Changes Are Inevitable – Not All is Welcome

Here it is . . No matter how you look at it, this isn’t good news. It’s something the 2008-2009 years were showing us. The aid put forth by the federal government to prop up the inherent weakness in the automotive manufacturers only prolonged the inevitable. Chevrolet_Cruz_ending_production

Ohio GM Assembly Plant Closing

Consumers make their choice and have decidedly moved in the direction of SUV’s, pickup trucks, and foreign over domestics.

Can we set aside the things that don’t matter in the marketplace for the things that do? There’s excessive manufacturing capacity of automotive products available, dating back to the 20th century. That’s not where the problem ends, because companies like Toyota, Kia, and Honda, unfortunately not Nissan, have been at the forefront of reliability and lower cost of ownership, by a lot.

I don’t care if you follow Edmunds, J. D. Powers, or Consumer Reports, if you talk to enough ‘car people’, the American competition has slipped off their proverbial cracker. Even the once lauded reliability leaders at GM, Cadillac & Buick, are losers in this game of attrition. With millions of cars made, and this much competition, you would think the price would go down, like TV’s and appliances.

This doesn’t apply, because the manufacturers have this policy of trying to keep production levels steady. Every time they make adjustments in labor force, the political machinations impact their business model. Ever since Michael Moore began his own personal fame & fortune with his Roger & Me film, the press has been increasingly critical of the auto industry. As background information, Moore portrays the regional economic impact of General Motors CEO Roger Smith‘s action of closing several auto plants in his hometown of Flint, Michigan, reducing GM’s employees in that area from 80,000 in 1978 to about 50,000 in 1992. As of 2015, they’re employing about 1/10th of that level, in Flint.

New car sales expected to slump in 2019.

Crime became so prevalent in Flint that when the ABC News program Nightline tried to do a live story on the plant closings, someone stole the network’s van (along with the cables), abruptly stopping the broadcast. The county jail also filled to its maximum capacity of inmates and a second jail is built. Living in Flint became so desperate that Money magazine ranks the city as the worst place to live in America.

When the recession hit, no one at the top of the political food chain wanted to be seen as doing nothing. Congress and the President were in lock step on propping up “banks too big to fail”, as well as the “Big Three” automotive manufacturers. GM was given a bailout, where it famously trotted out the loan(s) were paid back ahead of schedule. None the less, the factors which determine the success or failure of most business, wasn’t altered by any real measure.

Despite the gesticulations and prognostications, the American automotive industry has been protected through various loans, as well as tax incentives.

Michael Moore blames the leadership of these companies. To a degree, he’s right. The overriding facts of the market place; the need to keep the price high on each vehicle, as well as the many years of product complacency, and the killing of the fattened cow by the failed regional politics, have contributed to the demise.

Ford is also making adjustments to their line-up. They’ve opted to also go after the more profitable truck and SUV market. They gave up on their ‘premier luxury’ line in the first decade of the 21st century.

Chrysler is owned by Fiat, after spending some time under the German Daimler banner. Fiat Chrysler Home Page

In 2014, the Italian automotive maker, Fiat, merged with the American company, Chrysler, and formed Fiat Chrysler Automobiles N.V. Chrysler, Jeep, Dodge and Ram are under the American subsidiary, Fiat Chrysler Automobiles US LLC which has its headquarters in Michigan, USA.

General Motors (GM), is an American multinational corporation headquartered in Detroit that designs, manufactures, markets, and distributes vehicles and vehicle parts, and sells financial services, with global headquarters in Detroit Michigan in the Renaissance Center. its twelve brands, General Motors also holds a 20% stake in IMM, and a 77% stake in GM Korea. It also has a number of joint-ventures, including Shanghai GM, SAIC-GM-Wuling and FAW-GM in China, GM-AvtoVAZ in Russia, GM Uzbekistan, General Motors India, General Motors Egypt, and Isuzu Truck South Africa. General Motors employs 212,000 people and does business in more than 140 countries.

General Motors manufactures vehicles in 37 countries; its core automobile brands include Chevrolet, Buick, GMC, and Cadillac. It also owns or holds controlling interest in foreign brands such as Holden, Wuling, Baojun, and Jiefang. General Motors USA

Ford Motor Company is a multinational automaker which has its main headquarter in Dearborn, Michigan. The company sells automobiles and commercial vehicles under the Ford brand and most luxury cars under the Lincoln brand. Ford also owns Brazilian SUV manufacturer Troller, an 8% stake in Aston Martin of the United Kingdom and a 32% stake in Jiangling Motors. It also has joint-ventures in China (Changan Ford), Taiwan (Ford Lio Ho), Thailand (AutoAlliance Thailand), Turkey (Ford Otosan), and Russia (Ford Sollers). The company is listed on the New York Stock Exchange and is controlled by the Ford family; they have minority ownership but the majority of the voting power.

Ford is the second-largest U.S.-based automaker (behind General Motors) and the fifth-largest in the world (behind Toyota, VW, Hyundai-Kia and General Motors). It’s also the fifth-largest automotive manufacturer in Europe.

Ford was the eleventh-ranked overall American-based company in the 2018 Fortune 500 list, based on global revenues in 2017 of $156.7 billion. Ford Motors USA

When dealerships find too much inventory, big discounts are offered to move them out of their inventory. Sometimes dealers will promote them to get them sold. A dealer may send a car to a dealer auction to get rid of them quickly. Another dealer may buy them if they think the price is right and they can sell it.