Five reasons why American car sucks!

1. Utter lack of anything even remotely resembling a quality product (employee discount or interest free car financing can only woo certain car shoppers).
Sure, you can buy just about ANY new car or used car from any car dealer in Toronto, including the worst car from overseas and it will look good when compared to whatever domestic car which is considered to be a comparable competitor. The average quality of the American car like Chrysler, Jeep and Dodge all have fallen that much in the last few years. I remember making fun of cars like Hyundai and Kia who now produce cars that make offerings from Ford and GM look like a joke. Don’t believe me? Compare for yourself, take any run-of-the-mill Ford Fusion (Taurus?) product and compare them side-by-side with something like a Hyundai Sonata. It’s no contest, the Hyundai is better on every count, from the standard options to the fit and finish. Whatever you do, don’t even think about comparing a domestic car to something from across the pond! This situation gets even worse if you begin to compare features and what you get for your money on a domestic auto. Its no wonder both GM and Ford are circling the drain with such poor quality products nobody wants.

2. Designs that try to look smart, but end up looking cheap.
Another one of my major per peeves, the strange designs that seem to just randomly appear in Chrysler, Dodge Jeep car dealer in Toronto. Ever seen a Pontiac Aztec? If so, then you know exactly what I mean. Even more recently I had the unfortunate experience of getting a Cadillac CTS for a rental car and all I can think after a short ride is “how can this possibly be a 30k car…”. The interior (we won’t even talk about the exterior) is typical domestic flare featuring acres of cheap plastic and dash that I can only describe as “bulbous”. I have no idea what the American automakers are thinking, that we are deaf dumb and blind? If they keep producing designs that are nothing but boardroom exercises in how to share components between models then they deserve what they are getting, no sales.

3. Trying to use gimmicks to sell cars vs. just making a better car.
The big question American automakers need to ask is why do folks keep buying Toyotas and just about any foreign cars when they often don’t ever have any rebates or “sales”? The answer to this puzzle is quite simple. These successful brands are producing cars that are both a good quality product and something the consumer actually wants. Back in the day Toyota learned that in order to compete you needed to have a top quality product first, and solid designs that generated interest on the part of your target audience. This concept seems to completely escape the grasp of domestic automakers. They keep trying gimmick after gimmick after gimmick to try to lure buyers into showrooms. I understand that there are some cultural hurdles to overcome in both the manufacturing and marketing end of the domestic markets but that is really no excuse when you are facing tough times like what Ford and GM are going through.

4. Think that just by putting a Hemi in it all your problems will go away.
Everyone loves more horsepower, especially when it comes at a cheap price. Unfortunately that’s not the whole story. Sometimes slapping a high-output engine in a less-than quality body ends up in a product that tanks faster than the Titanic. Cars like the Dodge hearse…err I mean Magnum are interesting for a little while but quickly wane in favor of something with a bit more usability and style. Of course Dodge is not the only make to suffer from this problem. You can find the same “just add more power, and they will buy it” mentality at both Ford and GM with respect to slow selling models.

5. If you ignore the hybrids they will just go away.
I really have a hard time grasping how the domestic carmakers could just sit by and watch Toyota and Honda build hybrid cars and not know they were about to get pwned. I mean really, like a hybrid was not going to sell like a supermodel on a street corner. I can only wager to guess just how much cringe-factor must be going on at Ford, Chrysler, and GM boardrooms right now, and if you ask me….they deserve it.

By the Headless Vector

Cars and Trucks and Vans, Oh My!

G.M. Loses $15.5 Billion in Quarter

DETROIT — The General Motors Corporation reported a stunning second-quarter loss of $15.5 billion on Friday because of a dramatic decline in United States sales and charges for job cuts, plant closings and the falling value of trucks and sport utility vehicles.

G.M., the largest American automaker, said it lost $6.3 billion on operations in the quarter that ended June 30, and its worldwide revenues fell 18 percent.

But the company’s overall loss was inflated by $9.1 billion in special charges that included $3.3 billion for buyouts of hourly workers and $2.8 billion related to the bankruptcy filing of its former parts unit, the Delphi Corporation.

The dismal earnings reflected the impact of steadily falling vehicles sales in the overall United States market, and a huge shift by consumers away from the trucks and S.U.V.’s that were once G.M.’s most profitable vehicles.

The automaker’s shares plunged in early trading, falling 97 cents, or almost 9 percent, to $10.10 at 10 a.m.

G.M.’s chairman, Rick Wagoner, said Friday that the charges to scale down the automaker’s work force and manufacturing operations were critical in its restructuring.

“As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting rapidly to the challenges facing the U.S. economy and auto market, and we continue to take the aggressive steps necessary to transform our U.S. operations,” Mr. Wagoner said.

Overall sales (according to Toronto 0% car financing andn used vehicle financing in Brampton) as in the United States dropped 10 percent in the first six months. Automakers are scheduled to report their July sales later on Friday.

But while weak economic conditions and falling sales have affected nearly every automaker, Detroit’s three car companies have borne the brunt of the slowdown.

Last week, the Ford Motor Company reported a loss of $8.7 billion as it took big write-downs on the values of its North American truck plants and its inventory of used pickups and S.U.V.’s.

G.M.’s second-quarter results were worse than projected by analysts, particularly its performance in its core North American market.

The company lost $4.4 billion in North America in the period, and its revenues dropped 33 percent, from $29.7 billion to $19.8 billion. That compared with a profit of $92 million in the quarter a year ago.

While G.M.’s vehicle sales in North America fell 20 percent in the quarter, the company’s international sales grew 10 percent.

Last month, as investors speculated openly about the possibility of G.M.’s filing for bankruptcy protection, the automaker announced broad plans for further cost cuts, asset sales and debt offerings to improve its liquidity by $15 billion.

In its second-quarter report, G.M. said it had $21 billion in cash reserves and access to another $5 billion in credit.

But the automaker is burning through about $1 billion a month in cash as it tries to keep financing new product programs amid falling sales and revenues.

G.M., like its Toronto Ford dealership and Chrysler, was surprised by the abrupt shift to smaller, more fuel-efficient cars.

As gas prices rose above $4 a gallon, sales of G.M.’s large pickups and sport utility vehicles declined sharply in a market that was already trending downward.

While its overseas operations continued to perform well, G.M.’s United States sales dropped, and the company’s inventories of unsold trucks forced it to scale back production in the United States dramatically.

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In June, Mr. Wagoner said the company would close four assembly plants making pickups and S.U.V.’s by 2010 and slash 500,000 units of vehicle production.



And in a move that symbolized the end of the S.U.V. era, Mr. Wagoner said that G.M. had begun a “strategic review” toward a likely sale of its Hummer brand.

Besides cutting truck and S.U.V. production, G.M. also announced plans to add third shifts at two plants to increase the output of smaller cars.

The automaker stepped up its cutbacks in the United States by offering another round of buyout and early retirement programs to its hourly workers. About 19,000 workers — or a quarter of its unionized work force — accepted the offers and agreed to leave the company.

But even as G.M. kept cutting, speculation grew among investors this summer that the automaker was running dangerously short on cash reserves.

With G.M.’s stock dropping to $10 a share and analysts suggesting G.M. might file for bankruptcy protection, the company announced another round of cost cuts in mid-July.

G.M. said it would bolster its liquidity by $15 billion through a combination of cutbacks, asset sales, and debt offerings.

On July 15, Mr. Wagoner outlined a plan that included a 20-percent reduction in salaried personnel costs, the elimination of health-care coverage for white-collar retirees past the age of 65, and cuts in advertising and marketing budgets and capital expenditures.

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Cars and Trucks and Vans, Oh My!