I believe he's correct. I have it on good authority that a competitive Busch car is $11-12 million, so I can only assume that a 75-150% cost jump would be appropriate for a front-running Winston Cup...er, I mean, Nextel Cup car.

http://en.wikipedia.org/wiki/Keiretsu

Ed, you're right...but that doesn't change the underlying profitability problem that the Big 3 are having, due in large part to three simple problems:

1. Health and retirement costs for current and past employees
2. Inefficient project development and manufacturing techniques
3. Lack of robust, interchangeable platforms from model to model. (Only in very recent years/models have domestic manufacturers embraced this problem)

Toyota, specifically, is a nearly flawless example of Lean Manufacturing (5S) techniques, and generates nearly $2,600 in additional profit per vehicle than domestics.

Realistically, the Big 3 have baked themselves a nice steaming kettle of poop stew over the last fifty years, and the repercussions are just now coming to bear.

But I still love my GMC trucks and vans.

Domo arigato sensei

Okay Ed I'll grant you all of that ( I'll go and study the Wiki). I'll just tell you while on Oki I saw Honda Accord Coupes and Wagons with the Honda of America badges on them. I never saw any of the large Toyota/Honda pickups and SUVs that we have here on Oki or in Thailand. The Cavalier that was run in prostock is badged as a Toyota Cavalier in Japan. I would run by the Chrysler/Jeep dealer on Oki. I also walked by the Cadillac dealer in Seoul. And the capital of Nebraska is Lincoln Kampai

S/F
D

the main reason the "domestic" brands are struggling is lack of quality. i've owned foreign and domestic cars. the domestic cars are in the shop 10 times more often than the foreign cars. also, if you're bored sometime, do a kelley blue book on a chevy cavalier vs honda civic (same year, same mileage, condition, etc)....the resale difference will blow your mind. not to mention fuel economy, peformance, reliability and the fact that the place of final assembly is usually kentucky or ohio instead of canada or mexico.

just wait until toyota, nissan, et al. start venturing into the heavy duty truck market, which the big 3 have had cornered in the past. that is the one last thing that the domestic brands have that could be the straw that breaks the camel's back if the "foreign" brands are successful.

I totally agree with you Jason. I had owned domestic vehicles my whole life until '99, with exception of a Renault Aliance...YUK! I warped the aluminum head on that thing and the door locks fell out! That would total 7 vehicles.....all had issues after 60K, with exception of the Jeep Cherokee. That sucker was kickin' at 160K when I traded it in.

My last two vehicles were Toyotas and I have been awesomely impressed. The Solara had 140K when I traded it in and drove like the day I drove it off the lot. It was a monthly cost issue. My little Corolla S has been stellar for 3 years and 87K.

If I ever buy another domestic vehicle it WON'T be a daily driver!

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NAPA Nitro Fan! Beware of the Capps Blitzkrieg Tour 2008!

Great post Sean.

Jason, the resale values are based on MSRP and not sales price. If you compare based on actual sales price (accounting for the fact that US manufacturers are addicted/forced to discount) the percentages are much closer.

I agree smaller foreign cars seem to have higher quality and better design. I do like my big US diesel trucks, my V8 Dodge Charger has a lot of German parts but is a great car for the money, and my hauler's trailer car, a Chevy Aveo, is really a badged Korean car (I think) . . . I'd love to see more money come into NHRA sponsorship. A Mercedes pro stock would really be cool!

Jeff

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"The Doctor"
www.wannaberacing.com

From Richard - "Samuel, is that a type O? 20-30 million for a NASCAR sponsorship, please tell me you're joking? That's a huge pile of dollar bills, if my math is right that could be 10 NHRA teams. OooHhh MmmYyy!"
According to an aquaintance who pitches Nextel teams to sponsors, entry level bucks for a title sponsorship is $25 mllion. NASCAR marketing execs who land major sponsors can get a 1% to 2% bonus on top of their six figure salaries.
IF an NHRA team was able to hire one of these professionals away from a NASCAR team (offers have been made) - the only thing they would be able to sell is an ego trip.
The demographics don't lie - a very high profile TF team is heading into 2007 without a sponsor after stating that an announcement would be made at Indy. No new sponsors for 2007 - just a realignment of a small group of people who have lots of money and HUGE egos.

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"The Counterfeiter"

There's a ton of people out there, including me, that agree with this.

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BlueStangGT
"Could it be that somebody else is looking into my mind?"

That's not all together true, an announcement was made at Indy...........by Kenny Bernstein

I guess I fall on both sides of this. I have a 95 Hyunda that is my daily beater [80 miles daily] that has 208,000 miles on it and still gets 32 to 34 mpg. However I also have a 98 Ranger that has 198,000 miles and I haven't done anything major to it, just normal wear and tear and maintenance. Maybe I just been lucky.

There appears to be a couple of reasons that the big three are having problems being competitive. One of which is the cost of doing business. Right now the two major costs are health care and labor cost. If the other makes had this handicap then they would be suffering too.

However there is one other thing and that is what I call cycle of production. For example in the 70s when the first gas price fixing started the big three were making big barges while the imports were the economy cars. If you look close it has happened again with the latest price hike of gas. Having the right product at the right time does help.

One final thought, We used to have some really bad quality problems but all in all most all cars today are built well. Of course there is always that lemon but for the most part, pretty good.
jim

My 1993 Mercury Villager minivan was made in US and had a Nissan drive train. In the same plant Nissan Quest minivans were also made. The 2 models were practically identical. So other than the nameplate, why was the Mercury considered domestic and the Nissan considered import?

Brett

I'm glad you mentioned Mercury Brett.
According to the latest J.D. Powers survey of owners after three years; here's the quality ranking by make. 1) Lexus, 2) Mercury, 3) Buick, 4) Cadillac, 5) Toyota, and 6) Honda. I don't remember the rest of the rankings except that the lowest cars on the list included British, German, and Japanese makes.
My point was and is: good engineers and quality automobiles and trucks are produced in many countries. The domestic manufacturers aren't idiots and the Japanese have not repealed the law of gravity.
When someone tells me "American cars are no good," your example is a good one, as it represents a "Japanese" car and an "American" car which are the same vehicle. The automobile business is global and most automakers use parts and assembly points throughout the globe.
My long-winded original message was intended to point to an unindicted co-conspirator in the difficulties of our domestic producers: our government. We have been let down by a government that refuses to insist on fair trade rules for our exports or on others' imports.
You also mentioned Nissan. They've made some boffo cars through the years, but have had difficulty making a profit. Along comes Carlos Ghosn from Renault do Brasil (the Brazilian arm of French automaker Renault) and he shakes up the outfit and puts it in the black. Ghosn is a Brazilian, but his parents were immigrants to that country. They came from Lebanon. Yes, it truly is a global market.
I don't want to see the imports restricted. I support free trade. Neither do I want people to believe that foreign companies have made an investment in domestic manufacturing that they have not, in fact, made.
By the bye, the Toyota in front of my house was made in Hamamatsu. The Hamamatsu in Japan, not the one in Kansas.
The car next to it was assembled by the largest private employer in Ohio:Honda.
Cheers,
Ed
P.S. After World War II our benighted government extended wage controls in the postwar economy. In order to attract the skilled working people needed to assemble the cars Americans were demanding in that period, Detroit turned to one thing it could offer: big benefit packages.
"Those that do not learn from history are condemned to repeat it." George Santayana

Didn't Greg Anderson/Summit do that already?...