Friday, July 18, 2008

#424 Car Wars

#424 Car Wars

If you're a regular reader or listeners you know this space regards the automotives as the single most important business in America. But it's time to get real.

With GM cutting white collar jobs (why do they have those people in the first place?) and cutting back on models, it's time to rethink what this business does and has done since the era of Henry Ford and Alfred Sloan.

Start here: there are a bunch of brands we don't need. (The world did not end when Chrysler stopped making Plymouth. Nor did the ice caps melt when GM spiked Oldsmobile.)

Here's a list of cars we don't need: Pontiac, Saturn, Mercury, Dodge, Hummer and maybe Buick. Just fold 'em up and concentrate on the brands that still work. Chevy, Ford, Lincoln, Cadillac, Chrysler. The excess brands exist in name only. Their stuff differs only insignificantly from their corporate siblings.

Oh, and dealership organizations. That's really where the problem is. What do you do with all those Pontiac, Saturn, Mercury, Dodge, Hummer and maybe Buick dealers? Buy them. The car companies are sitting on enough cash to pay off the national debt. If there's no Pontiac, the guys on the production line can stay busy making Chevies and Caddys.

You want to wax nostalgic about the cars of olden times, go right ahead. Kaiser, Frazer, Tucker, Hudson, Nash, Studebaker, DeSoto, Franklin, Checker, LaSalle, REO, Oakland, Maxwell, Packard, Rambler International Harvester, Baker Electric, Stanley. Go ahead and get all teary.

Give it one minute per brand.

Okay. Time's up.

Now, think about the wood and metal and plastic, the electronics and glass, cloth and wire that it takes to build even the skimpiest of what's left. And think of what it would mean if THESE went away.

There ARE problems beside bad planning and bad marketing. Ford and GM took what they thought would be a short term gain by spinning off their parts divisions -- but did it without escaping from liabilities that went along with the sale. They're paying for it, bigtime. GM sold a good chunk of its lucrative financial arm, GMAC, also for a short term gain.

The Three (they used to be the "big" three,) need to concentrate on what the public wants and needs now and not worry about the margins. And, unfortunately, the margin is anything that doesn't sell well or shouldn't.


Shrapnel:

--They're putting advertising on the backs of airline boarding passes. Not a bad idea. Probably going to be effective if anyone flies again.

--Obama is a poker player. McCain likes the craps table. This is one case where "the house always wins" is untrue, because WE are the house.

--A local restaurant advertises its location by keeping an enormous plaster of paris cow on the roof. There's something they don't tell you. That's where they got your dinner.

I'm Wes Richards. My opinions are my own, but you're welcome to them.(R)
(C)WJR 2008

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