It’s hard to watch something so painful, yet you can’t turn away. It wasn’t too long ago that GM, Chrysler, and Ford announced their fiscal detriment to the world and now we’re seeing just what this means. You have to ask yourself exactly what on earth any of these companies were thinking throughout the years whenever this pending issue was alerted to them. This was a long time coming and it doesn’t appear there was a whole lot done in preparation. Only the poorest business minds in the world could allow a company to fall into shambles from such acclaimed glory. With performance cars OUT of your mind, think about the Big Three as a car company for the masses because they have to appeal to everyone, and they didn’t do a good job at that.
This isn’t really news to any of us. We all saw it coming at some point because we all noticed other brands popping up on the road here and there. Then Toyota and Nissan took a big chunk out of the American truck market with their new-from-the-ground-up Tundra and Titan that appealed to many Americans. A lot of this can be attributed to their crafty advertising. I admittedly sparked an interest in both of these trucks because they pointed out key advantages they had over their competition. Ford was quick to bounce back and was able to usurp the lead from their opponents while Dodge and Chevy managed to maintain a strong hold. Unfortunately, the damage was done. Not only was a chunk of the market now in the hands of formerly afterthought truck companies, but also sales for trucks were on a growth trend decline.
Now, looking at a sheet of paper with numbers telling you this, you would probably tell yourself you should slow you production. No, not the big three. They seized ahead in hopes they could keep their companies afloat by selling what they were producing, neglecting overhead costs.
The downfall of the American car market has been tough to swallow, but it’s a harsh reality. GM and Ford are starting to build high-quality vehicles that people want to buy and have supported them with larger powertrain warranties. The biggest problem is that this struck at a time of financial disorder in the States. People can’t really afford to upgrade to the new model every year because many of them are too worried about keeping a roof over their heads. Again, looking at these numbers on paper, you would assume that production would have been slowed.
Well it finally was after it was too late. The ’09 models were on their way in and there were too many ’08 models on the lot. New incentives were offered left and right to try and move them, but this didn’t pan out the way the Three had hoped. (Their facilities even loose money when their backed down.)
So all of the ingredients were in place. They just needed to me measured and mixed together.
Banks aren’t giving loans, vehicles have been sitting on lots and are being sold for a loss, and Americans aren’t looking to get out of their older models for something newer. What’s more, the American car buyer is looking to buy something more fuel-efficient so SUV and Truck sales were hurt tremendously. (Lots of time and money was invested in replacement models for their popular SUV’s and Trucks)
Let’s face it; Honda and Toyota have done fuel economy better. To some extent, this is actually true but a Civic, Focus, and Cobalt/G5 will all be within one or two miles per gallon of each other. Does the American consumer now this? No, they don’t. What they do know is that they see a 1992 Civic on the road running strong but not an ugly Focus or Cavalier. Honda also does a fine job of letting everyone know that their products last and do well at the pump. It just seems to me that GM and Ford have been very lazy with this approach and really don’t get the picture.
This editorial could go on for pages and pages, so I’m stopping myself here. It’s official, GM filed for Chapter 11 this morning and Chrysler has been sold to the UAW, Fiat, and the United States and Canadian governments.