Why are Ford and GM closing plants?

Question

It appears that some major car manufacturers are in financial trouble. Why is this happening so suddenly?

Pik- of course I am aware that recently, gas prices were higher. HOWEVER, gas prices have lowered tremendously over the past week or so. It has been forecasted that a gallon of gas will be around $2. So, your point is invalid.

TOMA- you're wrong. I don't buy Toyotas or imports. I have nothing really against them, but I like GM cars and trucks. My family owns two Fords and one GM- I drive the GM. You pejoratively accuse me of buying imports, and then you contradict yourself and say that domestic autos are crappy. Pick a side!

Answer 1

To "bummer's" point,

Toyota recalled more cars in 2006 than they sold - hhhhhmmmmmmmmm? Didn't see that one on the media, did you?

Understand that Japanese companies do not have any historical union rules, so they can add and drop employees to match their timing.

American companies have unions, and there are:

10,000 union people not working being paid by GM
5,000 union people not working being paid by Ford
3,000 union people not working being paid by Chryslser.

They get their paychecks for 2 stinkin years, and they don't even have to show up for work. Add that cost, and others (work rules), and you can see why the companies are buckling under those types of constraints - when the companies were growing they could absorb that, but they can't retract it now that the times are tough.

BTW, GM contributes 1% to the entire countries GNP - 1 company, 1%, Bash all you want, but the domestic automotives demise will impact us all.

Answer 2

It all comes down to excess capacity, and a reduced market. The excess capacity probably has more to do with the number of players in the market and rising gas prices, and a general slowdown in the US economy. GM and Ford also have some serious legacy issues that need to be dealt with.

BTW, let's go over this again, people.

GM makes more vehicles that get more than 30 mpg than any other manufacturer.

GM lead JD Powers Initial Quality survey this summer, beating Honda, Toyota, etc.

GM's new 5 year / 100,000 mile warranty is the best in the industry for a full line manufacturer

GM sells more vehicles in the US than any other manufacturer, and is still #1 in the world.

Toyota is not perfect, either. Lots of recalls recently, including the biggest in history.

Answer 3

There is a backlash on all the fuel inefficient models that the car manufactures have been producing. With gas prices breaking records, many ppl that own SUV or other gas guzzlers cars are trading them in for more fuel effecient cars.

Since the auto industry never bothered to make cars like that in the first place, their loosing vast amts of money (cause less and less ppl are buying the SUV's and et al).

Recently some auto manufactures started making eco-friendly cars, but not enough to make a profit.

Ford is trying to do a complete reconsuruct its business (and practices), and thats a GOOD thing!

Answer 4

simple really supply and demand, and the need to keep share holders happy. Given the condition of the economic climate, people being more concervitive gas prices. The company must mold itself to its market. ie the company is too big, if they don't cut back on ther e size and become more efficient they will start losing money. Slowly what has happened in europe and canada is slowly takign shape in america. They days of having a suburban, and two cars are gone. now a days it's a minivan and a gas efficient small car.

They are just being smart and anticipating this and adjusting themselves to compete better.

Answer 5

properly, different automakers will use that excuse, however the actual concern, is the CAW, and so on, have led to the salaries to truly make it uncompetitive for them to proceed working flowers in Canada. in the event that they are able to get comparable high quality and performance for a decrease cost, in say, Mexico or China or someplace else, so that they are able to develop their income margins (it is incredibly all shareholders care approximately), then why does no longer they? that's no longer to declare I one hundred% disagree with CAW pushing salaries. I propose, if we've been "aggressive" with another places, people does no longer have a residing salary. despite if, there are various people in any union concern that are fully incompetent, and handling to stay interior the gadget because of the fact unions defend them, and that facilitates smash it for each guy or woman else. From an corporation point of view, they are worried relating to the base line, and that's a "short-term restoration" to cover collective butts in greater administration. despite if, interior the long-term, they finally end up killing off area of their marketplace by utilising unemploying assorted ability shoppers. incredibly, the two sides are being unrealistic interior the area.

Answer 6

Because everyone like you is buying Japanese cars. And that is because the U.S. auto company's are trying to sell high priced crappy cars on the reputation of their past successes.

Answer 7

Could be the rise in gas, people aren't buying big cars too much these days. But the company says it is because of rising costs in health care.

Answer 8

if you havent noticed already, oil is expensive at the moment which driving consumers away from the market, on top of that theres big competition from the japanese manufacturers such as toyota, honda, mazda, etc considering the jap cars tend to drink less fuel and cost less then the usa manufacturers.

Answer 9

Their market share has been deteriorating for several years now. Trade barriers,energy costs,and the slowing economy are all factors,,:-(=

Answer 10

cause they are too stupid to offer the cars that they have been selling overseas here. like the ford festiva diesel that get almost 70 mpg.