Friday, May 23, 2008

The American Car Industry, sob

Somewhere in the late 2006 range, I had a post about Ford Motor Company pinning their hopes and dreams and profitability on their soon-to-be-successful marketing of SUVs and F250s. Yup, the American public wants huge penis (substitute) mobiles. As an aside, I am amazed the diesel F-250s don't come with a lifetime supply of magnums. Yes, they unveiled the master plan, stating unequivocally that profitability would return by 2009. Yessirree bob!

The great prognosticators that they were, they forgot that gas prices really would impact 12-15 mpg vehicles. In full disclosure, I just bought a Honda Civic Hybrid and bitch when I get less than 38 mpg. and know I will need to rent pickups or vans occasionally. Heck. to drive to CA when we moved from CO we rented a Ford Excursion to contain our bags, some knickknacks, some plants 2 cats and 2 dogs and a litter box. There is nothing wrong with trucks when needed.

But to stake the profits on gas prices staying as they were or rolling back was just stupid. Today in an Associated Press story Ford stated that they will cut production of trucks and SUVs because they are not being bought. Let me get this straight. You are being paid millions per year as executives and thought gas prices would go down. Then you gambled the jobs of thousands of line workers on your good judgment. Let's see, your current stock price is $7.16. I am too lazy to do research this morning (they were $60 in 1977) , but I bet in the hey-day of Ford, stock was near $100. GM's sure was and it now at about $18. So the company is still continuing to go down the tubes, workers are losing their jobs. I wonder how many Board members and executive management team members are going to lose their jobs. Will the Golden Parachutes be comparable?

Management is not inherently evil. It is easy to criticize. It is a dangerous position. And whether or not it is taken seriously, a manager holds the livelihood of many families in their hands! You would think that they could make better market predictions at the American auto industry. But betting your company and the lives of all your workers on trucks that get crappy mileage and not seeing the writing on the wall for gas prices? Let's just say I would not give them my family nest egg to bet on the Super Bowl. Or maybe in their minds it is time to bring back the Edsel or the Crown Vic.


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