"Change or die" - Ford chief warns the sector

[hajj]

"Either the American automakers, including Ford, will begin to change, play far better offence and truly connect with customers," Mr. Field said. "Or it will be the beginning of the end for some companies."

Just read an article about Mr Flieds' speech during the LA motorshow. Have you guys got anything on this? Seems interesting first time someone really addresses the issues in public.

[IVIaster]

That end is the Japanese motor industry. They have all ready done it to the american motorbikes. Americans cant make efficiently cheap cars.

[Urban Sombrero]

That's complete rubbish. American cars connect with the public in a great way. They are superior to over priced European cars and are more generally just as reliable, and more reliable in many cases (my friend's Mercedes lives at the shop). We can make cars better than the Europeans, but consumers aren't really forcing the auto companies here to stop cutting corners because domestics are still strong here and not at all threatened by foreign car makers except for the Japanese. American car companies either own or are partnered with most foreign companies as well.

What I think American automakers should do is focus on is making good cars for other countries, like Ford has. But most American companies could care less about that since they have subsidiaries that sell their cars for them in foreign markets.

[BlaRo]

^ Not necessarily, but you're right about the reliability part. Nobody wants to believe it, though...

30 years of domestic laziness and irresponsiveness has caught up to them, and consumer perception (along with spiraling healthcare costs etc.) is one of the biggest enemies of the American car industry. Field is right; there needs to be major changes now or the decent cars that come out of American companies will be ignored.

Ford has a decent lineup currently, if not a bit boring. But then again, Toyota became successful by building mildly boring cars that work (Celica, Supra, etc. notwithstanding.) Their management of their luxury brands like Land Rover and Jaguar is superb; no "Other GM products excluded" crap here.

Which leads me conveniently to the next point: what I think is killing GM the most is badge engineering. Consumers aren't stupid! We know you're taking your Equinox (which isn't that bad of a vehicle, really) and instead of going the extra mile to make it a worldbeater, as written about in Autoextremist, they slap a Pontiac badge on it and expect us to fall for it. Look at Saab; sure they have more sales, but how are consumers going to feel about it as a premium vehicle (it is, really!) when they're getting Trailblazer parts on it? Etc. ad nauseaum.



I've got a feeling this thread is going to get real ugly, quick.

So in advance, you're all n00bies, and anybody who posts anything next is wrong and a blithering idiot.

[AutoMX]

i have to disagree. first of all, european cars are not overpriced by any means, they are just overpriced here, just like american cars are overpriced there (not the european made models of things like Ford though). In europe, many taxis use mercedes because they last for a very long time and are easy to fix. my dad owns a 300E and have no problems.
american cars vary greatly in reliability. i know the buick v6 series is very good from personal experience, and that many american cars can run for a long time in north america without costing much.

i think they are indicating that american manufacturers are slow to respons to market demands and bring few "innovative" features. it's not like people aren't aware of how bad the interiors in most US cars are, or how much more efficient some small japanese cars are. it's just that US makers would rather just hammer out a bunch of GMC Yukon's or Ford Expeditions with bigger engines or more seats and lower the selling prices. why? i have no idea, but it's hurting them for sure.
the US started the whole big truck and SUV trend, and now something like 65% of vehicles sold in the US are SUV's and trucks. the problem for GM and the others is that suddenly Lexus / Toyota, Honda, Mercedes, etc.. all make competitive if not better trucks and SUVs, so new sales are dropping..

[hajj]

I agree with you BlaRo. Ford seems to know how to manage their line-up. Their premium-brands are connected, but you dont see the connection directly. Ford Europe has a lot of freedom to design cars which are suited for the European market and it works. I cannot really judge their american line-up, but that seems a but "dull" to me.
GM is a different story though, they simply take a car which has been engineered somewhere and badge it. Look at Vauxhall for a example I dont think they design their cars, sure they have factories in the UK, but the designing and engineering takes place in Germany. The only thing Vauxhall gets are Holden's and Opel on which they may put their badge. This strategy is useless if you want to keep a particular brand.

[oliB]

i have to disagree. first of all, european cars are not overpriced by any means, they are just overpriced here, just like american cars are overpriced there (not the european made models of things like Ford though). In europe, many taxis use mercedes because they last for a very long time and are easy to fix. my dad owns a 300E and have no problems.

Sorry, but you got that wrong. It really is a very common misconception among Americans, that, us Germans for example, could buy a 5 series or an E-Class for dirt-cheap just because they are built here.

European cars are way more expensive here than they are in America. Albeit most of them are built in Germany, we pay thousands, in some cases tens of thousands, of dollars more for BMWs, VWs, Mercedes', etc.

You are right about the American cars though. They are not cheap over here either.

[M3lover]

In the Europe vs. America battle there is a reason the European cars are more expensive. They are if not better (just to be on the safe side), then more engineered than their american rivals. There is simply put more thought into every bit of a European car. Also a european car will win on the interior everyday.
Edit: Forgot - Europe = Quality over quantity!

[mautzel]

Another thing to keep in mind is that America only gets full spec European cars (in case you don't know, the entry model for the 3 series is a 129hp 4 cylinder version called 318i over here) which are by far not as well equipped with electronical gadgets as they are in the U.S.

Hence, the Mercedes E-Class is the favourite choice amongst taxi drivers in Germany because they're dead reliable and easily will last for the same mileage as an American dependant. The advantage especially of German cars that is as far as I can see seen as a disadvantage in the U.S. is the unreliability of parts which aren't even available as an option on similar American dependants.

And I think it is really unnecessary to discuss that the built quality and the quality of interior parts of German premium cars is better than the parts or the fitting in an American one. And please don't tell me that this is irrelevant, otherwise no one would buy German cars.

[kaleidopope]

"Either the American automakers, including Ford, will begin to change, play far better offence and truly connect with customers," Mr. Field said. "Or it will be the beginning of the end for some companies."

Seems interesting first time someone really addresses the issues in public.

Folks have been singing that song since the 70's, it's just that it has taken this long for the "Buy American!" crowd to begin to hear it. US automakers have tried every trick they could think of (nat'l pride, save US jobs, huge rebates, etc.) to improve sales domestically, except for one:

building better cars.

Over the last several years, glimmers of hope have been seen on that front, and I think the Big 2.5 are getting better, but Detroit has yet to roll out a worldbeater.

[wahaha]

Or die? For christ sake they're already dead on their feet. They're just too rigor mortised to fall over.

Even the all mighty doesn't have a big enough line of credit to bail them out. Everytime they write a check, the bank bounces.

How far into junk status do you have to be lowered to be considered JUNK. I think once is enough. The public has spoken.

[mmap]

The american cars are cheap, because the companies have to sell them cheap! Otherwise no one would buy them. This is acknolwedged as a huge issue in the industry. The american companies are scratching their arses over how to improve profitability without incereasing the cost of the cars themselves...

And there is an old saying int he car indusry. "There is no problem for a car company that a good product cannot fix"

So why are the American companies in deep shit and Japanese and (most) European companes are profitable?

[IVIaster]

The Americans chose compete against the japanease with prize instead of quality and now the japanease offer both.

[GraemeH]

They are superior to over priced European cars ... We can make cars better than the Europeans

Ahahahahaha

ahhahahaha

ahhhh, thanks for that.

[BerserkerCatSplat]

So why are the American companies in deep shit and Japanese and (most) European companes are profitable?

I've said it once and I'll say it again, it's the unions that are killing them. A guy who tightens lug nuts at the Ford factory makes $50,000/yr. For tightening lug nuts. Forklift drivers make even more than that, ~$80,000/yr. Ford can't do a thing about the insane wages, because of the unions. Ford and GM pay out tens of billions of dollars each year in outrageous pension and health benefits - imagine if they had those tens of billions to actually improve their cars! No, the union (UAW) seems to intent on destroying the companies they hold by the throat.

[mmap]

^^ Well you are right of course, the unions and the pension funds etc. VW Workers accepted lower pay etc. in order to save their jobs and ensure the companys future...

BUT if they made proper cars they could sell them for more money or sell more of them. And while designing a well sorted out car does cost money, it's not like they do not have capable people already working for them? they merely choose to do things differently.

[BerserkerCatSplat]

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BUT if they made proper cars they could sell them for more money or sell more of them. And while designing a well sorted out car does cost money, it's not like they do not have capable people already working for them? they merely choose to do things differently.

True, but better materials = more expensive. Greater manufacturing precision = more money. It all comes down to cash flow, and companies like GM are struggling with their strangled funds. Ford is doing a better job than GM so far, but Ford is still battling against the unions. Heck, Ford brought both Aston Martin and Jaguar back from near-failure in the early 90's, which was no small task! I think that union presence and influence needs to be shrunk, and in a big way. If American manufacturers are to begin making better vehicles, they need to break the unions.

[wahaha]

I've said it once and I'll say it again, it's the unions that are killing them. A guy who tightens lug nuts at the Ford factory makes $50,000/yr.

Um... last I heard they are paying the same wages of $25/hr to the Benz and BMW assembly workers in the US. I don't see either of them hurting. Except for Benzs pathetic partnership with a US company that has obliterated their quality and reliability ratings.

[logo]

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BUT if they made proper cars they could sell them for more money or sell more of them. And while designing a well sorted out car does cost money, it's not like they do not have capable people already working for them? they merely choose to do things differently.

True, but better materials = more expensive. Greater manufacturing precision = more money. It all comes down to cash flow, and companies like GM are struggling with their strangled funds. Ford is doing a better job than GM so far, but Ford is still battling against the unions. Heck, Ford brought both Aston Martin and Jaguar back from near-failure in the early 90's, which was no small task! I think that union presence and influence needs to be shrunk, and in a big way. If American manufacturers are to begin making better vehicles, they need to break the unions.

About the jaguar thing, yes they did bring it back but they ruined it, they lowered the prices of Jaguars (like any solution to them, lower prices we can sell more) and now Jaguar lost its exclusivity and image and will be proabably hard to get it back, back in the day the super car is Ferrari, the luxuirous fast car is Jaguar, not anymore though. I actually saw an analyst talking about how ford saved and in the same time ruined Jaguar's image, But they're doing something about it, atleast thats what he said.

well whats happening to the american car makes is only good for the consumers, it should be better cars for less money in the future or else they're done, and I agree with you completely about Unions, they are the evil in everything.

[IVIaster]

.

BUT if they made proper cars they could sell them for more money or sell more of them. And while designing a well sorted out car does cost money, it's not like they do not have capable people already working for them? they merely choose to do things differently.

True, but better materials = more expensive. Greater manufacturing precision = more money. It all comes down to cash flow, and companies like GM are struggling with their strangled funds. Ford is doing a better job than GM so far, but Ford is still battling against the unions. Heck, Ford brought both Aston Martin and Jaguar back from near-failure in the early 90's, which was no small task! I think that union presence and influence needs to be shrunk, and in a big way. If American manufacturers are to begin making better vehicles, they need to break the unions.

[Are you against unions?] I though the unions were strugling in the US. Why have GM and Ford accepted their demands? Finding replacements for lug nut screwers shouldn´t be hard in the US.