| I posted on my blog "So, what were we talking about | | | | facing is a decline in demand - or interest even - |
| again?" a couple of days ago a fake car | | | | among North American consumers for buying their |
| advertisement I found on the net which mocked the | | | | cars. One of the key reasons for this is because of a |
| notion that public taxpayers should bail out the | | | | complete failure on the part of these auto |
| so-called ''Big Three'' US auto manufacturers. In that | | | | manufacturers to adapt to the changing needs |
| post, I mentioned that I wanted to share my | | | | demands of car buyers. At a time when gas prices |
| perspective on this whole idea regarding public funds | | | | have been on a continual rise to unforeseen levels, GM |
| being used to bailout corporations who are falling under | | | | kept putting its resources into the production of more |
| hard times. But before I do that, I want to discuss why | | | | gas-guzzling SUV models, Ford remained focused on |
| exactly these "Big Three" car manufacturers are in | | | | pushing its line of full size pickup trucks, and Chrysler |
| need of help in the first place since I think that's an | | | | tried to gain ground with its new line of luxury cars. |
| important factor to consider in any discussion on | | | | And now, as the global economy worsens, the "Big |
| whether these corporations deserve such aid from the | | | | Three" car manufacturers have no alternative, |
| public. And as the title and corresponding image for this | | | | cost-effective reputable model lines to fall back on to |
| post suggests, we'll see by the end of this piece | | | | keep their companies moving forward. What's even |
| whether or not these "Big Three" corporations share a | | | | more unforgivable is their continued inability to develop |
| common fate to that of the Dodo bird. | | | | model lines geared specifically for consumer markets |
| Essentially, the fundamental reasons why these three | | | | outside of the United States and Canada. Sure, |
| manufacturers are now teetering of the brink of | | | | attempts have been made to sell their cars overseas, |
| extinction is because of their lack of brand loyalty and | | | | but as they've demonstrated in the North American |
| an extremely myopic view of who their customer | | | | market, they clearly lacked an understanding of what |
| base should be (I'm omitting the outrageously | | | | their customer base is looking for in a car. Had the "Big |
| over-inflated wage costs since that's more a result of | | | | Three" paid more attention to the old adage of not |
| union demands than a choice made by the companies | | | | putting all of one's eggs in one basket, they certainly |
| themselves. I'm also disregarding the large salaries and | | | | wouldn't be on the brink simply because the American |
| benefits top executives have granted themselves | | | | economy is faring worse than others. |
| since that situation is hardly unique to these three | | | | So how does this approach taken by the "Big Three" |
| companies). Now that we have these parameters | | | | measure up against the nature of the Dodo bird? Well, |
| defined, let's take a look at each one individually to see | | | | let's take a look - the Dodo bird was a flightless bird |
| how these factors have led to the current situation. | | | | that was indigenous only to the small island of Mauritius |
| Brand Loyalty | | | | found in the Indian Ocean. As it existed in an isolated |
| A key factor to the success of any company product | | | | environment and due to its inability to fly, they were |
| is how their brand is perceived by their customer base. | | | | never exposed to such dangers as predation or the |
| Obviously, a great deal of this is created by the | | | | necessity of adapting a more varied diet. The Dodo |
| consumers themselves; however, the viability of a | | | | bird was first sighted by Portuguese sailors at the start |
| brand is also dependent on how the manufacturers | | | | of the 16th century and within about 100 years, they |
| owners present and maintain that brand. Two good | | | | were virtually extinct due to a combination of a loss of |
| examples of this in the car industry would be the | | | | their natural habitat and the introduction of foreign |
| Honda Accord and the Toyota Corolla. Although both | | | | animals like cats, dogs and rats which destroyed the |
| model lines have undergone numerous improvements | | | | Dodo bird's nests. The fact that these birds were |
| and aesthetic changes over the years, their respective | | | | incapable of migrating to new territories and their |
| car manufacturers have maintained the use of the | | | | inability to adapt to these new threats that arrived on |
| brand names, relying on the past performance and | | | | their shore is what ultimately led to their rapid extinction. |
| satisfaction ratings as a means to encourage | | | | Looking at the history of the Dodo bird's demise, some |
| consumers to continue buying these products. | | | | compelling and striking similarities can be found - the |
| Compare this approach to the one taken by General | | | | arrival of the Portuguese sailors causing a biological |
| Motors over the last couple of years. Instead of | | | | shift in the Dodo bird's ecosystem can be easily |
| investing in the development and maintenance of a | | | | equated with the introduction of European and Asian |
| select number of model lines, GM opted instead for | | | | car brands into the North American market. Also, the |
| putting out models with quick turn-overs, replacing | | | | inability of the "Big Three" to either develop new |
| newly created model lines after just a few years of | | | | markets abroad or to compete with European and |
| use. This approach naturally makes it difficult for | | | | Asian car manufacturers on their home turf is very |
| brands to develop a following as they not only have | | | | similar to the Dodo bird's failure to adapt to new food |
| limited lifespans, but any improvements are marketed | | | | sources and survival traits as a result of changes in its |
| under a new brand name, thereby proving the existing | | | | ecosystem, as well as its incapacity to fly which |
| one obsolete. It's obvious that what the GM executives | | | | prevented the birds from migrating to new territories |
| were counting on was that people who owned GM | | | | so its chances for survival could be improved. |
| cars would come back in a few years to buy a similar | | | | So, does that infer that the "Big Three" will go the way |
| make of car under a different model name because | | | | of the Dodo? It's certainly possible given the complete |
| of the new features it provides. Instead, what they | | | | lack of vision and long-term planning on the part of the |
| demonstrated to car buyers was a lack of brand | | | | car manufacturers of how they will re-brand/re-invent |
| integrity and endurance. It also didn't help GM to have | | | | themselves to regain both consumer confidence and |
| self-competing product lines under different car brands | | | | interest for their products. However, there still exists at |
| like Chevrolet and Pontiac in their quest to grow and | | | | the moment a sufficient market that might be able to |
| foster brand loyalty. The same issue also plagues | | | | sustain one North American car manufacturer, though |
| Chrysler with their use of both a Chrysler and | | | | whichever one does end up as the last one standing |
| Plymouth product line where often the differences | | | | would have to be downsized to carrying a small |
| between the two makes are almost indistinguishable. | | | | fraction of the model lines that currently exists and will |
| Know Your Customer Base | | | | obviously be a pale version of its former self. |
| Obviously, the biggest problem the "Big Three" are | | | | |