Introducing a car that’s perceivably in the same segment (the Mondeo) would just confuse people. Perhaps the Fiesta will be the first real, global test of an all-or-nothing, true global car, with only minor modifications for each target market, from an American company.
[/QUOTE]

The Ford Countour/Mercury Mystique was the US Mondeo- slightly larger body, but same platform and engines (and, importantly, suspension settings) as the Mondeo.

68

Tried to edit to add this but work intervened:

I wasn’t contrasting the Mondeo and Contour, I was using them as one example of a more or less identical vehicle which did well elsewhere and poorly here.

Incidentally, the Focus was (and is) already a real, global test such as you suggest the Fiesta would be. Alternatively, the VW Golf is basically the same car everywhere (except called the Rabbit here). The only difference with the US-spec one is that it only comes with the 2.5L five-cylinder engine option, unless you want a GTI.

69

One thing I want to mention is… Henry Ford didn’t make money by paying his workers enough so that they could buy his cars. Economies don’t work like that. That would be this freakish death loop where the company would inevitably give out more $ than it took in. It’s not in and of itself economically feasible. Rather, his workers were well payed to produce a vast surplus so that he could sell it to everyone. Some of them DID buy cars, but they certainly weren’t the target market, and Ford would have made a mint had none of his employees bought Ford cars.

Companies can’t spend their way to prosperity any more than governments can. Listening to some posters here, you’d think that the companies could just raise wages without limit and everybody would magically get richer.

70

[QUOTE=smiling bandit]
One thing I want to mention is… Henry Ford didn’t make money by paying his workers enough so that they could buy his cars. Economies don’t work like that. That would be this freakish death loop where the company would inevitably give out more $ than it took in. It’s not in and of itself economically feasible. Rather, his workers were well payed to produce a vast surplus so that he could sell it to everyone. Some of them DID buy cars, but they certainly weren’t the target market, and Ford would have made a mint had none of his employees bought Ford cars.

Companies can’t spend their way to prosperity any more than governments can. Listening to some posters here, you’d think that the companies could just raise wages without limit and everybody would magically get richer.
[/QUOTE]

Hmm - how is this different from the freakish death loop where you keep the prices going up while driving the incomes down - or companies attempting to save their way to salvation? Listening to your post, you would think that companies could raise prices and lower wages without limit and everyone would magically be prosperous as well. Right? Same logic is it not?

This has been a curious thread to be sure. My original post was that I shared my opinion that it was unwise for a company to actively cut the wages on its producers (a large chunk of a company’s consumer base), thereby reducing their ability to buy their product. Or at least to do so without a corresponding reduction in the price of the product produced (which theoretically would INCREASE its sales). Since that post, I have seen comments about touring auto plants, people being overpaid, the amount of tools one owns, the value of a global car, competing models, etc. I have not seen anyone refute my original position - not that this was intended to be a great debate or a pit. Just interesting to watch the group in action.

71

GM sold 3.8 million vehicles in North America in 2007, and employs 173,000 in North America. How do you reckon that as “a large chunk of its’ consumer base?” If every GM employee bought a new GM car last year it would still amount to less than 5% of its sales.

72

[QUOTE=Really Not All That Bright]
I wasn’t contrasting the Mondeo and Contour, I was using them as one example of a more or less identical vehicle which did well elsewhere and poorly here.
[/quote]

Okay, I thought you meant that as an example of global success, whereas it was less than astonishing here (it was the example of experimenting with global platforms above).

You’re right. Except… the US Focus still uses the original European platform, whereas Europe has moved on to the newer platform. A quick web search indicates this is already public, so I can say with confidence that for MY2010 or MY2011, the current platform will be migrated for assembly and sale in the USA. Also, for the USA market, it’s not what I’d call a stellar success. Don’t get me wrong – it’s a damn fine car. About the only thing wrong with it from a marketing perspective is the Ford name. For some reason people discount the better Ford for things like Corollas and Kias.

Maybe I missed something, but it’s not only employees that buy cars. It would require the salaries of the entire buying population to decrease significantly in order not to buy cars. This is the same argument made in the late 70’s early 80’s when there were massive layoffs.

Yeah, that’s just the thing. Let’s see… there’s are exactly zero Ferrari production employees in the United States, and so with your reasoning, there’s no one here to buy Ferrari products? Or I’m misunderstanding something. (Plus, employees get significant discounts; they’re already reduced price.)

73

[QUOTE=ASAKMOTSD]
I have not seen anyone refute my original position - not that this was intended to be a great debate or a pit. Just interesting to watch the group in action.
[/QUOTE]

I believe that I pointed out it was a flawed premise. You don’t seem very motivated to prove that your premise is true, other than the fact that you say it is.

From the Wikipedia entry on Ford Motor Company, I see the following:
In 2007, Ford revenues increased to $173.9 billion, while producing 6.553 million automobiles and employing about 245,000 employees at around 100 plants and facilities worldwide.

If Ford were to depend solely on it’s employees for it’s revenues, then each employee would have to purchase 6,553,000/245,000, or roughly 27 Ford cars, EACH AND EVERY YEAR. I’m certain that is not happening. Even if they bought only one Ford, that accounts for less than 4% of sales, and of course a Ford lasts longer than one year. Replacing the car once every four years and employee sales would only account for 1% of Ford sales. Reduce the wages a bit so they can only buy a car once every six years, and the results are not going to drive Ford out of business.

Your premise appears to be flawed. Defend it or quit whining.

74

[QUOTE=ASAKMOTSD]
Hmm - how is this different from the freakish death loop where you keep the prices going up while driving the incomes down - or companies attempting to save their way to salvation? Listening to your post, you would think that companies could raise prices and lower wages without limit and everyone would magically be prosperous as well. Right? Same logic is it not?
[/QUOTE]

My post was eaten, so I will write it in short form.

You don’t seem to actually comprehend economics.

The End.

…

Ok, for more, let’s consider here: you apparently think you’ve discovered a new principle which radically alters all existing business plans and economic theories. If you really believe in that, it’s time to get you a speaking tour, cause you can make millions.

That was sarcasm.

But the basic point is that business and the economy thrives on doing as much as possible with as little as possible. Ford won big by paying for the most efficiency he could get. And that’s what all businesses need to do. UNless these Ford employees are actually delivering 16$/hour of value more than the copany apparently thinks they are (30-14=16), paying them more than 14$/hour is a waste.

By paying everyone what their work is actually worth, taking into account all measures of employees value (work done, advisory relationships, knowledge, length of training, cost of replacement, etc.) and doing the work as efficiently as possible, we all get disgustingly wealthy. We don’t thik of it as such, but we are always getting wealthier. We can own and afford things people 30, 70, 100 years ago couldn’t dream of.

75

I just wanted to thank those that constructively offered their opinions on my original post. Have a great day.

76

[QUOTE=Balthisar]
Also, for the USA market, it’s not what I’d call a stellar success. Don’t get me wrong – it’s a damn fine car. About the only thing wrong with it from a marketing perspective is the Ford name. For some reason people discount the better Ford for things like Corollas and Kias.
[/QUOTE]

[QUOTE=Reuters]
RANK VEHICLE 2008 2007 '07 RANK %Chng
1 F-Series 690,589 796,039 1 -13.2
2 Silverado-C/K Pickup 618,257 636,069 2 -2.8
3 CAMRY 473,108 448,445 3 +5.5
4 Accord * 392,231 354,441 5 +10.7
5 COROLLA 371,390 387,388 4 -4.1
6 Ram P/U 358,295 364,177 6 -1.6
7 Civic * 331,095 316,638 7 +4.6
8 Impala 311,128 289,868 8 +7.3
9 Altima 284,762 232,457 10 +22.5
10 CR-V * 219,160 170,028 20 +28.9
11 Sierra 208,243 210,736 12 -1.2
12 Cobalt 200,620 211,449 9 -5.1
13 TUNDRA 196,555 124,508 33 +57.9
14 PRIUS 181,221 106,971 na +69.4
15 Caravan 176,150 211,140 19 -16.6
** 16 Focus 173,213 177,006 16 -2.1**
17 Odyssey * 173,046 177,919 16 -2.7
18 RAV4 172,752 152,047 15 +13.6
19 Econoline/Club Wagon 168,722 180,457 11 -6.5
20 Escape 165,596 157,395 22 +5.2
[/QUOTE]

(my bolding)

I’d call #16 a smashing success; after all, it was Ford’s best-selling vehicle, other than the F-series, which is really two different models.

77

[QUOTE=Dag Otto]
I believe that I pointed out it was a flawed premise. You don’t seem very motivated to prove that your premise is true, other than the fact that you say it is.

From the Wikipedia entry on Ford Motor Company, I see the following:
In 2007, Ford revenues increased to $173.9 billion, while producing 6.553 million automobiles and employing about 245,000 employees at around 100 plants and facilities worldwide.

If Ford were to depend solely on it’s employees for it’s revenues, then each employee would have to purchase 6,553,000/245,000, or roughly 27 Ford cars, EACH AND EVERY YEAR. I’m certain that is not happening. Even if they bought only one Ford, that accounts for less than 4% of sales, and of course a Ford lasts longer than one year. Replacing the car once every four years and employee sales would only account for 1% of Ford sales. Reduce the wages a bit so they can only buy a car once every six years, and the results are not going to drive Ford out of business.

Your premise appears to be flawed. Defend it or quit whining.
[/QUOTE]

Short on logic here. It is not just the auto workers,it has a multiplier effect. Restaurants,bars,shows grocery stores ,banks etc all were at least partly benefactors of decent wages for auto workers. In Detroit area you can see the restaurants and bars that have gone out of business. The whole economy has been impacted,(especially housing).

78

To partially quote P.J. O’Rourke, what do you think happens to the money that isn’t being overpaid to those workers? Do you think Rick Wagoner and Bob Lutz are baking it into pies?

79

[QUOTE=Throatwarbler Mangrove]
To partially quote P.J. O’Rourke, what do you think happens to the money that isn’t being overpaid to those workers? Do you think Rick Wagoner and Bob Lutz are baking it into pies?
[/QUOTE]

When come back, bring ill-gotten gains pie.

80

[QUOTE=Really Not All That Bright]
I’d call #16 a smashing success; after all, it was Ford’s best-selling vehicle, other than the F-series, which is really two different models.
[/QUOTE]

I’m abashed. I had no idea!