7 ms·

You Know Chrysler is Toast Because

28 points by fallentimes 18y ago

mattjaynes 18y ago
lol, the cartoon at the end is the best part. Pretty harsh analysis - but spot on given how clueless Detroit is. "For those in Detroit who have never operated a lemonade stand, or any other business, the way profits are generated is by making products at a price people want to buy them for, and then producing them, with all costs allocated, for less than you are selling them for. It’s not apparent that this is a principle that Detroit understands."
- bbgm 18y ago
  Apparently they've never read their Drucker, or have conveniently chosen to forget.
- newt0311 18y ago
  Unfortunately, Detroit happens to be in the company of Washington as well as most labor unions and several influential interest groups. It's a disaster in progress.
fallentimes 18y ago
A nice change of pace given patio11's comments from earlier today: "I work in the Nagoya, the Town Toyota Built, though not for Toyota. (Well, to the extent that anyone in Nagoya can be said not to work for Toyota.) The great thing about Japanese corporate discipline: when GM has a tough year, GM blames the year. No way we could have predicted spiraling gas prices, a down economy, and increased foreign competition. When Toyota has a tough year, Toyota blames Toyota. You can bet that somewhere in the bowels of that megacorp is a team of economists reevaluating their currency hedging strategy, while another team is working 16 hour days coming up with a car that captures the imagination of the American consumer but is priced to move as compared to the Prius. Keep doing this whole "Learn from failure and overcome it" thing for a few decades and you end up the biggest car company in the world and make the competition look like sniveling amateurs." http://news.ycombinator.com/item?id=406545 http://news.ycombinator.com/item?id=406545
- patio11 18y ago
  Funny -- my intuition of Japanese business etiquette, which is not always correct, suggests that the Chryster CEO if anything under-groveled with the $100,000 ad in the New York Times. It is a large expenditure to show feelings. Japan is really big on that (as are most cultures, truth be known, but the forms are different). If it were a Japanese CEO, I predict they would have taken a page out of the politicians' book: go to a busy train station, during the morning rush hour. Stand on a footstool. And shout the following for an hour: "I am the president of Toyota! I promise you we will not waste your money! Thank you for giving us the chance to keep these jobs in Japan! With your help we will proceed together to a beautiful future! I am the president of Toyota!..." There is a Japanese politician from the ruling party who is detailed to go to a large train or subway station, typically in Tokyo, and shout something like this. Every. Single. Workday. More than one when the government is hurting, for whatever reason. The point is not to draw a crowd -- most people are busy on their way to work and pass straight by. The point is not to draw a camera -- they could have thrown a press conference in a nice heated room with 15 handpicked reporters and been far less embarrassed about things. The point is to demonstrate that nothing I could possibly be doing this morning is more important than demonstrating my commitment to you. Even the Prime Minister is occasionally expected to put in an appearance. Of course, the Toyota CEO won't have to do that groveling because he runs a business which makes money. But if he didn't, oh boy, there would be an appropriate level of bowing and scraping.
  - tommusic 18y ago
    Wow. This would feel so out-of-place in the US that people would wonder about the mental health of the shouter. I like the assertion of importance implied by the shouting; it seems that the US car corps have enough separation between the performance of a company and the impact on the exec that it doesn't carry the same weight. The "down economy" or "lower consumer spending" are too well-established as escape-goats.
mattmaroon 18y ago
This is actually kind of stupid and poorly thought out. That thank you ad is just that, an ad. It's an investment. Just because a company's having a hard time doesn't mean it should never advertise. Sometimes it should advertise more. And the American car companies have figured out what cars people want and at what price range. They were selling SUVs before the rest, for example. The problem is that the other car companies can quickly copy them, and the price range is set by the market, which is flooded with Japanese cars of the same sort. The Japanese can undercut them because of their lower employee salaries. It's not as if the American car companies can't make a decent car. They just can't make one that doesn't cost $2k more than the Japanese because of their cost basis. No amount of innovation can overcome that.
- justindz 18y ago
  No amount of innovation could overcome a labor cost disadvantage? No amount? Ever? I'm not disagreeing with your main point. But I think you're either selling innovation a bit short or you're being too rhetorical.
  - mattmaroon 18y ago
    Not in the car industry, because the rest will copy any innovation that catches on. I have high hopes for the Chevy Volt, for instance, but I also have no doubt that if demand for it proves significant, Toyota will have a competitor out in 2 years, and they'll be able to price it $2,000 less. You can't out innovate someone who can just copy you and sell a product just as good for less.
    - misuba 18y ago
      So there are no innovations left to be made in the portions of the car industry that don't reside directly in the product?
      - mattmaroon 18y ago
        Such as? And even if so, that wasn't Cuban's argument. He said that Americans need innovate with respect to building cars people want. My point was that they can't do that when every car has to either cost $2k more than a competitor, or have $2k less worth of features. The fact that they choose the latter is why American cars are viewed as being of shoddy quality.
anewaccountname 18y ago
>Just one more example of how poorly run the car companies are. Note to the Big 3, spend money to make money. These types of ads have as much value as a Bernie Madoff account statement. Or maybe even as much value as a broadcast.com earnings projection.
kqr2 18y ago
Here's the actual ad: http://blog.chryslerllc.com/blog.do?id=564&p=entry http://blog.chryslerllc.com/blog.do?id=564&p=entry

28 points by fallentimes 18y ago

lol, the cartoon at the end is the best part. Pretty harsh analysis - but spot on given how clueless Detroit is. "For those in Detroit who have never operated a lemonade stand, or any other business, the way profits are generated is by making products at a price people want to buy them for, and then producing them, with all costs allocated, for less than you are selling them for. It’s not apparent that this is a principle that Detroit understands."

bbgm 18y ago
Apparently they've never read their Drucker, or have conveniently chosen to forget.
newt0311 18y ago
Unfortunately, Detroit happens to be in the company of Washington as well as most labor unions and several influential interest groups. It's a disaster in progress.

fallentimes 18y ago

A nice change of pace given patio11's comments from earlier today: "I work in the Nagoya, the Town Toyota Built, though not for Toyota. (Well, to the extent that anyone in Nagoya can be said not to work for Toyota.) The great thing about Japanese corporate discipline: when GM has a tough year, GM blames the year. No way we could have predicted spiraling gas prices, a down economy, and increased foreign competition. When Toyota has a tough year, Toyota blames Toyota. You can bet that somewhere in the bowels of that megacorp is a team of economists reevaluating their currency hedging strategy, while another team is working 16 hour days coming up with a car that captures the imagination of the American consumer but is priced to move as compared to the Prius. Keep doing this whole "Learn from failure and overcome it" thing for a few decades and you end up the biggest car company in the world and make the competition look like sniveling amateurs." http://news.ycombinator.com/item?id=406545 http://news.ycombinator.com/item?id=406545

patio11 18y ago
Funny -- my intuition of Japanese business etiquette, which is not always correct, suggests that the Chryster CEO if anything under-groveled with the $100,000 ad in the New York Times. It is a large expenditure to show feelings. Japan is really big on that (as are most cultures, truth be known, but the forms are different). If it were a Japanese CEO, I predict they would have taken a page out of the politicians' book: go to a busy train station, during the morning rush hour. Stand on a footstool. And shout the following for an hour: "I am the president of Toyota! I promise you we will not waste your money! Thank you for giving us the chance to keep these jobs in Japan! With your help we will proceed together to a beautiful future! I am the president of Toyota!..." There is a Japanese politician from the ruling party who is detailed to go to a large train or subway station, typically in Tokyo, and shout something like this. Every. Single. Workday. More than one when the government is hurting, for whatever reason. The point is not to draw a crowd -- most people are busy on their way to work and pass straight by. The point is not to draw a camera -- they could have thrown a press conference in a nice heated room with 15 handpicked reporters and been far less embarrassed about things. The point is to demonstrate that nothing I could possibly be doing this morning is more important than demonstrating my commitment to you. Even the Prime Minister is occasionally expected to put in an appearance. Of course, the Toyota CEO won't have to do that groveling because he runs a business which makes money. But if he didn't, oh boy, there would be an appropriate level of bowing and scraping.
- tommusic 18y ago
  Wow. This would feel so out-of-place in the US that people would wonder about the mental health of the shouter. I like the assertion of importance implied by the shouting; it seems that the US car corps have enough separation between the performance of a company and the impact on the exec that it doesn't carry the same weight. The "down economy" or "lower consumer spending" are too well-established as escape-goats.

mattmaroon 18y ago

This is actually kind of stupid and poorly thought out. That thank you ad is just that, an ad. It's an investment. Just because a company's having a hard time doesn't mean it should never advertise. Sometimes it should advertise more. And the American car companies have figured out what cars people want and at what price range. They were selling SUVs before the rest, for example. The problem is that the other car companies can quickly copy them, and the price range is set by the market, which is flooded with Japanese cars of the same sort. The Japanese can undercut them because of their lower employee salaries. It's not as if the American car companies can't make a decent car. They just can't make one that doesn't cost $2k more than the Japanese because of their cost basis. No amount of innovation can overcome that.

justindz 18y ago
No amount of innovation could overcome a labor cost disadvantage? No amount? Ever? I'm not disagreeing with your main point. But I think you're either selling innovation a bit short or you're being too rhetorical.
- mattmaroon 18y ago
  Not in the car industry, because the rest will copy any innovation that catches on. I have high hopes for the Chevy Volt, for instance, but I also have no doubt that if demand for it proves significant, Toyota will have a competitor out in 2 years, and they'll be able to price it $2,000 less. You can't out innovate someone who can just copy you and sell a product just as good for less.
  - misuba 18y ago
    So there are no innovations left to be made in the portions of the car industry that don't reside directly in the product?
    - mattmaroon 18y ago
      Such as? And even if so, that wasn't Cuban's argument. He said that Americans need innovate with respect to building cars people want. My point was that they can't do that when every car has to either cost $2k more than a competitor, or have $2k less worth of features. The fact that they choose the latter is why American cars are viewed as being of shoddy quality.

anewaccountname 18y ago

>Just one more example of how poorly run the car companies are. Note to the Big 3, spend money to make money. These types of ads have as much value as a Bernie Madoff account statement. Or maybe even as much value as a broadcast.com earnings projection.

kqr2 18y ago

Here's the actual ad: http://blog.chryslerllc.com/blog.do?id=564&p=entry http://blog.chryslerllc.com/blog.do?id=564&p=entry