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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (23542)	10/17/2009 4:49:51 PM
From: Metacomet	Read Replies (1) \| Respond to of 71475

I think the marketing advantage was won by the Japanese as a result of better market research. They learned early on the advantages of having potential customers comment on their offerings. I remember, I think it was Honda, but might have been Datsun, sponsoring customer workshops in the LA area, in the mid 1960's, where they actually paid a few dollars to folks to come in and provide feedback on their vehicles. The American manufacturers used a business model of here it is, take it or leave it. Eventually the second option prevailed..... Quality was certainly an issue early on, but I agree that that gap has been closed.

To: robert b furman who wrote (23542)	10/17/2009 6:13:39 PM
From: GST	4 Recommendations Respond to of 71475

<For those who know more about the car business.I'd love to hear from them.> Bottom line: A lower dollar won't solve any of GMs problems. My knowledge is from the manufacturing side - and there I can say that currency cost differences are dwarfed by other factors. Currency makes a difference in the short term if changes are large and abrupt. But slower changes pose few major problems for the kinds of multinationals that characterize the auto industry. A change of 5 to 10% over a period of years is of no concern to a well run multinational company. As to 'quality' being equal -- don't compare the quality of the car, compare the quality of the company. When one loses money and the other one makes money they are not 'the same'. If you have 2 car companies and both sell a vehicle at retail for $20,000 that holds up equally well in the hands of the customer it is silliness to think the companies are "equal" when one loses $1,000 per vehicle (GM) and one makes $1,000 per vehicle (Honda or Toyota) on cars that are both assembled in the US. The yen is a smaller driver of costs than assembly, and assembly is a smaller driver of costs than design engineering. Toyota and Honda have been superbly run manufacturing companies for decades. Toyota equalled GMs productivity levels way back in the 60s and never looked back as GM was stuck in the mud from a productivity standpoint trying brainlessly to automate their way out of dismal productivity levels. From where you sit as a dealer you might not notice that the company whose products you sold was losing money -- but you must have noticed that they were getting killed on market share. Compared to the big three factors -- management, design engineering and assembly -- currency has over the decades been at most a minor issue for the auto industry. When GM has the management talent and the design engineering capabilities of Toyota, then we can talk about things being "equal". As we go forward the news will get worse -- there are car companies emerging all over the world that are aiming to put GM back into its grave. GM is going to have to get much better fast to survive the next onslaught of global competition.