The Big 3 are digging out of the hole
The last 10 years have felt like one big kick in the groin if you're in any way associated with the old "big 3". Market share has swung ridiculously from one side to the other. Toyota is poised to become the top dog globally and appears to be ready to supplant Ford as the US number two by year end. Ford, BTW, has held the crown of number two since 1928!
Chrysler has been owned by the Germans for about a decade now, and for the most part they've held their share ground. So what if they've got inventory stashed all over the state of Michigan. At least they're putting up the good fight. Revenues are drying up again also and it seems like 2007 will be another year of cuts.
GM had the worst 2005 imaginable with 10.6Bln in loses, a Delphi strike, and some serious retail market share loss. 2006 looked MUCH better. They are eeking out some small profits and all their new products look great. The 2008 Malibu is a great example of what GM can do when they try. And look at Saturn! Oh my, the whole brand will be turned upside-down within 24 months! That is truely amazing.
Ford's 2006 mirrors GM's 2005. Almost 40,000 buyouts from the UAW will cost them billions. Share declines are staggering, especially since Mark Fields was quoted saying that the company's share loss was slowing and stablizing. I don't know what he thought was going to happen when all those rental Taurus models were done coming off the line.
The two biggest reasons for excitement for the ole big 3 are:
- Changing of the guard
- New products look competitive
New Management: Look at what happened at Ford. Billy Jr. had the audacity to fire HIMSELF. He replaced himself with Alan Mulally, a man that drove a Lexus and doesn't give a damn for excuses. At GM Rick Wagoner has looked like a real CEO stud, and he had a better year than Carlos Ghosn. DCX seems to be tightening the neuce on LaSorda and company. They won't except much more failure than what they got in 3Q 2006.
In addition to the changes at the top, the big 3 have shed over 100,000 union jobs in the past couple of years. They're digging out from the Visteon and Delphi messes and they're getting most of the big hurdles behind them. The 2007 contract talks will be all that is written about between about June and September, and the UAW is more likely to lend a hand than ever before. Wages aren't the biggest obsticle, health care is. It will be adressed to some extent come September.
Product is king in the automotive business... the biggest reason why Toyota has been kicking Detroit's butt lately. Slow product launches by the likes of GM and Ford illustrated all too painfully that market changes necessitated more speed and better quality. The 2004 Malibu and 2005 Five Hundred are perfect examples. Had the Five Hundred come out in 2003 as it would have in the Toyota process, it would have been a huge hit. By 2005 it was an also-ran with poor interior materials and a staid look.
Take a look at what's recently come down the pipe. The Edge, Outlook, Nitro, Fusion, and Aura are all world class. They look great and their launch quality is leaps and bounds better than what they were even 3 years ago. The recent production-leaning concepts announced in advance of the 2007 NAIAS look great. In 2003 when the 427 was unveiled the public begged for production. But with an expensive LS platform and expensive and underperforming engine choices available, the car would have costed over $40,000 in full trim. I'd rather have a Lexus or Caddy. The Lincoln MKR, meanwhile, while only a concept will have an affordable, mass-market Mustang chassis and a very economical 3.5L engine. Even with the twin-turbo getup you can see the Peter Horbury beauty costing between $40k-$50k. That's with Ford making a nice profit on the vehicle, too.
GM has some tricks up their sleeve too. The Australian Zeta program is said to be the RWD platform that will give us a bigger, more luxurious Impala that will give us much better performance and style than the current model. Dito for the new GTOs and Camaros that are rumored for the next year to year and a half.
It's easy to see where Detroit is peeking out of their little holes in the ground, but there's a long way to go till 2008 and beyond... lets hope they can keep digging and not get buried.