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How terrible. :( It's hard to imagine a foreign competitor having this same problem: running into a rough patch for a couple of years and then all of a sudden

• uuilly 18y ago
  It's really not terrible. America invented the TV and Zenith, the last American TV company, was sold to LG over a decade ago. Not many cried when IBM sold it's laptop division to Lenovo either. Americans just aren't great at manufacturing. PG wrote about this a long time ago here: http://paulgraham.com/usa.html http://paulgraham.com/usa.html It's not sad to pass the torch. The car is 100 years old. It's time to do something new. We should be focused on innovation not on some notion that it's our god given right to have American cars. As of this writing there is an interview with Elon Musk of Telsa Motors at the bottom of the news.yc page. That should be the future of American cars. I heard that the Tesla engineers had a week long sit down w/ the Volt engineers. The word was that the Volt guys were an embarrassment and that they couldn't answer simple questions about their batteries. Chevy can't build a simple gas powered car that can go over 60k miles w/o having all the buttons fall off the dashboard. There is no way they're going to build a decent Prius competitor. They had a good run, let them die.
  • ssharp 18y ago
    I don't think Paul Graham's analysis of the US auto industry is accurate at all. Toyota is the number one manufacturer of automobiles right now and outside of the Lexus brand, none of their designs are significantly more stylish than any GM product. Where Toyota was able to flank America was on quality. That advantage is pretty much over at this point as U.S. automakers have made huge strides in initial quality over the past several years and have implemented quality procedures on par with Toyota. In terms of style, Europe is well ahead of the U.S. but that is how they differentiate themselves. European cars are more expensive across the board than Japanese & U.S. If you look at the styling of Japanese and Korean cars, you're not going to see much of anything better than what GM and Ford are doing, yet Toyota, Hyundai, etc. are not having the difficulties that GM is having. Where GM is failing is in two things: marketing (mainly positioning and products) and labor. GM workers are making a lot more than Toyota assembly workers, especially those that have been around a long time. This problem is fixable with cooperation from the UAW but it's not going to be easy and a lot of buyouts will be necessary. The next problem with GM is that they failed to forecast the markets. They largely ignored the compact market, were behind the curve on crossovers, and didn't put enough money into their sedans. They put all their eggs in one basket with trucks & SUVs. Those vehicle sales were dropping off even before gas was $4/gallon. While their sedans have caught up to the Japanese in real terms, they still have a serious image problem and are still viewed as inferior. I haven't seen much advertising that really addresses these concerns. You can't reposition yourself overnight with advertising and you definitely cannot reposition yourself overnight with new/improved products but GM is on the right track. There are a lot of other macroeconomic conditions that get involved if GM does or does not receive bailout money but if they do get it, I don't think it will be wasted.
  • sown 18y ago
    I'd feel better about an analysis from an expert on manufacturing and so forth, which I get the impression neither you, pg or me are. I dunno about throwing "innovation" around on cars; I think people use that word without caution or really thinking about what it means. When I grew up the nearest stop light was 20 miles away; cars were the only way to get around. Even now, living in Mountain View it's a hassle living without a car. Everywhere I've lived up until now was a huge hassle without a car, partly because it was so remote. A very large segment of the US lives like this and frankly, I don't like the idea of sharing a bus seat with strangers, waiting on trains, etc. I like the idea of automated cars as public transit and so forth but we shouldn't throw stuff out because it is old. The chair is lord only knows how old and just like I need to sit, I need to get out of the house to do whatever. ;)
    • uuilly 18y ago
      I don't think anyone's arguing against cars. I just think that American cars are less desirable than Japanese, Swedish or German cars. Cars are no doubt useful things.
• mattmaroon 18y ago
  Foreign competitors don't run into this problem because they weren't saddled with unions. When you are forced by labor laws to pay $30 to a guy who pulls a lever all day, it turns out its hard to compete in the global economy.
  • nazgulnarsil 18y ago
    monopolies are bad, it doesn't matter whether it is a monopoly by the "evil corporations" or the "saintly workers". monopolies always hurt the economy. ALWAYS.
  • sown 18y ago
    There are good things and bad things about unions but painting them all as somehow bad is a bit extreme. Of course, there are Japanese auto unions as there will be in China. As the son of a man who was a APWU union man who worked himself to the bone for the family, my own personal experience can attest that the only thing that kept management's abusive treatment of their workers, like my dad, in check, was the union. While balance is a issue of most things, just blaming unions carte-blanche and saying we don't need them is...harsh.
    • mattmaroon 18y ago
      What abusive treatment? The market doesnt value people who work at car factories very highly because their job is so easy that anyone even slightly more intelligent than a chimpanzee can do it. The supply of able workers is pretty near 100% of the population. The reason programmers don't unionize is because they are trained in a trade that not just anyone can do. They don't need to worry about being "exploited". Regardless of whether we need them or not, unions are why American car companies have no shot. They're saddled with ridiculous wages and pensions. They shouldn't, according to market economics, have to pay any more than Wal Mart for their labor, but they are forced to, and as such they'll never be able to compete in a global economy against those who aren't. Any good things that come from a union in the short term (such as higher paychecks and pensions) are more than destroyed by the harm caused when they run entire industries out of the country. There's a reason they call my neck of the nation the rust belt. It's price fixing pure and simple, and it's always bad for the economy in the end.
• helveticaman 18y ago
  GM has been in a rough patch for thirty years.