Bob Lutz: Detroits Big Three are not Losers

By: Evander Klum

According to General Motors Corporation Vice Chairman Bob Lutz, he is getting fed up by the widespread notion that the big three are nothing but big losers.

Vice Chairman Lutz said, "We have been routinely dismissed as dumb, unprepared, anachronistic -- an endangered species. Are we to believe that three independent companies, with three completely diverse global management teams, grounded by three different and independent boards, all at once nearly imploded because they were all just the same level of stupid at the same time?"

Although the big three in the past have their shares of wrong management decisions, product development that have proven more of a liability than a profit earning venture and of course labor relations which until now is weighing down on the three automakers---it is according to Vice Chairman Lutz view an exaggeration to brand the three automakers as losers.

It can be noted that GM, maker of , and Ford have been able to turn itself profitable again this year despite the sad fact that they are losing money on their US markets. Last year GM and Ford have collectively lost $14.7 billion.

On the part of Chrysler after a not so good nine-year merger with Daimler, it is now finally independent and starting fresh led by an aggressive new management. Jesse Toprak, Executive Director of Industry Analysis at Edmunds.com said, "I think they'll all be around for a long, long time." But he also added that these companies will likely end up smaller than they've been in decades attributed to the cutting down of their work force by almost 70,000.

Aside from that just last month Detroit's Big Three has dropped below a combined 50 percent share of the US car and truck market. According to Autodata Corp., a sales-tracking service, Detroit's Big Three has only 49.5 percent of the total US market share as of July.

J.D. Power and Associates has its own story to tell with regards to Detroit's Big Three market share and that is that they control 53.2 percent of the US market. But according to GM and Ford their market share is dropping due to their decisions to reduce sales to less profitable rental car fleets.

Analysts say that the Detroit Three have no one to blame for their suffering but themselves due to their over reliance to gas-guzzling trucks at a time when gasoline prices were reaching their peak. Similarly, consumers are not also to blame for turning to Japanese vehicles since they are more fuel efficient and eco-friendly.

Erich Merklea, an auto industry analyst at IRN Inc. in Grand Rapids said, "The Big Three need to be able to compete more strongly with the Asian automakers outside of trucks."

Another factor that is hurting the high-profit pickup-truck market is the deep recession in the housing market since most building contractors including their workers are part of the main market for pickups.

The failure of the big three to get a favorable contract from the UAW is also affecting their chance to be profitable again.

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