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Detroit Over Time

October 28, 2008

Analysis of:How Detroit Drove Into a Ditch | online.wsj.com

Detroit had many chances to come around and beat the world's automotive markets but the reasons they did not were : too eager to take credit, adversarial relationship between workers and management, and profit center. Detroit is now paying the price.....

Auto Market will Rebound in 2009

October 22, 2008

Analysis of:Global auto market may ‘collapse’ in 2009 | www.msnbc.msn.com

1, North America and Europe has seen a major reductions in car sales in current quarter however if you look at the age of average vehicle it is getting close to 6+ years which is coming close to end of the life. 2. As credit crisis comes to end, the consumers will come back for a state of art new vehicle. New vehicles are equipped with lane departure warning, and many other safety features which makes it more encouraging to buy. 3. If world market to collapse, how would people move around ? Most of the third world nations have limited infra structure to move around the country. If no auto available, the complete country may come to paralysis. 4. Auto companies will need to work extremely hard to entice new customers with price reductions and additional features at low/no cost options.

GM Chrysler Merger would help auto industry

October 22, 2008

Analysis of:GM, Chrysler discussing merger, source says | www.msnbc.msn.com

1. There is too much excess capacity currently and eliminating one of Big 3 OEM would allow to get Big 2 to be competitive. 2. Toyota has been using "common worldwide parts" to help reduce design costs. This will allow Big 2 to "communize" parts. 3. There are currently large design centers for each of the companies and cost of them extremely high. Eliminate one or more can help to lower cost. 4. Reduce overall head count by using same resources as they were before merger and eliminate any new resources. Do with what you got ! 5. Opens up market for Minivan (Chrysler) for GM. 6. Eliminate multiple dealerships competitions with "one shop" sale of Chrysler and GM products.

BMW vs. GM on Electric Cars

October 22, 2008

Analysis of:LA Preview: 204-hp lithium battery-powered MINI E revealed! | www.autoblog.com

BMW has been taking a lead over Volt in Electric Power cars. They have been testing products for a long time in Europe and now bringing it to US. Volt has not been yet road tested for US conditions. We are sure both companies will have some tough challenges before electric powered vehicle is available for market.

China's Sub Standard Health Hazard Jewlery

August 9, 2007

Analysis of:Toy Recall Shows Challenge China Poses to Partners | online.wsj.com

1. US Toy supplier should be held responsible to market toys with health hazard to US children. 2. China needs to be penalized for making toys with lead. It took US 100 years to get lead out of gasoline and it only took small time for China to put it back in toys. 3. China has been consistently violating any and all standards set and controlled to US companies e.g. tires, meat, toys and I can go on how many items they have been dumping without any fear of consequences. 4. China shot the Minister who was caught with the last adulteration case. Now, this does not fix the problem. China needs to develop system which would allow to monitor their ability. 5. Chinese products needs to be closely monitored by US Commerce Dept. and see how many other items which could be health hazard. 6. It is high time that other parts of world can supply better toys with little higher costs but "safe". May be it is high time for US consumers to consider safety of their family first....

Are we playing with numbers here ?

August 9, 2007

Analysis of:Ford Profit Is a Salve, Not a Cure | online.wsj.com

1. Ford declared profit in the last quarter. Great News. 2. Only issue is that the biggest market they serve, North America, was NOT profitable. 3. Rest of the world market is very small for Ford so it questions how the pricing of the vehicles done in that part of the world. 4. Japanese auto makers are serious to challenge all US mfg. tough competition not only in US but all over the world. 5. If Ford needs to swing to profit in NA, they need to seriously consider further head count reduction of hourly and salary personnel. It is high time, Ford pays their employee to work (not to get paid while they do their own work). 6. Ford needs to look at benefits of current and retirees to see how this can come in line.

Ford's marketing fiesco

July 25, 2007

Analysis of:Ford: Hydrogen-Powered Cars May Reach Showrooms In 5 Years | online.wsj.com

1. Ford has learned to "speak" before they can "make" in past and this continues to erode consumer confidence in Ford. 2. Ford needs to keep their mouth shut until they can prove beyond shadow of doubt that they can demonstrate the technology. 3. Hydrogen power cars is "wet dreams" of Ford. They have yet not shown even a concept car. Typically a concept to market takes 5/6 years for a brand new technology. 4. Hydrogen power technology is not used by any other car companies. Nobody knows how it will work safely ??? 5. There are many alternate concepts available to improve fuel dependency and improve mileage such as hybrid electric car, etc. who has lot better merit over hydrogen powered cars. Only reason Ford pushed this concept, was since all other concepts came from competitors. 6. Ford does not have design staff to even handle this technology. First hire engineers to meet this challenge. Learn to talk once you know what you are saying.

Excellent Idea for GM's Environmental Committment

July 25, 2007

Analysis of:GM plans diesels for U.S. cars, crossovers by 2010 | blogs.motortrend.com

1. GM can use this as "new marketing tools for environmentally friendly engine". 2. GM can use this to help improve CAFE standards. 3. GM has existing European diesel engines which they will take and make it adopt to US vehicles with minor adjustment. 4. GM can reduce the cost of this engine by sharing the development cost over North America and Europe. 5. GM can use this to capture additional market share from Ford since Ford does not have a solid plans in this area. 6. GM can also compete against Japanese in environmentally friendly vehicles. 7. GM can market cheaper diesel over gasoline. This helps consumer to lower driving cost. 8. GM can market "low emission" vehicle to market in a very short time. This gives them to be market leader.

Ford has no choice but to sale Volvo, Jaguar and Rover brands

July 25, 2007

Analysis of:Ford May Put Volvo on the Block As North American Woes Deepen | online.wsj.com

1. If Ford sales Volvo, most profitable part of Luxury Group will be gone. 2. If Ford sales Volvo, Ford will be probably raise $ 6- $ 8 B. 3. This amount may last for a short time only. 4. If Volvo designed products are not used by Ford, Ford's product design cost will increase. 5. Ford needs Volvo to keep their foot in the luxury market. Rover and Jaguar are least profitable groups so they need to be sold. 6. If Ford sales Volvo, there will be major manpower souffle from Europe to bring all "X-Patriots" back to US. What to do with these people ? Since US salary people are not fully occupied, this adds additional "dead beat horses" to Dearbon. 7. If Ford wants to improve profit, Ford needs to look at their products and find a "unique niche" to differentiate their products, technologies or performance while improving long term durability and quality. 8. Ford needs to forget about JD Powers quality since long term quality is disaster.

Toyota's Too Premature Prediction

June 25, 2007

Analysis of:10 years after first hybrid, Toyota hits 1 million mark | seattletimes.nwsource.com

1. US auto industry is given ultimation that Toyota will switch all vehicles with lithium battery in 13 years. 2. If US auto industry (GM, Ford and DCX) wants to be competitive, here is the chance for them to beat this timing by 2/3 years. 3. If US Government wants to partner with auto industry, this is their golden chance to work together and show that jointly we can beat any challenge (e.g. change of asbestos to non asbestos brake pads). 4. This will provide new incentive to US auto industry and will help to develop new innovative products for which US industry is known for. 5. This will give one industry to stay in production not like television or coal mining which are all gone out of US.

Ford and Future

June 19, 2007

Analysis of:Ford: Another fine mess | www.economist.com

1. Ford could save money if the ideas suggested in commentary are implemented. 2. Ford can stay in business or go broke staying in the current course of actions. 3. Ford can redefine their core products and work to build the company again.

Big 3 lost money due to tight standards of UAW

February 23, 2007

Analysis of:UAW Losing Pay Edge: Foreign Automakers' Bonuses Boost Wages in U.S. Plants as Detroit Car Companies Struggle | www.aftermarketnews.com

Big three has been "held hostage" by UAW for many years. Every 4 years UAW is looking for new items (holidays, bonus, 95% benefit when no work, etc....) from Big 3. Big 3 have been paying out dearly and now there is not too much left to hand out.

So, UAW needs to reinvestigate their strategies and see if they would like stay as union or work in concert with Big 3 for "survival".  

UAW also needs to reconsider the pay and benefit structure. There demands can kill Detroit. 

UAW needs to also understand that non union work force makes more than them. WHY ? Because they are working as hard or may be harder than UAW and they are proud to be non union. 

UAW was an excellent idea when there were no labor laws in the start of 1900. Things have changed and they need to understand that money is not there with Big 3.  

DCX Suppliers will need to be ready for major cost reductions

February 23, 2007

Analysis of:Plan Good for Some Suppliers, Not So Good for Others | www.aftermarketnews.com

DCX announced that they are looking for $ 5 B (appx.) cost reduction from the purchased components. This means that suppliers will be asked to reduce their cost by this amount while reducing production volume at the same time.

Suppliers who are solely dependent on Big 3, they will need to either find the ways to eliminate cost or reduce head count or close plants or sell themselves. This is "do or die" time for all suppliers.  The writing was on the wall for many years and now it is reality.

Suppliers who have other customers (e.g. Toyota, Honda, Nissan, Hyndai, etc...) can survive with the volume increase for these to offset DCX volume reduction. They can also work to adjust production by making all plants to be efficient.

UAW has no right to say anything for GM/DCX

February 23, 2007

Analysis of:UAW says 'no opinion' on possible GM-Chrysler deal | www.autonews.com

If UAW were to make a statement on GM/DCX, it will provoke Big 3 and  major confusion will arise. 

UAW understands if this merger is to take place, there will be major head count reduction due to elimination of similar jobs.

UAW needs to understand that road is rough for Big 3 and they are riding in the same cars, So hold on tight and be ready for this rough ride.

UAW needs to understand that they have lost there power and Asian auto manufacturers are doing everything in their power to not allow union in their plants.

UAW started out with great intent and when labor laws were very weak. Now the things have changed and UAW needs to change along with time.

GM/Chrysler "MERGER OF TWO WRONG COMPANIES "

February 23, 2007

Analysis of:A Beauty to Chrysler's Beast? | www.fool.com

Advantages: 

1. GM would acquire access to Daimler process and design.
2. GM would maintain "Number 1" in total volume sales over Toyota.
3. GM would use internal resources to their full extent and phase out Chrysler hourly and salary employees.
4. GM will acquire additional dealers and networks in to Mexico and other areas where Chrysler is very strong.
5. GM will benefit from volume discount of purchased parts.
6. GM may also learn about new ways of testing and validating parts based on Chrysler's process.
7. GM may also learn to become "lean" by using Chrysler principles.

Disadvantages:
1. Chrysler has very high legacy cost and employee retirement cost.
2. GM cannot get rid of employees without providing a "package" which can add to the bottom line now.
3. GM has excess capacity hence purchasing Chrysler will just add fuel to fire.
4. GM is just beginning to stabilize and does not need a new issue into the challenges.
5. GM may never recover the purchase cost (e.g. Ford's purchase of Jaguar).

Toyota Does NOT need Ford

January 5, 2007

Analysis of:Ford, Toyota execs in partnership talks | money.cnn.com

1. If Toyota agrees to form a partnership, the only reason would be to purchase Ford.
2. If Ford needs help, Toyota will provide it for them but from the obsolete technologies.
3. If Ford works with Toyota, what will Mazda be for ?

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