Thursday, November 13, 2008
Let it burn
If consumers are buying your competitor's products over yours to the point that your business is in financial trouble (in this case, the US automakers), what should you do? Lobby for billions in bailout? Er, no. After all, a bailout only delays the inevitable. Should government force you to make eco-friendly cars? No!
You need to make products that consumers WANT to buy! I don't see what all the fuss is about.
Take a look at the top selling cars in January of 2008.
1. Toyota Camry: 31,601
2. Honda Accord: 23,957
3. Nissan Altima: 21,635
4. Honda Civic: 20,993
5. Toyota Corolla: 20,736
6. Chevrolet Impala: 17,544
7. Chevrolet Cobalt: 17,310
8. Chevrolet Malibu: 14,105
9. Pontiac G6: 13,942
10. Ford Focus: 11,600
Ok, first thing. The top 5 are foreign car makers. If you look at the costs to build those cars, the US automakers have roughly 2 to 3x the labor costs of the other guys. And no, its not because they are paying slave labor pay rates, its because they're not beholden to the UAW in terms of pay, benefits, and the ultimate of all sins, paying people NOT to work. Insane. Truly insane.
Second thing : see any hybrids in there? Nope. So, if the demand was there, the sales numbers would be there. So why force the manufacturers to make cars that aren't in demand - which is what the liberals in congress want. Agenda based policy is doomed to fail. (Need me to cite examples? No, I didn't think so.)
When you look at all vehicle sales for Q1 2008, the top selling vehicles are :
1. Ford F-150 : 94,551
2. Chevy Silverado 1500 : 90,903
Yup, the two top spots go to TRUCKS! The Prius comes in at #13 with 42,907 units sold.
Economic forces apparently aren't enough to force the automakers to do what's needed in terms of breaking the union contracts and becoming smaller, faster and more market focussed.
Bankruptcy is exactly what's needed. I'm sure they'll survive, but until they change their business they'll keep needing money which none of us can afford to give them. How can we bailout companies that refuse to be competitive??
Simplify, cut costs, focus and dominate.