I've been watching the whole world economy implode and I've been thinking a lot about how England used to have like 97 different car companies at one time and now have like four. The idea that the big three could die off or become big faceless, soulless conglomerates is disheartening. I'd hate for that to happen to you guys.
So I've come up with a solution to this problem: Cut car prices in half for everything except high end super and luxury cars.
2010 Camaro? 11 grand. Base Cobalt? 7 grand. And so forth.
Sounds at first like a plan to go bankrupt, but the fact is that car companies make a ton of money on maintenance costs and replacement parts. Every dollar someone spends on a used car or a local mechanic, is a dollar the big three lose. They gotta get asses in new cars.
The reason that car companies have been going south is simply that buying a car has become so expensive that nobody buys something on the basis of advertising and looks, they buy it for quality and refinement. Two things that are insanely expensive to devellop compared to just making something look cool. Literally, what we're seing here is a collective action problem. Where the companies have painted themselves into a corner. They need to spend money like crazy to build cars that they can sell for a lot of money so they can afford to have designed them in the first place. This is not a sound business choice, this is slow suicide.
Some cost cutting measures that could be implemented right now are offering only basic warranties and have extra warranty stuff be an option. Then, while you're at it, cut back the gajillion luxury options in cars. 4 wheels and a seat is just fine for some people. It'll also save when you build cars. Another cut that could be made is to eliminate the four year model cycle. Make it an 8 year cycle for some models that are "eternal" anyway like ponycars or basic economy cars or trucks. Think Porsche didn't save a gajillion dollars offering almost the same 911 from 1963 to 1994? Wasn't the Silverado just fine between 1973 and 1987? Sometimes fiddling with something is like playing with yourself. If you touch it too much it just drops off.
I know what I suggest is radical, but it does have a precedent in the electronic sector. Remember when a TV cost as much as a car and carried like a 5 year warranty? Now you have one year and it costs slightly more than a good toaster. Why not cars too?
it doesnt work with cars because they would be hemorrhaging money and not making any back
and the electronics/tv analogy doesnt even come close to working because the cost of electronic parts has dropped drastically over the years and the technology has become light years better. A lot of parts on cars have not gotten cheaper, and they add more stuff to cars all the time. The only thing they add to TVs really is ports for cables and the occasional DVD player. Cars get far more things added for safety and convenience
I completely agree that a 10 to 8 year cycle are all you need. we don't need a new car every 4 years...it's a waste. Build the same car for 8 to 10 years and just improve and refine it. That's what BMW did with the 80's era 3 series...and they did quite well with that. And yes the should offer "bare bones" cars 4 wheels, and A/C, but car companies are greedy they won't sell those because the profit on them are low.
"Formerly known as Jammit - JBO member since 1998" JBOM | CSS.net
Jookycola wrote:I completely agree that a 10 to 8 year cycle are all you need. we don't need a new car every 4 years...it's a waste. Build the same car for 8 to 10 years and just improve and refine it. That's what BMW did with the 80's era 3 series...and they did quite well with that. And yes the should offer "bare bones" cars 4 wheels, and A/C, but car companies are greedy they won't sell those because the profit on them are low.
It's not what car companies want, it's what people want. I had a '07 Cobalt LS, bare minimum with nothing added and I was fine with it. However, when I tried to sell it, nobody wanted it because it was 5-speed with no options.
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7 grand for a new cobalt? guess what most people would do when the engine or tranny would go out after a few years.......? yep, buy a new car.
sure, there's money in dealer maintenance, but how many people bring their cars to the dealer after the warranty is expired? only those who can afford it and usually only on higher models. its not worth bringing a cavalier or cobalt into a stealership when they charge 2-3x what a regular mechanic will. so dropping the prices on the initial buy wont do jack except make cars expendable again.
what needs to be done is to get rid of the unions. that lowers prices for the big 3 drastically. then they can undercut imports and compete with domestically made foreign cars. then from there they need to have more option packages. and by that i mean offer the most base model car possible rather than trying to cram them full of options and charging more for them. also, lower the dealership maintenance costs so that more people can afford to go there and that will make them much, much more competitive with local shops.
lets see if i can add any thing
jappan Europe socialized medicine goverment pays the bill less burden on mfg
Retirement
Lots of Americans grand parents are still being paid by the big 3
Pay
American mfg pay union wages
toyota the crown jewel of media pays 14 dollars an hour to Americans ( O yeah)
Jookycola wrote: And yes the should offer "bare bones" cars 4 wheels, and A/C, but car companies are greedy they won't sell those because the profit on them are low.
that's not true. The companies have to stick to an average MPG rating or they get hit with huge fines. Every single car they make gets thrown into that average. If the company offers a gas guzzler performance car they need to sell a few cheap bare bones economy cars to average out that 1 sport car. Its true the low end cars make very little profit for the company but they need them in order to sell the big engine, high end, high profit cars.
Edit- this is how it was a few years back, I haven't looked into it since but as far as I know this still applies
Edited 1 time(s). Last edited Sunday, October 19, 2008 8:55 PM
carnovirous mouse
Quote:
Pay
American mfg pay union wages
toyota the crown jewel of media pays 14 dollars an hour to Americans ( O yeah)
BS.
Maybe to their janitors.
Here in Canada Toyota's line workers make around 26 bucks an hour. Pretty much the same as the CAW after they pay their union dues etc.
Willem wrote:carnovirous mouse
Quote:
Pay
American mfg pay union wages
toyota the crown jewel of media pays 14 dollars an hour to Americans ( O yeah)
BS.
Maybe to their janitors.
Here in Canada Toyota's line workers make around 26 bucks an hour. Pretty much the same as the CAW after they pay their union dues etc.
Go to Japan, where the majority of Toyota units are built, and see what they pay their workers ...
Two words.
Slave Labour. People have, and continue, to die on their production lines. It is all over the media.
Toyota has the cheap labour advantage.
PS - this entire thread doesnt make any sense.
Jinxed:
Quote:
Toyota directly employed around 34,675 people in the United States, invested USD $15.5 billion, produced 1.2 million vehicles using US and foreign auto parts, sold 2.54 million vehicles, and donated USD $340 million to nonprofits. It has in total 10 plants, USD $2.9 billion per year payroll, purchased USD $28 billion in parts and supplies from 30 states. It created around 386,000 jobs in the United States as result of Toyota's spending and demand from suppliers. It celebrated its 50th year anniversary in the United States in 2008.
Half the cars sold in the US are built in the US. And this is not including the vehicles built in Canada, where there is two more plants, one in Cambridge, and one in Woodstock where they build the Corolla, Matrix, Rav4 and the Lexus RX330, RX350.
As for those people dying on production lines.... there was one, last year, he was an assistant manager, so not a production worker, and he was working about 70-80 hours a week for a year or so.... My dad and my brothers have been working more than that for years....
^^^ also... GM, VolksWagen and other companies build cars in Mexico and other 3rd world countries, so it's not like Toyota is the only one with the cheaper labor rates.
Well, when I buy my next car(next spring) there's a 99% chance it won't be american and a 100% chance it won't be new.
