NYT: Ford and G.M. Suffer as Buyers Shun S.U.V.'s

[DeepModem Mom]

Ford and G.M. Suffer as Buyers Shun S.U.V.'s
By JEREMY W. PETERS

Published: May 4, 2005


DETROIT, May 3 - The latest automobile sales figures show that Americans are increasingly wary of gas-thirsty sport utility vehicles. That was particularly bad news for General Motors and the Ford Motor Company, which both saw their sales slip last month as consumers continued their steady march into Asian car companies' dealerships.

Both Toyota and Nissan posted record sales gains in April, which helped push overall auto sales in North America up 1.8 percent.

But even as sales were expanding for the industry, they were shrinking at G.M. and Ford. The decline was the sharpest at General Motors, the world's largest automaker. G.M.'s sales fell 7.7 percent from the same month a year earlier, primarily because of a weak demand for S.U.V.'s. The lack of appetite for S.U.V.'s also hurt Ford, which sold 5 percent fewer vehicles in April compared with a year ago.

April's sales numbers showed no signs that the pressure on Detroit from its Asian rivals will let up anytime soon. That became particularly evident on Tuesday as Toyota reported that April had been the most successful month in its history. Its sales were up 21.3 percent on big gains in the number of passenger cars sold....

***

Although sales were up, DaimlerChrysler suffered a symbolic setback as Toyota sold more vehicles in the United States than Chrysler in April. It is rare for Toyota to crack the Big Three in monthly domestic sales and a sign of the Japanese automaker's ever-growing presence in the American industry.


http://www.nytimes.com/2005/05/04/automobiles/04auto.html

[LynzM]

1. Wow. Astounding...

People are finally starting to make fuel efficiency a priority? Who in their right mind would have seen that coming? :eyes:

[Art_from_Ark]

5. Exactly!

And how could Detroit *possibly* have foreseen that the fuel crises of the '70s could have reared their ugly head again???

:crazy:

[aquart]

2. Oh, do they DESERVE this.

They wanted their incentives to put those guzzlers on the road, freedom to do NOTHING about mileage. They got their wishlist. Weren't they clever? Bet the executives still take home their bonuses.

[Tempest]

4. They SO deserve this

They spent more money lobbying Congress to prevent increased fuel effiency than it would have taken to develop more fuel effient cars and trucks.

If it wasn't for the lost jobs, I'd wish a slow and painful death for GM and Ford.

[dissent1977]

58. Considering they are outsourcing most their jobs anyways...

I would be very happy to see them go under. They have brought so much environmental destruction, and destroyed so many families through their outsourcing that they deserve to go out of business. I feel bad for the few families that still do rely on them for their income, but there has to be a point where we say enough is enough.

[Geo55]

13. Yep.....

But let's not make them the BOOGYMAN, it's all about profit ...if you work for a corporation...what else is there?
No, they play to the "ego"...bigger IS better, MINE is SHINIER than YOUR'S....don't you FEEL safer in a BIG vehicle?
No , friends...bottom line is "US"....an' the ego that goes with it.
"

[BlueIris]

53. That's what I say!

Suck it, earth-killers!

[tabasco]

3. These companies are short-sighted and unpatriotic.

Of course they are unpatriotic. Multi-national corporations have loyalty to no nation, only the almighty dollar. American car companies have not provided quality or efficient vehicles to the American public, despite the best interests of the country. They have done nothing for this country's future and I am one of the people who will never buy another American car. I was a "buy American" kind of person for a long time. However, when I saw them churn out inefficient SUVs for years, I realized they cared nothing for the future, only for immediate profit. Screw them. I bought a Toyota.

[Tux]

7. I agree

As a member of the UAW family (through my dad), it is a shame that companies that pay their employees well with great benefits would screw themselves over by not making cars people need. From now on, I'll only support companies that make hybrids.

On average, a Toyota car had more Americans work on it than a GM car.

[borlis]

49. GM is coming out with hybrids next year.

They are starting on their big trucks first. The Chevy Avalanche/Tahoe/GMC Yukon, etc.

[cornermouse]

52. That's the problem right there.

They should have started with a smaller car, a mid size car, and a larger vehicle. People looking for fuel efficiency are not likely to be interested in a big truck as their first option.

[MindPilot]

9. I worked for Ford through the 70's & 80's

There was a time I thought they were finally starting to "get it" especially on quality and envronmental concerns. But not anymore.

I had all kinds of corporate Ford logo gimmies, clothes, luggage, key chains, you name it. My co-workers would comment "Everything you own says Ford on it...except your car". I drive a Nissan.

Edited for spellitude

[quiet.american]

21. Hilarious. n/t

[trogdor]

16. GM/Ford small cars are shit.

I wouldn't be surprised if they made them that way on purpose, in order to justify building gas hogs - "see? Americans don't like small cars. Now about that CAFE stuff..."

I'll say now what I tell the freeper assholes who tell me I'm un-American for driving a Honda. When the Big Three produces a small car worth the money they're charging for it, I'll buy it. Until then, I drive Honda.

[geniph]

41. What constitutes an "American" car, anyway?

Is it one with an American manufacturer's nameplate, manufactured by labor in Mexico from Asian parts? Is it one with a Japanese nameplate, manufactured in the U.S. from parts from everywhere? Is it one with an American nameplate made in Canada? The distinction is no longer meaningful; almost every single automaker anymore is truly multinational and as such, has no loyalty to any one nation. So there is no reason to exhibit "national" pride in any automaker who's been taking jobs out of this country for 40 years.

[amandabeech]

43. Well, they sure have made their share of clinkers.

The Pinto, the Vega, the Chevette, the Omni-Horizon, the Neon, the Cavalier--all were absolutely hideous!

However, I've known quite a few people who are very satisfied with their Saturns. Consumer Reports for many years recommended the later models of the humble Escort and Tracer as good buys in used cars because of reliability. Ford has had trouble with the introduction of the Focus to the U.S., but there are reports that commencing with the 2003 and continuing through the 2005, Ford has managed to correct the problems.

While I agree with you the Toyota, Honda, VW and maybe Nissan (not one of my favorites) generally make better small cars, Ford and Saturn have managed to produce inexpensive small cars of acceptable quality. I hope that they continue to improve.

And yes, I am from Michigan originally.

[geniph]

56. The Saturn WAS a great little car

the SL1 and SL2 (and the wagons based on those platforms) was a 100% American-manufactured car made of 97% American-sourced parts - when Saturn was based in Spring Hill, Tennessee. A couple of years ago, GM pulled Saturn back in, reined in their designers, started putting the usual corporate limits on the Saturn unit's methods and anything that deviated from the GM corporate norm was stopped. The result has been that the Saturns in the last few years are really mediocre - the Ion and that grotesquely ugly SUV they came out with a few years ago are much larger than the earlier cars, get poor gas mileage, their reliability is much worse than the SL and SW models, the handling is crap, etc. Not to mention that they're ugly.

GM fixed what wasn't broke. Oh, and they're outsourcing Saturn labor now, too. :-(

I really liked my SL1. I'd still be driving it if I hadn't gotten rear-ended at a stop light.

[MindPilot]

6. They never learn do they?

Are CEOs really that damn dumb? Just like anyone with two brain cells and a modem knew years ago there were no WMDs, none of these highly educated overpaid CEOs could see this one coming? Are they stupid or do they just not give a flying rat's ass?

[phantom power]

17. No need to choose.

They have a complete lack of vision, but then they also know it doesn't really matter, to them. No matter how bad this turns out for the auto industry, they'll be just fine.

They might end up with egg on their face, but then who cares if you're rich. Resign, and leave your troubles behind you.

[cliss]

39. They're not stupid.

They're perfectly aware of what is going on around them. I've worked with several decision-making CEO's.

The problem is, they are simply UNABLE to break out of a particular way of making money. If they have some asset that brings them revenue, there are these forces around them, which once set into motion, are very difficult to stop or break out of.

If a particular product is launched, they will do everything within their power to keep it going. They are totally focused on the moment, and a little bit out in time.

It's all about = the money.

[NV Whino]

8. I'm sorry for the workers who are going to suffer, but

damn, these companies deserve this. What fools they are!

[wallwriter]

10. Cynicism, stupidity, corruption

Rather than push technology forward toward efficiency, they cater to the lowest common denominator and falsely market dangerous and stupid vehicles as safe and desirable. Meanwhile, legislators are all too eager to pass unfair tax breaks and regulation loopholes for these lousy vehicles. Meanwhile, our culture makes a mockery of efficient hybrids. Well, ho is laughing now?

[TNOE]

11. Do you think this will hurt the CEO'S???

NOT! They will still get their multi-million dollar salaries and bonuses. Decisions like these CEO's have made only hurt the retirees on pension and their employees, which are a whole lot of Americans and their families. Americans need to demand smarter decisions from these companies, because if they fail, the burden shifts to all of us.

Edited to add: Its okay NOT to feel sorry for the "company" - but remember "the company" is a whole lot of American workers.

[gratuitous]

12. Somehow, I just bet these car company executives

First, the fallout for this blunder will land, as it always does, on the line workers and assemblers. The executives will bail out of the company packing a golden parachute.

Second, these same executives are probably shocked every October when the weather turns colder.

[prole_for_peace]

14. Awwww.....

that makes me so sad...:sarcasm:

[ret5hd]

15. i'm sorry, but i think this story is a liberal media LIE! ...

EVERYTIME someone here defends their driving and/or suv, it is because they NEED a suv...not want, not prefer...NEED.

now, as we all know, the price of a NEED (or, in this case the price of fuel for a NEED) will have no effect on the demand of the NEED.

so, obviously, this story is a liberal media LIE!

[maxsolomon]

19. i NEED to get rid of my SUV

but the wife says we "need" it for the following reasons:

1. 4wd used to access mountain trailheads, ski resorts.
2. cargo capacity used to facilitate landscaping projects.

at 15 mpg, it sits in the driveway unless absolutely neccessary.

[amandabeech]

44. If you could convince your wife to accept a 2wd,

you'd get better mileage. The Ford Escape comes in a 2wd, I think.
The hybrid has a very, very long waiting list.

Also the much maligned U.S. automakers have come out with "crossover" vehicles that are a somewhat high-riding boxy station wagon with attitude. Some of my friends have a Chevy Malibu version, and they're quite happy with it. I believe that the rear seats fold down for extra cargo space.

There is a cautionary note, however. With U.S. cars, the manufacturers foolishly seem to use the first 2-3 model years to work the kinks out, so it is usually best to wait.

[Samurai_Writer]

59. My 1997 VW Jetta can do that...

it's a 2.0 litre, 4 cylinder, 5 speed manual. I have driven that thing up mountains, through sandy beaches, in woods where the 'road' was more like a large trail. When I fold down the back seat, there is a HUGE amount of room for storage. The trunk is enormous for such a small car.

Oh, did I mention it gets 35 mpg? And that's with me driving 10 miles over the speed limit.

[phantom power]

18. Wouldn't it be nice to send the CEOs to jail.

I wonder if there is any legitimate way to charge them with criminal negligence?

[TNOE]

28. That should definitely happen

before any retiree loses any benefit. How I wish it were possible.

[reprobate]

20. One of my wife's friends complained it cost $72 to full up her

Chevy Subdivision. It is to laugh.

[The_Casual_Observer]

22. $72 would be cheap. Some of them have 70 gallon tanks.

It would cost about $200 to fill one of them up in California.

[captain crunch]

23. I'm curious, what suv has a 70 gallon gas tank

[MountainLaurel]

35. Chevy Subdivision?!

That. Is. Fabulous.

:rofl:

[Rainscents]

24. I had 8 back surgeries, so when I went out to look for new car

I needed something that will work for my back. I was looking at small SUV with good gas millage and I shopped around for a week. Looked at 12 dealership and only one that I liked was Toyota. It was front Wheel drive, 4 cylinder and got very good gas millages and it had 13 gallon tank. Toyota was my choice!

[Samurai_Writer]

60. I leased a Toyota RAV4 for a couple of years...

They are great little SUVs. I think I was getting 30 mpg in that thing.

[daleo]

25. Ford/GM solution will be to build a bigger SUV

Perhaps one with a swimming pool and a tennis court. That is bound to bring back consumers.

[Rainscents]

26. LOL... very funny!!! I needed good laugh!

:rofl:

[Arugula Latte]

27. Hey, Ford and GM:

This tune's for you:

:nopity: :nopity: :nopity:

[mainer]

29. outdated technology, too -- they're dinosaurs and deserve extinction

That's what the docent at an auto museum told me. (And this is a museum that features vintage American autos) The way he explained it, too many American cars are still using push-rod technology, while the rest of the word has gone to cam shafts. He's an older gentleman, and he seemed sorrowful to have to admit that American cars are junk.

[unkachuck]

48. he must have meant....

....over-head camshaft....a camshaft activates the lifter, pushrod, rocker-arm then valve....but your point is well taken....

[tabasco]

50. I think he was correct about the overhead cams.

I have a Toyota Echo and for an inexpensive vehicle, it has very advanced overhead cams. I took the car on a 400-mile trip and got close to 50 mpg (keeping it 60-65mph).

[progressoid]

30. Hey, didn't we go through this a few decades ago too?

The gov't bailed out the US auto industry because of the evil Japanese car makers. And then Lee Iococa became a hero, wrote a book about their shortsightedness and everyone wanted him to run for president.

Who wants to bet on a repeat?

[KansDem]

31. Will they do what Chrysler did?

Lee Iacocco, in the late 1970s: "If you find a better car, buy it!"
Americans in the late 1970s: Found and bought better cars.
Lee Iacocco, in 1979: "Uh-oh, we're going belly up! Americans are actually doing what I told them to! We need a bail-out!
US Congress in 1979: "Here you are, Lee!"
Lee Iacocco in 1979: "And I need 'voluntary' reductions from Japanese auto makers of their imports, thereby creating an artificial market and driving up the price of autos!"
Japanese auto makers in 1979: "OK, Lee! Here you are!"
Lee Iacocco in the late 1980s: "I want to buy American Motors!"
Americans in the late 1980s (at least those paying attention): ???? "Didn't you almost go bankrupt a few years ago?"
Lee Iacocco in 1987: "Dumb!" (But was he referring to Americans?):

Chrysler Corporation and two of its executives were criminally indicted for taking new cars off the assembly line, driving them as much as 400 miles with the odometers disconnected, and then selling them as new vehicles. When this became public knowledge, the company's initial legal position was that they had done nothing wrong. Negative public opinion began to mount.

At that point, Lee Iacocca, Chrysler's outspoken and straight talking Chairman, held a news conference in which he referred to these actions as "dumb." While stating that he had personally not been aware of these practices until a few months before the indictment, he nevertheless took responsibility. He then went on to reveal that his investigation had turned up the fact that there had even been some 40 cars that had been sold as new when they had actually been involved in serious accidents and repaired.
http://www.speaking.com/articles_html/JudyHoffman_1121.html

That's the way to pay back America's bailout, Lee: "Here, take this chump change and leave me alone!"

[hatrack]

32. Mr. & Mrs. Chicken? Please come in - here's your roost!

And welcome home!

[MountainLaurel]

33. As Nelson Muntz would say

Ha-ha!

[kwassa]

34. The Japanese make lots of SUVS, too, ..... and now make big pickups

the real issue is the percieved quality of the vehicles

Japanese cars are still better made.

Mercedes has had quality problems in recent years. DaimlerChrysler is now being supported by Chrysler, due to the popular Chrysler 300.

Here is one humongous Japanese SUV, the Nissan Armada, appropriately named;

[kwassa]

36. Here is my new SUV. What do you think of this baby?

[hatrack]

37. BTW, can anybody guess what GM's going to be offering this coming MY?

Why, more new SUVs and pickups, that's what!

After the "Year Of The Car", which seems to have rolled into a ditch sometime in the past 12 months, we'll be returning to the "Year Of More Of The Same", followed by the "Year Of The Imploding Market Share" and the "Year Of The Government Bailout".

Can't wait!!!

[spooky3]

38. Ford and GM lose money on their small cars and make it up

on their big cars, SUVs and trucks. When sales on the big 'uns take a dive so do both companies.

Today S&P deemed both their credit ratings as "junk."

http://news.yahoo.com/s/ap/20050505/ap_on_bi_ge/automakers_debt_ratings;_ylt=Ag4pMTZx35UbXvzrKRv67Oas0NUE;_ylu=X3oDMTA2amdibDI5BHNlYwNicw--

[geniph]

40. Those who cannot learn from history

are condemned to repeat it.

:nopity:

Apparently, no execs at either company remember 1976, when fuel costs and shortages bit them in the ass with their giant Queen-Mary-sized American vehicles and the Japanese manufacturers came in with compact cars and stole a march on 'em.

[Bombero1956]

46. I don't understand

Why the Japanese get a free pass on the gas guzzler label. Whether they're well made or not, they still suck up more gas than small cars. If GM and Ford are evil for making huge vehicles that get poor gas mileage then Toyota and all the rest are just as evil. Some comparisons of comparable vehicles.

Ford F150 Pickup 2WD
15 city 19 highway

Toyota Tundra 2WD
16 city 18 highway

Nissan Titan 2WD
14 city 19 highway

Ford Explorer 4WD
14 city 18 highway

Toyota Sequoia 4WD
14 city 18 highway

Chevy K1500 Suburban 4WD
14 city 18 highway

Nissan Pathfinder 4WD
15 city 21 highway (Nissan doesn't make a 8 cyl)

[sellitman]

42. The H3 is coming!!!

That's GM's answer ....15-18 MPG!!!! The bastards deserve to rot in hell.



Vehicle type: front-engine, 4-wheel-drive, 5-passenger, 5-door wagon
Estimated base price: $30,000
Engine type: DOHC 20-valve inline-5, aluminum block and head, port fuel injection
Displacement: 211 cu in, 3464cc
Power (SAE net): 220 bhp @ 5600 rpm
Torque (SAE net): 225 lb-ft @ 2800 rpm
Transmissions: 5-speed manual,
4-speed automatic
Wheelbase: 111.9 in
Length/width/height: 186.7/85.5/74.5 in
Curb weight: 4800 lb
C/D-estimated performance (4-sp auto):
Zero to 60 mph: 9.3 sec
Standing 1/4-mile: 16.9 sec
Projected fuel economy (mfr's est, 4-sp auto):
EPA city driving: 15 mpg
EPA highway driving: 18 mpg

[enki23]

45. the asshole executives deserve this. the workers deserve so much better..

.

[Psephos]

47. A lot of glee here

But there will be less glee when these companies go belly up and we permanently outsource car production to foreign manufacturers.

Maybe we should just get rid of all corporations and manufacturers and go back to farming?

Peace.

[hatrack]

54. Yes, since they haven't done any outsourcing at all so far . . .

In case you actually bothered to read any of the threads, many posts are expressing a lot of concern for the workers and their families who are going to be badly hurt by this as layoffs and shutdowns expand.

Associated with these posts is the assumption that few, if any of the Platinum Plus Preferred Executive Citizens who put these companies in the pickle they're in will really feel the sting of the bad decisions they made, aside from maybe sagging stock values or perhaps having to give up that Aspen time-share.

But if you're seeing a certain satisfaction that bad decision-making is finally reaping its reward at the highest levels of corporate America . . . yeah, so sue me.

[Psephos]

55. "In case you actually bothered to read any of the threads..."

I live in Michigan. Several generations of my family worked in auto plants, and they fed and clothed us. I am a union member myself, although not in the UAW.

Outsourcing is a fact of life in this millennium. But there are still more than sixty Big Three assembly plants in North America that employ a huge number of people. So what is your point? That if these go poof, so what?

When the plants go away, the Platinum Plus Preferred Executive Citizens are not the ones I will be worrying about. I will, however, miss these rich bastards' contributions to the tax base, from which we pay for schools, police, and social programs.

Speaking of bad decision making, while reading through the posts that you allege I ignored, I noticed that not a single one alluded to the unsustainable costs imposed by zero-deductible health care for all employees, retirees, and their families. The unions and the companies alike must share blame for putting in place a system whose runaway costs are the real threat to the continuation of auto manufacturing. With benefits, the average US autoworker is paid more than $60 an hour. Every current worker pays the way for 2.5 retirees. Health costs alone add $1700 to the cost of every car produced. Meanwhile, a schmoe like me has NO health care. How about you, hatrack? Sixty bucks an hour and all the doctor bills you feel like running up sound good? Sure sounds good to me.

Everyone knew that there would come a day when the demographics would make the bill come due for the auto labor agreements. But the union leadership needed to show the workers yet another big score, and the company leadership needed to keep the plants humming and satisfy next quarter's stockholders at the expense of next decade's. They rather deserve each other, but of course, it's Joe Rivetgun who will pick up the ultimate tab.

Given that you are an economic expert, how did you manage to overlook this structural problem in your race to pile on the schadenfreude? The automobile business is highly cyclical, and always has been. Blaming current woes on SUVs, and not structural costs, means you haven't done even basic homework. Try looking at the numbers yourself, instead of repeating something you read on someone's blog. There are a number of thoughful, politics-neutral analyses available for sixty seconds of googling.

IMO, true progressives are pragmatists who believe in preserving jobs, and therefore don't cheer and sneer when manufacturing companies go belly up.

I hope you reconsider your position, or at least recognize there are deeper issues than SUVs involved here.

Peace.

EDIT: fixed typo in headline

[burrowowl]

51. What is Good for GM is Good for America.

Old saying and a CORPORATE LIE!
The layoffs are going to be hard.
and DAMN the Congress: what gas guzzling anti-standards, CAFE. The CEOs of GM and Ford will not suffer, the workers will.

[harpo]

57. Are they going to ask us to bail them out like the airlines do?