Auto Industry Error

Big error by the American auto makers Chrysler and GM. By reducing the number of salespeople to sell their products, they are simply speeding up their demise. By reducing the number of dealerships, they are reducing their profit potential and volume, and might increase dealer profits slightly.

The biggest problem is that this will send MOPAR and GM enthusiasts to the superior Subaru and better valued Kia. This has already been happening, but will now greatly accelerate.

Enthusiasts tend to remain loyal to brand. It's the average car buyer -- with no particular allegiance to brand, model, manufacturer, or country of manufacture -- who is likely to purchase alternatives.

Point is, that loyal buyers have had enough, and have found that there are indeed alternatives that they can get just as excited about.

These are sad times for the American auto industry, mainly because of ignorant and careless decisions by people without wisdom and insight.

This comment seems unfair. The executives at Chrysler and GM are quite aware of the insights in TheMachineThatChangedTheWorld, and have been working for years to resolve the tension between their high fixed costs and the need to design and build vehicles that people will gladly pay for. As the Big Three's market share has shrunk, the UAW has accepted so many layoffs that most of the people they represent are former autoworkers.

But, the issue is that it makes no sense to cut your sales staff when you need more sales. By doing so, they are increasing the exposure that other manufacturers have to the car buying customer. Instead of cutting the number of dealerships, they should be concentrating on increasing exposure and availability all while increasing profit margins on products.

5-15-2009

TheMachineThatChangedTheWorld diagnosed the root cause of GM's problems: Each GM design needed to go through two sets of bureacracies: the engineering design process, and multiple brand organizations. As a result, GM used to take twice as long (and spend twice as much) as Toyota, Honda, and Datsun to design new versions of their vehicles. GM has improved, but the difference is still enough that the average GM vehicle is 1 - 2 years behind the average Toyota or Honda vehicle, so GM has to sell its vehicles at a discount -- to an ever declining share of the market.

The Presidential Auto Task force diagnosed the root cause of Chrysler's problems: Mercedes gutted Chrysler's engineering budget. As a result, nearly all of Chrysler's products are a few years behind the competition.

It's worse then I originally thought. Since Chrysler is in bankruptcy they do not have to honor any dealer agreements, so they can give that short 30-45 day notice. GM on the other hand, has given a 1 1/2 year advance warning as to not get the pants sued off of themselves by their dealers. Chrysler's move is designed solely to screw the dealer out of lots of money, because the dealers will be left holding cars that they paid more for then they can sell them for once the short time frame is up. First you screw the public, then you screw your own dealers, its the American way...

When this is all over with, Detroit hopes to have 15% of the USA market, but in reality it will be closer to only 5-6%.

This is all part of the systematic dismantling of the USA, so get ready to wake up some morning to the call to prayer by a mosc, or wake to another countries rule.

At least that'll make it easier to ask for one's job back ;-)

It's getting worse. Not only are dealers being ripped off in both GM and Chrysler bankruptcies, but the public that has law-suits against these companies over faulty equipment that resulted in death and/or dismemberment, have been shut out. It is said, that the very best that a complaintent may do, and that would be a slim chance, would be to win 1/2 of 1 cent on the dollar. Outrage... Now we get to the real truth of what all of this scam is all about. Use taxpayer's money to rip off taxpayers...

Chrysler dealers were told that they had to load up on Chrysler autos in order to save the company, and those that did not cooperate would be remembered and treated unkindly. Then Chrysler dumped those very dealers that loaded up on the over-priced autos that they paid more for then are currently selling for at retail. Next up, taxpayers will be ripped-off again with scarce parts supplies and unfair warranty practices... both GM and Chrysler...