Cuts at Ford moot without turnaround in buyers' attitudes

[Len_A]

From Dan Howes Column on Sunday, 1-22-2006: Link Here

 

Daniel Howes: Cuts at Ford moot without turnaround in buyers' attitudes

 

The most important number won't be how many jobs will be lost.

 

Or how many plants will be closed.

 

Or whether Ford Motor Co.'s mondo restructuring, coming Monday, will be "enough" to get the 102-year-old company back on a track to sustainable profitability. Whatever the Blue Oval bosses do, bet it won't be enough for Wall Street or the arm-chair experts on Main Street.

 

No, the most important number will be a number Ford's execs -- like General Motors Corp.'s brass before them -- cannot confirm because they don't know it: How many more Americans will buy their new cars and trucks and help revive the last two American-owned car companies on the planet?

 

Without enough buyers who believe Detroit's Big Two are turning the corner, that their products are worthy of another try after years of disappointment, the long, slow slide driving Detroit's most painful cutbacks in more than a generation will continue.

 

More than cutting

 

That's the Big Lie of Detroit's Season of Restructuring. Cutting 60,000 blue-collar jobs (30,000 at GM and perhaps as many at Ford over the next few years), closing plants, axing corporate officers and doubling down on developing markets may be necessary to revive these companies, but it's not sufficient.

 

These companies need revenue. More real people outside the industrial Midwest have to buy a Ford Fusion, which may be the best mid-size Ford since the Taurus of the mid-1980s. They have to be willing, despite rising oil prices and instability overseas, to get behind the wheel of an all-new Chevy Tahoe, a Saturn Aura or an impressive new Explorer SUV.

 

None of that is a sure thing, which is what makes Detroit's corporate slaughter doubly painful. There is no assurance -- for the leaders, for salaried employees, for local and state governments, for the United Auto Workers -- these cuts will be enough or be the last.

 

History is an uncomfortable guide. Detroit commands less of its home market today than ever before -- 56.9 percent. Excise the German-owned Chrysler Group and American share of the American market is 43.3 percent. That's neither spin nor treason. It's fact.

 

Seeking silver lining

 

For decades, too many American consumers have been steadily leaving GM and Ford brands because they believed GM and Ford left them, even if the bosses of the RenCen and the Glass House never intended to do so.

 

Now, the would-be saviors of GM and Ford, the people who would validate the turnarounds rippling through Michigan, Ohio, Indiana and the global auto industry, are those who walked away from Detroit's metal and into that of the Japanese, the Germans and the South Koreans.

 

That's fact, too.

 

Want to see a silver lining? Consider two things: first, the revival of Chrysler is Exhibit No. 1 that a Detroit automaker can move the market needle with North American-built cars and trucks developed mostly by Americans and Canadians.

 

Second, GM and Ford are taking painful steps while they still have room to maneuver. Stalling and hoping for the best is not an option. It's corporate suicide.

 

Daniel Howes' column runs Sundays, Wednesdays and Fridays. He can be reached at (313) 222-2106 or dchowes@detnews.com.

[Len_A]

Chrysler is German, not American. If it wasn't for the influx of money from Dailmer, Chrysler would be dead.

 

 

 

True, but it's been American designers turning things around as far as the product is concerned, and that's what grabs the customers attention.

[mercurymichael]

Chrysler is German, not American. If it wasn't for the influx of money from Dailmer, Chrysler would be dead.

Actually, the way I understand it, was that Mercedes needed Chrysler's bank account. They aledgedly had quite a bit of cash at the time of the merger.

[01FOCI]

Actually, the way I understand it, was that Mercedes needed Chrysler's bank account. They aledgedly had quite a bit of cash at the time of the merger.

 

 

"Merger" :lol: Even Jack K knows it was not a merger, thats why he sued. And how come a majority of Chryslers "new" products are underpinned by a version of Mervedes chassis? Hell the Hemi's even get a genuine mercedes tranny! Thank God! cause most of chryslers trannys have been crap! Anyway I'm with Jensen, Chrysler would be dead if it was not for Mercedes.

 

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