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Saturday, March 13, 2004

Same Thing All Over Again

Honda and Toyota are flush with cash. So where have they decided to spend this cash? Reinvest in their product line? Nope. Acquire competitors? No way. Expand their lineup? Not that either. How about buliding airplanes? You bet.

GM, Ford, Chrysler, all experimented in various industries, and have largely abandoned them. All the military arms of the Big 3 have been sold off, GM's rail line was sold off recently, as well as Hughes Electronics. Car companies just can't concentrate on anything but building cars; the market is too competitive. If I was an American exec I'd be throwing a party, because this means that Honda and Toyota are already starting to take their eyes off the ball, and concentrate on other, unprofitable industries. There's a reason why the small jet market is largely untapped for the Japanese to take it over; because all the previous companies were driven out of business by liability lawsuits for crashes. These small jets typically have as their passengers rich executives and business owners. If they die in a crash, you can expect their families to buy the best lawyers possible and sue the pants off the manufacturer.

Honda and Toyota must be dreaming if they think they are perfect manufacturers. Acura's cars outside of the RSX don't sell well. Both companies sell poorly in Europe, to the extent that their European arms have NEVER been profitable. Their own domestic market is decreasing in size and profit. Instead of fixing these problems, they are going to build planes. It's a bad idea, that's going to cost them in the long run.

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Friday, March 12, 2004

Good Article

Here is a good article from CBS Marketwatch on the Big 3 being behind the times. Ford is borrowing hybrid technology from Toyota, instead of developing it on their own. If anyone still thinks that gasoline is not an important issue in the future, tell that to the 200,000 troops currently stationed in the Middle East. The European and Japanese manufacturers are masters of dealing with oil shortfalls, the American's depend on oil abundance. It's looking like the 1970's fuel crisis all over again.

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Tuesday, March 09, 2004

It's a Step in the Right Direction

Evidentally American auto manufacturers are making more reliable cars than their European counterparts, according to this article. My family's experience with their Oldsmobile Cutlass Supreme '86, and Jaguar XJ6 '90, are in total agreement with this article by the way. Of course a Jaguar is a Jaguar, so breakdowns are expected.

What's interesting to note is that American cars used to be made quite poorly, or at least not as reliably as they are now, and people bought more of them. A BMW might not be as reliable as a Cadillac, but guess which one will sell more world wide? That's a warning to the Japanese as well; build a bland reliable car, and you might lose customers. Build excitement, and you gain some.

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