More damage control propoganda from Detroit:
GM: Brace for more cuts
General Motors warned of more cutbacks after the company capped a disastrous 2005 by reporting on Thursday an US$8.6-billion loss for the year, the second-largest loss in the history of Detroit automakers. The larger-than-expected loss raised more concerns among GM's executives and workers about the automaker's shaky future and sent the automaker's already battered stock down 3.35%. Ceo Rick Wagoner said 2005 was "one of the most difficult years in GM's history." He said the automaker will have to chop beyond the health care concessions reached with the UAW in October, and November's plan to idle a dozen plants and cut 30,000 jobs in North America by the end of 2008. "We need to continue to lower our overall manufacturing costs," Wagoner said. GM also needs to cut the "huge legacy cost disadvantage burden," he said, referring to the health care and pension benefits paid to more than 1 million retirees, a cost foreign automakers don't face. Wagoner and other GM executives did not specify what those cost cuts would be. Analysts who follow the industry say they are concerned GM's problems are not over. "We believe that Kerkorian's presence has ratcheted up pressure on GM management to restructure the business," Merrill Lynch analyst John Murphy said in a report to investors Thursday. Regardless of what Kerkorian does, "we believe that things are going to get worse before they get better," Murphy added.
(Detroit Free Press 060127)
Lay them all off! Shut everything down! Move operations to Myanmar or Cambodia ASAFP!!!
Ford ad gambles on family imprint: 'Rebirth'
This past Monday, William Clay Ford Jr., ceo of Ford, made his case to employees, analysts, and the media for how his company could survive. Then he planned to start making that case to consumers. Whether they will buy it is another issue. In a new television commercial Ford timed for broadcast just two days after it said it would close as many as 14 factories and cut up to 30,000 jobs during the next six years, Ford says his company is "determined to retake the American roadway." The ad, titled "Rebirth," echoes much of the restructuring plan the company presented and candidly acknowledges the company's recent difficulties. Details of the plan continued to unfold on Tuesday as Ford shook up its top management ranks. Its chief marketing and sales executive, Stephen Lyons, and its head of investor relations, Barbara Gasper, will both leave the company, Ford said. Ford also eliminated four corporate officer positions and shuffled other high-ranking managers. Anne Stevens, Ford's coo, said if Ford was to overcome the perception it was not doing enough to address its problems, candour was the best way to do that. The 30-second commercial will appear on national television and in some select markets, including Detroit, New York, and Washington, during the next three months. There are no plans to air the ad in Canada. But analysts said the commercial, intended as a marketing component of its restructuring plan, was risky because it reminds consumers of Ford's problems even as it asks them to buy Ford vehicles. This is not the first time Ford, the great-grandson of Henry Ford, has taken up the role of company spokesman. His first starring role in Ford commercials was in 2002, shortly after he became ceo and began his first corporate turnaround plan. Those ads, titled "Ford on Ford," featured Ford talking about his family's imprint on American culture.
(National Post 060127)
I think the North American car companies have shown once again that they are incapable of competing in the world marketplace. Everytime there's an economic downturn, the car manufacturers and airlines are seemingly always caught holding the hot potato. It's inevitable that they either have to close up shop or move somewhere where their capital expenses are lower. Either way, rising out of the ashes like a phoenix 'rebirth' is not an apt metaphor. It's more like a zombie that gets hacked up again and again, but never dies. It just keeps coming back to try to kill you and your loved ones over and over again.
As for my take on Ford's imprint on American culture, well, they've certainly been successful in convincing everyone that the independent, free-driving lifestyle is the norm of affluence, success, and power and always will be. That car ownership = independence = American Dream. Admittedly, they are only partly responsible for the environmental devastation, societal stresses, and resource shortage problems we are already witnessing but about to see become much, much worse. They should be held completely culpable for those things that can be directly attributable to them. Everyone is about to see that their 'imprint' was a ruse and tenuous fabrication.
5 comments:
I can't say that I have studied this very in-depth.
But what can be done to counter this trend?
A Japanese friend of mine who follows this sort of thing closely would typically say something like "perhaps American automakers could stop making cars that suck...?"
Of course, his gripe was about the general disparity in quality between foriegn and USA automakers.
I'd like to think that if... the North American makers, could be convinced into producing a variety of fuel efficient cars, or hybrid/alternative fuel cars...
(or heaven forbid, research renewable lubricants/fuels made from organic and/or certain kinds of waste matter!)
...then perhaps these companies might have a chance of staying competetive.
That is, stop flooding the market with the same inefficient designs. And market the new designs in a way that makes Mr. and Mrs. Fatass want to "do the right thing" and buy a more efficient vehicle.
And then there is the whole foreign production issue. Yup, it is probably cheaper to build a car in some third world country where you payoff the local governments and pay the locals pennies on the dollar for what North American labour would cost.
Unfortunately, all the average Joe Workers who will be caught under the Axe of the Bottom Line are going to eat some pain before this is all through.
In all fairness to NA automotive manufacturers, Japan doesn't allow automotive imports. They can sell their cars here but we can't export over there. Would that really make that much difference? Probably not but it would have certainly taught them what it takes to sell cars to a Japanese market and seeing as how we're all buying Japanes, that could make a huge difference.
In then end, I say fuck 'em. The automotive industry is the second most evil in the world, a close second behind oil & gas.
The NA manufacturers have been so busy either buying up smaller, high-end companies (like Jaguar or Land Rover) or retooling their entire infrastructure specifically for building stuff with a huge profit margin (like SUVs), or volume creationnn of crap to flood the market with (think Sunfire or Ford Tempo), they've completely lost the ability to be agile in a global market. Good point, Experience on the Japanese protectionism, but the NA manufacturers can sell under Mazda or whatever in Japan, and they do have full access to the European market. Their business plan was based on costing with the zero-down, no interest programs which made their products look even shittier. They shot themselves in the foot. They either didn't read the NA driving public properly, or simply refused to follow the trends.
And yes, the MARKETING of said products is a huge variable to do with it too, no doubt. Very powerful stuff, the ability to affect mindsets. Stop with the "nature calls, time to hop in the Hummer and climb up the side of the mountain" marketing schemes. I'd like to think the NA consuming public is smarter than that, but even if they are just sheep, they'll suck in any message Detroit sends at them. Hopefully they'll start doing the right things if it's not too late already.
The open-the-Japanese-market screed is the most common argument of the unionists around here - I live near Ford's St. Thomas plant. It was reduced to one shift as part of this latest wave of cuts, and it could very well be shuttered entirely next time out.
I've written extensively about this issue - both on my blog and in my column for London's daily paper. It's the most concrete example yet that times have changed, and the old ways of the Big Three will never be seen again.
Anyone who has issues with that is pretty much deluded. I'd like to welcome them to the new world.
Great blog, BTW. I'm enjoying your thought-provoking entries. Nice to meet another Canadian in blogland, too.
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