Ask a Car Maker …

September 12, 2008

 

The U.S. autos sector has hit a wall like some kind of crash test dummy – record gas prices, rising supply costs and sales hitting a 15-year low. Can car makers ride it out?

Reuters journalists will interview car companies, including some from the Big 3 , next week as part of our Autos Summit 2008. We will ask why investors should hang on, and is the sector about to hit the wall?

What would YOU ask the major automakers?

33 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

The gov’t should not back loans to the auto industry. I don’t want my tax dollars going to GM so they can roll the dice and leave us with the bill if they crap out. GM needs to get it’s house in order if it wants to survive and if they don’t, let them fail.

Posted by scott | Report as abusive

Is it not more efficient for the U.S. government to set up a $50 billion fund to invest in the most promising green transportation technology than loan the funds directly to Detroit to retool?

Posted by Emily Church | Report as abusive

Is hybrid or electric car really the answer to the problem? Ten years from now, what are we going to do with all the used batteries from these cars? Reuse or recycle?

Posted by Clive Chan | Report as abusive

” Euphoria ” !

Dear Auto Makers & Designers of the Future,

Do you realize simple technologies are the ANSWER to ALL future solutions ! We can’t go on like this ? Basic inputs like Fuels have gone up by 400 % increases since the Recent Times ? While every thing else is only getting more expensive ~ From Insurance to maintenance to repayments to ” Survival ” ?

Some ” Recalls ” to fix a Bolt or Nut will not help @ this stage !

Are you guys capable of RE-Calling all the older cars sold by your company to make them fuel efficient By @ least 2 to 3 mpg more ??? Or give them some thing to Look UP To ~ Other than New Models ……. Heralding the latest Gags with ” GPS ” to find your way home !!!

i wish some one reveals the 100 MPG Car ~ Before Oil goes through the $ 150 Mark ! And the Stock Market ” MeltDowns ” supporting the Euphoria of over spending !

It will never be the Same ! Big will end up Small !???

A Silent Observer !

enough is enough with the American auto companies selling substandard vehicles to American people. Yes, the rising cost of fuel and supply and etc., they are all valid. but the bottom line is, American auto companies are not producing better cars than their competitors. I wouldn’t buy an American car even if they sell it at half price, because i know that the repair cost will be high. i don’t know when they might recall my vehicle. and there will always be multiple people who get injured or even get killed for a nationwide recall to be initiated. We live in a capitalist economy, and we should let the market run its course and devour the lowest competition. Other companies produce better cars that consumers want. There is no Patriotism in the market folks. it’s brutal reality and it all comes down to numbers and profits.

given the circumstances of the American auto industry, I’d recommend that a new system should be born. The big three should seriously downsize and focus on quality of their vehicles more than the quantity. they sell the same car with three or four different names, all of which are not as good as the competition.

Initially, we need to find a way to bring Diesel engine family cars into the states. Diesels are cleaner and safer and more cost efficient to produce, and there are newer technologies and factories that can be built on this land to replace the gasoline engine plants. We lost the game in the gas engine segment. We need to push for diesel in the short term.

Hybrid is a gimmick when it comes to production analysis. more energy and resources are used to produce Hybrid vehicles than what we can pull out of it. cost effect ratio is not good enough. when we think mass production, hybrid system is way too heavy, and too costly, and hardly disposable.

The future of energy lies somewhere we don’t know yet. I think America has the edge when it comes to the latest technology. if car companies can invest in anything, they should invest in new technologies. fund the universities across America. fund more into California where students with diverse background can network and deliver a solution that can apply to other countries.

Car companies in America have it easy when it comes to types of fuels their cars use. there is only one. in Europe and Asia, diesel as well as lpg, natural gas, etc. are available as well. in a sense, they have more reasons than American car companies to make better cars. because there are so many more options there.

I believe there is one upper hand our market has and that is our ability to quickly adapt. I highly doubt American auto industry will continue lagging behind in sales forever. in less than ten years we should be up on top again.

Posted by raymond sim | Report as abusive

I hate to see job’s go overseas, but it’s time GM, Ford and Chyrsler were at the leading edge of quality, innovation and technology, not chasing the foriegn car makers. I was told investing most of your future in a narrow product line was bad, SUV’s, etc. Don’t they listen. It would be great if they came out with a 100 MPG car or even a smart car equivilant. An all electric car for commuting would be awesome. Like I say if you want to survive you have to quick making wagon wheels and get uptodate with today’s technology and I might add QUALITY. I own an American made vehicle and a honda. I have had the first in the shop lot’s of times and the other NONE. Speak’s for itself.

Posted by Don W | Report as abusive

We had oil shocks in the 1970s, we had warnings against pollution. Since, there was ample time to make automobiles more fuel efficient and less polluting. What plansm, what innovations have you in placce now to catch up the past 30 wasted years?

Don’t answer, it will be some BS about “what the consumer wants.”

Posted by Marton | Report as abusive

what are your plans to recycle the OLD used cars before you flood the market with NEW cars ?

Posted by J O | Report as abusive

What I would ask the automakers is….. After all you’ve spent on Washington… If you could go back in time. What would you change, if anything?

Posted by jason | Report as abusive

A lot of us miss a key point. While the top-heavy, lumbering giants they are become so engrained in their old ways, there is a more relevant core issue that few dare speak of in fear of being slapped with political in-correctness. Unions, unions, unions. The car makers are so incredibly shackled by unions, they cannot survive. Innovation and quality suffer because investment in R&D is limited due to the pension deals that began in the 1980′s. GM dumped hundreds of millions into an electric / hybrid car that was ultimately scrapped. Meanwhile, little start-ups in California are cranking out electric sports car prototypes for a tiny fraction of the cost. Do you think those compaines are shackled by unions?

Everytime things are beginning to look up for the car makers, the unions want a cut. When things are looking down, they want protection to ensure they get theirs when the money runs out. The company can’t get away from it. Ask an assembly line worker if he / she really gives a darn about their employer’s profitability. While I don’t argue that employees are due their adequate treatment and protection from their employers, the unions use their powers for bad rather than the good. They were created for all the right reasons, and are still in place for many of the wrong reasons.

As you can see, I am anti-union to certain extent. I have no problem with a union that is keen to protect its members AND the companies where they are employed. But this was lost long ago. Car makers are often not even allowed to bring in consultants into production facilities because someone will usually file a greivance.

But, not that this is the only problem at hand. Let’s talk executive management….got a minute for that one? Maybe more like a day.

Posted by bcdbcdbcd | Report as abusive

Right, CEOs in Detroit are stupid enough not to plan ahead like the rest of the world so why not give them my tax dollars, great idea. They can’t be fiscally responsible and looking ahead so why not just give him then $ that I put aside doing just that.

Posted by AB | Report as abusive

Why should they ride it out? Why should they not collapse? If they produce a crappy product, they should go away. The only problem is that the workers get hurt while the idiots who made the decision to produce crappy products get the golden chutes.

Posted by rja | Report as abusive

‘Innovation and quality suffer because investment in R&D is limited due to the pension deals that began in the 1980’s. GM dumped hundreds of millions into an electric / hybrid car that was ultimately scrapped. Meanwhile, little start-ups in California are cranking out electric sports car prototypes for a tiny fraction of the cost. Do you think those compaines are shackled by unions?’

well said. My conclusion is the same. We need to let the market go on its course and scrap the big three. and out of the rubble should come out a smaller and more efficient form of business that produce vehicles we want.

Posted by raymond sim | Report as abusive

I’ve read that Ford is selling all the Focus they can build… and could sell more if they could build. Why do the Japanese competitors appear to be able to dramatically increase production of their small cars to meet the surge in demand when Ford can’t?

Posted by RJJ | Report as abusive

I have wondered why the automakers don’t research outside their own office? Same thinking gets you same results. There is so much technology that has been suppressed. Any one of them would power a new generation of cars without petroleum. Look into “Energy from the Vacuum – textbook, The Joe Cell, Japanese water car, Joseph Newmann, and Brown’s Gas. There was also Tesla’s Radiant Energy that was stolen by J.P. Morgan, Edison, and Westinghouse (so that that could control all electricity for a profit). Gasoline is not the answer.

Posted by jesse | Report as abusive

GM asks for taxpayer money while they pay union workers full pay to sit around a lunch table in the jobs bank and do nothing but play cards? It seems the unions don’t want the Big Three to survive. Why are they always so adversarial? Why can’t these guys be put to work doing something useful to make GM more competitive? With this in mind, the taxpayer should not be put on the hook for poorly negotiated union contracts, and poor market planning. Think about it: Toyota had the Prius out BEFORE the price of gas went sky high. Ditto with Honda’s hybrid. Has Toyota, Honda, Nissan, Mazda or Subaru asked for U.S. tax dollars? They have to meet the same CAFE rules as Detroit. Those companies made better decisions, and were realistic about market conditions and the future. GM, Ford, Chrysler AND the U.S. taxpayer would be better served if the Big Three just went bankrupt. Learn the lesson!

Posted by Robert Bowers | Report as abusive

One of the major reasons the auto industry is in so much trouble is the enormous pressure put on them regarding the out of control salaries and benefits of workers(while employed and then retired)auto makers are forced to pay using the threat of strike and/or banruptcy. It is time to pare down current wages, and all benefits paid to auto workers.

That would give breathing room for R & D so better cars could be produced.

Posted by Richard S. | Report as abusive

I agree with the blogs above that the big 3 deserve to fail. They have consistently opposed fuel efficiency and anti-pollution devices for the last 35 years. During that same time, Japan has consistently produced a better automobile. The Japanese cars would even be cheaper than American cars if the tariffs were eliminated. It is time for the big 3 to go the way of the dinosaurs who also could’t adapt to a new environment.
Diesel is not the answer. This only prolongs the agony of eventually getting rid of petroleum products as a fuel for transportation. Batteries may have environmental problems too but at least it is a step towards a better technology. Just like biological evolution, necessity and innovation will drive new ways of fueling transportation. Yes there will be some dead ends and even stupid and wasteful mistakes, but the end product will surely be better than what we have. Let the games begin among the inventors and visionaries!

Posted by William Scott | Report as abusive

The direction of the world auto market was quite obvious in the early 1970′s: the gas crisis & the increase of foreign imports 35 years ago should have been a wake-up call to Detroit & the U.S. auto industry but they all chose to ignore the writing on the wall & now expect the American tax payer to bail them out? Are these over-paid corporate executives with their advanced degrees from prestigious business schools not being held accountable for their poor judgment & bad planning? The unions: greedy, corrupt & self-serving as usual did nothing to help in making Detroit more competitive in the world market – their only solution? “buy American”, as if their appeal to patriotism was going to solve real market problems. Let them fail…let the marketplace run it’s course & let’s be done with enabling corporate & union incompetence

Posted by Steve Rousseau | Report as abusive

When will Jeep make a more fuel efficient Wrangler and/or will diesel Wrangler’s ever be available in the U.S.?

Posted by Jan Felber | Report as abusive

What’s the point of “concept” cars? Consumers know that they will never reach the showroom floor, half the time they are impractical idiotic marketing schemes, and they are a waste of money to design and develop. So why even bother? Also, what’s so exciting about driving a car? I mean, the technology hasn’t changed since the combustible engine was invented: I still have to pump gas, I still get stinking fumes, the engine still makes noise, and it still breaks down. Where’s the excitement in that? Current automobiles are such a bore. I wouldn’t buy one unless I needed one to get to work and chores; other than, a car is just a waste of my personal resources (time, patience, and finance).

Given Chrysler’s new policy of running every new model through an interior design studio, can we expect the other Detroit auto makers to follow suit? What kind of feedback has Detroit received over recent attempts to improve the driver interface?

Posted by DM | Report as abusive

The Big three have been outsourcing American jobs while retaining outrageous management salaries and bonuses. Forgein automakers have built factories here in American and hired americans to build forgein cars successfully for years. The big three have lost touch with the global market and the all the Pacific rim automakers have better quality, selection and fuel efficency. This is a vision problem and not a guy on the assembly line taking a smoking break! The big three must pursue smaller more efficent vehicles and stop partnering with the corrupt oil companies who pulled the rug out from under them!

Posted by Edward | Report as abusive

I own an independent used car sales, repair and detail business. I was used to selling about 120-150 used 5000-12000 dollar vehicles a year. Starting in August 07 thru now. Our sales have been reduced to practically nothing, with the exception of tax season and a few rebate check sales. We now feel lucky if we can sell 3 cars a month and make an entire 500 bucks on the sale. The cars that people want are selling at the auto auctions for way more than people can borrow on them because the selection horrendous. I used to keep about 15 cars on a dealer floorplan and it about done me in. I was somehow able to pull out of my mess, and at this time I would rather not have any cars at all than to have cars that will just set there while I get eaten alive in floorplanning fees and interest. I am a small guy that practically drowned in this business. I absolutely can’t image what the big dealerships are going through when you have 100′s of vehicles piling up interest, 50 or 60 employees, and row after row of vehicles that are never never never ever going to go anywhere. You mark my word, there is a big crash getting ready to happen with the big auto makers, the big dealerships, and the big dealership floorplan financing companies if something don’t change soon.

Posted by Donnie | Report as abusive

Hey guys. In the 70s I worked for Ford as a zone service manager, and for Honda in the 80s. In my first 3 years with Ford I must have written up 1,000 product improvement suggestions for the design engineers due to in-service problems and not one was implemented – maybe 10 acknowledged. I was also an expert witness in court cases and did new vehicle tech training to the dealers so I am pretty knowledgeable about what makes a good vehicle. I was reamed out more than once at Ford for going over my bosses head with these ongoing problems that no one cared about solving. At Honda, it was completely different. The President would fly over from Japan and ask everyone, unfiltered and point blank, how they could improve their vehicles, and what does the customers want. He said even if we are 99.9% then we must reach 99.91%. What incredible attitude. And that guys is the difference – attitude. GM and Ford deserve to fail. In my view, their executives are overpaid idiots, and union workers are pigs at the trough. When I buy a car, I am voting for what I want with my money. We should be outraged that the government would steal our money through taxes to support arrogance, ignorance, indifference and incompetence. Let the free market decide which companies will survive. Thats what democracy is all about — not propping up failed industry like they used to do in old Soviet Russia. Its a fools game to think we should, or can, do the same.

When I lived in North America from 1970 to 1982 the USA made the same low quality cars they produce today. The engine sizes have increased up too 8.5 liters. Every other country has produced smaller more fuel efficent cars so that in 2008 I own a japanese car in new Zealand that is 2 liter turbo, gets in excess of 32 MPG is faster than any USA 4 door car, and has every extra including comfortable seats, air bags, 4 wheel drive, traction control etc. When visiting the USA and renting cars they are just as they were 30 years ago. Why pay GM to develope cars they should have been developing over the last 20 years. Paying shareholders dividends was more important than developing products that consumers want. Let GM fail as it is destined to do because its product is inferior.

Posted by Gary Watkin | Report as abusive

OK guys, one more observation. Don’t blame “American Workers” because, given half a chance, they are still the best in the world. Honda quality in North America is still consistently better than Japan, and the same with Toyota. The difference is lazy union guys who got where they are through seniority instead of competence — vs. non-union American workers who have real pride in what they do, and know they can get ahead by doing a great job. In respect to management, in the foreign companies on USA soil, they get together with the workers to make the best product instead of fighting each other over B.S. issues all the time. Pig unions, stupid management, and the government all deserve each other — just don’t ask me to pay for their failure with MY money (yes folks, the government has NO money, it just all yours and mine until its taxed away).

Give GM taxpayers money – you have to be nuts.

These are the same guys that spent more than it would have cost them to buy all of Toyota Honda and Nissan together to ” retool to catch up with the Japanese ” some years ago.

Let them join the other 40 odd carmakers post war that failed to make what customers wanted. It’s called the market !

Has the absence of Studebaker and the presence of Honda been a good or bad outcome for America ?

Posted by John Blundell | Report as abusive

All car makers ARE in the pockets of oil companies !!!!

Don’t tell me that there is not enough engineers in say: Ford or GM to design an electric car.
Electric car has only electric motor, converter, heaps of batteries (bit of the boot + floor) and power points to charge it.
Put it into the existing chassis and you’ve got an electric car.
All I need is a car which does 100Km/H (or 60 M) , does 100 Km between charging and I can charge it at home.
But WHO wants this cheap car?
Only end user! NOT a Government or the car makers and certainly NOT oil companies…..

Posted by Adam | Report as abusive

It is time. Speculation has reached its peak; When the economy went god everyone wanted to make a fast buck. It lead to a bubble. Mortgage, homes, auto, credit!! Everyone wanted a share of the pie. Some one has to loose to gain. Everything that goes up needs to go down! Buckle up, ride the downturn. Believe me, it is going to get ery ugly il it gets to normal. And, here is the surprise. Everything will be rock bottom for a while and then the speculation cycle will begin!! Humans have a very short memory and no generation learns from its predecessors. Your time will come! And yes, the more the goverment will meddle the more ugly it will get; cause not a single thing has gone right with their medling. This is because they use your money and not theirs. They have nothing to loose but to fil their coffers!!
Republicans or democrats!! Has anyone got anything right when they try to fix?

I was a Ford College Grad in 1984 hired and I agree with many folks about not bailing out big 3. They should die and the strong one will rise from those ashes.
The culture of big 3 so ingrained, they will never change. They did not learn anything from mid 70′s fuel crisis and they never will.

It is very interesting that folks who don’t actually add any value to the economy at all have all of the answers. Unfortunately, it is these same people that sit around all day in a little circle and email each other that are part of the problem. Now, before you “do nothings” get defensive and attempt to defend your jobs (which, of course, you can’t), let me say this. America was built on manufacturing, (ever read about the industrial revolution in grade school?). Any great country has a base firmly planted in actually producing goods that people want. You might say that the American automakers dragged their feet in keeping up with the rest of the world. I won’t disagree, but, I would say that if it weren’t for these companies, you might be living under a dictatorship (WWII? but I suppose you could continue to “do nothing” regardless of this). But for those of us that actually think, produce, and add value to society, it is frustrating to see a large group of psuedo Americans that buy goods based on “trends”, and what others think of them.

If you actually believe that foriegn companies have any easier time in America, then you have your head in the sand. The only reason that they kick our butts, is the fact that their government truly supports them. If it weren’t for their own politicians, they would be in the same boat as most American companies.

No folks, I hate to burst your bubbles, but USA is not a very business friendly atmosphere, especially if your an American manufactruing company. So the next time your sitting around in your comfy jobs, just remember there are people out there that can do your work cheaper too.

Posted by Jay | Report as abusive

I for one do not want any of our taxpayer money bailing out these auto makers, the unions say they have made enough concessions, well I think not, when you are unemployed you will eat those words. Enough is enough for bailing out anything, they got in this mess, they can look in the mirror, no one bailed me out

Posted by Taxpayer | Report as abusive