Pressures have been building for a long time and big changes seem close at hand in the auto industry, a bell-weather indicator of US manufacturing.
"We've been ahead 73 years in a row, and I think the betting odds are we'll be ahead for the next 73 years."
Japan came on strong in the 1980's with quality. Detroit ignored the changes and the customers and it took Detroit decades to catch up. In the late 1990's Toyota and Honda spearheaded hybrids and high mileage vehicles. Again Detroit ignored the signs and customers and now is trying to play catch up. But given the advancement of globalism, will it be able to catch up again? I would say that things look pretty grim for GM.
Toyota Maps Plan To Displace GM As Top Car Maker
Challenger Revamps Models, Boosts U.S. Manufacturing As Detroit Faces Struggles
November 19, 2005
Toyota Motor Corp. is making a big bet that it can ride a host of new models past struggling General Motors Corp. next year to become the world's biggest maker of cars.
Late next month, when the Japanese auto maker unveils its 2006 targets, it could set the ambitious goal of producing as many as 9.2 million cars, say people familiar with the plan. That would be an 11% leap from the 8.28 million cars Toyota expects to make in its current fiscal year, which ends in March.
GM -- which has been the world's No. 1 auto maker for more than 70 years -- has not outlined its production plans for 2006. It has projected it will build 9.1 million cars this year. GM sold 8.99 million vehicles in 2004, a 14% share of the world-wide auto market. Ford Motor Co., the world's No. 3 auto maker, sold 6.98 million vehicles world-wide.
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GM has long made being No. 1 central to its culture and its business strategy, counting on its massive size to help it recoup the billions spent on development and to help it open new markets. Last January, GM Chairman and Chief Executive Officer Rick Wagoner dismissed speculation that GM could fall behind Toyota, saying, "We've been ahead 73 years in a row, and I think the betting odds are we'll be ahead for the next 73 years."
But since then, his plans for GM have been derailed by falling sales of high-profit SUVs in the U.S. market and rising costs for U.S. health care. While GM is growing in some markets, notably China and Latin America, and has stabilized its European sales, its gains have been more than offset this year by declines in North America.
GM's debt is rated at junk status and its stock is trading near its lowest levels in more than a decade -- its shares were up $1.42 at $24.05 in 4 p.m. New York Stock Exchange composite trading yesterday. Mr. Wagoner is gearing up for a round of potentially deep cuts in North American production capacity and manpower in an effort to reduce costs and restore investor confidence. GM has said it plans to cut 25,000 of its 181,000 U.S. workers by 2008, and has signaled it will announce a broader restructuring plan soon.
"I know, we are blessed but it has felt like a slow death"
Greenspan recently talked about how market forces will make changes that government policy cannot. This article takes a look at the changes those market forces are making to American families.
A Middle Class Made by Detroit Is Now Threatened by Its Slump
Henry Ford's Gold-Plated Pay Belongs to an Older Era;
Realities of Globalization The Brown Family Takes Stock
November 14, 2005
COOPERSVILLE, Mich. -- Chris Brown needs to have a talk with three of his kids before the end of the year. He plans to tell them he probably won't be able to help pay for college anymore.
Mr. Brown, 47 years old, earns $26.09 an hour working the midnight shift at Delphi Corp.'s plant here, assembling fuel-injector parts. His pay, combined with generous health benefits, afforded his family a comfortable, middle-class lifestyle with enough left over for extras. But the troubled auto-parts maker -- which filed for bankrupty protection last month -- is restructuring and Delphi's U.S. factory workers will likely see their total wage package cut in half or more.
Mr. Brown doesn't have to look far to see what his future holds. His younger sister, Penny Austin, had a similar conversation with her children in late 2003 when her employer, auto-seat maker Lear Corp. slashed her pay to $18.64 an hour from $26.40. It also cut her benefits. "Christmas won't be the same anymore," she recalls telling her two kids. Mrs. Austin, 35, the family's biggest breadwinner, recently learned that Lear plans to close her plant. Another Lear facility nearby may be hiring -- at $12 an hour.
For earlier generations of auto workers, these jobs were more stable, better paying and came with gold-plated benefits. One beneficiary is the siblings' father, Adrian Brown, 72, who retired from General Motors Corp. after a 32-year career there. Under a recent deal between GM and the United Auto Workers union, he'll have to pay premiums on his health care for the first time.
"I don't want to complain because I will still be able to afford my house," says Chris Brown, sitting in his living room across from his sister. "I know, I know, we are blessed," she interrupts, as tears roll down her cheeks. "But it has felt like a slow death between the pay cut and now this with the plant." As she talks, tears well up in Mr. Brown's eyes, too.
