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The Future of the Detroit Region is in Hands of the Locals

March 22, 2011

Analysis of:Meet the ‘New’ Motor City | adage.com

While outsiders have always made significant contributions to the success of the US auto industry and the Detroit region the resurgence of the region remains in the hands of local people, including industry, political and union leadership.  Outside marketing specialists are welcome and have made a difference in getting people to think more positively about who we are.  However, the overall strength of our competitiveness and the focus on what we want for the future will come from within.

Will the Consumer Spend as Readily as Washington for EVs?

January 24, 2010

Analysis of:[USA] Telsa Secures $465M DOE Loan To Build $50,000 Electyric Cars In California | www.detnews.com

Consumers have not yet accepted EV technology as practical or economic. Washington wants them to buy EVs but, as we saw with the GM EV in California, consumers do not seem ready to spend their hard earned money on electric vehicles. Washington should focus on policy, e.g. a comprehensive energy policy, not on spending taxpayer money to support specific technologies.

Ford Makes Yet Another Move to Become a Strong Company

December 27, 2009

Analysis of:Fresh promise for Volvo as Ford agrees $2bn deal with China's Zhejiang Geely | www.guardian.co.uk

Ford and GM needed to shed brands to become stronger and to improve their break even points. How that happens is less important than the fact that it will happen. The global auto business today and the future is about strong brands and flexibility in production to improve operating costs, and, in the end profitability. Volvo may hold value in the eyes of some customers. Its image could offer Geely a niche in the North American market. Both Ford and GM are large volume producers.

Spyker Restarts Talks to Buy Saab from GM

December 22, 2009

Analysis of:Dutch automaker renews Saab bid | www.chicagotribune.com

Spyker has decided to try again to acquire Saab from GM. The proposition would require a major automotive partnership and a very clever marketing strategy to make it viable. The Saab brand is a major challenge to the plan.

Magna Writes a New Chapter in the Entrepreneurs Manual with Canada's Funds

December 22, 2009

Analysis of:Magna, Canada team up on auto research center | www.reuters.com

Magna operates with an entrepreneurial spirit. Yet, it has tried and failed with investments in new technology many times over. Its success remains to be in only the most basic product and manufacturing segments of the auto business. The brand is established. One must wonder what the Canadian government really expects to gain from funding yet another new technology investment for Magna. Perhaps it is seed money for another Magna manufacturing venture. That would make sense. But little else.

Ford On Its Way to Viability

December 22, 2009

Analysis of:US: Ford again offers factory workers buyouts | www.just-auto.com

Ford is on the way to long term viability due to the plan put forth by Alan Mulally. The company moves toward viability due to: Effective leadership, strong brands, driving costs down and becoming a truly global organization. Growing market share and market volume recovery will contribute to improved short term profits through 2011. Competitive activity will require continued strengthening of the entire company.

GM - REVA Agreement a Practical Step for GM in Electric Vehicles

September 26, 2009

Analysis of:GM, Reva tie up for electric vehicles | www.business-standard.com

GM is taking a practical approach to expanding its electric vehicle product technology and consumer experience in a market where there is limited existing infrastructure that favors fossil fuels over electric vehicles.

Innovation and Size Cannot Overcome Economic Realty for Major Suppiler Bosch

September 17, 2009

Analysis of:Bosch to cut 10,000 jobs this year | europe.autonews.com

Bosch' strategy focus on innovation is a good one. However, the realities of the downturn in their major markets and the competition in Asia will take time to respond and adjust to. Their major business is in Europe and North America.

Management was Another Board Snafu

September 13, 2009

Analysis of:UK government seeks to bar directors over MG Rover demise | www.reuters.com

Management also contributed to the demise of Rover by lacking a basic understanding of the operation and the business they were in. Who hired these people?

Nissan Struggles with Quality, Brand Image

August 26, 2009

Analysis of:Nissan Leads Auto Shares Lower on Clunker Program’s End, Yen | www.bloomberg.com

In the recent past product quality of the Quest, Armada and Titan here North America have tarnished Nissan's image.New small car designs are getting some attention.Costs and the Yen exchange rate are hurting profitability.Success in this market requires hard work and a strong brand image. Nissan is not quite the strong brand that Toyota and Honda are.

Toyota Makes Another Strategic Decision to Adapt to the Local Market

August 10, 2009

Analysis of:Toyota Streamlines North American Management to Speed Recovery | www.bloomberg.com

Toyota's move to shift production decisions to the US is another of their conservative management approaches that have held them back. They delayed for some time adding Diesel engines to the product line in Europe and they held off in upsizing their minivans for the US market so long that they have never really earned a significant market share of that segment. Toyota protects it brand with a conservative strategy. But these delayed moves have held them back in the past.

Ford's Cadence of New, Improved Products Drives Competitiveness

July 23, 2009

Analysis of:Ford Fiesta, Focus launches on track-executive | www.reuters.com

The cadence of Ford's new and improved products drives the company toward improved competitiveness and financial performance. Now, one of the D3 is showing that an American auto company can begin to compete with the foreign auto makers. Ford management is making the right moves.

Bravo Mr. Mullaly!

July 23, 2009

Analysis of:Ford Loss May Narrow, Letting Mulally Sell Stock, Reduce Debt | www.bloomberg.com

Mr. Mullaly's focus on improving efficiency, improving quality and listening to the customer during his time at Ford has led to improved financial results. Much work remains to right the company. However, great progress is being made.

A Start - Then What? The Next Few Months will be Telling

June 29, 2009

Analysis of:Auto Sales Rate On Track To Break 10-Million Mark | www.marketwatch.com

An upturn in sales is a positive.  Is this the start of a trend?  What will the tend line look like?  These are the critical questions.  The economic recovery, consumer confidence and home sales will drive the trend.

Can We Bank on a Spark?

June 24, 2009

Analysis of:Car Dealers Bank On Clunkers | online.wsj.com

The program may be a spark for new car sales.  250,000 seems to be a small one with some important open questions.  1. Will workers with lower wages be able to get credit or to make the payments?  2. Do car makers have the inventory of vehicles with improved fuel mileage on hand to meet the improvement criteria?  3. What will happen after the incentive ends?

Ford Must Focus on Global Competition

June 12, 2009

Analysis of:Ford to Face Tougher Rivals Following U.S. Rescue | online.wsj.com

Global competition is Ford's major concern.  GM and Fiat/Chrysler must become competitive and enter Chapter 11 before they can threaten Ford.  A slow economic recovery caused by a new lower US stantard of living will keep show room traffic down for the next 18-24 months.

American Automotive Management Must Look in the Mirror

June 5, 2009

Analysis of:Salutary lessons from the downfall of a carmaker | www.ft.com

The management challenge for American automotive companies must be to focus on the customer and the need to provide value in their products. Past practices led both senior management, and the unions, to focus on their pay, their power and their perks.  The customer was not their first priority until they finally realized how much market share they lost.  Then the credit crisis came along and everyone was shoved into a bad corner. Innovation in all levels and all aspects of the corporation are required, not just in manufacturing and engineering.  Putting the customer first, outdoing the competition must be the top priorities in this global business and getting everyone on the same page are absolute requirements.

Washington Needs Patience: Consumers at Lower Pay Need Time to Adjust to Green Car Prices

June 2, 2009

Analysis of:G.M. to Seek Bankruptcy and a New Start | www.nytimes.com

GM production volumes need to be reduced to 1.8 to 2.0 million per year assuming they can hold their market share in an 8 million per year market.  Planning at the 10 million per year level is based on an historical replacement rate.  The economy is not likely going to support that volume level for another two years. Green cars are projected to grow slowly.  The consumer is still getting used to the idea and the extra cost.  Hybrids are projected to be 15% of the market by 2015. The trend to lower income levels (UAW wages going from $28 per hour to $14 per hour) higher priced cars will be a problem. Detroit owes Washington its gratitude for funding its Chapter 11 filings.  GM now has the chance to restructure and become a viable company once again.  Washington has to realize that this is just the first step in a long journey. It is far to early to take credit for saving the auto makers.  The next five to ten years of operating success will determine if they made the right steps.

Fiat Deal is Last Resort for Chrysler

May 28, 2009

Analysis of:Chrysler’s Nardelli Tells Judge Fiat Sale Is Best Deal for All | www.bloomberg.com

Fiat is not the "best deal" for Chrysler it is the only deal.  Other car makers that had prior business relationships with the company have walked away. Fiat has much to gain in terms of plants, offices, engineering facilities and a brand name, probably Jeep.  Chrysler is likely to be a Fiat brand until the management figures out if it really has any value in the eyes of US car buyers.

GM and CAW Do What's Needed: The Long Term Result Will Impact Everyone

May 26, 2009

Analysis of:GM Gets Concessions From CAW Before Probable Filing | www.bloomberg.com

GM and the CAW succeeded in moving one step closer to preparing for a "prepackaged" Chapter 11 filing.  Much more work has to be done.  As we have seen already with Chrysler, the process will still take time, probably longer than Washington anticipated. Concessions by the CAW, and likely the UAW, are important to union leadership to save the union. The union concessions will likely drive our economy toward a new, lower standard of living.  White collar workers' wages and benefits usually follow the trends in the union agreements. 

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