American Auto Bankruptcies

[Earl B.]

Isn't it a shame that past presidents and congresses did not worry about the bankruptcies of other automobile companies. If they had been, we might still be seeing Pierce-Arrows, Packards, Duesenbergs, Auburns, Cords, Hudsons, Kaisers, and a host of other cars still being manufactured.... Granted, over the years, some of the companies might have merged, but think of the possibilities!!!...just a thought, B

[Guest Bob Call]

We saw some of these mergers in the 50's. Seems when when management of a company goes astray it is almost impossible to steer them back on the right path.

For example, Nash, Kelvinator and Husdon to form American Motors. Nash wasn't alone in being in the car and appliance business, GM owned Frigidaire. Kaiser (-Fraser) and Willys Overland. Packard Motor Car and Studebaker Corporation to form Studebaker-Packard.

I believe the US owned auto companies are finished except maybe for Ford.

[Guest THEHKP7M13]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Bob Call</div><div class="ubbcode-body">I believe the US owned auto companies are finished except maybe for Ford. </div></div>

FORD is a lock almost.

GM I believe will

Chrysler will be the one out of the three to fail unless an act of congress/FIAT occurs.

[1937hd45]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: THEHKP7M13</div><div class="ubbcode-body">

Chrysler will be the one out of the three to fail unless an act of congress/FIAT occurs. </div></div>

Just what is the motivation to EVER buy a Chrysler/FIAT?

[keiser31]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: 1937hd45</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: THEHKP7M13</div><div class="ubbcode-body">

Chrysler will be the one out of the three to fail unless an act of congress/FIAT occurs. </div></div>

Just what is the motivation to EVER buy a Chrysler/FIAT? </div></div>

An Italian Viper? Can't wait to see that one.

[Reatta Man]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Bob Call</div><div class="ubbcode-body">

I believe the US owned auto companies are finished except maybe for Ford. </div></div>

<span style="font-weight: bold">I couldn't disagree more.</span>

They may be smaller, since car companies seem to just be waking up to the idea that some, most or nearly all of the baby boomers are at the end of their car-buying days.

As approximately 28% of the U.S. population, we have been the buying force of the U.S. economy for most of our lifetime. That isn't bragging, it is just a fact. And, as boomers are aging, (a boomer turns 60 every seven seconds) we are shifting priorities to paid off mortgages, paid off debt and as much retirement income as we can build. In a market where most of us lost 40-50% of our retirement income in 2008, spending $500-600 per month on a car is a low, low priority.

So, Detroit seems to be setting their goals on an annual car sales rate of 10-11 million, when they have been planning on an annual rate of 17-18 million. The car companies will be smaller, but not everyone wants to drive a Kia Rio or a Toyota Prius.

Joe

[alsancle]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: 1937hd45</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: THEHKP7M13</div><div class="ubbcode-body">

Chrysler will be the one out of the three to fail unless an act of congress/FIAT occurs. </div></div>

Just what is the motivation to EVER buy a Chrysler/FIAT? </div></div>

It's funny you should mention that because for the last couple of months I've been thinking about replacing my Dodge Ram with a new one. The other day I looked at my wife and said, "well I guess we'll never be buying Chrysler again". Maybe I'm in the minority though.

[Guest bkazmer]

Chrysler/FIAT could offer some very interesting vehicles.

The Alfa 159 is a much more appealing car than the Sebring.

The FIAT turbo diesel to power a Caliber replacement.

An Italian body with a Viper engine? Sounds like the Iso Grifo, Interrmecchanica, Pantera. But I think that one is unlikely.

Someone's experience with their rusty 1971 FIAT is not really relevant to the current models.

The time to get safety and emission certification will likely drive introduction timing

[poci1957]

ReattaMan, once again a relevant take that has not been brought up much. The baby boomers have indeed been the bulk of the car market, and they are aging. Let me take a step ahead though, and tell me what you think.

In hindsight Toyota and the imports targeted the baby boomer market, and quite brilliantly. The 22 year old in 1970 could buy a VW, but they could get a Toyota Corolla for a first car and like it. By 1980 at 32 they could have had a nice Celica or Honda Prelude, and by 1990 at 42 they could get a Camry, Accord, or Nissan Maxima that was a nice, real mid size car. In 2000 at 52 they could get an Avalon (as if Toyota made a Buick, said Car & Driver) and now at 60+ another Avalon, minivan, or whatever. All this time the baby boomer, who was often upscale, college educated, and in their mind more sophisticated than their parents, was driving an import as something of a rebellion against their parents who liked GM cars and theoretically ended up in a Cadillac or Lincoln the boomer would not be caught dead in(I know these are all generalities, but bear with me please).

So now the boomer is 60 and driving Toyotas. Toyota itself is very worried about the aging of their demographic and created the Scion to work on this, but take a look at the Scion driver when you see one. They are more likely to be Gram and Gramps than Justin and Britney. Now whether or not boomers will be cutting back is not certain, but what is clear is that the "Millenial" generation is now 20ish and ready to buy. AND with other products these 20 somethings like to pose themselves with what they see as "authentic" products like old fashioned blue-collar beers, "trucker" hats and jackets, tatoos, etc.

So the question is, demographically, will the huge group of millenials want to drive something different from their parents, as the boomers did? An authentic domestic like a Ford, Chevy or Dodge? Or do they (it is often said) respect their parents opinion more than the boomers did and copy their car buying habits? What do we think?

[1937hd45]

Good points at 58 I'm out of the loop to ever help the Big Three, my NEW car/truck/van buying days are ancient history now. The only thing new on the road that turns my head is a Mini Yoman for some reason, but I still need a Ford E-350 to haul stuff.

[Reatta Man]

Poci,

I think you made some excellent points. The old GM mantra was start someone on a Chevy and move them up to Cadillac as their income grew. Good plan, lousy execution.

I think one point you made indicated where most domestic brands lost a lot of buyers and I still hear people griping about these cars--the 1980s.

When a GM V-8 started loosing valve guides (Chevy 305) or the GM diesel blew up (Olds converted 350s into diesels) and other significant problems, they waived goodbye to Detroit and never looked back.

Righgt now, sore knees, stiff backs and other 50-something problems due to hard work, old football injuries or just growing old are pushing people into domestic trucks and SUVs. Why? THEY ARE EASY TO GET IN AND OUT OF! But, when gas hit $4 per gallon (and diesel hit $5) last year, many people my age took a hard look at their SUVs (on their own, not FORCED by the liberal, anti-SUV crowd) and didn't find anything on the domestic or international front that made them say 'wow, gotta have that!'

So, everyone has seen their sales go in the tank, older buyers are suddenly satisifed with their current (often paid for) ride and will likely stay that way with gas at or below $2 per gallon. Will they buy again? Very, very hard to say; no one, and I mean no one, has anything fresh, new and different to catch the attention of those 76 million boomers and get them back into the showrooms. Mercedes looks old, Toyota is still a boxy sedan with rounded edges, Buick's Lucerne looks like it was designed by someone who used to design Lincoln Town Cars.

So, a $15-18K certified used car with 15-20K miles and 1-2 years left on the factory warranty (or longer, if it is certified by the OEM) looks a LOT better than virtually the same car brand new at $25-35K.

The one exception to this may be something I saw yesterday at a Lincoln dealer--the Mercury Milan hybrid. A city rating of 41 MPG in a real car that doesn't look like a prop from a sci-fi movie! If that car delivers with decent performance and reliability, it (and the Ford Focus twin) could do wonders for Ford.

Joe

[poci1957]

I think you are right about the above too, and in fact made a post last week regarding the value of program cars. It used to be that program cars were deliberately blocked from upgraded trim levels, wheels, stereos, etc and if the buyer wanted them they had to buy new. For years now that is not usually the case, they are equipped as well as most people want.

Still another issue with boomers and others holding on to their cars is they simply last longer. In the 1990s I leased a new car for my wife every 2-3 years. In 2003 we decided to buy a program car and keep it, so now I have an 8 year old Jeep with 90,000 miles. 20 years ago such a car would be old and rough, with bad paint and a step from the junkyard. But now it is still reasonably attractive and serviceable, and no newer model makes me interested enough to spend the money. If Jeep were marketing and designing effectively I should be on my third by now, but they just don't make me spend the money.

I also second the note on the Milan (and Ford Fusion) for 2010, they are very sharp looking and the new 2010 Taurus is said to be even more so. I still say good design sells cars.

[Reatta Man]

At least someone is making interesting car commercials again:

http://www.kiasoul.com/#/downloads

My fav is the Gold Fish version.

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Reatta Man</div><div class="ubbcode-body">At least someone is making interesting car commercials again:

</div></div>

That's funny!! Because whenever I see one of those funny looking cars, I picture someone like that driving it....

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Reatta Man</div><div class="ubbcode-body"> But, when gas hit $4 per gallon (and diesel hit $5) last year, many people my age took a hard look at their SUVs (on their own, not FORCED by the liberal, anti-SUV crowd) and didn't find anything on the domestic or international front that made them say 'wow, gotta have that!'

</div></div>

I often wonder if the $4.00/gal was put into place to finish off the Big 3 that was already taking a blow. It sure did take a toll on all three. There are reasons for everything in life, maybe this was one. It's quite funny how it dropped fast after.............just a thought!

[Guest Bob Call]

I have purchased my last new car, I'm 68, and I'm very satisfied with it. I't a 2006 Ford Five Hundred 3L V6. This model, and its sister Mercury Montego, were re-badged in 2008 as the Ford Taurus and Mercury Sable. It has lots of room inside for an old fat boy and gets 27-28 MPG highway. Not all American iron is inferior to foreign stuff. Seems Ford is getting its stuff together.

[ex98thdrill]

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">I often wonder if the $4.00/gal was put into place to finish off the Big 3 that was already taking a blow. It sure did take a toll on all three</div></div>A couple of weeks ago the local newspaper reported that Exxon/Mobil was #1 in profits for 2008 with a $220+ <span style="font-weight: bold">BILLION</span> dollar profit.

Do you think they could've survived keeping prices at $2 a gallon and settling with a $110+ Billion dollar profit??

The article also reported that for the first time in many years, Wal-Mart was bumped out of the #1 spot.

[Guest Jim_Edwards]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: ex98thdrill</div><div class="ubbcode-body"> <div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">I often wonder if the $4.00/gal was put into place to finish off the Big 3 that was already taking a blow. It sure did take a toll on all three</div></div>A couple of weeks ago the local newspaper reported that Exxon/Mobil was #1 in profits for 2008 with a $220+ <span style="font-weight: bold">BILLION</span> dollar profit.

Do you think they could've survived keeping prices at $2 a gallon and settling with a $110+ Billion dollar profit??

The article also reported that for the first time in many years, Wal-Mart was bumped out of the #1 spot. </div></div>

Yes, but did that same newspaper also report that Exxon/Mobil's 2009 first quarter was down 48%?

$4.00 a gallon gasoline isn't what has effectively killed Chrysler and maybe GM. The cause was/is "STUPID" management. Management of the same "boomer" era age wise as the customers they failed to maintain. Too many totally wrong operational and design decisions from around 1960 to the present. Air Heads!

The last guy running any car company that understood the market was Lee Iaccoca and whether one is a GM fan or not, no one can dispute GM's Harley Earl understood.

[Guest Bob Call]

The news media loves to demonize those mean, nasty, greedy corporations by reporting "record" profits. These reported numbers are gross profits and they are meaningless. The profit margin is what counts. Profit margins of the "big oil" companies is around 10%. Check the profit margins of the news media companies and you will find that most, if not all, have higher profit margins than "big oil" and that awful WalMart. God bless the sole of Sam Walton.

Also, "big oil" does not control the pump price of fuels. Refined fuels are comodities and are traded on the comodity markets. The market determines the price of fuels and the market prices are driven by a number of factors. Like, OPEC increasing or decreasing production, fear of interruption of flow along the supply stream such threat of war, Somali pirates, etc.

[Guest Skyking]

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Jim_Edwards</div><div class="ubbcode-body"> Management of the same "boomer" era age wise as the customers they failed to maintain. Too many totally wrong operational and design decisions from around 1960 to the present. Air Heads!

</div></div>

I'll agree about mismanagement, but design decisions, well I doubt that. Let's see, most every car maker out there has copied Caravans, convertibles, Jeep (although it wasn't really their design), Quad-cab pickups and some designs they didn't, slant-six, Hemi motor. The list goes on. They had alot of old good designs people bought and are still buying...............

[Guest Bob Call]

Skyking Bob

You are right about the mismangement and copycat mentality.

What a travisty when Diamler-Chryser called their new V8 a "hemi" when it does not have hemispherical combustion chambers. They fooled some of the people but not all of the people to paraphrase Abe Lincoln.