Competitive Connection
November & December 2006
What They're Saying . . .
"Like it or not, these challenges aren't the kind that can be ridden out. They demand new and farsighted solutions."
Ron Gettlefinger, UAW President
What Others are Saying . . .
GM plans to introduce a remote-control key fob next April that will allow drivers to not only determine the pressure in each tire, but also check the odometer reading, see if there's enough fuel in the tank to make it to work in the morning, change the radio station settings and see if they remembered to lock the car doors, to name a few. The device will be a $150 option on Cadillac Escalade luxury SUVs and other full-size GM SUVs, pickups and crossover-utility vehicles. --USA Today, Nov. 19, 2006
A look at the Competition
Toyota's philosophy boils down to two basic principles.
"There's only a couple of ways you get in trouble at Toyota," Convis told employees. "One, you don't come to work. And two, you don't pull the cord when there's a problem... Those two things get you in trouble. Anything else, we'll train you."
Gary Convis, senior VP of manufacturing in North America for Toyota Motor Corp
Detroit Free Press, Nov. 20, 2006
What Others are Saying . . .
Although using different ways to raise more money, GM and Ford are demonstrating just how difficult the turnaround could be for the Detroit automakers, said Shelly Lombard, a senior analyst with Gimme Credit, an independent research service on corporate bonds.
Even as GM and Ford try to get their footing, the global market is changing and rival Toyota Motor Corp. is making billions of dollars each quarter.
"You're still out there competing with Toyota. You're still out there competing with the economy," Lombard said. "This thing is shifting. ... It's kind of like getting your footing in an earthquake."
GM and Ford are making monumental moves that could either save the companies or send them further into financial distress. The key measure of success will be how they use the extra money, Lombard said.
"Three years from now, they're going to either look like geniuses or total idiots," Lombard said. "It's going to be one extreme or the other. That's how radical these moves have been."
Ultimately, GM and Ford will only find success by getting their core business -- making and selling cars -- back on track, said Kevin Tynan, an analyst for New York-based Argus Research Co. Companies cannot survive for long by selling off assets.
"Eventually, you run out of chances," Tynan said. "At some point, you have to dig in and go on the offensive. You can't constantly backpedal and win the fight." --Detroit Free Press, Nov. 30, 2006
What Others are Saying . . .
“My job … your job … everyone's job … is to sell GM cars and trucks and take care of our customers every single day.”
Mark LaNeve, in the current edition of eNEWS, a communications tool targeted to dealers
What Others are Saying . . .Over the last two decades, for example, the number of automotive-related manufacturing jobs in Michigan has fallen 34 percent, according to Economy.com. By contrast, the number of automotive jobs in Kentucky rose 152 percent over that period.
''There is a definite shift away from the strongholds of American manufacturing to places that were never manufacturing centers,'' said Gary N. Chaison, a professor of industrial relations at Clark University in Worcester, Mass. ''These international companies want a fresh start -- not in a town like Detroit, with a long history in the auto industry, but in an empty field where people appreciate them.'' The shift carries with it not just thousands of well-paying jobs and billions of investment dollars, but also a sense of prosperity gained or lost.
New York Times, Dec. 5, 2006
A Look at the Competition
What Toyota says about their newest U.S. plant
Excerpts from a Toyota Press Release
If the class-leading new 2007 Toyota Tundra is the largest, most sophisticated and most powerful half-ton pickup truck ever built, it?s only fitting that the factory where it is assembled is the most advanced that Toyota has yet built in the United States. The new plant, Toyota Motor Manufacturing, Texas, Inc., or TMMTX, will be capable of producing up to 200,000 new Tundras each year, with a crew of 2,000 team members working two shifts.
Texas is the capital of full-size pickup sales in the United States. In fact, roughly one of every seven full-size pickups sold in the U.S. is sold in Texas. Toyota received more than 100,000 applications for the 2,000 high-paying manufacturing jobs.
The company acquired the site in 2003 meaning that TMMTX has gone from ranch land to state-of-the-art manufacturing facility in just three years. At a total cost of $850 million, the result is 2.2 million square feet, or 46 acres, of main factory built to construct the 2007 Tundra from scratch, starting from coils of steel rolling into one end of the building and ending with gleaming, powerful trucks rolling out the other. The plant contains stamping, welding, paint, plastics and assembly facilities where TMMTX team members can build Tundras at a rate of up to about 750 per day.
On-site and fully integrated with the main plant are separate production and assembly facilities for 21 individual parts and component suppliers. That means that an additional 1.8 million square feet were constructed to house their operations and an additional 2,100 workers. Little of what goes into the new Tundra will be sourced from Japan: approximately 80 percent of the content is domestic.
The TMMTX factory floor will feature a blend of automation and manpower. In the stamping, welding and painting areas of the plant, robots will do much of the work. Nearly 400 will do the painting and welding, making those areas about 90-percent automated. Using this creative combination of muscle and machine, it takes about 24 hours going from raw, coiled steel to finished, painted, rolling and running state-of-the-art pickup.
Following a line-off ceremony on November 17, the plant started with a one-shift operation, and plans to add a second shift in the spring of 2007.
What the media are saying about Toyota's new plant:
"The San Antonio plant is significant because it takes dead aim at a traditional stronghold, the full-size truck market where GM, Ford and the Chrysler Group account for more than 90 percent of U.S. sales. It marks Toyota's 13th plant in North America, with factories stretching from West Virginia to California to Mexico."
Detroit Free Press, Nov. 20, 2006
Toyota's San Antonio Plant by the Numbers
Source: Toyota Website
Start of Production |
November 17, 2006 (one shift) |
Daily Production |
750 per day |
Annual Production |
Up to 200,000 |
Plant Investment |
$850 million |
Size |
2.2 million sq. ft. (43 acres) |
Employment |
2,000 (at 2 shifts) |
Domestic Content |
80% |
Number of Robots |
Nearly 400 |
Time to Produce a Truck |
24 hours |
Product |
Toyota Tundra |
Nissan
Nissan’s Motto: The power to change both the way you view the world and the way you move in it
Source: Nissan website
Nissan first came to the United States to sell vehicles in 1958 and began importing and making Datsun vehicles in the United States in 1960. Nissan markets 12 vehicle lines through 1,100 dealers in the continental United States. The vehicle lineup includes the Sentry, Altima, Maxima, X-Terra, Pathfinder, Frontier, Titan, Versa, Z, Murano, Armada and Quest.
Key dates in Nissan’s recent history
1991 - Nissan unveils a $490 million, 1.7 million-square-foot expansion of the Smyrna, Tennessee plant. It builds an $80 million Research and Development Technical Center in Farmington Hills, Michigan.
1992 -As the Sentry surpasses two million sold in the U.S., the first Nissan mid-sized sedan produced in the U.S. - the Altima - rolls off the assembly line in Tennessee. Nissan Quest becomes the first Nissan vehicle jointly produced with a U.S. manufacturer, Ford Motor Company.
1993 - Altima becomes the best-selling new nameplate in the United States, while the Maxima surpasses one million sold.
1996 - A Nissan plant is named the most productive plant in North America in "The Harbour Report" for the third consecutive year.
Nissan’s newest plant: Canton, Mississippi
Acres Owned at Site |
1,400 |
Plant Size |
3.5 million sq. ft. |
Investment |
$1.4 billion |
Employment |
4,000 |
Job Applicants |
100,000 |
Base Production Wages |
$12.90 starting, to $23.22 after first 60 months |
Products |
Nissan Quest minivan, Nissan Pathfinder, Armada SUV, Nissan Titan full-sized pickup truck, Infiniti QX56 full-size SUV and Nissan Altima sedan |
Source: publicly available data and GM Global Manufacturing Planning
Three great GM vehicles to recommend . . . to Toyota Camry owners
Product |
Price |
City Mileage |
Plant |
What Edmund's says . . . |
Toyota Camry CE |
$19,320 |
24 mpg |
Georgetown, Kentucky |
No manual transmission available with V6, some odd styling elements. |
Chevy Malibu LS |
$17,155 |
24 mpg |
Fairfax, Kansas |
Comfortable ride, 3.5-liter V6 provides performance with fuel efficiency, lots of passenger and cargo space, excellent crash test scores, remote-start feature. |
Pontiac G6 GT |
$22,310 |
21 mpg |
Orion, Michigan |
Spacious rear seat, peppy yet fuel-efficient V6 engines, sporty suspension tuning, retractable hardtop in convertible model, available panoramic sunroof in sedan. |
Saturn Aura XE |
$19,945 |
20 mpg |
Fairfax, Kansas |
Refined powertrain, roomy cabin with high-quality fit and finish. |
Information from Edmunds.com
Three great GM vehicles . . .to recommend to Honda Civic Owners
The Honda Civic is one of the best selling cars in America, but GM has some great vehicles in the compact car segment. In the J.D. Power IQS Survey, the Civic competes against three GM products: the Chevy Cobalt, Pontiac Vibe and the Saturn Ion. Make sure you let any Civic owners know what options GM has to offer.
Model |
Base MSRP |
Fuel Economy |
Warranty |
Plant |
Honda Civic |
$21,290 |
32 mpg |
5 years |
East Liberty, OH |
Chevy Cobalt |
$13,125 |
34 mpg |
5 years |
Lordstown, OH |
Pontiac Vibe |
$16,710 |
36 mpg |
5 years |
NUMMI in Fremont, CA |
Saturn Ion 2 |
$12,300 |
35 mpg |
5 years |
Spring Hill, TN |
Source: Edmund's.com
Then & Now
Consider that in1960, GM offered 37 models for customers to consider in the U.S. Today consumer choice has exploded with more than 350 distinct vehicles for sale in the United States. GM has 89 of them. That's competition!
There was a time when newspapers were king when it came to dealership advertising, but the share of dealership ad spending allocated to newspapers has dropped sharply in the past decade. The information age has changed the way dealers do business.