Automotive Industry Update

Update – The natural progression of the downward spiral… Ford and GM are talking about reducing the quantity of dealerships.  This closes the loop on my comments from Jan 23.  Namely, the owner of the Ford dealership in Dayton probably saw the handwriting on the wall and decided to get out before being forced out.

Feb 7, 2006 – Toyota Motor Corp., the world’s second-biggest automaker, said third-quarter profit rose 34% to a record, buoyed by a weaker yen and increased sales of fuel-efficient cars in the U.S. and Asia.  You can read the entire story at Bloomberg.com.  Obviously, this Japan-based manufacturer is moving in a trajectory opposite to those of Ford and GM…  I hate to admit it, but my son owns a Toyota Camry (assembled in Kentucky), and we haven’t owned a GM or Ford automobile in more than 15 years.

Jan 23, 2006 – You may have noticed the continuing decline of the automotive industry in the heartland of the country.  GM and Delphi are in dire straights, and Ford is announcing a major restructuring.  The Dayton, Ohio area has (or used to have) many automotive parts and assembly plants.  While it has not been officially announced, most of the Delphi plants in the Dayton area are probably slated for closure.

Interestingly, an acquaintance of mine inherited a Ford auto dealership in the Dayton area and he recently decided to sell the business (the dealership had been in his family for over 50 years).  There are many structural changes that are coming to the automotive industry, similar in many respects to what occurred in the steel industry.

One comment

  1. There’s an interesting book by David Halberstam called Reckoning. It juxtaposes and follows Ford and Nissan (Datsun as it was then called) from the end of WWII to when the book was published in 1986.

    As you read the book, you almost feel as if you are watching an accident happen and you cannot look away. Nissan slowly and steadily became a force to truly be reckoned with. They were smart, hungry, full of guile, and willing to admit what they did’t know and brought in people to teach them.

    Ford, on the other hand, was an arrogant and bloated organization run by The Whiz Kids who really thought they had all the answers. They didn’t and the company suffered mightily because of them. The didn’t produce cars people wanted to buy. They didn’t even use in their own factories technolgies they developed that went on to become industry standards — like e-painting.

    Seems like what was written 20 years ago is still appropriate today. That’s too bad.

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