Forbes Article

[Rampant]

After I voted, I read the Forbes article (http://www.forbes.com/lifestyle/vehicles/2004/09/13/cx_dl_0913feat.html) and found some very disheartening tidbits:

"GM may still sell more cars than any other automaker, but Toyota's market capitalization--the value of its stocks--is ordinarily about $80 billion to $100 billion more than its closest competitor. At press time, Toyota's market cap was $128 billion, compared with $26 billion at Ford and $24 billion at GM. We constantly hear talk on television about how the U.S. is the world's last superpower, but Toyota could buy this country's two biggest automakers--two of its biggest companies overall--without going to the bank. "

...and...

"The incentive-laden sales strategy of the American automakers has taken its toll since it came about in response to the sales drought after Sept. 11, 2001. DaimlerChrysler's Chrysler division lost $496 on every car it sold in 2003, compared with $48 at Ford. GM made a profit of $178 per vehicle, a measly total compared with per-car profits of $1,488 at Honda Motor, $1,742 at Toyota Motor and $2,402 at Nissan Motor."

So... not only are the U.S. automakers significantly weaker (from a financial health perspective), they are losing about $1,600 - $2,200 per vehicle sold to Toyota.

Now, they are bring a lot of new cars to the market (300, Mustang, etc.), but are these going to be enough to stop the hemorrhaging? I just don't know.

 

[shatner saves]

I don't know about GM and Chrysler, but Ford has turned things around *significantly* since then.

2001 - net loss of $5.45 billion
2002 - net loss of $980 million

Remember, Ford was dealing with Firestone tires, the beating the Explorers rep took from the public (and congress) and what seemed like thousands of Ford Focus recalls. They were also spending a lot of money developing a lot of new or re-vamped vehicles at this time (ie Mustang, F150, Five Hundred, etc.)

2003 - net profit of $495 million (the year the forbes article references)

2004 Q1 - net profit of $1.95 billion
2004 Q2 - net profit of $1.2 billion

I think their 2004 outlook is around 5 billion. Granted, they have a long way to go before they can approach what toyota is doing, but things aren't as grimm as they might seem.

 

[ryanrule]

the ami car makers also have unions and enormous numbers of people on pension to pay off. does toyota offer those sorts of beifits to its employees? i know japan does not have the best workers rights, they typically work long days 6 days a week

 

[sgtfirormsg]

Is this just US sales or WW sales...you do know that Ford and GM dont sell well over there lol but yet we sell their cars over here like hotcakes...plus they have about a billion people living in one little town and all with a car and on the road at the exact same time making a 5 mile trip a 30min venture grrrrrrrrrrrrrrrrr.

 

[XtorT'r]

I think the best thing we could do here to save our hometown auto companies ( excuding chrystler) is to have the gov't not tax their production as heavily. Then maybe we could be able to get Ultra high quality american cars for a reasonable price. I think Japan treats its auto companies like national treasures, shouldn't we. If all else fail I'd say Fire all current UAW and replace them with top notch workers and the bes machinery, that'd cut cost and raise quility, crap toyota does that.

 

[DBMSTNG]

the ami car makers also have unions and enormous numbers of people on pension to pay off. does toyota offer those sorts of beifits to its employees? i know japan does not have the best workers rights, they typically work long days 6 days a week

this is the biggest problem with U.S. automakers. Ford and GM have been making cars in the U.S. for a long time. 100 years for Ford. think about how many Ford retirees are still alive and getting pension. (my dad is a Ford retiree and he makes just as much being retired as i do working) this is a huge drain on U.S. automakers. Japanese carmakers however, haven't been around long enough making cars in the U.S. to have many retirees. i'm not positive, but i believe in the Japanese culture, the family of older people are supposed to take care of them after they retire, so retirement pensions aren't common over there.

 

[DBMSTNG]

Is this just US sales or WW sales...you do know that Ford and GM dont sell well over there lol but yet we sell their cars over here like hotcakes...plus they have about a billion people living in one little town and all with a car and on the road at the exact same time making a 5 mile trip a 30min venture grrrrrrrrrrrrrrrrr.

also, Japan taxes the hell out of U.S. cars. a Mustang GT costs 3,906,000yen in Japan. that equals over $35,000 U.S.

 

[MarSaleenMustan]

what gets me the most is people buy these cars... they think that just because it has asian import on it it must be god's gift to the automotive world. the politics of it also piss me off, while I dont really have a "problem" with european imports for two reasons:1 they cater mainly to the high end, not the mass market perse, and 2 they allow american car brands to sell and market relatively freely compared to the japs. I do have a problem with Asian imports, mainly japanese ones. We allow thme to market thier cars here in the us freely, but yet as someone mentioned above thye tax the heck out of our products.
but again i go to the point that the consumer has the final say in this and they're the ones buying these cars, driving american companies into profitilability weakness.
Worst of all is that this is the country that attakced the US 60 years ago, its not like the guy down the street kills your child and years later you are buying from him yet he doesnt buy from you. I know i'm stretching it with this comparison but I fel setrongly about this aspect of buying foreign when we have a national choice and at the same token their government imposes ridiculous obsticls to minimize an American product's success in their homesoil

 

[vrpirata]

From http://www.howtobuyamerican.com/

"Why Buy American?

Forty-percent of the world is in recession. New records have been set for both personal and corporate bankruptcies. America's trade deficit continues to escalate to historic levels. The savings rate has turned negative, as the average consumer spends $1.10 for every dollar they earn. Real wages for working Americans have plummeted 19% since 1972 - about the same time we entered into a so-called "global economy." We only vote for our representatives every two or four years, but we vote with our wallets and checkbooks every day!

How Americans Can Buy American puts the steering wheel controlling our nation's fate in the hands of those who care about it most - The American People. The time has come for ordinary Americans to take control of America's destiny."

 

[01White5spd]

Worst of all is that this is the country that attakced the US 60 years ago, its not like the guy down the street kills your child and years later you are buying from him yet he doesnt buy from you. I know i'm stretching it with this comparison but I fel setrongly about this aspect of buying foreign when we have a national choice and at the same token their government imposes ridiculous obsticls to minimize an American product's success in their homesoil

I agree completely...I have always thought it was kind of ironic that Americans biggest auto competitors are the 2 countries that we had the most problems with in WWII: Japan and Germany.

 

[Stang8URMPRT]

**** 'em all. Let's nuke the hell out of them and call it a day. No more forgein cars!

Nick

 

[tjredgt2000]

A couple of things to consider when comparing U.S. and Japanese automakers. First of all, most Japanese companies are assembling a significant portion of their cars and trucks in the U.S. (almost 100% of Honda). Since they are relatively new in the U.S. they have very few U.S. pensioners. U.S. companies have been getting more efficient over time with fewer employees and have tons of pensioners. The oldest GM pensioner retired in 1958!!! This is what is referred to as legacy costs. Also, Japanese employees have far lower health care costs than U.S. employees because we are the only industrial country with no price controls on pharmaceuticals. This is why some U.S. production has moved to Mexico and why GM is now importing engines from China for U.S. vehicles.

 

[mr_woodster]

I buy american!
I've gone asfar as to classify "Uncle Ben" as a sell out.