Monday, July 30, 2007

Late Night Thoughts From Detroit

Detroit is memories of the days when the Big 3 were rolling, when GM, Ford and Chrysler were, for all intents and purposes, the only game in towns all across America.

That was then and this is now and today Detroit is home of the Big 3 who are being rolled over, beaten into total submission by, well, almost every other carmaker in the world. Earlier this year, Toyota took over King of the Hill status from the once invincible General Motors.

As I stare from the window of my hotel this late night, even if I didn’t know it I’d know it. You would, too. You can see in the faces of the people -- a disturbing dull-eyed stare of those who have lost their jobs and their middle-class lifestyles as their employers lost their market positions. They look like assault victims still in shock.

And I wonder why it happened. Who is to blame? Who is the next victim?

Good questions, and there are plenty who will jump headfirst into the blame-game. It is one of those strange situations where facts actually get in the way of understanding.

Employees point to the almost criminal-negligence with which American cars were designed and manufactured for so many years.

Employers point to unions that had so many rules that even the best-designed car could never be built, at least a price that anyone would pay.

Unions point to the employers who, after all, agreed to all that featherbedding.

Executives point to employees who didn't perform and employees point right back at them.

And they all are right -- so busy being right they are not open to seeing a way out or better said, a way back up.

Whether execs, employees, unions, or customers, each sees me, you, and them, and the object of the game is to get yours, to make sure your head stays in the feed bucket longer than all the others, that you stay fat, dumb, and happy figuring the others will take care of themselves and if they don’t, who cares?

It is a zero-sum game. Someone has to lose for another to win but in this case it turned out to be everyone who lost.

No one was open to the idea that it isn’t about the company, the execs, the shareholders, the employees, or the unions. It was about something else that they paid lip-service to, but never considered -- the product. It sounds reasonable but to have even uttered those words might have found you naked and dead in the trunk of a stolen rental car in west Detroit.

Yet, it was true. And it is true. In the 1970’s when I first came to Detroit I had a nascent sense that what I was experiencing wasn’t real, or if it was, it couldn’t last. It wasn’t just the lack of efficiency, but the lack of care that was palpable. The game everyone was playing wasn’t about making cars. It was about making money.

And when the game, any game, is about making money, no one wins for long. It is like telling a batter in baseball that the game is about the outfield fence. Looking at the fence instead of the ball only insures the ball will never leave the park.

The people I know who have made the most money focus the least on it. They focus on what they are doing and what they are doing is not making money. It is something else – it is their product or service, the byproduct of which is money.

The endgame could have been different for Motown if money and selfishness had not been elevated to virtues, if money wasn’t the measure of greatness but the result of it. If each of the nags at the feedbag had focused not on the money but on the moment, on what they were doing, and are doing, Detroit would be different tonight.


Anonymous Anonymous said...

So true . . .

Toyota, Honda Lead Asians to Record U.S. Share as Sales Fall

By Alan Ohnsman and Bill Koenig

Aug. 2 (Bloomberg) -- Toyota Motor Corp. and Honda Motor Co. led Asian carmakers to a record share of U.S. auto sales in July, sending their U.S. rivals below the 50 percent threshold for the first time.

Japanese and South Korean automakers raised their combined share of light-vehicle sales by more than 3 points to 44.6 percent last month, according to Bloomberg data. The market share gains came as sales declines at Toyota and Honda were exceeded by those of Detroit automakers General Motors Corp., Ford Motor Co. and Chrysler.

The results mark a shift 50 years in the making for the U.S.-based automakers, since Toyota began exporting vehicles to the U.S. GM alone had more than 50 percent of the U.S. market in 1962. In July, GM, Ford and Chrysler held only 48.2 percent.

The steady expansion of international brands at the expense of U.S. domestic makers ``to a certain extent is the shape of things to come,'' analyst Rebecca Lindland, of Global Insight Inc. said in an interview. For GM, Ford and Chrysler, ``it's painful to see them go below 50 percent.''

U.S. industry sales fell 12 percent to 1.31 million in July as a weak real estate market and high fuel prices continued to crimp demand for new cars and light trucks. Falling home prices leave homeowners with less equity to tap for extra cash, squeezing consumer spending.

``No one was immune to the weaknesses in the marketplace in July,'' said Jesse Toprak, an analyst at Santa Monica, California-based ``The demand for new cars is not unlimited.''

Record High

The previous market share record for Asia-based brands was 42.7 percent, reached in June. GM's July sales fell 22 percent, Ford's were down 19 percent and DaimlerChrysler's Chrysler declined by 9.1 percent.

Toyota's sales dropped 7.3 percent to 224,058. Even with the decline, Toyota's volume topped that of Ford for the third month this year. Ford's lead over Toyota as the No. 2 automaker in the U.S. has shrunk to fewer than 10,000 vehicles; a year ago, the gap was 317,371.

Toyota's sales decline was its biggest in three years. Sales fell for Corolla, Yaris and Scion small cars and for light trucks including the Sienna minivan, according to data from the Toyota City, Japan-based company.

The Pickup Challenge

Bob Carter, head of U.S. sales for the Toyota brand, said conditions in California and the entire West Coast have become ``challenging,'' in part because of falling home values.

The company sold a record 23,150 Tundra pickups. Toyota's incentives on the truck jumped to an estimated $6,861 per vehicle, the highest level of spending for any full-size pickup, according to

Carter said such estimates ``far exceed our actual spending'' without providing details.

Large pickups are ``a very challenged segment this year. You'll see us continuing to use incentives in a tactical way,'' Carter said in a conference call yesterday. ``I can tell you our August incentive plan is lower than July's. You should expect a downward trend.''

Toyota's market share in July was 17.1 percent, up 0.9 point from a year ago. Ford's fell 1.2 points to 14.8 percent.

Honda, Nissan

At Honda, fifth in the U.S. market, rising sales of Fit, Civic and Accord cars and CR-V wagons failed to offset declines for Pilot and Element sport-utility vehicles and Odyssey minivans.

The Tokyo-based company's total sales of Honda and Acura vehicles were 141,049, down 7.1 percent from a year earlier. Still, Honda's sales topped those of Chrysler for the first time.

Honda's market share edged up to 10.8 percent from 10.2 percent a year earlier.

Nissan's sales rose 1.7 percent to 87,877 vehicles, the sole increase among the six largest brands in the U.S. The gain for the Tokyo-based company was led by the midsize Altima and compact Versa cars, Bill Bosley, North American vice president of sales, said in an interview.

Hyundai Motor Co., South Korea's largest automaker and No. 7 in the U.S., said sales fell 7.8 percent.

Combined sales for Asian brands fell 5.6 percent to 583,352.

July had 24 selling days, one less than a year earlier. Bloomberg and some automakers use unadjusted percentage comparisons, which would be about 4 points lower.

6:52 PM  

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