Thursday, November 13, 2008

Should we bailout the Big Three?


The following is my part of a back and forth email rant concerning this article... Also, for full disclosure it should be stated that I think the above F150 SVT Raptor unveiled this month at SEMA is disturbingly awesome, much like many earth f$%#ers on the road. It may, however, show that Ford has been concentrating on the wrong stuff. Of course, Toyota just launched a Tundra that does 0-60 in 4.4 seconds, so they're not exactly walking away from big vehicles either...

I think the failure of the big three is due to the fact that they had their own gigantic domestic market of not particularly picky or discerning customers. Many of whom didn't even try foreign cars because they wanted to 'buy domestic.' Every other car maker on earth is working to sell cars in all kinds of diverse markets, thus pushing the envelope of what they can build. The big 3 simply spent the last 15 years making farm yard work vehicles, dressing them in leather and wood 'King Ranch edition' style makeovers, and selling them at huge margins. Cars have been a second thought for them, something you pump out as cheaply as possible and who cares if they're any good or not, sell them to Hertz.

Not making a 'Prius' is a part of this whole deal, but the big3 have been completely ignoring anything but trucks. They haven't made good sedans, hatchbacks, convertibles, sports cars, hybrids, anything... just trucks and SUVs. While BMW, VW, Toyota etc have all been striving to make cars that Japanese like, that Germans like, that Italians like, picky Brits like, and of course, that Americans like. Thing is, when they're done engineering the crap out of their cars for all these different diverse places, roads and people they end up being really really good. Take a Passat out after a Malibu. Or a Mazda3 after a Cobalt.

Then when all the rest of the world realized they could sell big ass trucks to Americans and really make money, they put all their engineering goodness into their trucks as well. I recently rented a Dodge Ram for a week and loved it, until I rented a new Tundra the next week. Who knew highway interchanges didn't have to feel like rafting?

Look at SUVs as well. Americans gobbled up the old Ford Explorer 'Eddie Bauer' Edition like it was god's gift to the car business. Then they tasted the 4Runner, then the X5, then the Taurag and then even SUVs were all over for Detroit. They answered with the H2 and H3 so you could really feel American and play Desert Storm on your way to work. That'll go over well internationally. Meanwhile Chevy started working on small cars again. So they rebranded Daewoos (Aveo) and tried to sell them here with the help of NBA players. Oh no.

I don't really totally understand the ramifications of job losses that would be related to letting the Big 3 fail, but from a purely product view it seems like we're just rewarding mediocrity. Invest in Tesla or Fisker or someone who's moving the game forward.

The other aspect to this seems to be the issue of whether its fundamental to the economy. I can see the pressing need to save the finance industry so that business can still function and I can still find fancy cheese imported from all over the world at the store. If there were no GM, Ford, and Chrysler, couldn't I still buy a expertly made vehicle from right here in the UsofA? Say, a BMW x5. I just read last night that the new Toyota Venza is their first car to be conceived (um...) designed, engineered, and produced all in the US. So you see, it can be done.

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