This ignores the possibility that GM and Ford management have been perfectly rational in opting not to make major capital investments in their auto lines. The finance guys made A LOT of money at GM with GMAC and several big non-auto deals. It's perhaps a bit naive to spin this tale where GM would be doing very well if only they had been obsessive about engineering.
GM and Ford's apparent neglect of their US car lines makes perfect sense if you come to the conclusion that there's massive global overcapacity in car manufacturing and the unionized US workforce could never compete anyway. It's early yet to say Honda will even be a winner in the next 10 years. Every two bit country in the world is subsidizing a domestic car industry. My wild guess is it will be close to impossible to make decent profits and smart management would exit the business.
DIGITAL was another company known for technical prowess and a focus on engineering. They got eaten for lunch by the wheeler-dealers.
Honda makes money building cars in the US. Industry's with large upfront capital outlays tend to have a fairly constant and positive ROI for the most efficient participants. Because people don't spend a billion+ to enter the market if the odds of a positive ROI are poor.
I completely agree with you, the financial guys make a lot of money. And because of that, the core business of GM should be financial and no automotive. So, let's make them sell the automotive part and buy Japanese, German and Korean cars. They know how to make cars.
http://online.wsj.com/article/SB122669746125629365.html
GM and Ford's apparent neglect of their US car lines makes perfect sense if you come to the conclusion that there's massive global overcapacity in car manufacturing and the unionized US workforce could never compete anyway. It's early yet to say Honda will even be a winner in the next 10 years. Every two bit country in the world is subsidizing a domestic car industry. My wild guess is it will be close to impossible to make decent profits and smart management would exit the business.
DIGITAL was another company known for technical prowess and a focus on engineering. They got eaten for lunch by the wheeler-dealers.