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Recovery of the automotive industry is hurting

It's been a long time since the auto industry is plagued by overwhelming worries. Not is the increasing gas prices, global warming concerns, declining sales, currency issues, demand for fuel-efficient vehicles, labor concessions, and more. Almost any car manufacturer could go Poco Loco envisioning the appropriate strategies to employ to recover and run the business back in black.

This week is a week vital to the industry, especially for domestic manufacturers and the United Auto Workers (UAW), its largest union. The UAW and the Big Three, which consists of General Motors, Ford Motor Co. and Chrysler Group, formally began what is believed to be the most important round of labor negotiations the history of the industry.

After losing a combined total of 15 billion U.S. dollars last year, shedding over 80,000 jobs per hour companies are pushing for major concessions to close a gap of $ 25 per hour labor cost with their Japanese rivals. And the signs are all parties that the UAW is ready to change profoundly the way it does business in order to protect union jobs that are 180 000, Forbes wrote Joann Muller.

In retrospect, the UAW reached landmark agreements with two suppliers working in bankruptcy. At Delphi, the former subsidiary of GM, the UAW agreed to lower wages for new employees, while in Dana, the union agreed to change the health care liabilities off the books of the company and a union-controlled trust funds. Both concepts are being discussed at the negotiating table the big three, along with proposals for temporary workers in factories and the so-called "bank jobs. "

Concessions on these issues would certainly help domestic manufacturers compete with the likes of Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. But even a written contract by the National Federation of the Union Busters will not solve the crisis in Detroit. Domestic automobile manufacturers face a litany of problems that the concessions of the workforce could not be repaired.

Industry analysts say the domestic automakers are lines producing the wrong product at the wrong time. Detroit automakers are still very dependent on big trucks and sport utility vehicles, a time when gas is over three dollars a gallon and Congress is threatening to pass tough new fuel economy standards. domestic manufacturers sold 63 percent trucks and 37 cars per cent. foreign car manufacturers, however, that the cars are 64 percent and 36 percent trucks for the Japanese.

"They are racing to develop more fuel-efficient cars and crossovers, but new models of three to five years to develop, leaving domestic producers flat-footed again, just as they were during the oil crisis of the mid-1970, "Muller wrote." Even more cars in the lineup, the benefits would be impaired. Strategy consultant AlixPartners estimates a manufacturer earns $ 8,000 to $ 14,000 variable profit on each pill is sold but zero to $ 6,000 on every car. "

He added: "Cars are much improved Detroit, but few Americans have discovered.'s New general manager of Saturn Aura sedan, for example, was 2007 North American Car of the Year, but languishing in at dealerships. And did you know this is a hybrid, too? Probably not. " Saturn Lights rear could not have highlighted the fact.

Detroit may have the biggest problem in the U.S. market: how to attract back to a generation of car buyers that American cars abandoned in the 80s, said Muller. GM, Ford and Chrysler have sworn off low-profit sales to Car rental agencies, and its declining market share showing. Detroit does not seem to be the most efficient solution.

The conclusion is that although the triumph domestic manufacturers in each grant of work, there is no strategy to recover smoothly – no it is not quickly and easily.

About the Author

Anthony Fontanelle is a 35-year-old automotive buff who grew up in the Windy City. He does freelance work for an automotive magazine when he is not busy customizing cars in his shop.

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