For explaining why the decrepit American auto industry is failing. The screenshot to the left shows the three closest competitors that I could find to the Honda Civic Coupe on the General Motors website. They all come in at at least $1,000 more than the Civic in their MSRP. They same is true of their price relative to the Toyota Corolla.Is it any wonder, then, why people would no longer be buying these cars? When you make a product that is more expensive, less reliable and that doesn't even have a very good image, you can't exactly expect to do well in the market.
The unions and the big 3 are made for one another. Between expensive, ugly, unreliable designs and overpriced labor, what could possibly go wrong?
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The idea of bailing out the car companies is a tough one. Back when you and I were discussing socialism, I said something along the lines of:
If you give money to a man who doesn't know what to do with it, he will simply squander it away.
The same holds true here. The big three have not made significant changes to their business model. The very model that got them to where they are now. Why am I to believe that loaning them 25 billion dollars is going to solve anything. They wouldn't know what to do with the 25 billion. They'll just be back asking for more money next year.
The banks got themselves into quite the mess by handing out home loans to people who obviously would not be able to pay them back. I hope the government doesn't make the same mistake.
At their current burn rate, it would take at least $25B to keep GM going until this time next year. I think only something as radical as my proposal would save them.
I drive an '05 Malibu Maxx. Very reliable, consistent 35mpg on hwy with a V-6. Only complaint is cheap seats. Kind of appropriate in a way...
I'd be curious to know what the longterm reliability of a Malibu is. That's the great unknown. A key part of the reason why my last 3 cars have been Hondas is that Honda has built up an incredible reputation for longterm reliability. The only Honda that I owned that was unreliable was one that I have good reason to believe only got an oil change every other blue moon.
I live in Michigan and therefore have only driven American cars. I think we are brainwashed as children. However, I have never had a problem with reliability.
Yet today I don't think it matters much because makes have other makes parts. For instance, the Pontiac Vibe has a Toyota engine. The Pontiac Vibe and the Toyota Matrix are basically the same vehicle. This strategy hurts GM because they sell the same vehicle, but they are at a disadvantage because they have to pay the high union contracts.
Most of the people I've met who own American cars haven't found them to be anywhere near as reliable as their Japanese counterparts.
I think a better example than the Vibe would be the way that American manufacturers haven't figured out that having nearly 50 products under a single roof isn't good. There's far too much overlap between American vehicles. The Japanese get around this by providing a small set of vehicles with a set of options for each. For example, there is only 1 mid-level Honda car: the Civic. There are many slight variations of it, such as the DX and LX which are the two slightly lower end versions, there's the non-sport high end EX and then the sport version the SI. The only real differences are interchangeable components like braking systems and heated seats between the DX-EX lines, and the 200hp engine in the Si. That way, they can offer a lot of variety at a lower cost.
If the big 3 were smart, they would get rid of most of their brands. For starters, I think GM should eliminate basically everything except Chevrolet and Cadillac. Liquidate Buick and Pontiac, and sell off the assets to raise funds for their core businesses. If there is a market for those cars overseas, then what they can do is start a new corporation in the South, and start production there of those brands under an independent company they own stock in.
Mike, as to the Malibu's reliability, I see plenty on the roads if that's any indicator. As to the rest? I've long said that the big 2.09 have entirely too many models. It's nuts. I'm in agreement with you on that.
I hear the Chinese love Buicks
Apparently not enough to get GM out of its current mess.