Originally Posted by PimTac
"I don't find this convincing.
The real issue has long been that foreign competitors produced a more advanced and higher quality product while the Big 3 were always a step back in both.
Playing catchup is never enough and none of these firms had the vision to leapfrog their foreign competitors. Overcapacity is never an issue if your product offerings and build costs are kept in line and labor costs are only a small part of the cost of a finished vehicle. Legacy costs have no impact unless you're shrinking your company because you can't come up with competitive product and must discount heavily, as the Big 3 did.
This was a failure of senior management and its roots lie in the seventies, when these American companies found that mediocre was good enough.
They never did see the changes that were coming commencing in the eighties, when mediocre was no longer good enough."
Great analysis. The seventies were a horrible time for the Big 3. After the Saudi oil shock, they just kept making cars but they were poorly built and engineered. The labor force didn't care as long as they got paid. The Malaise as it's called.
The Japanese entered the market but their cars were not the greatest yet. They learned very quickly though. They capitalized on fuel economy with their 4 cylinder engines while the American companies stuck with V8s.
A whole generation experienced this including yours truly. Brand new cars rusting on dealers lots. Many had parts missing or put on in a sloppy manner. The salesman's most used line those days was "we will take care of that before you get it. "
The American companies have been a step or two behind since then.
The 70s definitely damaged the American auto sector, but emissions and regulations like the 1973 federal roll over standards that never materialized and 5 MPH bumpers made a lot of cars during that period slow and ugly. 80s American cars were pretty cool but the 90s-bailouts were laughable. I think it was hubris that lead them to make cars that were just not competitive anymore during the 90s and 2000s, putting a Malibu against a Corolla or Camry in the late 90s is completely ridiculous looking back.
All they are good for is trucks and muscle cars, everyone knows that by now. It's sad that people are losing their jobs but it's been a decade since the bailouts and the American auto industry is just beginning to learn the lessons that were obvious to anyone back then: Stop building cars!
"I don't find this convincing.
The real issue has long been that foreign competitors produced a more advanced and higher quality product while the Big 3 were always a step back in both.
Playing catchup is never enough and none of these firms had the vision to leapfrog their foreign competitors. Overcapacity is never an issue if your product offerings and build costs are kept in line and labor costs are only a small part of the cost of a finished vehicle. Legacy costs have no impact unless you're shrinking your company because you can't come up with competitive product and must discount heavily, as the Big 3 did.
This was a failure of senior management and its roots lie in the seventies, when these American companies found that mediocre was good enough.
They never did see the changes that were coming commencing in the eighties, when mediocre was no longer good enough."
Great analysis. The seventies were a horrible time for the Big 3. After the Saudi oil shock, they just kept making cars but they were poorly built and engineered. The labor force didn't care as long as they got paid. The Malaise as it's called.
The Japanese entered the market but their cars were not the greatest yet. They learned very quickly though. They capitalized on fuel economy with their 4 cylinder engines while the American companies stuck with V8s.
A whole generation experienced this including yours truly. Brand new cars rusting on dealers lots. Many had parts missing or put on in a sloppy manner. The salesman's most used line those days was "we will take care of that before you get it. "
The American companies have been a step or two behind since then.
The 70s definitely damaged the American auto sector, but emissions and regulations like the 1973 federal roll over standards that never materialized and 5 MPH bumpers made a lot of cars during that period slow and ugly. 80s American cars were pretty cool but the 90s-bailouts were laughable. I think it was hubris that lead them to make cars that were just not competitive anymore during the 90s and 2000s, putting a Malibu against a Corolla or Camry in the late 90s is completely ridiculous looking back.
All they are good for is trucks and muscle cars, everyone knows that by now. It's sad that people are losing their jobs but it's been a decade since the bailouts and the American auto industry is just beginning to learn the lessons that were obvious to anyone back then: Stop building cars!
