Re: Automobiles
Jmonica, chugger and GQ, you are right, I was in a foul mood last night (and not because of you) and I am sorry for pokin at you. I was wrong.
It is a good thread and lots can be learned from its exploration. It will apply eventually to almost all industries and understanding where this will lead may help many to plan for the future. Sorry for pipin off at you...<br /><br />On point of the thread, The numbers even GQ provided are for domestic mfg, of the toyota product vs.domestic mfg GM. You don't even want to discuss overseas labor rates. How can you compete when your labor costs are pushing three times that of your competition. Regardless whose numbers you believe, the contrast is stark. GM starts with about a $1600 legacy cost per unit that honda, toyota and nissan don't have. Take that off the cost of an escalade and its no big deal, but off a cobalt and you have the difference between a sale and a lost sale. This also goes against their ability to spend on new technology, R and D, speed to market, etc. and that is what is known as the downward death spiral. And that is where GM is. In the spiral. <br /><br />The UAW is supposed to supply the best workers in the world, yet non-union mfg consistantly win awards for build quality. My 2000 olds intrique is a perfect example. A 10 year old could have seen the mistakes and general lackluster eye for detail. Gaps in the dashboard, doors not fitting right, replaced rear bearings 4 times in 50K, window seals failing, some glitch in the stearing box, flickering headlights, clunking moonroof, general build quality issues. Whereas my wifes 2003 Honda CRV was absolutely flawless. Zero defects, perfect in every way. You could shoot the hood and door gaps with a lazer. I support the US mfgr's and have all Fords currently but they are seriously making me question my decision with at least two of the three vehicles. I will be looking at toyota and honda next time around. It is clear that there is greater attention to detail at these other mfg's and the fact that they are non-union shops may or may not mean anything. You want to get an accurate view of quality, look at resale values of competitive products. If you do, you don't even want to look at a GM car.<br /><br />Jmonica I have to say, why would you trust UAW numbers over any..any independant source? I am very interested in knowing this.<br /><br />From Bloomberg.com<br /><br />Big Advantage' <br /><br />The Japanese automakers have an advantage because they know how to keep costs down in markets like the U.S. and can apply that as they expand in other markets,'' said Atsushi Osa, who helps manage about $110 billion for Sumitomo Mitsui Asset Management Co. in Tokyo. That's a big advantage for them against the foreign automakers.'' <br /><br />This year's annual efficiency study by Harbour & Associates, ranking the most productive auto plants in North America, again found that Toyota, Nissan and Honda on average need less time to build a vehicle than General Motors, Ford or Chrysler, an edge they've maintained for more than a decade. <br /><br />The big Japanese had an average production cost advantage of $200 to $300 per vehicle compared with the U.S. Big Three,'' said Harbour analyst Laurie Felax. GM and Ford are reducing output at several facilities, meanwhile you've got Toyota, Honda and Nissan operating plants at very high utilization rates, and in some cases trying to squeeze out even more capacity.'' <br /><br />The overall cost advantage for Asia's largest automakers in U.S. may be closer to $3,000 per vehicle, said Koji Endo, a Tokyo- based auto analyst for Credit Suisse First Boston. <br /><br />Question Mark' <br /><br />A big question mark is how long can they continue to enjoy such a big cost advantage relative to the U.S. Big Three?'' Endo said. About $1,500 of the difference is for health-care and pension costs, and that will not really disappear anytime in the near future. The remaining $1,500 is a pure productivity differential.'' <br /><br />That cost advantage is one reason General Motors and Ford have to sell their vehicles with at least $3,000 of incentives just to be competitive on price,'' Endo said. The Japanese make a lot of profit out of the U.S. that goes for research and development of new products.'' <br /><br />General Motors, manager of a retirement plan that covers pension and medical bills for than 1 million people, reported so- called legacy costs of about $40 billion in its third quarter, and for the year may have total costs of $50.6 billion, the most of any carmaker, according to Bruynestyn's estimate at Prudential. <br /><br />That's down from a peak of $66.2 billion in 2003, Bruynesteyn said in a report.
