GM v. Toyota again
I had a bizarre conversation at a conference this week. We were talking about gas prices around the country and I asked what GM, Ford, and Chrysler were planning to sell if this keeps up. My wife had just told me that she got a Wall Street Journal alert that they were all down and Toyota was up, again.
Someone walked in and told me that GM wasn't down, it was showing record profits. I told him that I thought that was wrong (I haven't been near a network connection the whole week), but in any case, what could they be selling. He said they just showed several new cars at a car show last week (here's an article); I told him that those could not possibly have been what they were selling last quarter. He then explained that he lives in Detroit and knows about these kinds of things. I started to explain that Toyota is a manufacturer that makes a profit by manufacturing things, while GM thinks of manufacturing as a secondary source of income; he said that the record profits are proof that they are manufacturing and that the problem with their cars is that each car has $X of pension fund in it. I pointed out that they could have made those record profits by selling off a plant or two (or three); I did not address the fact that Toyota's pension funds are also embedded in their prices (even if those are accomplished through the public sector by means of punitive taxation). He walked away, convinced that I, a non-Detroit dweller, could not possible know what I am talking about.
I completely forgot to point out that the GM is a conglomerate whose main stream of profit comes from their lending arm, GMAC.
Yet, here it is:
Someone walked in and told me that GM wasn't down, it was showing record profits. I told him that I thought that was wrong (I haven't been near a network connection the whole week), but in any case, what could they be selling. He said they just showed several new cars at a car show last week (here's an article); I told him that those could not possibly have been what they were selling last quarter. He then explained that he lives in Detroit and knows about these kinds of things. I started to explain that Toyota is a manufacturer that makes a profit by manufacturing things, while GM thinks of manufacturing as a secondary source of income; he said that the record profits are proof that they are manufacturing and that the problem with their cars is that each car has $X of pension fund in it. I pointed out that they could have made those record profits by selling off a plant or two (or three); I did not address the fact that Toyota's pension funds are also embedded in their prices (even if those are accomplished through the public sector by means of punitive taxation). He walked away, convinced that I, a non-Detroit dweller, could not possible know what I am talking about.
I completely forgot to point out that the GM is a conglomerate whose main stream of profit comes from their lending arm, GMAC.
Yet, here it is:
- GM, Ford, Chrysler's U.S. Sales Fall; Toyota's Rise
- Toyota's sales jump while GM, Ford fall
- Big Three Get March U.S. Sales Beating, Toyota Cheers
- General Motors March US adjusted sales fall 7.7 pct to 349,867 units
- GM Sees Softer Q2 Sales; Plans Summer Incentives
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