"J. R. Carroll" wrote in message
om...
If you think that GM is tanking because of their labor contracts or
pension
obligations you are just plain wrong. They suck hind tit because their
business model if for ****.
So you're saying they can absorb $1,500/car just by having a better
business
model than Toyota or Hyundai?
No, they can do that by properly understanding and then delivering to
their
market. This is what they are utterly failing to do.
The difference in price between a Hyundai built in Arkansas and a GM
product
built anywhere is much more than 1,500 dollars.
As a percentage it's about half.
Hyundai understands the market pretty well, too. In fact, I bought one last
September, after trying out all of the Japanese and American competition.
The Europeans offer no competition in that market. Any European car that's
technically competitive costs $10,000 more, at the minimum. My Hyundai
Sonata is a hell of a car for the money, and 'way ahead of anything
comparably priced -- in other words, anything in that market.
The next day I bought a Ford Focus ZX3. It's another good car for the buck,
although the bottom-end Civics probably are better overall. I just liked the
handling and performance; with its 2.3-liter engine, it will stomp any
Civic. g I consider it a good buy, though, and not bad for an American car
built in...Mexico.
And then, after gaining a $1,500/car advantage
over them simply through smarter organization, that they can maintain
that
advantage in a viciously competitive global market?
They do not gain any advantage with a reduced price and shouldn't try.
Good
value is critical in purchasing but you are talking about racing to the
bottom and that is the stupidest thing I have seen in recent times. It
does
not work.
What does work? Are you suggesting that GM can dope out the market better
than Toyota, Honda, Nissan, Audi, etc.? How would they do that? Are they
somehow smarter?
I don't think they're smarter. Since all of those foreign car makers have
good American marketing people to serve the US market, I don't think GM has
any greater knowledge of the market or greater insights into what people
want.
So, what's left?
These are all fine assertions, John, but I'd like to see the specifics.
Frankly, I don't believe you can "business-model" your way to success
when
you have the kind of legacy overhead that GM has. That is, unless your
business model is based on moving all of your manufacturing offshore and
abandoning your legacy entitlements to the federal government.
Just the opposite in most respects. You are smarter than this Ed.
I thought I was until I spent a year of research in preparation for the
5,000 word articles I wrote about China trade a couple of years ago. Now I
realize we're living on a heap of wishful thinking and baloney.
Any advantages we have are going away very quickly. In fact, our
multinationals are shipping the advantages offshore as fast as they can. I'm
waiting for the Milton Friedman dollar devaluation, but there will be hell
to pay if and when it happens. The recent devaluation ain't it.
Ed,
I am unable to continue this for the rest of today but I will.
I read what you have written about global markets and manufacturing. The
questions and their answer are largely contained in your own work and the
underlying research behind it. The need to present fresh facts doesn't
exist. There aren't really many fresh facts regardless. A fresh
perspective
is the key, as I said. You answered, intelligently I might add, the wrong
question. Your work revolves around looking like a top notch vendor. This
is
certainly necessary but it is also the WRONG WRONG WRONG perspective.
I get paid big bucks for this Ed and have yet to see anyone who will truly
embrace what I provide as a service fail to flourish . I also have enough
confidence in the results that I only take equity. I also, except once and
not directly, don't do "turn arounds". My advice under the turn around
scenario has consistently been "Get Out and do it Now".
When you get some time, John, it would be good to hear more about what
you're saying. It's one of the most important issues in metalworking today,
if not THE most important issue.
The five dollar ratio to costs was 6 percent and we knew that percentage
very precisely.
Well, 8% was reasonably close, then. d8-)
--
Ed Huntress
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