motownr

check out the current edition of autoextremist.com The "inside" guys in the industry press on on to Ghosn and his short-lived 'miracle.' I think you'll eventually see the Detroit auto reporters chime in as well.... I've posted in the past about how the dealers--always the canaries in the proverbial coal mine--are in an all-out shooting war with Nissan. Delorenzo takes a different angle, but comes up with a similar conclusion. Nissan is going to make plenty of headlines in 06--not many of them favorable.

[quote name='puma' date='Dec 2 2005, 03:18 PM'] I'm in auto sales (Chevrolet/Cadillac/Toyota) and I haven't met a GM retiree yet shopping for a Toyota. It seems that people of that generation do actually have some loyalty, unlike today's younger generation of car buyers. My experience is that GM retirees are more than willing to drive a non-GM vehicle IF they can get the same deep discount that their former employer provides them. In other words, they are not really loyal to anything other than the price. In practice, that means they wind up in F or DCX products, not Toyotas or Hondas. However, if they could get Employee prices for those brands, I have no doubt that a significant number of them would happily drive them as well. My $.02

I agree 100% with the complaints about CR's methodology. If GM ever tried to use data like that, they'd have every lawyer in the country filing suit.

But were they (until recently) ever really thought of as bad quality? I've always thought of them as your stereotypical Japanese brand in terms of quality. In other words, better than average. What CR is saying is something completely different: if you look at the data, it says that Nissan is about the worst in the industry in many segments. That's a big difference.

The relocation is an interesting topic. Obviously, the toll in terms of turnover and the distraction it represents is at the top of everyone's list. However, if you read into the BW article a bit, you see a pattern emerging: Ghosn does whatever it takes to cut short-term expenses, and leaves the LT implications to...well, the long-term. He did the same thing in terms of cutting component costs, and while the ST profits have been stellar, the LT damage to Nissan's reputation is starting to show itself in things like the recent CR Reliabily Survey, which basically said that Nissan was the first major Japanese mfg to have a reputation for BAD quality. I wonder if the jury is still out on Ghosn: if the follow ups to the Altima and sentra are marginal (and they are rumored to be pretty conservative), and Nissan continues to struggle, maybe everyone won't continue to think he should be running GM or Ford. It'll be fascinating to see how it turns out.

A nice break from all the bad news about GM and Ford: here's a story on how the media's automotive darling is having problems. http://www.businessweek.com/magazine/conte...47/b3960064.htm I've heard that over 10% of Nissan's dealers have already sued the company for what sound like some nasty tactics. Apparently, Ghosn's trick is to cut corners to prop up short-term profits and threaten any dealer who doesn't stock up on the necessary number of Quests, Titans, and Sentras needed to make the numbers. If you don't play ball, they lose your allocation of whatever's hot or send you all kind of nice legal letters about terminating your franchise. BW hints that the gig is up. I agree. Nissan is as close to Toyota and GM as the Lions are to winning the Super Bowl.

Can anyone in the Detroit area ever recall a recent time when things felt like this? It appears that there is consensus that Wagoner and the Board are facing a choice of jettisoning assets that Kerkorian doesn't like, or having him force their hands by buying more stock. Subaru is gone, GMAC is going, any predictions for what's next? I'll vote for Saab. The cost of selling the division would be minimal, as opposed to the cost of shutting down a la Oldsmobile. What else makes sense to consider selling?

Regardless of the LT outcome, if you ask any Nissan dealer or employee, they'll tell you that Nissan is a company in internal turmoil. The move to TN has been anticipated for a while now, and it's next to impossible to get anything done within the company. EVERYBODY is looking for a new job, and the frustration level with Ghosn's style of "do or be fired" is high. Morale stinks. Good luck running Nissan, Carlos, when 1000 of your 1300 employees are expected to bail.

For all the accolades that DCX has recently received, they deserve a swift kick in the pants for not seeing the value of a Chrysler wagon like the 300 Touring. The 300 Touring is designed to appeal to a different crowd than the Magnum; in this respect, it's badge engineering done right. Even sitting between a Magnum and a Pacifica, a 300 wagon would be an attractive option, offering the sportiness of one with the luxury of the other. And, subjectively, with more attractive looks than either. Hopefully, as the LX line matures and sales start to cool, DCX will come to their senses and release something like this. It has the chance to be a winner, IMO.

Lots of companies proclaim that they are going to increase sales dramatically. Didn't some genius at Pontiac say that next year is good for a 25% bump? Suzuki is struggling, period. The cost of sales is killing them, and they, as mentioned, have a rotten reputation. These were single points in metro markets.

Cost of sales is just as important as revenue from sales. I'm sure the story will eventually get out....it'll be interesting to see how far the retrenchment goes....maybe they limit it to just markets that have a domestic bias and large populations of EP buyers. As the market consolidates, some of the struggling brands will find that they need their dealers more than their dealers need them. Suzuki has a reputation for being a lousy group to do business with...delusional expectations for exclusivity, signage, facility, etc....from what I hear, the factory/dealer culture is as adversarial as Nissan's...at least with Nissan, you get a full-line to go along with their ugly ways of doing business.

Bingo. So far, the buyouts have been limited to Midwest markets. However, it probably isn't too much of stretch to say the crack in the dam is now started. Will be interesting to see if they can hang on to an ongoing presence in the NA

Anyone care to name the brand that is quietly going around buying back its franchises....and promising not to return to their market? It's not Isuzu.....not Mitsu..... Bueller????

While I'd prefer something smaller/cheaper, count another vote for a version of the Lambda. IIRC, Pontiac was originally slated for one of the Delta plant products, but lost its spot in the rollout to GMC. Given the impressive differentiation hinted at by the spy pics, I wouldn't be at all surprised if Pontiac finagles some kind of sporty hauler that doesn't overlap with the Enclave or the Arcadia. The timing would also seem to work--call it a late '08 model. Would AWD with a hot 3.9L and 5 seats be a bad Pontiac?

I think everyone should be grateful that a guy like Miller is at DPH. The more I read of him and his views, the more impressed I am. This guy has that rare dispassionate view of the situation and context that is so rare. Imagine where the UAW would be if they had to deal with some hack artist like Boesky, Perlman or any of the other poster children of corporate reform in the 80s...Miller is their potential savior, not their enemy. Great article.

Terrific point, ehaase. While I'm a Michigander, I do travel a ton. The average consumer could care less about this issue. Much like most of us didn't give a hoot about the steel unions, the airline unions, etc. Unions are a trivial part of the US economy, and are increasingly tied to the public sector. Don't we all love and respect the public sector? GM and Ford could file for Chapter 11 and the vast majority of Americans wouldn't think twice about it. The UAW could go on strike and most consumers would hope that they would lose their jobs. Great post by you.

And just to add fuel to the fire....Automotive News is reporting today that a clause in the DPH deal will substantially add to GM's reitiree costs by forcing GM to add 7 years to the calculated seniority of every DPH worker. Am I the only one who's starting to think that a Chapter 11 filing might save the company by giving GM's new products a chance to be cost competitive? I used to dread the thought--now, it's starting to sound like the lesser evil. Drowning under legacy costs is a no-win situation.

The idea that the government is going to come riding to the rescue of the UAW is nonsense. Private sector union membership is now verging on being an irrelevant part of the total US workforce. It's influence is localized mainly in the Midwest--the key "Smile Belt" states could care less about the UAW. Many of them are actually gaining jobs in the auto sector thanks to the UAW. In fact, I think the average consumer likes the benefits of a global economy, as it creates competition while also keeping the prices of all goods in check. What's not to like about this? I also find the idea that DPH 'needs' its US plants ludicrous. Read Miller's statements: DPH is trying to find a way to retain employment, but it has the ability to close all of its domestic plants if it needs to and source the work elsewhere. Who has the leverage here? It certainly doesn't seem like the UAW.

I haven't seen anything that demonstrates that the government is culpable for any of this. It's a globalized economy, this is part of it. The UAW is going to squeal, but Miller is only being candid. He can fill those domestic plants with new hires, just like NWA filled found new techs when the union told its workers to strike. Not pleasant....inevitable.

I think your ad hominem attack speaks volumes for your side of this discussion. May I ask your background in economics? Perhaps you may have overlooked my point that I come from a pro-union background. However, that has not blinded me to the facts of the situation, which you conveniently ignore.

Why is that, Josh? Under a reasonable restructuring, equity in one of the top suppliers in the industry might be a terrific stock. Wilbur Ross is not waiting in the wings because he thinks this is a lousy opportunity.....

They'd better have some warm clothes, then, because they're going to be on the outside looking in as tens of thousands of applicants line up to take their jobs. The average blue-collar worker listens to the gripes of the typical UAW guy and thinks he's nuts. Don't think so? Just wait until DPH starts to advertise openings at competitive market rates....they'll be overwhelmed with people willing to 'suffer' at such horrible wages...just like Honda, Toyota, Nissan, and Hyundai were overwhelmed with people willing to be 'victimized' for similar wages. My grandfather was a union organizer. I respect the contributions organized labor has made. But that doesn't make me one bit sypathetic to where the leadership has taken their members. Get smart, or start looking for a new job. It's going to be as simple as that for the rank and file.

I can't believe that a quiet auction isn't being held for SAAB right now. As others have properly pointed out, GM is in the early stages of a significant and historic restructuring. Core brands with clear futures are going to stay and be funded, and marginal assets like Subaru and SAAB are going to the highest bidder. Wonder what all those GM dealers who built standalone SAAB stores are going to think when they open up the paper one day and find out that GM gave their franchise away to some firm that has little interest in it except for Europe? Oh, oh.......

Perhaps, but irrelevant, with all due respect. I understand the resentment this move has caused among the rank and file, but I think it's perfectly acceptable despite the unfortunate timing. Providing a mechanism to retain key personnel from defecting is part of any turnaround situation. Miller's an old and incredibly experienced hand at this, and knows exactly what he's doing. To those who object based on the fact that some jobs are being insured against loss while others are not, get over it. What hasn't been widely reported is that this same group of executives will own something like 10% of the post-bankruptcy corporation. That's where the BIG cash is. Think millions of dollars per executive, on average. Again, all part of how the process works. The guys brought in to fix things get paid very well for doing their jobs.

I respectfully disagree. We're witnessing the evolution of responsibility for retirement from employers via defined benefits to employees via defined contributions. If you (meaning anyone) can't be responsible enough to save for your own retirement, then you'd better plan on working until your last day on earth. It shouldn't be up to the rest of us to finance your stupidity via some incredibly costly federal program. The federal Pension Benefit Guarantee Program is a safety net to bridge the gap in the workplace as corporations migrate from defined benefit programs to 410Ks, etc...it's not designed to provide a full retirement equal to what the private market may offer. On a related note, Miller has made it clear that the UAW has a choice: work for a lower wage and get your full pension, or work for whatever the market will bear and get what the GPBC will give you. It's a fair option, given the circumstances. Think the UAW rank and file will go along with it? Probably not. But they'd better think twice, because they are out of options.