Automotive industry

[Tommycat]

I have been thinking about the latest thing with the auto industry. See, being a car guy and all it really is bugging me. I have come to the conclusion that part of the problem with the US auto industry is self inflicted.

 

Auto designs as of late in the US are so similar to the Japanese equivalent that they are almost identical. If you hide the badges you would be hard pressed to tell who the manufacturer was. I mean seriously. If you are going to buy a car that looks identical to all the other cars out there. If all things are equal in the workmanship of the car, you go with the history of the manufacturer. Sadly the Japanese have been beating the US manufacturers for a while. Then on top of that we add in that the cars have consistently been cheaper. Very few American cars LOOK American. Not to mention FEEL American.

 

I also looked at the average cost of cars. See back in the 60's cars were about 5-7 grand. average incomes were on average 32 grand a year. Now cars are 18-40 grand. and the average income is 42 grand. That means the average cost of the new car went from around 25% to between 50 and 90% of the average person's income. They have priced themselves out of their own market. People can't buy new cars. Or they have to finance them. Buying that new car makes it almost a requirement to finance nowadays. So with the financial implosion, the manufacturers are now stuck with cars people can't buy. They need to lower the cost and make cars that the average consumer can save for a year and buy.

 

Oh and... We have foreign manufacturers building their cars in the US. Meanwhile the US manufacturers are exporting those manufacturing jobs to other countries, but bringing those cars back to the States. It's pretty sad that a Toyota is more American than a Chevy. These last two are related... Unions have such overhead that the manufacturers are forced to pay way more for each worker... Foreign nameplates get around that, and manufacturing costs are significantly lower. The unions may have actually caused their own unemployment.

 

Anyone else have ideas on why the auto manufacturers are having their problems... and how they should go about fixing it.

[Q]

Inflation is an ugly, ugly thing and I'm convinced that a huge part of it comes from the auto industry. Cars are far more expensive to produce now thn they were in the '60s, however, especially when loaded with ridiculous gadgetry that the average person will never need. I love how they pigeon-hole people into buying that crap by "packaging" it with the stuff that is actually useful.

 

And manual transmissions are fast becoming a thing of the past.

[Rev7]

There is no way I am gonna afford a new car.

[Q]

Get a good used Honda.

[mimartin]

And manual transmissions are fast becoming a thing of the past.

No doubt, I had to special order a Jeep, in order to get a manual transmission with a hard top. A Jeep Wrangler for crying out loud!

Anyone else have ideas on why the auto manufacturers are having their problems... and how they should go about fixing it.

This goes back to your Union statement, but look at GMC pension and health care cost as to why they are going though major problems. As to how to fix that, well if I knew that I’d be talking to GM’s management about a extremely high paying job. I don’t believe the answer is acquiring Chrysler.

[Tommycat]

I agree about all the crap that's added as standard. I wish they would make a true base model. You get the basic body and very little stuff. No radio. No built in Nav system. None of the extra stuff. Heck I would love to be able to buy one of the new Camaros with no stereo onstar beafy engine, plain jane wheels and tires(because I intend on replacing them anyway), and a manual transmission.

 

But really the thing that needs to be done is to drop the prices down. Sell more cars at a lower price and you can employ more people. I think the only way that they can do that is to remove the union from the equation. Granted that's kind of a dangerous thing. Perhaps that should be the primary focus of the thread. Whether the usefulness of unions has run it's course.

[Q]

I think that the UAW has really shot itself in the foot by nearly bankrupting its members' employers.

[Bimmerman]

Less politics, more cars. I like it.

 

For full disclosure, I race cars and am a massive car enthusiast.

 

Auto designs as of late in the US are so similar to the Japanese equivalent that they are almost identical. If you hide the badges you would be hard pressed to tell who the manufacturer was. I mean seriously. If you are going to buy a car that looks identical to all the other cars out there. If all things are equal in the workmanship of the car, you go with the history of the manufacturer. Sadly the Japanese have been beating the US manufacturers for a while. Then on top of that we add in that the cars have consistently been cheaper. Very few American cars LOOK American. Not to mention FEEL American.

 

What is "American feel or look?" Huge, bloated, ugly cars like the Lincoln Town and Country, Ford Taurus? Cars with more cupholders than seats? A ride so underdamped that you can't feel the road?

 

It is true that the American manufacturers have made leaps and bounds in terms of workmanship and quality to where they are now near on par with the Japanese manufacturers.

 

Now, as for the price issue. You write:

 

I also looked at the average cost of cars. See back in the 60's cars were about 5-7 grand. average incomes were on average 32 grand a year. Now cars are 18-40 grand. and the average income is 42 grand. That means the average cost of the new car went from around 25% to between 50 and 90% of the average person's income. They have priced themselves out of their own market. People can't buy new cars. Or they have to finance them. Buying that new car makes it almost a requirement to finance nowadays. So with the financial implosion, the manufacturers are now stuck with cars people can't buy. They need to lower the cost and make cars that the average consumer can save for a year and buy.

 

No offense, but you have completely disregarded the massive inflation during the 70s which explains the majority of the price increase, not to mention the oil crisis.

 

Why is this important? The oil crisis made it quite clear that the American manufacturers were peddling cheap crap for cars. The oil crisis showed the world that efficiency actually....mattered. Woah.

 

Inflation rose by leaps and bounds back then. Saying a car was 5k and comparing to now makes no sense; back then a couple could live on $20 in food for a month. So....inflation rise causes a massive decrease in purchasing power. A $5k car then is about the equivalent of a $25k car now in terms of price; quality, performance, consumption are all better now.

 

Car manufacturers are not going to lower prices on their cars. Not because "people can't afford new cars" or "because gas is too expensive, waaa waaa waaa," but simply because then they would make no money. The cost of materials, engineering, production, tooling, components, shipping, testing, and advertising have all gone up since the days of yore.

 

As a side note: I hate to say it, but bitching about $4/gal gas is pathetic considering every other country pays double or more for a gallon. They also drive economic cars; Americans for whatever reason don't.

 

Furthermore, the average consumer won't save for a year to buy a car. You can buy a Smart car today for about $13k. You can buy a used car for faaar cheaper. If you can't afford a new car, or can't afford to finance a new car, buy a used one. They're not that bad! Leasing is for idiots; if you can't buy new buy a good used one. Americans have this idea that they need a new car every few years or 60 000 miles; that is simply retarded. My racecar has 260 000 miles on it and runs extremely well. My daily driver has 130 000 miles. Used is better than new and costs far less to own, run, insure, and maintain. You don't need a new car, get over yourself.

 

Now saying that "the manufacturers have priced themselves out of their own market" is similarly faulty logic. Most people buying a car take out a loan. GM, Chrysler, Ford, and all others have a financing and leasing division to take care of that. They have done anything but price themselves out of their market.

 

Oh and... We have foreign manufacturers building their cars in the US. Meanwhile the US manufacturers are exporting those manufacturing jobs to other countries, but bringing those cars back to the States. It's pretty sad that a Toyota is more American than a Chevy. These last two are related... Unions have such overhead that the manufacturers are forced to pay way more for each worker... Foreign nameplates get around that, and manufacturing costs are significantly lower. The unions may have actually caused their own unemployment.

 

This isn't bad. Foreign manufacturers make money, US manufacturers don't. Foreign employs Americans; US don't. The auto workers' union is primarily to blame for the poor quality, high cost, and noncompetitiveness of the American auto industry. The union pays people not to work, to sit around doing nothing earning $30 per hour. Union rules also dictate that a union worker must do everything, and that a union worker must unload a truck, another must move the goods, and another must unpack them; useless bureaucracy and useless protectionism. Auto workers are overpaid, underworked, and given perks that are disproportionate to their jobs and skills. Useless and bad for the industry. The lack of unionization at Foreign factories is a key reason why their cars are cheaper yet better. As long as the union is around the US will not be competitive without compromising on something.

 

And manual transmissions are fast becoming a thing of the past.

 

Correction: Manual transmissions (i.e. real cars) are fast becoming a thing of the past in the US market. I will never own a car sullied by the spawn of satan i.e. an autotragic transmission. Words cannot express how horrible they are nor my absolute hatred of them. That and cupholders.

 

There is no way I am gonna afford a new car.

Why not? Just save enough to cover a car payment or go the smart route and buy a few year old car. I'm not going to buy a new M5 while I'm in school, but I sure as hell am going to buy a used one someday.

 

I agree about all the crap that's added as standard. I wish they would make a true base model. You get the basic body and very little stuff. No radio. No built in Nav system. None of the extra stuff. Heck I would love to be able to buy one of the new Camaros with no stereo onstar beafy engine, plain jane wheels and tires(because I intend on replacing them anyway), and a manual transmission.

 

But really the thing that needs to be done is to drop the prices down. Sell more cars at a lower price and you can employ more people. I think the only way that they can do that is to remove the union from the equation. Granted that's kind of a dangerous thing. Perhaps that should be the primary focus of the thread. Whether the usefulness of unions has run it's course.

 

As I said earlier, prices aren't going to come down; if anything they are going to go up. I agree entirely with you on being able to buy a stripper car model- I don't need cupholders, nav system, heated ass massaging seats, or any of the superfluous BS that cars are full of. All it does is add weight and more things that can break or go wrong.

 

I think that the UAW has really shot itself in the foot by nearly bankrupting its members' employers.

 

I couldn't agree more.

 

My thoughts on the US Auto Industry- I have no sympathy for them whatsoever. They got to this position by bending over for the unions, building SUVs and horrid cars with terrible gas mileage (30 MPG Hwy! OMG 11!!1!!one! idiots.), and building cars without any "engineering" or "QA" or "Testing" or other fancy things. I don't see why I should support them for being beyond incompetent and peddling nothing but crap for years. They got to this position themselves, they can get themselves out of it. I and my money will go elsewhere.

 

That and American cars I can afford are boring and all have thirsty V8s. Ugh. All I want is a light, small, car that has a sporty suspension, good tires, and decent power. Basically....not an American car.

 

Damn that was a long response. I like cars and tend to just talk and talk and ramble.

[Tommycat]

Actually Bimmer, by American look, I mean unique to a manufacturer. For instance you can tell a BMW driving down the road at a glance. You don't have to wait until you see the badge that says BMW to know what it is. But now most cars look almost identical to the Japanese equivalent, have worse or at best on par fuel economy, and a higher sticker price. With all of that, if you are going to buy one, you'll likely go for the Japanese one even if on price alone. It's pretty sad when the most unique vehicles are the trucks.

 

I'm not whining about car prices. I can actually afford any new car I want. Just very few draw my attention any more. I run drag races, and generally take older cars to the track. Obviously they are not going to be fuel efficient in the least. I don't whine about fuel prices either. I just drove 1800+ miles for the heck of it, in a pickup truck no less. A pickup that I bought for $500. I just feel that the costs are prohibitively high for the average consumer. I took inflation into account. That's why I note the average income increase versus the average car cost increase. Average income increased 6% and the average car cost increased 110%.

 

Believe me I really do not like UAW. Actually not a big fan of unions in general. They served their purpose before, however they have become too much of a burden on the employers and even the employees. I've seen how union shops tend to work and I can't stand it. Promotions based on time in the job rather than merit, forced breaks, limitations on who can do what, for how long....

 

Haha as for the stripper cars, must be the racer mentality. All that stuff is more stuff you gotta take out. I think we could get prices down if they would start coming out with stripper versions. Of course the first thing would be to get the union out of the automaker. Now might be the best time for it. Nobody is buying cars, no need to build them... let them go on strike... Hire an all new non-union workforce at a fraction of the cost. Bah who am I kidding.. there's probably some contractual thing...