Mike -
CR reports reliability for vehicles 1-10 years old.
Ford used to sell well over 100,000 Tauruses a year to fleets, mainly as rental cars. That meant an overabundance of 1 year old vehicles on the market. An overabundance of supply means low prices AND a negative on the $ the company can get on the new vehicle market. This sort of sales behavior is what has killed Ford resale value in the past more than anything.
That’s a very good point…but only part of the picture…And really only accounts for the 2-3 yr old vehicles…NOT the ones that are 5-10 year old vehicles…A 10yo Taurus (which no rental agency owns) has a resale value of basically NOTHING…While the same comparably equipped Honda and Camry with the same mileage is worth a few thousand…
Texaco filed for bankruptcy in 1987.
Dow Corning filed for bankruptcy in 1995.
Delta filed for bankruptcy in 2005.
None of these were in the middle of a worldwide financial crisis, and none of them had trouble finding private financing for their reorganization.
I’m not arguing that the whole GM bailout was good. But the idea that they could have found financing to reorganize without government intervention is false.
On a personal note, I wonder how your nephews would feel if they knew that your smearing the products they make might actually be contributing to them eventually losing their jobs.
I never said it was…All I said was that other huge companies did come out of chapter 11…
On a personal note, I wonder how your nephews would feel if they knew that your smearing the products they make might actually be contributing to them eventually losing their jobs.
They know my feelings…and believe or not…in most parts they agree…I can give you example after example where they knew a part they were making was faulty…AND wanted to do the right thing…but were NOT allowed to because it would cost too much…A company has to EARN my loyalty…I don’t give it blindly…I’ve stated this MANY times in this forum…I’m a firm believer that GM and Ford CAN build high quality cars…but they choose NOT too…You may believe they do…but until they change their management model (which looks like they have no wish to change) then you may see small short term changes…but that’s it.
As for where they are heading, the key is that despite shrinking sales, the key metrics of jobs/car, domestic content, and import/export balance show that the domestics are simply not reducing their commitment to US labor (ie, NOT headed in the wrong direction).
Show me please…that’s not what I’ve heard nor seen…
According to YOU…CR rates the Taurus and Ford in General very high…
Sorry…you are 100% right…they are keeping track up to 10 years…and the Taurus of 10 years ago is rated MUCH LOWER then the Accord or Camry…
Taurus had a rating of 5.5…while the Accord is rated at 7.1 and the Camry is rated at 7.2
For the 2010 they are currently rated dead even…HOWEVER…Lets wait 10 years see what the rating is then…JD Powers and News Week both rated the Accord and Camry higher then the new Taurus…
And believe it or not…I Truly want Ford to make an extremely reliable Taurus…when they do I’ll buy one…When GM or Ford makes an SUV that’s been as reliable as my Pathfinders or my current 4-runner…I’ll be more then happy to buy one…
“Taurus had a rating of 5.5…while the Accord is rated at 7.1 and the Camry is rated at 7.2”
I don’t have a copy in front of me, but aren’t those the overall ratings you’re referring to, not reliability scores? I could care less what CR believes is a comfortable seat - my own rear will tell me that. Likewise, I could care less what they think is “cheap plastic”. I’ve seen them rip into some cars for that while letting others with notably cheaper interior materials get a pass…
Those were the reliability ratings…
I’ve seen them rip into some cars for that while letting others with notably cheaper interior materials get a pass…
Yes and I have no idea why…I use CR as ONE source when I buy a car…and I rarely read their road tests…their personal biases come through…At least their reviews are bought and paid for like Motor Trend.
Don’t shoot the messenger…Posted on Yahoo.com today…
Simple Google Search yield this…
I have no idea to it’s validity…
Sure, most of the TARP money is being paid back. But the GM bailout is a separate pile of money and not included in that analysis.
Second, there’s the $81 billion invested in the automobile sector, most of it in General Motors and related entities. Of that, $67 billion remains outstanding, and GM’s upcoming initial public offering is likely to make only a small dent. Treasury now expects that it will ultimately lose $17 billion on its efforts to aid the auto industry.
I predict that their estimate that they will get paid back $50 billion of the $67 billion outstanding is a wee bit optimistic. Let’s see if the analysis suddenly changes on November 3.
Simple math, Mike, by loading up annual reports.
You nailed the real issue behind layoffs when you mentioned productivity improvements. In the mid 90s, Ford had 5 factories producing F-series trucks for the US. Now they have 3, and those 3 are capable of producing more trucks per year than the 5 were able to before. When they had 5, they had one that was taking 26 man hours per vehicle for assembly and one that was taking almost 110 man hours per vehicle. The one that took 110 was gutted and retooled and now it produces vehicles with about 19.19 man hours per vehicle for assembly, and the average Ford assembly plant was down to 22.65 man hours per vehicle in 2007 (Honda = 20.9, Toyota=22.35, Nissan=23.44), per the Harbour Report.
According to “The Future of Canada’s Auto Industry: The Big Three and the Japanese Challenge”, in 1978-1979, US automakers used 144 man hours per vehicle. Accounting for all assembly, engine, transmission, stamping, etc, that number stands at 33.88 for Ford, 32.29 for GM, and 30.37 for Chrysler today. At the same time (1980), there were 10.646 million passenger cars and trucks sold in the US. GM, Chrysler, and Ford combined for 73.8% market share. Today we’re at a 45.2% market share for those companies YTD and on target for roughly 11.2 million sales for the industry for the year.
So, you would expect:
Domestic manufacturer man-hours per vehicle produced in 1980=a
Domestic manufacturer man-hours per vehicle produced in 2010=b
Vehicle market size in 1980 = c
Vehicle market size in 2010 = d
Domestic manufacturer market share in 1980 = e
Domestic manufacturer market share in 2010 = f
Expected % reduction in jobs = g
g = 1 - (fdb)/(eca)
g = 1 - (0.452 * 11.2 * 32.18)/(0.738 * 10.646 * 144)
g = 1 - 0.144 = 0.856
That’s an 85.6% reduction in jobs simply based on market share and productivity changes in the past 30 years alone. That’s what would be expected. Since actual job losses are smaller, even before accounting for outsourced component work, the proof is in the pudding - the jobs simply aren’t fleeing the US - its simply a case of resizing to meet the market and increased productivity.
Note that the blog simply refers to shifting production from Canada/Australia/Europe to China/Mexico/South Korea/Japan, not shifting production from the US to China/Mexico/South Korea/Japan.
It’s also outdated, as it came at the time when it was assumed GM was selling off its European operations. Lots of changes have been made since then. Some good (moving Aveo production TO the US for the upcoming model), some bad…
Mike - I just sold my 14 year old Taurus for “a few thousand” - full blue book value. It took me less than 24 hours to sell it, I had numerous offers, and I never took out an ad. If I traded it in, it was, in fact, worth nothing. But selling it myself, the difference in blue book values between it and my 13 year old Camry was less than the difference in initial purchase prices (ie, less depreciation on the Taurus).
I agree it has little effect on 10 year old vehicles, but it certainly still hits 5 year old ones - the depreciation hit the first three years on my ol’ 97 (big rental fleet seller) was HUGE its first three years, then it stabilized to a nice linear curve. My 98 Camry had a nice linear depreciation curve since new… So after about 3 years the resale value difference began narrowing, but it wasn’t until about 9 years old that the differential in resale value actually settled down to something relatively stable and predictable, while continuing to shrink…
Quotes from Article…
GM also disclosed it will start importing vehicles made in China in 2011, reaching 51,546 vehicles in 2014. Imports from South Korea to the United States will jump from 36,967 vehicles in 2010 to 157,126 in 2014.
Outdated…Maybe…but came out this year…Time will tell…
That is one plant for 1 vehicle…That’s NOT the same for ALL of their plants…Many of their plants have not been fully automated…
In 1975 GM sold 4,654,000 cars…Market share was 43%
In 2005 they sold 4,753,800…Market share was 17.1%
So even though they lost market share the number of cars produced increased.
Closest stats I could get for employees…
1979 - 618,000 employees (US and Canada).
By 2009 - 88,000
So they sell more cars and drop the number of employees by 80%…Even accounting for drastic increase in productivity per employee…that’s still a HUGE gap…
Unfortunately, buying stock in a company doesn’t usually help the company itself, unless it is an IPO, an issuance of new stock, or the company turns around and sells more authorized (but not publicly traded) shares. Most of the time, you’re simply giving your money to the previous owner of the stock, who uses it to go buy something else or invest in another company. The company whose stock you bought benefits very little.
That’s one of the screwy things about our tax code. The GOP decided that to encourage investment, we should have lower capital gains and dividend tax rates. Ok - so that helps out stock prices, but we’ve established that this is of little benefit to an existing company, unless they issue new stock. If Ford’s share price increases and they don’t issue new stock, they don’t get a dime from that increase, and their working capital doesn’t change. However, the former owner can buy other stock, that stock’s owner buys something else, and eventually you get to a venture capitalist who helps fund a new business (but generally not the same business whose stock you bought). Sure, the money gets to some company somewhere at some point, but it isn’t the most efficient transfer scheme around nor does it guarantee a cent of that money is invested in the US, so it doesn’t necessarily even spur our economy (except the financial sector).
On the other hand, if you buy bonds, you are taxed at a much higher rate (personal income taxes), even though the money is no less direct an investment in a company than is stock… Or if you drop your money in a CD at the bank, you also get higher tax rates, even though that investment on your part is most likely going to immediately get reinvested in a business, a consumer loan, a mortgage, etc… and is arguably the most direct way for money to move from an investor’s pocket to an investment…
I’ve never heard a good argument for why these investments are taxed so differently. I would love to get a good explanation…
Time will tell… but remember that same blog (not really an article) does report that imports from OTHER countries are dropping to offset those planned import increases. In any case, I can think of a couple vehicles that reports around that time were that GM would import, but which are now planned for the US…
Mike -
The 144 number was the GM/Ford/Chrysler’s AVERAGE plant in 1980. The 32.18 is not a single plant - that is their AVERAGE today. GM’s sales in the US have dropped by more than 50% since 2005. They’re actually on target for maybe 2.1 million this year, IF they’re lucky.
So:
g = 1 - (38.122.1)/(1444.654) = 88.1%
So you would have expected an 88.1% drop in employment simply from productivity improvements and market changes. If your 618k and 88k are taken as correct, then you would have an actual 86% drop in employment, which would represent an increased commitment since 1975 to US labor. I believe the most recent 10Q for GM had 78k employees in the US, which is below your 88k, but then your 618k includes Canada, where the 78k number does not.
So that’s the rub, really - there has been an ENORMOUS drop in employment, but it is really all easily traceable to productivity improvements and lost market share. If GM sold the same number of vehicles in the US today that they did in 2005, you would expect nearly 100,000 more employees in the US at the same productivity rates. That’s simply staggering right there.
It would simply have been irresponsible of them to keep the same number of employees as they needed 5 years ago, or especially 30 years ago. Their cars would be ludicrously unaffordable.
Well then Tauruses must sell well in your area…
Because here in NH they sure don’t…Just did a simple Auto-trader search for Tauruses, Accords and Camrys in my area…
10-yo Taurus - $3k…13-yo Taurus (if you can find one) - $1,500)
10-yo Accord - $12k…13-yo Accord - $6k
10-yo Camry - $12k…13-yo Camry - $7k
These are the prices for cars for sale right NOW…