Monday, November 17, 2008

The End of Detroit

As a self-confessed car buff it has been interesting to follow the plight of the Big 3 automakers. In following the news coverage as well as comments from letters to editors etc., it would appear that politcians on both sides of the border and consumers at large have little sympathy these days for bailing out Ford, GM and Chrysler. Claims abound that these three car manufacturers are the most mismanaged companies in North America and I can not help but agree.
For years, Ford, GM and Chrysler through the 70's, 80's and 90's turned out vehicles of poor design and inferior quality forcing them to rely on rebates and zero percent financing gimmicks in order to get them sold. Remember such engineering marvels as the Vega, Chevy Citatation, Cadillac Cimarron, Plymouth Volare, the Gremlin, Ford Fairmont, Granada and countless others? All the while Toyota and Honda slipped onto the scene, responding to consumer's demands for better quality, more fuel efficient vehicles, quietly gobbling up marketshare while the Big 3 focused on profiteering from the sale of gas guzzling pickups and SUV's. To make matters worse, they agreed to the ridiculous contract demands of the UAW and CAW, inflating their labour costs above what Honda and Toyota pay their North American non-union employees, while at the same time driving pension and health care expenses for retirees into the stratosphere.
With the price of oil reaching record levels this year taking gas prices to almost $1.50 a litre, GM and Chrysler spent what little remaining cash they have reviving nostalgia with a 6.2 litre Camaro and a 6.1 litre Hemi Challenger. Don't get me wrong as a car lover I'd like to have either one those in my garage but neither are going to win back the North American car buyer.
Bailing these guys out with billions in financial aid will not stop the bleeding. Only a change in senior management at all three will curb the insatiable appetite that these companies have for cash. I would highly recommend their replacements receive a copy of the book titled "The End of Detroit" by Micheline Maynard before they get started. It may not provide all the answers but it is a fact based account of why the Big 3 aren't so big anymore.

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Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.