I don’t understand why the car makers are in trouble…

According to the SMMT car production in the UK is at the same level as it was in 2007, so why the panic?

Presumably because nobody is buying them?

Production does not equal sales.

I heard on the news that SAAB haven’t made a profit since 2001!

Little wonder they are in so much trouble, GM are desperate to get rid of them so I can’t see them being around for long if they are left on their own!

I heard on the news that SAAB haven’t made a profit since 2001!
Little wonder they are in so much trouble, GM are desperate to get rid of them so I can’t see them being around for long if they are left on their own!

funny you should mention that..

but look at the gradient of the curves. In 2007 they are level, in 2009 almost vertical…

I heard on the news that SAAB haven’t made a profit since 2001!

But then again they haven’t made a new model since about 1991, really.

But how come that sudden jump in 2008?

Hadn’t any of them noticed that credit had stopped? After all isn’t GM a major player in the loans industry? or have they sold that as well.

Well SAAB must have an enormous advertising budget to presuade people to pay big money for a 1998 Vauxhall Vextra with some nasty chrome stick on bits.

Production is being stopped by many as they have loads lying around so as already mentioned doesn’t represent sales.

SAAB’s in trouble because of GM! We all remember the days when SAAB built quality cars their way and made decent profits – frankly I with the Swedish courts running the show its likely it will be the end of the marque in three months time according to reports.

After all isn’t GM a major player in the loans industry?

GM as a business is basically f$%^ked. It’s essentially selling cars to pay the pensions of former workers.

SAAb is in trouble now because it would have gone bust about 15 years ago without GM – there aren’t any niche manufacturers making cars any more because they can’t afford to develop and get them approved in the markets they make the money in.

but back to it – why was there a jump in production last year when they weren’t selling the cars they could make then?

I have no sympathy for the car manufacturers. They have been making far too many versions of essentially the same car for far too long. They have been too driven by fashion and have relied on people buying pretty much the same car simply re-packaged time and time again. Furthermore, they have invested huge amounts of time and money developing the latest technology only to then hold it back and drip feed the advances into the industry over months or years to ensure they always have something ‘new’ to offer each year. My sympathies lie with the employees, the majority having little or no influence on the management decisions that have created this mess. Personally think it’s good that society has finally realised how ridiculous it has been by perpetuating this fashion trend by the manufacturers. Rant over.

I’m still to be convinced that slimming down the car industry in general, with less new cars being produced, is actually a bad thing. Unfortunately I don’t suppose it will last in the long term.

After all isn’t GM a major player in the loans industry? or have they sold that as well.

Yep. GMAC. They are properly in the sh*t and have been knocking loudly on the door of the last and present US gov’t for cash. Last year GMAC instigated a programme to withdraw or hike the cost (i.e. interest rates) of credit available to 3,500 car dealerships across Europe in nan attempt to save in excess of $4bn.

So that’s 3,500 businesses across Europe that have been f***ed by GMAC’s mess.

If they offered clearance pruces then the stock pile would shrink surely.and i don’t mean like our local Vauxhall dealer.Credit crunch only 16k instead of 22k.Wow wheres my cheque book.

…If they offered clearance pruces then the stock pile would shrink surely…..

But the excuses given by car industry are,

1) Selling off cars cheap devalues their brand.

2) If the new cars in the stockpile are sold off cheap people won’t buy new cars off the production line.

Of course both arguments (as a consumer) seem pretty poor.

1) Going out of business is pretty poor for a companies image, but then again because car companies are large scale employers governments can’t let them go out of business. A win-win for the car companies I guess.

2) A percentage of **** all is still **** all. Those cars in the stockpile are dead money unless they are sold.

why pay full price for a new car when in 3 years it will be worth 25% of that value.

…why pay full price for a new car when in 3 years it will be worth 25% of that value…..

Because some folk want new cars, regardless of value in later years.

Luckily such folk are still about as otherwise I wouldn’t have been able to get my last ‘new’ car so cheap.

I hear the sound of chickens coming home to roost. There’s been overcapacity in car production for years and the shortage of cheap money has removed the safety net. Maybe if the manufacturers had taken action sooner they’d be in better shape to survive this recession.

Agree with sootyandjim going out of business with thousands of units of unsold stock sitting next the docks is madness. They seem to think the laws of supply and demand don’t apply to them. If you can’t get your goods sold then drop the price until they will.

Agree with sootyandjim going out of business with thousands of units of unsold stock sitting next the docks is madness. They seem to think the laws of supply and demand don’t apply to them. If you can’t get your goods sold then drop the price until they will.

Or do a rover and go bust and all your stock ends up in the car supermarkets!
the sad things is lots of people are going to lose their livelehood if GM etc does fold.

I hate the way the car industy works. I want reliability,reliability,reliability,reliability – not lots of useless extras that cost a ton to fix when they go wrong.

‘Citroen – full of technology’ now that scares the sh*t out of me.

‘Citroen – full of technology’

and lovingly built by the french! That’s the scary bit!

you cant beat a good recession to give inefficient industries a rollocking good shakedown.

Yes there will be blood and it’s obviously terrible for those getting laid off, but* it will improve the health of our economy as a whole greatly.

*I got in trouble on here not that long ago applauding some company standing up to recalcitrant unions and firing their staff… I wont make that mistake again 🙂

‘Citroen – full of technology’ now that scares the sh*t out of me.

It would have me too but the French are a damn sight better at building cars now than they used to be.

(Happy Citroen C4 owner. Yes the ‘full of technology’ car).

Well at least the french backed their own industries in the 80’s unlike our lot who shut them all down i suppose.

french backed their own industries in the 80’s

propping-up I think is the word you’re looking for doc.

I got in trouble on here not that long ago applauding some company standing up to recalcitrant unions and firing their staff… I wont make that mistake again

In trouble with whom? I’d be quite proud of getting into trouble with the most obvious people I can think of on here…

Well at least france are propping up their own industries and looking after their own workforce. If things do really take a dive honda toyota nissan etc could easily pull the plug on the uk to look after their home interests. Britain is in a very shaky and exposed position at the moment as we don’t own many of our industries anymore so it’s not in our hands!- thanks largely to the 80’s policy of privatisation and selling everything off for short term gain!
We have made alot of our money in the last 20 years in the finacial sector also and that has gone spectacularly tits up!

there may be trouble ahead….

… thanks largely to the 80’s policy of privatisation and selling everything off for short term gain!….

Which lets be fair was based on the back of not wanting a return to the policy of the unions in the 70’s to strike over every niff naff and trivia ‘problem’ and thus burden the state with large workforces of ineffective employees in nationlised industries with an equally large amount of real estate and plant to support.

Of course the government is currently supporting the car industry so that hasn’t been entirely successful but at least they’re not all out on strike over the type of biscuits sold in the canteen.

Oh yeah i aggree, 70’s uk cars were awful( my dad had a brown allegro estate-yuk!) and the unions do have themselves to blame from the red robbo walk out on strike in a instant because they werent given their fag breaks. Arthur scargill what an idiot taking the miners out on strike in the spring when coal is not needed!
I aggree the unions needed bringing down a peg or two but the state is now burdened with millions of people who are not working/on “the sick” which has got to be worse for all of us in the end.

why pay full price for a new car when in 3 years it will be worth 25% of that value.

Exactly.
We bought a 3 year old Focus Zetec Estate from a local used car dealers 2 weeks ago. It’s a small, well established place with a good local reputation and they always seem to cream off the best condition, lowest milage cars to sell, from 2-5 years old. The salesman told us they’d had their busiest December ever and they nearly ran out of stock to sell!

Why?
Well, said Focus has 16k on the clock, one owner, utterly IMMACULATE, even still smells new, full history: It cost £16,000-ish new and we paid £6000 which is 62.5% depreciation that the previous owner has paid for us…! Well, they paid more than that because the garage has made a tidy profit, of that you can be sure!

New cars are a mugs game, and I think people are now realising that chucking 10 grand down the drain to have a new 09 plate is plain stupid.

The obvious answer to your question is because no one buying a car at the moment.

Another point is that because at the bottom end the margins are tiny; (the list price for a basic Kia Picanto is GBP 5,995 and list price for the more mainstream Ford Ka is GBP 7,945). With tiny margins you have to sell in huge volumes to make a profit and going back to my original point non one is buying cars. This makes it hard for manufacturers.

GM and Ford have their own issues to cope with as well…

Closing thought:
TrekTop Fuel 9.9 SSL list price GBP 4,500
Kia Picanto list price GBP 5,995

Another point is that because at the bottom end the margins are tiny; (the list price for a basic Kia Picanto is GBP 5,995 and list price for the more mainstream Ford Ka is GBP 7,945).

You’ve quoted ‘list prices’ which provides little illumination on bottom end margins.

Because the Kia Picanto is priced nearly £2K doesn’t mean that it costs £2K less to produce than the Ford Ka. In fact its possible that the Ford Ka is cheaper to produce because of the huge amount of trickle down technology used in its production from other vehicles in the Ford range, paid for already from sales of those other vehicles. It could be that the reason price the Ka higher than the Picanto is purely down to where Ford believe they should pitch it to protect brand image or just at the price point they believe the market will accept.

I think that there is a bit of both. I agree that prices do not just reflect manufacturing costs. That said look at the number of parts in a car (even a very basic model like those being discussed). The price always amazes me because no matter how automated and efficient the building process is there are simply a huge number of manufacturing steps that need to be conducted to make a car. This is offset in part by the volumes produced giving economies of scale but also at the low end there are also incredibly tight margins.

doctornickriviera I’m sightly confused by your comments. Your brown allegro estate might well have been an “awful” car, but what has that got to do with Derek Robinson and the trade unions ?

The Allegro was designed and developed by a private car manufacturer. If it was a failure, then presumably the responsibility for that clearly lies with the management. After all, even if there hadn’t been “red robbo walk outs because they werent given their fag breaks” as you put it, the car would still have been ‘awful’ and therefore presumably a failure.

I’m also confused by your claim : “Arthur scargill what an idiot taking the miners out on strike in the spring when coal is not needed”. The NUM was on strike for an entire year in 1984/1985. During that time coal was very much needed, as indeed it is still needed today – present UK coal consumption is at very similar levels to what it was 20 years ago.

Hence the reason why firstly, the NCB and power stations had been ordered by the government to stock pile coal in preparation for the strike. And secondly, why the Nottingham working miners were so important in defeating the strike. Had the Notts miners with the support of the government and the right-wing press not scabbed and formed their own scab union, then the strike would almost certainly have been successful.

Furthermore, the strike was purely against pit closures (Coal not Dole) the NUM arguing that the then government had plans for full-scale pit closures with the last few remaining pits being privatised. The government vehemently denied this, claiming that many pits had a future specially the so-called “super pits”. Which was one of the main reasons why Notts miners carried on working. The government also very strongly denied that it had any plans to privatise the industry.

We now know that the government was in fact lying, and that the NUM was telling the truth. Had there been no strike, the government would simply have done what they had always intended to do. The only thing which might have saved the industry, would have been if the strike had been successful.

And incidentally, the strike was nowhere as futile nor doomed to failure from the start, as you appear to suggest. If this had been the case, the government would hardly have felt the need to order the deep infiltration of the NUM by MI5. Stella Rimington head of MI5 at the time, has openly admitted of MI5’s involved in the strike, and it’s responsibility for discrediting the NUM.

Trade unions strikes were not the reason for the destruction of car manufacturing and the coal industry in the UK, rather for the reasons I’ve outlined, it was management decisions and government policies which were responsible. Indeed had British trade unions been as successful in their strike actions as their French counter-parts, we might today still have those industries and be actually in a position to ‘prop them up’ as Stoner puts it.

This what 20 years of tame trade unions and the consequential de-industrialisation has resulted in :

Britain to suffer worst recession of any advanced nation, says IMF

Quote :

“The economy will shrink by 2.8 per cent this year, with Britain faring significantly worse than the United States, Western Europe or Japan due to its reliance on the financial sector, the International Monetary Fund said.”

Still, there’s nothing quite like blaming the trades unions for everything, is there ? At least it lets management and governments off the hook.

It’s a shame that years of unrelenting anti-trade union propaganda by the right-wing press, media, and apparently even the secret services**. leads to the clouding of the issues by what would appear otherwise liberal individuals such as yourself doctornickriviera.

**the Director-General was Stella Rimington (DT950626), who was previously head of F2 branch and responsible for discrediting the Mineworkers’ union during the 1984 coal strike

Had the Notts miners with the support of the government and the right-wing press not scabbed and formed their own scab union, then the strike would almost certainly have been successful.

The Notts miners were not ‘scabs’. The Nottinghamshire branch of the NUM were in fact the only branch in the country to abide by the NUM’s own constitution, whereas other branches that followed Scargill out on his undemocratic strike (failing to hold a ballot before strike action) and later harassment of Notts miners through the use of flying pickets were acting illegally, against their own constitution and without the support of the TUC.

Scargill was only using his position at leader of the NUM to further his personal political aims, strangely a very similar accusation to that often lobbed from the left against Margaret Thatcher for taking on the unions.

Of a personal note my father-in-law was (still is in his heart) a Nottinghamshire miner, as was his brother and I have heard first hand accounts of how Scargill’s bully boys turned up at the pit gates to harass the old fellas who worked the pit head and kids waiting for their dads before scarpering when the shift finished and some proper men turned up. Like all bullies they were a bunch of cowards, but gullible cowards led by a tyrant who is on record as a paid up supporter of Uncle Joe, the chap who killed quite a few more folk than that nasty little Austrian ever did.

Dance on Thatcher’s grave? I’d dance on Scargill now whilst the nasty little twerp is still breathing.

The Nottinghamshire working miners were indeed “scabs” Sooty, by the very definition of the word :

Scab : a. A worker who refuses membership in a labor union.b. An employee who works while others are on strike; a strikebreaker.c. A person hired to replace a striking worker.

How a strike is called, is totally irrelevant to the definition of the word. Please feel free to disagree with everything I’ve said, by not with my use of the English language – well not in this case anyway.

BTW I am fully aware that not all Notts miners were scabs, and many did in fact support their union in defiance of their local officials. Indeed for the entire duration of the strike, my local Trades Council had the privilege of providing accommodation and support to some Nottinghamshire striking miners as they lobbied and picketed in the London area during the year long dispute (we also had very close links with the Ellington colliery in Durham and the Kent miners)

Sadly the Notts striking miners failed, and as a result of the actions of the Notts working miners and their scab union the Union of Democratic Miners, the industry in Nottingham was decimated. By 1999 only four pits in Nottinghamshire survived out of 26 working mines 10 years previously.

Scab may be apt if it were a legal strike, but seeing as trade unions are democratic organisations and no democratic ballot was held before the illegal withdrawl of labour was announced by Scargill they never crossed an official, legal picket line and hence were not scabs.
The ‘strike’ was never legal and hence in the eyes of the law and the TUC at the time the action was an illegal withdrawl of labour accompanied by harassment of people going about their lawful business.
As an aside, seeing as the Notts miners didn’t want to be linked to the actions of an undemocratic organisation it was prudent that they form their own democratic union as a voice against their oppression by a socialist tyrant.