Originally posted by sigma:
Ford sells their cars at a lower price because the market values it at a lower price.

The money saved if not for the exorbitant UAW contracts wouldn't go to lower the price. Lower prices have done nothing but persist the notion that domestics are 'cheaper' cars. People don't want cheap cars, they want good cars -- look at the success of the Camry for proof of that. The money saved would go towards better engineering, higher quality components, etc, etc, etc. Once the consumer got it back in their head that "Domestic" does not equal "Inferior" prices could come up, bringing margin with it.

I believe it was Lutz, ironically enough, that said "It's better to spend an extra $1,000 on quality than give the customer $2,000 to buy your car".



I firmly believe in Lutz's vision, though I'm just not seeing where American manufacturers have executed on anything close to it, except in a few select occasions. Since all are publicly-traded companies, there exists a myopic short-term view of things and I for one firmly believe that any margin would be sunk into making the Street happy on a quarterly basis instead of correcting issues that would give both Ford and GM a fighting chance in the automotive market. I've just seen too many companies do it simply because executive pay is tied to quarterly performance and not any elusive "long-term" performance gains...

It's hard for me to swallow that any "extra" margin found in nixing the financial gang-rape that the UAW leads in would be seriously used to up quality and materials; penny-pinching and short-term goals are just too ingrained into the US automotive industry at this time, IMHO. Change is in the air, but I believe it's going to get MUCH more painful before effective and worthwhile changes are going to be made.

I'm guessing that fixing the overall operations issue is taking precedent at GM and Ford over most anything else these days, though they are going to have to start paying more attention to their products or face continuing market-share decline.

I'm just wondering how many more arteries have to open up and bleed red ink before the UAW and top management in Ford and GM wake up...

JaTo e-Tough Guy Missouri City, TX 99 Contour SVT #143/2760 00 Corvette Coupe