STUDY: The way to profits in Detroit? Make fuel efficient cars
According to a new study by the University of Michigan Transportation Research Institute, the Detroit three automakers need to make major changes in their current corporate cultures if they truly want to reverse their fortunes, and that will likely require new leadership. Says Walter McManus, director of the Transportation Research Institute's Automotive Analysis Division and co-author of the report:
Our findings support rapid, wide-reaching change in business models. The key to a long-term recovery is executing an excellent portfolio of products, and we find that increasing fuel economy standards will lead to a portfolio of products that is more likely to raise the profits of the Detroit 3 automakers than to lower them.Perhaps it's not fair to lump all three major American automakers into the same category, but it's also true that Ford, General Motors and Chrysler have only recently shown any real efforts to drastically improve the fuel efficiency of their automotive fleet. Whether it's with the current leadership or not, hopefully that culture really is on the way out.
[Source: Automotive News - sub. req'd]
Photo by Elsie esq. Licensed under Creative Commons license 2.0.
Reader Comments (Page 1 of 1)
wow 4:02PM (6/22/2009)
Wow. It took a study to come up with that. I could of told them that about 5 years ago.
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TX CHL Instructor 3:59PM (6/22/2009)
"Perhaps it's not fair to lump all three major American automakers.."
There are now only two. Government Motors (Barack Obama, CEO), and Ford.
Reply
gerrrg 7:48AM (6/23/2009)
Didn't take long for someone to drag the discussion into politics.
TX CHL Instructor 7:55AM (6/23/2009)
With government ownership of the auto industry, it is no longer possible for that industry to do anything or make any decision that is non-political. You can write off both GM and Chrysler. They have no future.
CH 10:40AM (6/24/2009)
@gerrrg
Which discussion?
Throwback 4:03PM (6/22/2009)
"Our findings support rapid, wide-reaching change in business models."
Isn't that what is happening now? Ford started this 2 years ago, but with bankruptcy, GM and Chrysler are there also.
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Brandon 6:48PM (6/22/2009)
The way to profits is to make cars that people want. A second strategy that is helpful is to make cars that have high profit margins. The federal gov't will not make cars people want and labor unions destroy profit margins. It's the sad truth.
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andrichrose 6:18AM (6/23/2009)
I have just returned from the US and whilst there I took
the new Ford Fusion on a 2000 mile trip from Wyoming
through the Rocky Mountains to New Mexico and back.
To my surprise the car returned an overall fuel consumption
of 34 miles to the gallon ! after this it looks to me as if FORD
are already on their way to becoming a manufacturer of
fuel efficient cars .
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Holden Miecranc 10:03AM (6/23/2009)
Yes, because the difference in gas mileage between the Big 3 and the imports is HUGE.
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Ghen 10:19AM (6/23/2009)
Its not just fuel efficiency but also resale value due to foreign cars having the connotation of being made better and costing less later. More QA and less UAW but that'll never happen.
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CH 11:04AM (6/24/2009)
To quote "The Roots" by changing their words a little:
You are all...
We don't even come to see our own, man.
Listen, Freddy, listen...
If we had to depend upon black our people to eat,
We would starve to death.
You've been out there,
You on the bandstand,
You look out there, What do you see?
You see Japanese, you see... you see West Germans,
You see Slobovic, you know, anything, except our people man.
It makes no sense, it incenses me that our own people
Don't realize our own heritage, our own culture.
This These is are our music cars.
That's bul**hit!
Why?
That's all bul**hit. Everything, everything you just said is bul**hit.
You're complaining about-
I'm talking about the audience clients.
That's right.
The people don't come buy because you grandiose mothe**uckers don't play build the sh*t that they like. If you played built the sh*t that they liked, then the people would come buy. Simple as that.
Inevitably, hip-hop records cars are treated as though they are disposable.
They are not maximized as product even, you know not to mention as art.
Reply