| We've already stated our belief that that
| |
| | share, and we see continued declining
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| 2007 will see Americans buying several
| |
| | market share. The Chairman has verbalized
|
| hundred thousand less cars than they will
| |
| | nothing that deals with the issue of
|
| purchase in 2006. We are looking for 16.8
| |
| | quality, and upgrading the consumer's
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| million vehicle sales this year. Let's
| |
| | consciousness to consider GM cars when it
|
| get into the numbers, and see what the
| |
| | comes to quality. Even Mercedes marvels
|
| implications are. When you, or I buy a
| |
| | at Japan's ability to produce the quality
|
| car for our personal use, we pay on
| |
| | they do for the dollar it costs. Mercedes
|
| average about $25,000 per car. The car
| |
| | doesn't understand how Japan does it at
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| rental companies in the United States
| |
| | their price points.
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| purchase more cars than any other group.
| |
| | We took a close look at Ford (where
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| They buy American cars, and pay an
| |
| | "Quality is number 1", and "Ford has a
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| average of $15,000 per car. We don't see
| |
| | better idea"), and found their
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| any big profits from this market segment.
| |
| | restructuring plan isn't substantial
|
| Let's look at the dealerships, and sort
| |
| | enough to get the job done. They call it
|
| out how the Japanese do against the
| |
| | the "Way Forward Plan". We call it the
|
| Americans. A Chrysler dealer last year on
| |
| | "Lost in the Wind" plan. They are taking
|
| average sold about 225 cars. If you were
| |
| | total charges of $3.4 billion in 06. They
|
| a Ford dealer, you averaged almost 700
| |
| | expect to be profitable in 08, why, we
|
| cars per dealer. GM's Chevrolet
| |
| | ask? What's going to change between now
|
| dealerships came in under 650 cars per
| |
| | and 08? They believe they can save almost
|
| dealer. Would you be surprised to learn
| |
| | $6 billion in costs. We don't see it, and
|
| that Toyota sold more than 1600 cars per
| |
| | if they were able to do it, don't you
|
| dealership last year?
| |
| | think Japan would jump on the bandwagon
|
| Now you know why American car dealers are
| |
| | and do whatever they have to do to drag
|
| complaining and going out of business. In
| |
| | their already low costs lower.
|
| the last year GM lost 200 plus dealers
| |
| | Did you know that when GM, or Ford
|
| while Ford lost 40, and Chrysler lost
| |
| | produce an interesting car, Japan buys
|
| more than 110. This is happening on our
| |
| | the car immediately, rips it apart, part
|
| home turf, folks. This is not the
| |
| | by part in Japan, and than takes any
|
| Japanese and the Americans slugging it
| |
| | interesting technology and applies it to
|
| out on European soil for control of
| |
| | their cars almost immediately. Japan can
|
| European markets. This is the American
| |
| | put out a car in one-third the time it
|
| consumer choosing to buy Japanese over
| |
| | takes GM, or Ford to design a car by
|
| American made products on American soil.
| |
| | committee. South Korea can go from design
|
| People are voting with their feet.
| |
| | to showroom in even a shorter time span.
|
| Here's the next big question. If American
| |
| | Ford's restructuring efforts in our
|
| car dealers are closing their doors at
| |
| | opinion are clearly overstating the
|
| this rate, what kind of shape can the
| |
| | bottom-line results. We see a headwind
|
| rest of them be in? Can the owners be
| |
| | coming, where Ford thinks it's got a
|
| putting big bucks into their dealerships
| |
| | tailwind at its back. It's going to get
|
| while their friend's dealerships are
| |
| | tougher for Ford, and this is being
|
| folding up? We think not. Will the
| |
| | overlooked because GM and its troubles
|
| friendly banker be willing to finance
| |
| | are getting the headlines. With the
|
| their car inventories when the bank sees
| |
| | employees departing from both companies
|
| other domestic dealers closing their
| |
| | how do you think the guy down on the
|
| doors? We don't see it. This means that
| |
| | assembly line is feeling? Do you think
|
| American car dealers can only finance
| |
| | he's a loyal, lets get it done type of
|
| through the car manufacturer's financing
| |
| | individual? Do you think he's wondering
|
| arm, and that's not good when the dealer
| |
| | if he's going to be there 2 or 3 years
|
| has only one choice. We estimate that
| |
| | down the road? Will his pension benefits
|
| half of Ford's dealers are not making a
| |
| | be safe? Will he ever get a pension? Will
|
| penny. We think for General Motors, it
| |
| | he even have a future at either of these
|
| could be as high as 25% are unprofitable.
| |
| | two companies that were once the
|
| What's the customer experience going to
| |
| | unquestioned leaders of American
|
| be like in a dealer that's losing money
| |
| | managerial know how?
|
| on every car he sells? Is anybody
| |
| | Henry Ford wrote the book on
|
| listening in Detroit?
| |
| | manufacturing, and GM's Alfred P. Sloan
|
| Every time GM loses a point of market
| |
| | wrote the book on building a company that
|
| share, they have to implement plans to
| |
| | is still studied at Harvard Business
|
| dismiss 20,000 people from their jobs. We
| |
| | School, and MIT today. Somehow in the
|
| see the necessity for GM to cut another
| |
| | last 3 decades, the bean counters in
|
| 60,000 jobs that they haven't announced
| |
| | Detroit forgot how to make cars. They
|
| to establish break-even 12 to 18 months
| |
| | literally forgot what business they were
|
| from today. With all the talk about GM in
| |
| | in. They instead thought only about the
|
| the news in the last 60 days, has anybody
| |
| | money. Labor became a cog in the wheel,
|
| at GM or Ford uttered a word about their
| |
| | not an integral meaningful partner in the
|
| real problem, QUALITY? The American
| |
| | process. To turn this American industry
|
| consumer does not want to buy American
| |
| | around will involve a different level of
|
| made cars in any quantity that would
| |
| | intelligence than the intelligence (used
|
| allow Detroit to make money.
| |
| | advisedly) that got them into trouble in
|
| We believe that GM will be unprofitable
| |
| | the first place. Einstein was right.
|
| until 2008 at a minimum, and 08 can only
| |
| | Goodbye and good luck
|
| be profitable if they maintain market
| |
| | Richard C.
|
