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Car Forum / Driving, Maintenance, Tuning / Maintenance and Repair / March 2006

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What causing major automakers cut jobs and shutdown plants?

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Hubert Mak - 05 Mar 2006 05:21 GMT
??????????
Marv Soloff - 05 Mar 2006 12:01 GMT
Without going into a lot of detail, American automakers are cutting jobs
and closing plants because not enough people want to buy the cars they
are producing at the prices they are asking.  There are better values
available in the auto marketplace other than General Motors and Ford.

Regards,

Marv

> ??????????
Elbert - 05 Mar 2006 15:04 GMT
two words.....  quality & price  and maybe a third........ design

>??????????

-----------
Elbert
ask@me.com
djohnson64@gmail.com - 06 Mar 2006 06:12 GMT
Bunch of reasons.  US manufacturers frequently have contracts that mean
in the short term they lose more money by shutting down a plant
building a money losing vehicle than they do continuing to produce.
Management is rewarded for short-term goals, so for years tough
decisions have been put off until later.    It is now later.  SUV's
don't cost nearly as much more to produce as they sell for--While raw
materials costs may be a bit higher on a big vehicle, you don't need
more people to install doors, fenders, radios, etc.  When gas is cheap,
it is obvious that you should concentrate on high-profit low-mileage
vehicles, but when gas prices rise, you get stuck with overcapacity.  A
plant that was single-handedly responsible for a double-digit
percentage of GM profit a few years ago has been cut back, and is in
danger of being shut down in a few years.
 
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