Has the auto industry hit a tipping point?

dohboi · Light Sweet Crude Joined: Dec 05, 2005 Posts: 1476

GM announced that they would close four plants that make trucks and SUVs.

GM closes plants

Have the majors finally seen the light?

Closing factories that make SUVs basically signals that they do not plan to make more of these any time in the future. If others follow and essentially no more of these guzzlers are made or bought, how quickly and how far could the total mpg of the fleet rise? What if all former SUV drivers switch to scooters (see related thread)?

Are we hitting a discontinuity here, where drivers, auto companies and politicians wake up to the facts that:

--gas prices are not going to go back down to levels seen in the late '90's early 2000's.

--incremental change is not going to work; it's time to scale down dramatically

--big cars and trucks symbolize, not power and machismo, but rather economic idiocy and ecological pig-headedness

Combined with new mega-oil-projects, could these developments provide a further lengthening of the plateau?

tecumseh

The Big Three have had their heads in the sand for decades. They should have seen the light in the late 70's and made changes that would have at least kept pace with Japanese automakers. How hard is it to buy a Toyota and give to your engineers and say "Make one with these qualities and give it a name we can be proud of."? It seems as if the economic destruction of Detroit (and industrial America) was planned. It's hard to imagine they were really so blind. They could have at least stayed diversified and not been so top heavy with SUV's and pick up trucks. Where is the Ford Festiva when we really really need it! Those cars were reliable and got 45 mpg.

The only thing that makes sense is the consistent busting of unions and shipping jobs over seas to break the back of the middle class. Detroit gave us the large middle class, labor rights, weekends off, pensions... Detroit has been going down for decades now. Detroit represented the highest standard of living in the world in the 1950's thanks largely to Henry Ford and his willingness to pay good wages to workers.

I don't understand the role of the Ford family in all of this. They still own nearly half the stock in Ford Motor Co. Why run the company into the ground? Are they really that inbred? I think the Ford family also pissed off the real world elite some time ago. Check out what Henry Ford had to say here: http://www.jrbooksonline.com/Intl_Jew_full_version/ijtoc_.htm
Maybe this explains why Detroit looks like a war zone? Was the large middle class a threat to the New World Order?

If this is all just the result of greed and stupidity, how does this bode for our ability to get through peak oil?

usncom · Tar Sands Joined: May 04, 2008 Posts: 38

The big three are just responding to demand...plain and simple. Its shortsighted and in retrospect...it almost looks stupid...but thats supply and demand economics. Even Toyota is feeling the pain from the drop off in demand of trucks after trying to take away market share from GM and Ford.

Over in Europe where gas prices have been kept artificially high with taxes you won't recognize Ford or GM brands becuase they are so radically different from North America. Different market environment=different consumer demands.

Serial_Worrier · Heavy Crude Joined: Jun 05, 2008 Posts: 285

Even though many think it was stupid of Toyota to build that new Tundra plant in San Antonio, it's a brilliant move for them to dominate the future small big truck market. In the near future, only people who actually need them(construction) will be buying them. Maybe they'll sell 25K of them a year.

WyoDutch

Don't blame the auto makers for providing what we consumers demanded. They gave us the big pickups because we bought them by the hundreds of thousands.

Used to be, pickups were a basic utility vehicle. No air conditioning... rubber floor mats instead of carpet... plain-jane interiors. Take my pickup for example (pictured here)....

I bought it new in 1984. The only extras were the automatic transmission and the 6.2 diesel engine. Still runs like a top after 25 years and 250,000 miles.

Problem was... GM couldn't sell a rig like that to the urban cowboy. He demanded air conditioning, plush leather interior and of course, a nifty bed cover so the grocery bag didn't scratch the pristine finish of the cargo box.

They'll always be a market for pickups... only difference is, you'll see a lot more plain-jane work-trucks and a lot fewer boulevard queens.
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socrates1fan · Heavy Crude Joined: Jun 04, 2008 Posts: 284

Car companies won't vanish.
They will lose a lot of power and money as America learns that auto culture is not sustainable.
The auto companies that can survive decline of auto use will probably get into the public transit or bicycle business (the very thing they were out to destroy in the 40's and 50's.).
A lot of the car dealerships here are hurting bad. I used to see new cars a few years ago on the lot but now I see the same cars gathering dust.

Serial_Worrier · Heavy Crude Joined: Jun 05, 2008 Posts: 285

socrates1fan · Heavy Crude Joined: Jun 04, 2008 Posts: 284

Kingcoal

I can't imagine anyone in their right mind buying a new car right now that doesn't get over 30mpg. Personally, I can't imagine anyone buying a new car period right now. The used car lots are overflowing with deals. I switched from oil heat to natural gas a couple years ago and the initial cost is paid off. I'm pondering on what to do about my other liquid fuel beast; my car.
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timmac · Heavy Crude Joined: Mar 27, 2008 Posts: 269

In some ways I beleave the big 3 knew somthing was going to happen when fuel prices got above $3.50 a gal,, but instead of planing for what is coming I think some where up in a high exec's office they wanted the companies profit to tank and file for bankruptcy so they can get rid of the high paying union contracts and expensive legacy of retired union workers,, they have tried for some time to get out of these over paid worker unions and failed in the past,, only way out of union contracts and retired legacy is full blowen backruptcy,, it worked for the railroad ind now it might work for them,, Just to give you a example I had a cousin that worked at a champian spark plug plant in Iowa back in the mid 70's and he made $20.00 hr plus excellence benifits and double time a lot and all he did was install a small cap on plugs all day, a monkey could have done it and he even said he was paid way to much for a simple job but the union got them this pay and no one complained,, well by the late 80's earler 90's champian moved to Mexico.. I think the big 3 are just tired of the over paid union workers and legacy and need a complete way out,, Bankrupcty is there way...

SoylentGreen · Heavy Crude Joined: May 25, 2008 Posts: 168

Chrysler was bought by Benz several years ago and they just dumped it last year like a burnt bratwurst. Private money bought Chrysler for a lil more than a song and a dance.
GM and Ford were both put on credit watch last week. If things keep going the way they are, they will both go under in 1 year per Wall Street.

Serial_Worrier · Heavy Crude Joined: Jun 05, 2008 Posts: 285

SoylentGreen · Heavy Crude Joined: May 25, 2008 Posts: 168

the Wall Street rumor now is either Ford or GM(a major player) will file for bankruptcy next month.

Tyler_JC

Ford shares just fell below $5 for the first time in God knows how long.

It's scary to think what will happen to all of those pensioners if Ford tries to abandon its responsibilities via bankruptcy.

But at $4 a gallon, what choice do they have?
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catbox

I actually turned on the tube last night, a rarity in this house, and caught the Simpsons and King of the Hill. During that time, just about every commercial was for all the major car companies trying to pawn off trucks and SUV's to the masses. Overall it was kind of creepy! Even my daughter was wondering what was going on...Ford had the strangest commercial with their employees talking about how they are still Americas's truck builders..on and on...showing the factory in action, etc....again, it was creepy in a doomer sort of way.

The market and oil looks pretty creepy this morning as well.

catbox
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