why is ford and GM losing ground?

Question

what were their big mistakes that cost them revenue and marketshare to Toyota in recent years?

Answer 1

Their number one problem is their 55 and out retirement policy. Both Ford and GM currently have more retirees than employed people paying into the pension fund. Most plants currently have 1/3 the workforce they had in the 80's and all those from the 80's are now retired. Both are borrowing like crazy from profits and sales to pay pension and benefits. This reduces their profit margin drastically. Yes, their sales are down as well, but their bottom line looks worse due to the heavy pension payouts.

Answer 2

It's not just Toyota - they are losing ground to Nissan, Honda and many other automakers for several reasons. Here are 2 biggies:
1. Longevity. It is a proven fact that foreign vehicles will last much longer (in terms of miles driven) and cost less to maintain (repairs, fuel efficiency etc.)
2. Value for the dollar. I had the option of buying a brand new Ford F-150, or a Nissan Titan - both crew cabs. They had all of the same basic otions (stereo, power windows and locks etc.) Even the fuel efficiency was close. Where Ford lost totally was that the 5.4 liter V8 (upgrade from the standard 4.7 liter V8) delivered less horsepower than the 5.6 liter V8 (standard equipment) of the Titan. Towing capacity for the Ford came in less than the Titan as well. Lastly even though the F-150 was less truck than the Titan, it also cost $1,500 more than the Titan. This same scenario is repeated in comparison across many types of vehicles.

Those are the 2 biggest reasons. I don't think I have to tell you what I now drive.

I hope this answers your question.

Answer 3

They lost this market share over years. People remember their parent's Ford that wouldn't start in winter in the 1970s and won't even go into a domestic dealership. A lot of Japanese car owners won't look at a domestic car even though US quality now meets world standards. The quality gap has closed but the perception remains.

Moreover, the reason Dad's Ford was hard to start in the winter was because it had a carburetor instead of fuel injection. The changes in technology that have improved all cars has further widened the gap between today's car and your parent's car you remember. So the import buyer sees a modern Honda and compared it to his father's 1975 Oldsmobile. If he compared it to a Saturn Aura, GM would get a lot more sales.

Answer 4

The unions have sucked the company dry, and management let them.
Health Care alone accounts for about $2500 on Ford or GM car compared to about $800 on a Toyota.

Answer 5

It's very simple. They are what's known
as the old guard. They are stubborn and
refuse to change because as Americans
we think we're always right. They will run
those companies into the ground before
they give us what we want. Why, because
that would mean they would have to admit
that another country has found a better way
to do something than them.
We as Americans always have to be right.
Need I say more than one word, Iraq.

Answer 6

The "big three" have failed to lead the industry. The consumer wants inovation not gadgets. The ENTIER industry Must move and I do mean now to faze out fosil fules and go GREEN. Give me a viable product that will get me where I'm going and I WILL buy.

Answer 7

Because Toyota is a great car with low on gas!

Answer 8

because American has over 75 cruse control systems and Toyota has 2! American cars have many different dash panels where Toyota has like 5!

Answer 9

High union retiree benefits. There is 3 union workers supporting the one retiree. Toyota does not have unionized workers so they can keep their costs down.

Answer 10

Labor Unions