We had a K-car that only finally died when we junked it. It was reliable, accelerated well, drove nicely, and eventually fell apart after, oh, fifteen years or so of very heavy use.
Looked like a box on wheels though. Style was definitely not its strong suit.
As for his criticisms, it didn’t exactly take a rocket scientist to figure out over the past decade that profits from SUV sales should be plowed into hybrids, electrics, you name it. Obviously when the next spike in oil prices came, as it now has, that would wind up being a plus.
I guess it has to be not just obvious, but blindingly obvious before Detroit thinks of it though.
Part of the reason cars from the 80’s were so crappy is that it was ‘blindingly obvious’ in 1975 that ‘the era of cheap oil was over’. There were gas lines, gas was very expensive, the 55 MPH speed limit was introduced to save gas, and Jimmy Carter was wearing a sweater. Therefore, the auto makers began cranking out flimsy, rust-friendly, underpowered vehicles.
Turns out, the era of cheap oil came back stronger than ever, for another 25 years.
Hindsight is a wonderful thing. And if I were betting, I’d bet that the price of oil stays relatively high - certainly no where near the lows it attained a decade ago. But I wouldn’t bet the company on it. And even if I wanted to, I wouldn’t know which technologies to invest in. Hybrid electric? All electric? Hydrogen fuel cells? Do I spend my research dollars on powerplant technology? Or do I spend it on advanced materials for making the car lighter and stronger? Or do I spend it on making cars faster, or more manoeverable, or what?
The auto makers are behaving rationally. They make forecasts to the best of their ability about the price of oil and other commodities in years to come, and then try to figure what that will do to demand for cars in the various segments. They look at alternative fuels, and try to spend money on the ones that show the most promise. They spread their research dollars around in proportion to what they think the car buying public will care about the most.
Will they lag behind the problem? Probably. There’s a natural hysteresis involved - the problem becomes apparent, but it takes time for a huge auto company to change gears and re-allocate resources. During that period, people complain that the auto makers aren’t doing enough, or are stupid because they don’t already have their money invested in the problem area.
But the alternative to lagging behind is to guess. And that means spending money on problems that don’t materialize, backing technologies that turn out to be non-competitive, etc. In the end, they wind up with even less money for the ‘real’ problems.
The people who think that car makers should spend every nickel on green technologies are at one end of the spectrum. The people who think there is no problem at all are on the other. The auto industry is somewhere in the middle, along with the bulk of the population.
My bolding.
I would go for lighter and stronger, the USA passion for large cars and the later passion for SUVs is a yearning for armour.
Armour serves two functions, it protects … and it looks good.
Get both those right and you can drop in just about any powertrain.
So why do Toyota and Honda have viable alternatives now, while the Detroit boys are just now figuring this stuff out? At the top of the cycle, looking at all those SUVs, and at all that cheap gas fueling them, all you needed was for someone to figure that it might be prudent to diversify the car portfolio some. Nothing more radical than what you or I would do in our personal investment portfolios.
Or, to put it even more simply “Don’t put all your eggs in one basket.” Like I said, not exactly rocket science. More like common sense.
We have nothing new. The execs knew what was coming. They kept playing with the books to make huge profits at the cost of the future. They had nice bottom lines,.great bonuses,and huge retirements. We let the execs make our corps their private playgrounds. They only answered to each other. They worked the system for all it was worth.
There just might be a huge flaw in the capitalistic system.
Yeah, and the way they make everyone buy their products!
And the way they force everyone to want huge four wheel drive vehicles for hard top roads which get cleared of snow within hours! Damn those executives for making the American Consumer act like idiots!!
Tris
Thanks for terrible response. I can not even guess how the mainstream American was convinced trucks and SUVs make sense.
Who is buying them now? What did they do to protect the corporations from new laws of higher gas prices.? What did they do about staying ahead of the technology?What did they do to fix the dealership problem?If I was given a SUV ,I would sell it immediately.
We built smaller cars and what ended up happening was that everyone switched from sedans to SUVs. People feel that they need room for four, plus a dog, plus groceries. And in truth, that is what they need in the US. You could fit all that in just fine into a Ford Crown Victoria or something, but people have been taught that big cars are old fashioned and inefficient and they have to get a small car if they get a coupe or sedan.
That’s true. (Thanks for the sane response, btw. Ideologues make me impatient.) What’s not true is that said SUV or whatever needs to be fueled by gasoline. For years the car companies in the US have said they just can’t produce an efficient vehicle. Like some whiny three-year old, they just keep saying “We can’t.” Meantime, Japan comes along and proves, every time, that they can.
These guys are just spoiled. Or stupid. Or both.
How often do you see people driving those huge vehicles with one person in it. My neighbor has 2 vans and 3 SUVs. All his kids drive a behemoth. I do not think we need them. We actually got around at one time without driving huge vehicles,needing cell phones etc. They are gas guzzlers and are not safe.
The really perverse thing: as gasoline gets more expensive, these behemoth SUVs will become worthless-so they will wind up being driven by teenagers and poor people. Watch for a crop of dealy accidents, as these two-ton SUVs (poorly maintained) slam into 1600-lb. econoboxes-the results will NOT be pretty!
I’d like to respond here regarding the idea that it is simply a matter of course that a good leader will adapt his direction to the state of the market. Obviously, you have to cater to the market to some extent or you won’t sell anything at all, but on the other hand, you don’t have to give them exactly what they want either. The best example of that is a product like TiVo. TiVo is the product that nobody knew they needed. If someone were to explain the concept to you, you wouldn’t be very impressed. But somehow, TiVo created a market out of thin air, essentially. Sure, everyone had VCRs but that was long ago made a commodity. This is a great example of creating a product with little express demand from the market. You had to see TiVo in action to believe it. Secondly let’s have a look at the Apple iPod. We all know that the iPod wasn’t the first portable MP3 player, or even the first one to use a hard disk for storage. All of the other companies were using a big three mentality by trying to cram the most features into a certain price point. Apple came along and said, we can do this a lot better than these guys. Is anyone asking for something better? Not really. I was particularly happy with my MP3 player at the time, yet when I saw an iPod I knew I had to have it then. It made them all seem so clumsy and difficult.
How does this apply to the big three? For a long time IMO, the big three has been working to make their cars as bottom-line as possible. They’ve been phoning it in for decades. A Mustang with a live axle? Give me a break! They look at some studies and decide that the consumer wants X, so they build X and are suprised at their lackluster results. The big three could actually get a lot more respect if they surprised us every now and again. I was excited about the new Mustang until I found out how freaking big it was going to be. It’s typical of the Ford mentality. They are simply too afraid to make reasonable deviations from the norm on important products.
On the other hand they’ll come out with absolute shit new cars like the Pontiac Aztec. Who the hell comes up with junk like that?
I think Ford has the ability to make better cars. They’ve been going that way recently, it seems with a lot of European design and tech drifting in. But if they really want to get people excited, they simply need to just focus on bringing the quality up a notch. Try to start selling Fords as something maybe not as good as a BMW or Euro import, but not as boring as a Japanese import. I do get the feeling that Ford is finally focusing on quality, finally.
But my point is this. The market is very fickle, and will not demand low gas-mileage cars until it really needs them. At which point, they’ll want them badly. Ford had access to the same data as Toyota. We’re running out of oil. It’s simple, Supply is decreasing, while demand is increasing. Prices go up and people will demand more efficient cars as a result. I saw this coming 4 years ago when I bought my TDI Jetta. Toyota was very smart in introducing the Prius when they did. Now a Prius is an acceptable car to drive. At the very least it’s given Toyota a great name in fuel efficiency.
The US auto industry has rested on it’s laurels for far too long. They’ve always been in business because there is a large group of people who have strong American brand loyalty. However as these people get old and die out, they are going to see problems, as people in my generation are much less attached to such a notion.
Chrysler ,the company in the most trouble, came up with the Viper, The Prowler, PT Cruiser, and brought back the convertible. How has innovation paid off for them.?
Thankfully, GM’s seen the light and put a bullet through that horse.
The point is that it takes innovation, true, but you can’t keep building cars that are seen as inferior. That’s a lot of what I mean by innovation. To use the Apple analogy, they build things that don’t do anything new, but are stylish AND are higher quailty. Higher build-quality that is. That’s what I mean by innovation. The iPod was never a new idea, but the fact that Apple made it the way it is was innovative.
The simple fact for me is that I’ve seen so many cars of much better quality, I’ve got no reason at all to buy an American car. A good way to start is by improving the fit and finish of a their cars. Sure it’s more expensive, but if it doesn’t fall apart so easily and creak when you put some weight on the dashboard, then that’s a good start. Ford’s old plastic was so cheap that it felt like it was made of the same material as a Dixie cup. What I mean is that Ford needs to step back and focus on making good cars. Not gimmick cars. The PT Cruiser and the Prowler are gimmick cars. They actually might be okay though. The Viper. Well, who is gonna buy that? It can’t really be in the same category. It’s too expensive and impractical.
If I were chairman of Ford, I’d focus on R&D and build quality and take the hit in the short term. The public can change their impression of a brand quickly based on a few good products. Remember the New Beetle? That really catapulted VW into a higher position after it’s introduction. It gave the VW a bunch of hipster cred. Ford needs to aim to have the quality of their competitors before focusing on price. Ford needs cash now, but it better deal with a few serious flaws first.
Um, in ridiculous profits up until the point at which Daimler took over?
The Toyota Tundra and the Nissan Titan are full-sized trucks-and they are not selling, either.
My understanding is that Honda still makes a net loss for each hybrid it is selling (I have yet to see anything to the contrary). Toyota’s is profitable, on the other hand. Ford licensed it years ago.
I would not call the Viper innovation. A big engine in a small car has been done many times over, and with much more capability. The Prowler, and PT cruiser might have been styling innovations, if custom makers had not been using the same styling for years. (plus, how is reusing styling from 60 years ago innovation?) Convertible? Mercedes never stopped making them.
As far as I can tell Chrysler’s last innovation was the minivan, under Iacocca’s watch. And, I have never liked the minivan, so shame on you for indirectly making me admit is was an innovation.
How so? If anything, this proves that capitalism works. The market is now making a bunch of mismanaged, inefficient, shortsighted companies pay the price for their own incompetency.
The owners of these companies let the executives do all the things you mentioned. That was their mistake, and they are suffering for it.