GLG News by Dr. Michael Kowalski Ph.D., Consultant
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
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Chryslers Strategies for the Future.
May 12, 2008
LaSorda: Chrysler Wants Small Cars "As Fast As We Can" | www.autonews.com
Chrysler is pursuing two strategies to improve the fuel economy of its product offerings: focusing it limited resources on developing a flexible mid-sized platform capable of producing a large variety of vehicles and working with other manufacturers to badge engineer smaller sized automobiles. While these are smart strategies near term, there are risks to the company longer term.
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Can the Genral Motors Volt meet the expectations?
April 17, 2008
Volt plug-in hybrid is 'No. 1 priority,' GM says | www.msnbc.msn.com
General Motors has been exploring and developing alternative drivetrains for many years. These designs have not yet reached the stage of commercial viability for a variety of reasons. However recent events such as increased fuel prices, tougher fuel economy regulations, increased public concerns for the environment, concerns with dependence on foreign oil dependence have raised the level of these efforts. The introduction of the Volt concept car with its projected battery powered range, and backup gasoline engine "range extender" has fired up public enthusiasm. This could be a break through vehicle for GM if they can pull it off. It really depends on the viability of the lithium-ion battery pack.
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Rapid Growth has lead to problems for Toyota
November 8, 2007
Toyota Needs Skid Control | www.forbes.com
This interesting article by Jerry Flint, a respected automotive commentator, summarizes a number of recent events that taken together present a troubling problem for Toyota. As Mr. Flint points out, it not the end of the world, but it does indicate that the mighty Toyota company can stumble in its businesses just as other manufacturers. The quality image that has been so important to its rapid growth may be tarnished by these developments.
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Does Ford really have a brighter future than General Motoers?
October 16, 2007
CORRECT: GM cut at Bear Stearns, Ford preferred | www.marketwatch.com
The decision by Bear Sterns to recommend Ford Motor Company over General Motors seems very misguided to me. Ford is literally just beginning its turn around efforts and they may not save the company. General Moors has already taken many steps of cost reduction and new product introductions and moreover is investing in many new powertrain technologies for coming years that Ford will find difficult if not impossible to duplicate. I expect GM to benefit and Ford to suffer as a result.
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September 14, 2007
Volvo ReCharge concept plugs into hybrids | www.autonews.com
Volvo has shown a concept hybrid powertrain in a modified C30 vehicle, quite similar to the design that General Motors showed earlier this year at the North American Automotive show in Detroit. This technology when fully developed will be able to substantially improve fuel economy and drastically reduce vehicle emissions. However this appears to be a Volvo effort and is not part of a wider Ford Motor Car Company program.
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Who is responsible for the failure of Chinese aftermarket replacement tires?
June 29, 2007
Accident Raises Safety Concerns on Chinese Tires | online.wsj.com
Quality of Chinese manufactured products is a hot topic these days. The safety of pet food ingredients is just a recent example. The Chinese seem able to avoid international standards for safety and quality, instead focusing on price and volumes. Tire failures are just another example. Radial tire manufacturing requires a skilled operator to build a good tire, assuming that good design and quality materials are used. A deficiency in any of these three areas can lead to the tread separation failures reported. Clearly the manufacturer of the vehicle experiencing a tire failure with these aftermarket replacement tires is not responsible for the problem. However they make an easier target than Chinese manufactures, and litigation motivated lawyers will go after the automotive manufacturers as they have the deepest pockets. Who can predict the outcome of the litigation that is sure to follow these tire failures?
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Chrysler’s future hangs on the next United Automotive Workers contract agreement
May 17, 2007
Union Cracks in Chrysler Deal | www.thestreet.com
The purchase of a majority stake in Chrysler by Cerbus Capital Management signals a chance of another Chrysler resurrection. This will require an accommodative new contract with the United Auto Workers union and massive changes to Chrysler’s business. The initial response from the union is constructive, however many difficult issues will be on the bargaining table this fall, not only at Chrysler but at Ford and General Motors as well.
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The Future of Chysler operations sill uncertain
May 3, 2007
Magna out front in bid to buy Chrysler Group, analysts say | www.thestar.com
While the take over of Chrysler by Daimler was ill conceived and a poor business judgment, current issues in the market could provide a rationale for continuing joint operations to the benefit of both parts of the organization. However Daimler does not appear to have the tenacity to make the Chrysler operations a success and is anxious to unload them. Magna probably has the next best shot, but it is in competition with other bidders who would dismantle the company by selling off the parts. While the UAW may be willing to offer Magna concessions to save their jobs, it is still uncertain how this all will evolve.
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Toyota, the new leader in World Wide Auto Sales
April 27, 2007
Toyota Overtakes G.M. in Sales for First Time | www.nytimes.com
The fact that Toyota has outsold General Motors in the first quarter of 2007 is the result of difficult and different strategy decisions at the respective automakers. Toyota has decided that the sale of unprofitable hybrid vehicles is an important part of its global strategy to improve its public image as a "green" manufacturer. General Motors has decided to reduce its dependence on fleet sales to improve its profitability. Both strategies are important and have resulted in the change in sales leadership. The question is what is more important, profits or sales?
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Chinese Automotive manufacuring will impact Global Market Soon
April 27, 2007
Chinese automakers | biz.yahoo.com
The Chinese automotive market continues to grow rapidly, but local companies are taking a larger share of the market because of their lower costs. Thus they are reducing margins for off shore competitors. Even more disturbing for the major global automakers are the beginnings of a Chinese automotive export industry. If the Chinese (rather probably when) can develop a reputation for quality, they will have profound impact on the major global competitors.
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A smart stategy for the auto makers
April 17, 2007
Detroit Decides to Help Shape, Not Resist, Regulation of Emissions | www.nytimes.com
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Will globalization work for General Motors?
March 12, 2007
Seduced By The Siren Of Globalization | www.forbes.com
Importing off shore designed vehicles has proven to be a unsuccessful strategy for the Detroit’s automotive companies. Mr. Flint lists many of these failures in his commentary. He ends with a bit of optimism for General Motors, an opinion I share. His views are based on new products from General Motors, mine are based on the implementation of a broad and integrated global strategy for the company. This has been under development for several years and the fruit’s of this effort are beginning to pay off. Simply stated they are starting to act like one company, and it may work.
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Magna International could provide resolution to the problems at Chrysler
March 1, 2007
Magna eyes Chrysler data | www.thestar.com
With the prospect of a sale by Daimler of its Chrysler assets a number of possibilities arise. In my previous analysis I focused on some possible alliances with other automotive manufacturing companies. The cited article introduces another possibility, Magna International Inc. While the article cautions that a Magna acquisition of Chrysler is a long shot, I think such a deal could result in revitalized operations at Chrysler, albeit with a quite different business model. If Magna were to take over Chrysler, I think, it could become a major vehicle supplier to other manufacturers, rather than trying to market their own (Chrysler) vehicles. The sales of no longer need operations like sales, service, and marketing could help Magna pay for the parts of the organization that it could use.
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The Keys to making General Motors's turnaround successful
February 28, 2007
General Motors wants union to give up nonassembly jobs | www.stltoday.com
Three areas that are critical to General Motors continued success are new product introductions, resolution of the Delphi bankruptcy, and the settlement of the new labor contract with the United Auto workers later this year. The first is solely within GM's control, while the other two involve the UAW. The union is in a weakened position because of its rapidly declining membership (due to the downsizing of the Detroit companies) and it failure to organize Japanese and Korean plants. GM is beginning to indicate some of the issues, such a flexible work rules, and lower pay scales for non-assembly jobs, that will be part of the negotiations. This year will tell the story if GM's turnaround will take root.
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Ford Motor is attempting to follow General Motors Lead--a positive sign!
February 26, 2007
Follow Leader Ford’s New Game Plan | wardsauto.com
Mr. Alan Mulally the new CEO at Ford Motor Company has taken actions that are designed to provide a "way forward" for this troubled enterprise. These initiatives basically follow the strategies already implemented at General Motors Corporation some time ago. While these policies are good if effectively implemented (not a simple matter), they will require time before Ford realizes the benefits.
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February 26, 2007
Private equity groups eye Chrysler | www.ft.com
There are many possible automakers that may be interested in acquiring all or parts of Chrysler's operations. Perhaps even a couple of these may make sense and could succeed. However the more likely outcome is that the attractive parts of Chrysler will be sold off and the rest just discarded. A sad ending for a proud company.
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Ford Motor Company is Facing Reality, a Hopeful Sign!
February 5, 2007
Ford Chief Sees Small as Virtue and Necessity | www.nytimes.com
Mr. Alan Mulally, the new CEO at Ford Motor Company, is beginning to make his presence felt in his organization. He is making progress in ending the fiefdom culture that has defined Ford internal politics for decades. That combined with an aggressive restructuring of the product line up may be a real way forward for Ford Motor Company.
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Can the Big3 (or the auto industry as a whole) stop Global Warming?
January 31, 2007
Global warming bound to burn Big 3 | www.detnews.com
The earth is going through a warming cycle that may or may be due to automotive emissions. Despite of the uncertainty, the Big 3 car companies (and the automotive industry as a whole) are under the gun to respond to the problem. This response is already well underway, however there is a difference between technical advancements at an automotive manufacturer and that automaker receiving the public recognition as a result (sales of improved vehicles). New regulations if poorly conceived may inhibit this progress.
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How can Ford and GM turn around the perceptions of their products?
January 25, 2007
American Perception Problems of the American Auto Industry | www.howtobuyamerican.com
So far the turn around at General Motors and the anticipated (perhaps hoped for is a better description) turn around at Ford Motor company has focused on cost reductions. This has reduced losses at General Motors and may have the same effect at Ford and perhaps at Daimler Chrysler as well. However increased sales is necessary for a return to profitability. And expanding sales and increased market share is necessary for a return to sustained profitability. The obvious approach is to focus on attractive vehicles that have high quality and good reliability. The truth is that these companies have been building vehicles every bit as good as the off shore competition but the public perception is lagging this significant improvement. A satisfactory turn around requires overcoming this hurdle as well. Can Detroit find a way?
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Will the Honda Future Power train plan succeed?
January 19, 2007
Honda's Diesel-Powered Dreams | www.businessweek.com
Honda has announced a plans to introduce Diesel powered vehicles into its smaller vehicles starting in 2010. They are of the opinion that hybrids are better suited to larger vehicles and have consequently chosen to pursue diesel technology. This is about 180 degrees from the plans and actions of other automotive manufacturers. Given Hondas well-deserved reputation for power train engineering and manufacturing, it is to be expected that they will create a product with outstanding technical performance. The question to be answered is will they be able to market it to a consumer that has shown great reluctance to purchase diesel powered automobiles.
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