Jerry Flint: Going Global "Has not worked in the past" for Detroit

[Buickman]

Backseat Driver
Jerry Flint

No doubt about it: Going global is Detroit's latest cure du jour.

At the Chicago auto show, General Motors (nyse: GM - news - people ) showed a near-ready version of the Pontiac G8 sedan, which should be on sale early next year. The G8 is a rear driver with a V-6 or a stronger 362-horsepower V-8. Maybe you remember the old Pontiac slogan: "We build excitement."

The only problem is that GM is not building the excitement in Pontiac, Mich. Instead, GM's Australian affiliate, Holden, will manufacture the sedan and ship it to the U.S.

GM also previewed the Saturn Astra, which is a slightly modified small car from Opel, the German unit of the company. The plan is to build this car in a GM plant in Belgium and import it to the U.S. I have heard that GM may eventually build the Astra in this country.

Ford Motor's (nyse: F - news - people ) executives have been talking about building European models for Americans. Among the mentioned contenders are the midsize European Mondeo cars and a small commercial van.

Nothing is going to stop this trend, especially at GM. For the most part, GM will design and engineer its future passenger cars in Europe or other foreign countries, and then build them in North America, with only modest changes.

One such example is the next Saturn Vue sport utility vehicle, which is a version of a German model. GM will build its new Vue in Mexico. Whatever happened to the promise that Saturn would be a new kind of American car company?

The idea of global models is simple enough: save money and time. The only problem is that it has not worked for Detroit in the past.

full text at www.forbes.com

[GM-10]

Since it didn't work in the past, are you seriously contending that they should never try it again?

[neshapop]

Originally Posted by GM-10

Sice it didn't work in the past, are you seriously contending that they should never try it again?

I agree, perception and needs of a new car buyer changed a lot. Back then people would buy one thing but today they want more and more features even in small cars plus superb efficiency. How come Lexus, BMW and other premium brands sales are soaring? Today people are ready and willing to pay for quality and peace of mind. American consumer stated that e.g. Ford Focus European Edition is quite allright vs. el cheapo box sold here.

[Chaz_23]

Globabalization like everything else is a trend in an industry full of morons, so everyone follows it hoping for salvation. It's not gonna happen. Eventually it will be replaced by "nationalization" where national tastes again rule over global homogenization, or some total unification where all resources are dumped into China and they design, engineer, and manufacture cars, while a handfull of marketing fools in the US market that stuff and US executives get all the loot.

[howpeculiar]

Industry in America faces a lot of challenges. As one of the very few companies in our field that designs, builds, and supports telemetry and law enforcement products in the US, we are constantly faced with some pretty tough decisions. Insurance costs have risen dramatically, salary demands are out of sight, american made parts are hard to find (and expensive when they can be found). When your competitor can sell an equivelent system for $50K (at a profit) that costs you $85K to build, it gets really hard to stay in business. We loose more money every year, and made in the USA labels do not help sell your product. As time goes on, we will either have to move our manufacturing to a Maquiladora in Mexico or a contract out to Taiwan/China. Your government is not willing to pay more for an American product, your Uncle, Sister, Teacher etc. are not willing to pay more for the made in the USA label either. American labor is too expensive when you are competing with companies that pay literally pennies on the dollar to what you are paying. It is depressing, but an anavoidable business condition. Unless the American populace decides to miraculaously start buying American products, there will eventually be no American made products available. I cannot in any way blame companies like GM for spreading their costs to other labor markets, it is the only way to stay in business.

[FamilyTruckster]

I don't care where they are designed or if they are re-badges of a Holden or Opel. If they are good vehicles and are profitable that is what counts.

However, we must keep building them in North America with as many American suppliers as possible.

[Ming]

Backwards-thinking article from an old curmudgeon. He complained when the Aveo came over, and I wouldn't call that car a "failure". But his memory is selective, apparently.

Globalization dredges up politically charged images of a world without borders where the U.N. imposes a world tax on us, etc., but much as I dislike that Brave New World from a cultural and political perspective, I think that big businesses like GM would be foolish to try to return to the past and design and build everything here.

GM can't compete with truly global companies like Toyota by retreating into Detroit and spending billions redesigning versions of cars it already makes overseas. This is wishful thinking from a guy who lived through the Golden Era of Detroit and would probably rather see GM go down than see cars imported from overseas so he can maintain his nostalgic view of how things should be - everything designed and built in Detroit, Toyota, Honda, etc. out of our market, and the Big 3 going against each other once again.

The lame counter-argument I often read is that Toyota designs / builds cars here. Sure it does. But it also has the import heavy lineups of Lexus and Scion, 2 very successful brands that don't rely on American design or manufacturing.

Jerry is stuck in the past in regard to "world cars" constantly dredging up examples back for years of cars that GM & Ford took and softened the suspensions on and decontented, for instance.

But Flint, like a poor marksman, keeps missing the target.

The point is, GM has lost market share to import brands and their imported cars and car designs. It really cannot get more simple than that. People like the styling, the ride, the engines/transmissions, the interiors, the options - and for cars like the Aveo - the pricing and standard features. And not enough of them care where the car was built. In fact, many seem to gravitate towards the imported ones.

Of course, when GM brings a car over and decontents it or softens the ride for "American tastes" strips out the projector beams and nav systems and lip kits - and Mazda or BMW don't? Then Jerry cites those kinds of actions as examples of why Detroit has "failed" at it before and why it shouldn't be done?

If the Import Brands like Mazda can bring a car here successfully, then Jerry is just admitting that he thinks that Detroit is too dumb to do the same thing, or that Opel/Holden/etc. are inferior to Mazda, Hyundai, KIA, Nissan, etc. that all have imported "world car" models and designs they sell here with success.

But I'm rather certain that Jerry knows all of this. He wants GM to fail at going global because it is at odds with his nostalgic ideal of the Detroit of the 1960s.

[eaton53]

The cars haven't worked in the past because they got "Americanized" on the way here.

[Geotpf]

One problem with the importing of the Astra and G8 is, due to currency issues (plus tarriffs and shipping costs), GM is guaranteed to lose money on every single one of these imports. Now, sometimes a project goes badly and one loses money, but GM is planning on selling these vehicles at a loss-best case scenerio. That's pretty damned dumb.

[t-rex]

More mindless tripe and miscellaneous ramblings from ye olde Mr. Flint. Perhaps he's harking back to the early '80s, when US versions of the Escort and J-cars appeared, woefully inferior to their European counterparts. The Escort in fact was only related to the Euro version in name only, sharing no more common parts than a water pump gasket. Both went on to sell extremely well nevertheless.

Apparently Mr. Flint still thinks it's 1972, and imports are only driven by college professors and west coast trendies. Even if there was no cost disadvantage to building here, American cars would still have to, as Ming reflected, adopt more of an international design edict in order to successfully compete.

But as I've iterated countless times before, I really wish Americans would look to innovation, rather than capitulation, to solve the problem of the high cost of building cars here.

[guitarlix]

Originally Posted by t-rex

But as I've iterated countless times before, I really wish Americans would look to innovation, rather than capitulation, to solve the problem of the high cost of building cars here.

I think a great innovation would be to scuttle the UAW ship.

[camaro_freak]

OK, I will concede that GM's new global cars might do better than the old ones. The Saturn Aura on sale now, a version of a German model, is better looking than any previous Saturn model. The next generation Chevy Malibu, coming this fall, also shares this European platform, and is more attractive than any versions of the Malibu since GM revived that nameplate for model year 2000.

yes it's called CAR OF THE YEAR AWARD WINNER!!!!! but you failed to mention that tid bit of info did you?

The problem with Australian cars is that they look dated. Even the G8 that GM showed was not as stylish as a Pontiac should be.

really? Is that why G8 was one of the most talked about cars at Detroit and Chicago? The design is dated? Actually the design is chisled and very modern. This is the new look forPontiacs and it will sell quite well.

Maybe Mr Flint needs to get out more and actually do a little thing called research. Expereince an auto shows and see the PUBLIC's reaction before making stupid personal opinions pulled out of your hat.

Jerry Flint is obviously a cranky, tired old man who wants to see one of the last American owned and operated companies tank instead of succeed.

Maybe we can outsource Jerry's job at Forbes since this article has ZERO value.

[supraracer]

Originally Posted by Geotpf

One problem with the importing of the Astra and G8 is, due to currency issues (plus tarriffs and shipping costs), GM is guaranteed to lose money on every single one of these imports. Now, sometimes a project goes badly and one loses money, but GM is planning on selling these vehicles at a loss-best case scenerio. That's pretty damned dumb.

From what I have read, and I don't have the link, but GM will eventually build the Astra and G8 here or at least in Mexico/Canada. That will cut the costs way down. Right now I think it's way more important to get these cars to market as soon as possible to build positive mindshare about the brand. Just my 2 cents.

[Ming]

Originally Posted by camaro_freak

nothing to see here.. move along people. Jerry Flint is a screw-off

lame-o article.... mods please delete....

I've never seen a US citizen so quick to write off one of the last American owned companies. Maybe we can outsource his job since this article is obviously a waste of time reading.

I decided to keep it here in the news because even though I disagree with him completely, I think his view should be heard. For all we know, there could be more than a few GM big wigs in Detroit who despite the changes still think like this, and I assume that many in the UAW would side with his opinion.

Not sure why Buickman cares, except to take pot shots at the latest strategies of the management at GM he seems to hate so much.

[Geotpf]

Originally Posted by supraracer

From what I have read, and I don't have the link, but GM will eventually build the Astra and G8 here or at least in Mexico/Canada. That will cut the costs way down. Right now I think it's way more important to get these cars to market as soon as possible to build positive mindshare about the brand. Just my 2 cents.

That's the logic, but can GM afford to lose money doing this now? Wouldn't it be better to just set up the local plants ASAP instead of importing them at a loss for a few years?