US News: How Ford and GM Turned a Corner

[Omaha Steve]

http://money.usnews.com/money/blogs/flowchart/2010/07/30/how-ford-and-gm-turned-a-corner.html

By Rick Newman

Posted: July 30, 2010


What took so long? The 2011 Ford Fiesta.

Behold the Ford Fiesta. The newest addition to Ford's fleet is cute and perky, with solid handling and gas mileage that will make greeniacs grin. Japanese automakers have been building quality subcompacts for years, and while vehicles like the Honda Fit, Honda Civic, Toyota Corolla, and Nissan Versa typically earn strong reviews, they don't usually mark a crowning corporate achievement.

For Ford, however, it's different. For years, the No. 2 Detroit automaker turned out bland compacts and subcompacts, while focusing heavily on trucks and SUVs that were far more profitable. Neglecting the bottom end of its lineup nibbled away at Ford's customer base, then became a full-blown crisis when gas prices hit $4 per gallon in 2008 and buyers shunned the big vehicles that Ford was overdependent on. The new Fiesta—ranked first out of 31 vehicles on U.S. News's list of affordable small cars—shows that Ford got the message and finally stopped papering over the holes in its lineup. The prodigal automaker has returned to the fold.



Ford has the profits to prove it. After years of steep losses, the automaker turned a $2.7 billion profit in 2009—a horrible year for car sales—and earned $4.7 billion in the first half of 2010. And Ford's not the only comeback carmaker. Barely a year after its humbling bankruptcy filing and $50 billion government bailout, General Motors has returned to profitability, with a public offering likely this fall. That will allow it to start buying out Washington's 61 percent stake in the company. Even Chrysler, which got its own bailout last year and is considered the most endangered big automaker, has been cutting costs and boosting cash flow ahead of schedule.

President Obama is so confident in a Detroit turnaround that he recently pledged that U.S. taxpayers would "get all the money back that we invested"—a hefty $85 billion for the industry as a whole. The domestic auto industry, he said, "tells a good story." There are still many chapters left to be written, but revival is emerging as a dominant theme. Here are some of the factors that have helped Detroit get its groove back:

Better cars. Financial engineering might help banks burnish their luster, but automakers rise and fall based on the quality of real products driven by ordinary people. And tangible improvements are finally paying off for Ford and GM. In J.D. Power's rankings of initial quality, the domestics, driven by Ford, are now slightly ahead of imports. David Champion, director of automobile testing for Consumer Reports, says that Ford's turnaround actually began several years ago with a gradual but steady improvement in reliability. "The Flex, Taurus X, Focus, and Escape all came up from disastrous levels to become reliable cars," he says. Ford's overall reliability, according to CR's methodology, is still middling, due to weaker models like the aging Focus compact and the old Explorer SUV being replaced by a brand-new version out this summer. But the Fusion is CR's highest-rated sedan, and a shining star for Ford.



FULL story at link.

[Sherman A1]

1. When I went looking for a car with the best mpg in 2007 &

2008, I wanted to buy American, but there were no cars that beat the Toyota Yaris or Prius. So after a year of looking, I bought a Yaris for my commute.

[parkia00]

2. Are they really American cars though?

Or re badged foreign imports? I know the Ford Escape is actually a Mazda and I think the Fiesta is a European designed vehicle that was brought over. I know for sure the Focus is.

[Omaha Steve]

3. Country of origin is listed on ALL new car window stickers

It must be 51% or more sourced parts in the USA to get a made in USA or Canada designation. Engines & transmissions are usually listed as from what country too. Marta's equinox had the engine (union made) in Japan. The transmission was made in China. The car was assembled with over 60% of the total parts made in USA & Canada.

My Cobalt (assembled at Lordstown, Ohio USA)has a made in USA power train. Over 70% made in the USA.


http://www.vindy.com/news/2010/jun/26/gm8217s-cobalt-paved-the-way-for-lordsto/

GM’s Cobalt paved the way for Lordstown plant’s future

Published: Sat, June 26, 2010 @ 12:00 a.m.

When it was unveiled in Decem- ber 2003 at the Greater Los Angeles Auto Show, the Chevrolet Cobalt was received by many industry experts with apprehension. After all, the vehicle General Motors was touting as its offering in the highly competitive compact market was being built in the Lordstown plant — with its blemished history.

But as we said in an editorial marking the unveiling, the Cobalt “presents the Mahoning Valley with a great opportunity to show the nation and the world that this region can compete with the best of them when it comes to manufacturing and that the business climate has never been better.”

Six-and-a-half years later, the Lordstown assembly plant and the Valley not only have proved the detractors wrong, but have firmly established that a new era has dawned.

General Motors now considers the Lordstown complex one of its most valuable and efficient facilities. Hence, last week’s final production of the Cobalt marked not only the end of a highly successful run, but the beginning of a new chapter in auto manufacturing in this skilled-labor region.

FULL story at link.