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Ford + GM Have Been Making Small Cars For Years. In Europe.

with 2 comments

Recognize these?

getimage1

2au_largeThe one on the left is a Ford Ka, the one on the right is GM Vauxhall Corsa.

Small, good-looking, low cost, not at all thirsty, and sold in Europe for years.

Ford and GM during their latest congressional grovel sessions, said they’d tool up to produce small cars in the US. Great idea, except they’ve been making small cars for decades. Good ones too.

Here’s the rest of the Ford Europe Range, and here’s the GM Europe Range (brand name Vauxhall). Take a look. Would they be able to take on Toyota and Honda in the US? Definitely.

They both have great well designed ranges that could be really competitive in the US, with low emissions, great gas mileage (almost as good as a hybrid for way less money) and far better European styling than we’re used to here in the US even from the Japanese.

So why weren’t they for sale here?

Why weren’t their European versions (with left hand drive) shipped to the US? Why wasn’t the tooling imported to US factories years ago, to diversify their domestic ranges? Ford and GM could have saved themselves, and their dealers, and their workers, and all the people who depend on the car industry.

The answer is short-term profit hunger. Selling these cars makes less money than selling an SUV. Ford and GM tried to squeeze out the last drop of profit from the SUV and didn’t plan ahead, like any good business should. As usual, blinkered incompetence at the top is the primary reason. But there is another. Legacy costs. Ford and GM labor under onerous union agreements and health/pension benefit arrangements that eat up massive amounts of profit potential per car. If these costs were lower, profits from smaller cars would have been higher, and management would have been more willing to maintain them in their US ranges. But instead of dealing with the issue then – management waited until it was essentially too late. GM + Ford have taken massive hits to their brands that will take decades to eradicate.

Then there’s the issue of globalization.

We’ve been talking about it for years. But Ford and GM have been making cars in Europe for more than seventy-five years, way before globalization was even a word. They were among the first businesses in the world to go global. And yet, their US markets were profoundly devoid of the globalization they pioneered. The US market was provincial and protected. It was only a matter of time before Ford and GM paid the price.

That moment arrived in the last year. In spades.

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2 Responses

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  1. I don’t understand the US Car companies. Chrysler’s lifesaver is the Cinquecento. GM and Ford were close to the edge for years, sticking with wheezing SUVs and old models that they were convinced the US market would find acceptable, while refusing to sell their own – far better – cars in what is still their core market. It was a huge waste of time, money, and goodwill.

    coolrebel

    June 21, 2011 at 1:29 pm

  2. I would like to see more cars from Europe come to the states like the Focus did. Seems to me like Europe gets most of the new stuff and then we get them in the states.. Do you agree?

    Gary Yeomans Ford

    June 21, 2011 at 11:55 am


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