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How Detroit Drove Into a Ditch

The Detroit Three (no longer the Big Three) are adamantly denying bankruptcy rumors, but there's no denying that their very survival hangs in the balance. (http://online.wsj.com/article/SB122488710556068177.html)

http://www.cleanmpg.com/photos/data/501/2008_Hummer_H21.jpgPaul Ingrassia - WSJ - Oct. 25, 2008

2008 Hummer H2 – GM’s future at one time according to its current CEO.

A sad commentary and a must read :ccry: -- Ed.

With little fanfare, a new car factory opened in America earlier this month. The new Honda assembly plant in Greensburg, Ind., will produce 200,000 compact Civic models annually after reaching full capacity late next year. The contrast couldn't be starker between Detroit's woes and the continuing U.S. expansion of Japanese, German and Korean car companies -- in both market share and manufacturing capacity. There are two American auto industries, one generally thriving and the other drastically shrinking…

On Aug. 20, 1979, 18-year-old Brad Alty, fresh out of high school in Mechanicsburg, Ohio, was driving his Gremlin to work when the car broke down. He was two-and-a-half hours late to his first day on the job at a new motorcycle factory that Honda Motor was opening in central Ohio.

For the next few weeks, Mr. Alty and his 63 co-workers did little but sweep floors and paint them with yellow lines. Then they started building three to five motorcycles a day. And at the end of each day they would disassemble each bike, piece by piece, to evaluate the workmanship. Mr. Alty hated it, and he kept getting grief from his older brother for working for a Japanese company. "I thought I had made a mistake by going to work there," he recalled recently. "It was like, 'What the heck am I doing here?'"

But Mr. Alty stuck with it, and Honda stuck with him. Honda's real goal was to build cars in America, but the motorcycle plant allowed it to test the mettle of American workers for a modest investment. The workers passed the test. Honda started building Accords in Ohio in November 1982. Ironically, some U.S. Honda dealers actually protested that they wanted to sell only Accords made in Japan. But the quality of the Ohio-made cars was soon confirmed…

Two weeks ago some automation equipment broke down at the Honda factory in Marysville, Ohio, but employees rushed to the scene and devised a temporary solution. There were no negotiations with shop stewards, no parsing of job descriptions. Instead of losing an entire shift of production, Honda lost just 150 cars. The person overseeing Marysville's assembly operations is Brad Alty, still with Honda after nearly 30 years. These days, instead of a Gremlin, he's driving a Honda Pilot -- made at a Honda factory in Alabama… http://online.wsj.com/article/SB122488710556068177.html

Full disclosure: xcel did this post for me to help me get started posting news. Thanks!

Full disclosure: xcel did this post for me to help me get started posting news. Thanks!You're a quick study!

I liken what is happening to Detroit to millions of Americans that for decades eat junk food and don't exercise. they get diabetis, high blood pressure and suddenly they are an inpatient with cancer, dialysis and a heart condition....in real like many people die from such double whammies - one of my uncles had a triple whammy (diabetis, heart condition, cancer).

This is analagous to Detroit (gas prices, recession, maxed out credit)

we are human, we will survive, we always do, we haven't lost yet to surviving.

I'm sure this is a good slap in the face for a lot of the workers, but a good slap is sometimes is what you need to realize, "Hey this is serious business your in it for good or its time to leave now and seek something better."

edit: yeah he picked the right automaker to begin with! nice story

That was an awesome article I loved Paul Ingrassia's writing style and flow. I really do hope that the Domestics make it through this crunch, if they don't the "imports" may get complacent. Right now isn't a good time for that, they need to continue to wean us off the gasoline with something mass produced if everyone makes it I see this happening quickly, if any one of the players drops out I see us getting set back until its nearly to late. Imagine turning the Titanic, a few moments earlier and they might have missed the 'berg, but we may be nearing the point of no return if the auto industry doesn't continue to reach for those bootstraps.

The situation with Detroit has gotten so bad that the import automakers face no serious competition anymore.

...except for millions of people who would rather not drive at all before they'd drive an import. Having been involved in quite a few Ford vs. Chevy arguments imagine the hell raised if someone begins mentioning a Toyota truck :rolleyes:

The Japanese automakers are already complacent. Toyota could have capitalized on the hybrid market and expanded the Prius into an entire line of hybrid vehicles years ago, but they were content with selling ~150,000 hybrids a year which is a tiny fraction of vehicles, even though cars still made up huge segments of the market. Honda would have made some serious money had they continued making the Insight, especially last summer. That and sales of the Prius far outstrip the Civic Hybrid because the Prius is more distinguishable (the HCH except for the hybrid logo is almost indistinguishable).

The non-hybrids are increasingly turning into jokes. I know someone's going to mention Wayne's 65+ MPG in the 09 'Rolla but that won't fly with the millions of "just drive it" people out there. I got 55+ in an '06 at MPGfest so decent FE is possible but that was throwing the whole book at it and no regular person will DWL, RR, and Fas like the pros here. With the incredibly short gearing you see in the Yaris, Fit, etc. FE is toast at anything above 50 MPH, so incredibly so that even doing the speed limit would result in a buzz bomb let alone the idiots who do 15 or more over. I remember test-driving the '08 Matrix a few months back and it was a joke. I was pulling 2,500 RPM's at 50 MPH :(

Wow... ford almost stopped making cars entirely? Unvelievable!

How come GM can't make a decent B-class car? The Aevo is just an absolute clunker compared to the Yaris, Scion xD, and Honda Fit.

Seperate restrooms for line workers and executives? That's awesome for morale! (not).

Executives cutting wages for line workers while increasing their own bonuses? Say it ain't so!

...The Aevo is just an absolute clunker compared to the Yaris...



My son has an Aveo, and I think it is a great car. My daughyter also has a Yaris. I have driven both cars extensively and I like the Aveo better. I have taken both cars on cross country trips of over 1000 miles.

Now for all you GM haters out there, you are wrong about the Aveo, it is inexpensive, well built and gets about the same FE (Aveo 24/34 vs Yaris 29/36) and has a 100,000 mile drivetrain warranty. Aditionally the Aveo price was $8500 and the Yaris $11,500.

After 30K miles on the Aveo and 45K on the Yaris, I feel I am able to make an informed comparison.

At the next CincyMPG met-up, we will use the Aveo for our FE Challenge. We will report back with the numbers.

Hi Best..,

Its a GM, but the Aveo is made in South Korea by GM-Daewoo. So, the UAW situation effecting price and quality is not present. That is the point of that article. The UAW does dumb things that do nothing but shoot the golden goose, for this month's boat payment. When the fact is, boats are holes in the water that you throw money into, and GM/Ford would could have used that money to bring the Precept/etal to market. But, instead stuck with conning the public into SUV's because that is the only way they could recoupe the money neccasary for UAW involvement in automobile manufacturing.

The cat was out of the bag when the author noted that the American car companies can't actually make any profit on anything but trucks and SUVs. The big three did such a lousy job on their small car designs that few wanted them, and they had to be sold at fire sale prices. The companies didn't evolve, so now their dynasaur like behavior is killing them. They once had time and money to change, but didn't. Now it is simply too late. I suspect the government will pump some money in, that is happening in all quarters, but the situation is unstable and will collapse. Sad!

I see the stuff that GM has more vehicles that get 30mpg than anyone else.

How about 40mpg and better?

And with a decent resale value?

Is my request unreasonable, or was GM, Ford, Chrysler completely disinterested until bankruptacy was staring them in the face?

The Big 3's usual explanation,"labor/pensions cost us much more than Japanese USA manufacturers" is true.
Yeah, someone is going to ask me to prove that-sure I have access to GM and Toyota's books. I also "believe" the self servince BS that manufacturers put out. It is OBVIOUS that the Japanese pay less; that is why they build plants in "Right to work" states- non union states.Yes, they claim it is because it gives them more control over manufacturing , but the bottom line is always the bottom line.
I don't blame the UAW- they were/are doing exactly what unions shoud do-get their members the most $$. I don't blame the Big 3 much either. Our USA based USA "owned" way of making autos is something left over from a different time. A time when USA automakers completely controlled USA auto sales.

There really wasn't any way for this situation to end up differently. The unions will eventually accept the same $$ that the non union Japanese plants pay.Maybe, maybe there will be some GM,Ford,Chrysler plants left in the USA when that happens- maybe not. Now by wages I means wages and the all important retirees benefits.Apparently the retirees plans are legally "fully funded" but aren't really, really fully funded,so they are a huge drag.

When someone makes a product for a lot less than you do, and everyone goes to the same business schools and engineering schools- you go out of busness.

I hope GM and Ford make it.I have no hope for Dodge-who I always liked!
Charlie

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Kacey --- A 09-02-2008 Join Date, 1st Post on 10-07-2008 and now Moderator News Article Thread Starting Privileges too. With a “Fast Track” record like that, you must be a close relative or in-law of Wayne’s. ;)

No, not related, that I know of. I do have the background and enthusiasm needed to help make sure an online community can thrive. Ever since I started lurking here, years ago this has been one of my favorite online hangouts.

I hope that I can exceed the expectations of the site administration and members during my service here.

At the next CincyMPG met-up, we will use the Aveo for our FE Challenge. We will report back with the numbers.

I hadn't thought of using it at the next meet. I was going to give you a call sometime and be like "Let's see what the Aveo is worth." But the meet would work just fine.

This is a related tangent: coal provided a larger share of our energy than it does today. Mining is dangerous, Google News to find accidents in other countries. :(

While mining became more automated, labor costs were still greater than in the oil industry, so by the 1950's this put coal at a disadvantage

http://en.wikipedia.org/wiki/United_Mine_Workers_of_America

Dear Detroit,

I would actually pay a PREMIUM if you could build a vehicle as low cost to operate and reliable as Honda or Toyota.

My HCH2 should be ready to sell/replace in another 4 years or so. I look forward to seeing what you offer by then.

Best,
SpartyBrutus

Dear Detroit,

I would actually pay a PREMIUM if you could build a vehicle as low cost to operate and reliable as Honda or Toyota.

My HCH2 should be ready to sell/replace in another 4 years or so. I look forward to seeing what you offer by then.

Best,
SpartyBrutusFor years, Detroit has told us there is no money in sedans and dissed hybrids as money losers, then good PR as recently as 2006. Now they realize they may not have enough time to catch up to Toyota.