Auto analyst Dennis Desrosiers is amazed (and not in a good way) at some of the dumb things the auto industry does. He sent around a note yesterday titled “The Automotive World Has Gone Mad” with examples of some of the strange decisions auto execs and policymakers have made and are making. Here's some excerpts (*See the bottom of the note for some explanations of acronyms and terms):
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- A Detroit – 3 CAW worker comes home early and finds a strange car in their driveway. Curious he checks out this out and finds his spouse in bed with a complete stranger. The worker goes back to work and GM / Ford / Chrysler files the divorce papers for the worker and pays the legal costs for the divorce… or at least part of the legal cost. Why are the D-3 paying for CAW workers' divorces
- Scrappage programs are proven to be an effective way to get older vehicles off the road and to stimulate sales and improve the environment. Our Government launches a scrappage program which gives a consumer $300 dollars to get rid of an older vehicle that is worth $2,000 and they don't even get the $300 dollars instead they get a certificate to buy a bicycle. And our Government wonders why the market is not responding?
- The pension funds of the D-3 are under-funded by billions of dollars and Governments may have to make up the difference. But CAW workers don't contribute to their pension funds. Why should Governments have to fund pension plans for workers who don't contribute to their own pensions.
- Governments are forcing vehicle companies to build vehicles that consumers are unlikely to ever buy. Has anyone looked at hybrid sales this year now that gas prices are low again.
- We have the near identical vehicles for sale in both Canada and the US. About 60 percent of Canadians bought a small fuel-efficient vehicle but only 28 percent of Americans. Yet politicians in the US claim the OEMs do not have a fuel-efficient product mix in the US. If this is true then how in the heck did Canadians find these products to buy?
- Vehicles per driving age population in the US at 101 percent while in Canada it is only 74 percent. I believe the transportation needs in Canada are being filled quite adequately with this lower level of ownership … how is it that Americans need 101 percent ownership?
- For most of the last two decades the dealers in Canada fighting tooth and nail to keep our chartered banks out of leasing and in a matter of months ( when their own OEM leasing companies cut back on funding of leases ) begin to lobby our Government to allow banks to begin leasing vehicles possibly creating thousands of potential competitors ( each and every bank branch in theory ) leasing new vehicles.
- Ford in the US saying they are in better shape than GM because their sales were only down 49.5 percent and GM's were down by 53.1 percent. Chrysler Canada leading their press release with the fact they are the number one selling vehicle company in Canada and ignoring the fact that their sales were down 27.0 percent.
- Labour featherbedding their contracts to the N’th degree and then standing up and declaring they aren’t part of the problem because their hourly wage is the same as Toyota who has zero featherbedding with their workforce.
CAW – Canadian Auto Workers, the union representing a lot employees at the D-3. Honda and Toyota manufacturing employees in Canada are not represented by the CAW.
Detroit-3 or D-3 refers to the three car companies who had their corporate roots in Detroit: General Motors, Ford, and Chrysler
OEM – Original Equipment Manufacturer