Hoisted from Comments: Annals of Corporate Strategery

Here’s Vtcodger:

Detroit’s problems are self inflicted and entirely predictable … although not by the guys they are paying millions of dollars a year to do the predicting.

Whocudanode? Anyone with half a brain.

The basic problem is that between 1950 when they probably did build the best cars in the world (with the possible exception of VW’s beetle) and 1975, they did nothing much to improve the reliability, safety, or handling of their cars. They just raked in the cash and headed to the country club for a round of golf and a few drinks.

Then they woke up one morning and there was a gas shortage. Worse, the Japanese were selling cars that cost less, lasted longer, didn’t break as often, got better gas mileage and — important to those of us who do not live in Detroit — could negotiate curves and hills in relative safety.

Detroit’s response was to limit Japanese car imports, lie a lot, and eventually to spend a gazillion dollars in advertising convincing Americans that they wanted and needed huge, expensive, and not especially useful vehicles. In fact Americans (mostly) didn’t need those vehicles. At least not as far as I can see. But Detroit needed to sell them.

So now, here we are again. Another gas crisis, and Detroit still can’t build inexpensive, reliable, fuel efficient cars profitably. If you ask me, that is no one’s fault but Detroit’s.

The problem. Bad management. Lots and lots of bad management. Solution: GM should I think, consider simply folding up its tent and liquidating the company. I don’t think Chrysler matters. Ford — Might be salvageable. But it’s going to take years, and they are going to be rough years.

I think Ford and GM are more similarly situated, and contrast with Daimler-less Chrysler, at least in that both manage to sell fuel-efficient cars in large quantities and sometimes even at a profit into the European market. Both also seem to have been hit with large clue-sticks, as other recent car news has indicated some willingness to actually try to sell decent compacts and subcompacts in the U.S. on the part of both firms. Arguably they’ve stopped digging their graves, but ‘Codger is right that getting out is another matter.