GLG News by Brake and Friction Components Experts

Michael KowalskiConsultantMichael Kowalski

Who is responsible for the failure of Chinese aftermarket replacement tires?

June 29, 2007

Analysis of:Accident Raises Safety Concerns on Chinese Tires | online.wsj.com

Quality of Chinese manufactured products is a hot topic these days.  The safety of pet food ingredients is just a recent example.  The Chinese seem able to avoid international standards for safety and quality, instead focusing on price and volumes.  Tire failures are just another example.  Radial tire manufacturing requires a skilled operator to build a good tire, assuming that good design and quality materials are used.  A deficiency in any of these three areas can lead to the tread separation failures reported.  Clearly the manufacturer of the vehicle experiencing a tire failure with these aftermarket replacement tires is not responsible for the problem.  However they make an easier target than Chinese manufactures, and litigation motivated lawyers will go after the automotive manufacturers as they have the deepest pockets.  Who can predict the outcome of the litigation that is sure to follow these tire failures?

Michael KowalskiConsultantMichael Kowalski

Chrysler’s future hangs on the next United Automotive Workers contract agreement

May 17, 2007

Analysis of:Union Cracks in Chrysler Deal | www.thestreet.com

The purchase of a majority stake in Chrysler by Cerbus Capital Management signals a chance of another Chrysler resurrection. This will require an accommodative new contract with the United Auto Workers union and massive changes to Chrysler’s business. The initial response from the union is constructive, however many difficult issues will be on the bargaining table this fall, not only at Chrysler but at Ford and General Motors as well.  

Michael KowalskiConsultantMichael Kowalski

The Future of Chysler operations sill uncertain

May 3, 2007

Analysis of:Magna out front in bid to buy Chrysler Group, analysts say | www.thestar.com

While the take over of Chrysler by Daimler was ill conceived and a poor business judgment, current issues in the market could provide a rationale for continuing joint operations to the benefit of both parts of the organization. However Daimler does not appear to have the tenacity to make the Chrysler operations a success and is anxious to unload them. Magna probably has the next best shot, but it is in competition with other bidders who would dismantle the company by selling off the parts. While the UAW may be willing to offer Magna concessions to save their jobs, it is still uncertain how this all will evolve.

 

Michael KowalskiConsultantMichael Kowalski

Toyota, the new leader in World Wide Auto Sales

April 27, 2007

Analysis of:Toyota Overtakes G.M. in Sales for First Time | www.nytimes.com

The fact that Toyota has outsold General Motors in the first quarter of 2007 is the result of difficult and different strategy decisions at the respective automakers. Toyota has decided that the sale of unprofitable hybrid vehicles is an important part of its global strategy to improve its public image as a "green" manufacturer. General Motors has decided to reduce its dependence on fleet sales to improve its profitability. Both strategies are important and have resulted in the change in sales leadership. The question is what is more important, profits or sales?

Michael KowalskiConsultantMichael Kowalski

Chinese Automotive manufacuring will impact Global Market Soon

April 27, 2007

Analysis of:Chinese automakers | biz.yahoo.com

The Chinese automotive market continues to grow rapidly, but local companies are taking a larger share of the market because of their lower costs. Thus they are reducing margins for off shore competitors. Even more disturbing for the major global automakers are the beginnings of a Chinese automotive export industry. If the Chinese (rather probably when) can develop a reputation for quality, they will have profound impact on the major global competitors.

 

Michael KowalskiConsultantMichael Kowalski

A smart stategy for the auto makers

April 17, 2007

Analysis of:Detroit Decides to Help Shape, Not Resist, Regulation of Emissions | www.nytimes.com

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Michael KowalskiConsultantMichael Kowalski

Will globalization work for General Motors?

March 12, 2007

Analysis of:Seduced By The Siren Of Globalization | www.forbes.com

Importing off shore designed vehicles has proven to be a unsuccessful strategy for the Detroit’s automotive companies. Mr. Flint lists many of these failures in his commentary. He ends with a bit of optimism for General Motors, an opinion I share. His views are based on new products from General Motors, mine are based on the implementation of a broad and integrated global strategy for the company. This has been under development for several years and the fruit’s of this effort are beginning to pay off. Simply stated they are starting to act like one company, and it may work.

 

Michael KowalskiConsultantMichael Kowalski

Magna International could provide resolution to the problems at Chrysler

March 1, 2007

Analysis of:Magna eyes Chrysler data | www.thestar.com

With the prospect of a sale by Daimler of its Chrysler assets a number of possibilities arise. In my previous analysis I focused on some possible alliances with other automotive manufacturing companies. The cited article introduces another possibility, Magna International Inc. While the article cautions that a Magna acquisition of Chrysler is a long shot, I think such a deal could result in revitalized operations at Chrysler, albeit with a quite different business model. If Magna were to take over Chrysler, I think, it could become a major vehicle supplier to other manufacturers, rather than trying to market their own (Chrysler) vehicles. The sales of no longer need operations like sales, service, and marketing could help Magna pay for the parts of the organization that it could use.

 

Michael KowalskiConsultantMichael Kowalski

The Keys to making General Motors's turnaround successful

February 28, 2007

Analysis of:General Motors wants union to give up nonassembly jobs | www.stltoday.com

Three areas that are critical to General Motors continued success are new product introductions, resolution of the Delphi bankruptcy, and the settlement of the new labor contract with the United Auto workers later this year. The first is solely within GM's control, while the other two involve the UAW. The union is in a weakened position because of its rapidly declining membership (due to the downsizing of the Detroit companies) and it failure to organize Japanese and Korean plants. GM is beginning to indicate some of the issues, such a flexible work rules, and lower pay scales for non-assembly jobs, that will be part of the negotiations. This year will tell the story if GM's turnaround will take root.

Michael KowalskiConsultantMichael Kowalski

Ford Motor is attempting to follow General Motors Lead--a positive sign!

February 26, 2007

Analysis of:Follow Leader Ford’s New Game Plan | wardsauto.com

Mr. Alan Mulally the new CEO at Ford Motor Company has taken actions that are designed to provide a "way forward" for this troubled enterprise. These initiatives basically follow the strategies already implemented at General Motors Corporation some time ago. While these policies are good if effectively implemented (not a simple matter), they will require time before Ford realizes the benefits.

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