Comments on: Roger Smith was a genius; Detroit automakers total capital destruction http://blogs.law.harvard.edu/philg/2008/11/16/roger-smith-was-a-genius-detroit-automakers-total-capital-destruction/ A posting every day; an interesting idea every three months... Sun, 29 Nov 2009 20:08:49 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Helinet http://blogs.law.harvard.edu/philg/2008/11/16/roger-smith-was-a-genius-detroit-automakers-total-capital-destruction/comment-page-1/#comment-94117 Helinet Wed, 19 Nov 2008 22:59:36 +0000 http://blogs.law.harvard.edu/philg/?p=1126#comment-94117 Hard to argue about Honda's greatness with article here: http://money.cnn.com/2008/02/28/autos/cr_car_brand_report_card/index.htm?postversion=2008022905 Honda wins ..... again IN regards to American car companies making money from replacement parts this it just is a personal opinion based on how much my dad spent on parts for the American vehicles he so strongly believed in growing up. Have you seen this article about the American car companies: http://www.nytimes.com/2008/11/19/business/19auto.html?hp They are obviously doing something wrong. by the way, my dad at 74 years old now owns a Honda Accord. Hard to argue about Honda’s greatness with article here:

http://money.cnn.com/2008/02/28/autos/cr_car_brand_report_card/index.htm?postversion=2008022905

Honda wins ….. again

IN regards to American car companies making money from replacement parts this it just is a personal opinion based on how much my dad spent on parts for the American vehicles he so strongly believed in growing up.

Have you seen this article about the American car companies:
http://www.nytimes.com/2008/11/19/business/19auto.html?hp

They are obviously doing something wrong. by the way, my dad at 74 years old now owns a Honda Accord.

]]> By: John http://blogs.law.harvard.edu/philg/2008/11/16/roger-smith-was-a-genius-detroit-automakers-total-capital-destruction/comment-page-1/#comment-94065 John Wed, 19 Nov 2008 02:25:57 +0000 http://blogs.law.harvard.edu/philg/?p=1126#comment-94065 James (Helinet): "... I couldn’t believe that Honda would do that but they care about their reputation more than anyone else. No other car company does this. ... " Subaru had a bad batch of alternators that included my '96 Legacy, they replaced mine out of warranty for free. They sent me a letter to notify me. So, agreed that Honda is great, but other companies might do this too. Also: "American car companies almost want the parts to go bad since they make so much money on their parts business. " Would you have any actual evidence on this? People I know get the official GM part if it is covered by warranty (so free), or take the cheaper 3rd party part if it was out of warranty - so no extra income to GM for bad parts. I know the Big 3 did some really stupid stuff, but I doubt that anyone there now wants parts to break. PS - the Chevy warranty is bumper to bumper for 3 years, 36,000 miles; and powertrain to 5 years, 100,000 miles. James (Helinet): “… I couldn’t believe that Honda would do that but they care about their reputation more than anyone else. No other car company does this. … ” Subaru had a bad batch of alternators that included my ‘96 Legacy, they replaced mine out of warranty for free. They sent me a letter to notify me. So, agreed that Honda is great, but other companies might do this too.

Also: “American car companies almost want the parts to go bad since they make so much money on their parts business. ” Would you have any actual evidence on this? People I know get the official GM part if it is covered by warranty (so free), or take the cheaper 3rd party part if it was out of warranty – so no extra income to GM for bad parts. I know the Big 3 did some really stupid stuff, but I doubt that anyone there now wants parts to break.

PS – the Chevy warranty is bumper to bumper for 3 years, 36,000 miles; and powertrain to 5 years, 100,000 miles.

]]> By: Helinet http://blogs.law.harvard.edu/philg/2008/11/16/roger-smith-was-a-genius-detroit-automakers-total-capital-destruction/comment-page-1/#comment-94052 Helinet Tue, 18 Nov 2008 14:54:24 +0000 http://blogs.law.harvard.edu/philg/?p=1126#comment-94052 My mechanic only buys Hondas. You see if a problem arises in one of their vehicles consistently that they feel should have not been a problem Honda has a program titled "Goodwill". This is beyond the warranty. You bring your vehicle to the dealer and they see if one of their parts failed prematurely (after the warranty is even over). If it has they will at least provide you the parts for free. Personal Example: Our 2004 Honda Pilot had the A/C compressor go out. It had 57,000 miles so the bumper to bumper warranty had expired on paper at 36,000 miles. I called my Honda dealer and they said they had been having some problems with the compressors on that Honda Pilot. Not only did they need to check the Pilot in detail they gave my wife a 2009 Toyota Camry car rental for the trouble for free. The next day they called and said the A/C compressor had failed and they would replace it all, labor and parts for free. I had bought this car used and had no warranty on it (so I thought). I couldn't believe that Honda would do that but they care about their reputation more than anyone else. No other car company does this. I am a loyal Honda owner for life now. American car companies almost want the parts to go bad since they make so much money on their parts business. It looks like this philosophy has come back to haunt them. James Monroe Helinet Aviation My mechanic only buys Hondas. You see if a problem arises in one of their vehicles consistently that they feel should have not been a problem Honda has a program titled “Goodwill”. This is beyond the warranty. You bring your vehicle to the dealer and they see if one of their parts failed prematurely (after the warranty is even over). If it has they will at least provide you the parts for free.

Personal Example: Our 2004 Honda Pilot had the A/C compressor go out. It had 57,000 miles so the bumper to bumper warranty had expired on paper at 36,000 miles. I called my Honda dealer and they said they had been having some problems with the compressors on that Honda Pilot. Not only did they need to check the Pilot in detail they gave my wife a 2009 Toyota Camry car rental for the trouble for free.

The next day they called and said the A/C compressor had failed and they would replace it all, labor and parts for free. I had bought this car used and had no warranty on it (so I thought). I couldn’t believe that Honda would do that but they care about their reputation more than anyone else. No other car company does this. I am a loyal Honda owner for life now.

American car companies almost want the parts to go bad since they make so much money on their parts business. It looks like this philosophy has come back to haunt them.

James Monroe
Helinet Aviation

]]> By: Friedrich http://blogs.law.harvard.edu/philg/2008/11/16/roger-smith-was-a-genius-detroit-automakers-total-capital-destruction/comment-page-1/#comment-94044 Friedrich Tue, 18 Nov 2008 11:00:05 +0000 http://blogs.law.harvard.edu/philg/?p=1126#comment-94044 This sounds like an exceptional subsidy for US firms which tend to outsource other work to every other land. Why should the US carmakers get such "special" treatement. What would Americans say if we'd do the same in Europe. ..... No if they are unable to compete then let them go down. And let the others buy them if they see enough value in them. Regards Friedrich This sounds like an exceptional subsidy for US firms which tend to outsource other work to every other land. Why should the US carmakers get such “special” treatement. What would Americans say if we’d do the same in Europe. …..

No if they are unable to compete then let them go down. And let the others buy them if they see enough value in them.

Regards
Friedrich

]]> By: Joseph Hare http://blogs.law.harvard.edu/philg/2008/11/16/roger-smith-was-a-genius-detroit-automakers-total-capital-destruction/comment-page-1/#comment-93815 Joseph Hare Mon, 17 Nov 2008 13:38:51 +0000 http://blogs.law.harvard.edu/philg/?p=1126#comment-93815 'The 15% Solution" One possible approach to dealing with the auto crisis -- The federal government should give any one who buys a fuel efficient car from the Big 3 a 15% instant rebate back on the selling price. This program could have an 18 month time limit. The total of the rebate dollars might then constitute a loan the auto makers would have to pay back. If effective, this solution would immediately jump start US auto makers by giving them a huge advantage over the competition while they work on the remaining legacy issues. Auto makers would stay employed and no money would go directly to the car makers. The feds might also think about underwriting an extended warranty program for this period. Again, the total dollars to do so, could constitute a loan to the auto makers. If the dollars don't proof out, the concept still might we worth exploring. Joseph Hare Hingham, MA. More..... A quick direct "15%" instant government rebate (say averaging around $3,000) from the Dept of Treasury paid to consumer with purchase of a US auto maker lower mileage car I think would make those cars stand out from the crowd. Problem with tax return deductions is you onlyt get indirect value but once a year(Aprol 15) and higher wage earners get more real dollar benefit....and they do get lost in the shuffle. If you could buy a Camry priced today at $20,000 for $20,000 versus a Malibu priced today for $20,000 for $17,000 plus get a 10 year warranty which would you buy? US Car makers would have to use their real current sell the car off the lot price (then on top of that consumer gets 15% back ASAP from the Feds. Such a program, if it worked, would give auto makers an instant dramatic jump start while they work on getting more cars that would sell (without rebate program) developed and while they deal with worker legacy issues. Giving a bailout just keeps them from going bankrupt while they try to get a higher % of americans to buy their cars. They have not suceeded in doing that over the last 20 years. ‘The 15% Solution”

One possible approach to dealing with the auto crisis — The federal government should give any one who buys a fuel efficient car from the Big 3 a 15% instant rebate back on the selling price. This program could have an 18 month time limit.

The total of the rebate dollars might then constitute a loan the auto makers would have to pay back.

If effective, this solution would immediately jump start US auto makers by giving them a huge advantage over the competition while they work on the remaining legacy issues. Auto makers would stay employed and no money would go directly to the car makers.

The feds might also think about underwriting an extended warranty program for this period. Again, the total dollars to do so, could constitute a loan to the auto makers.

If the dollars don’t proof out, the concept still might we worth exploring.

Joseph Hare
Hingham, MA.

More…..
A quick direct “15%” instant government rebate (say averaging around $3,000) from the Dept of Treasury paid to consumer with purchase of a US auto maker lower mileage car I think would make those cars stand out from the crowd.
Problem with tax return deductions is you onlyt get indirect value but once a year(Aprol 15) and higher wage earners get more real dollar benefit….and they do get lost in the shuffle.
If you could buy a Camry priced today at $20,000 for $20,000 versus a Malibu priced today for $20,000 for $17,000 plus get a 10 year warranty which would you buy?
US Car makers would have to use their real current sell the car off the lot price (then on top of that consumer gets 15% back ASAP from the Feds.
Such a program, if it worked, would give auto makers an instant dramatic jump start while they work on getting
more cars that would sell (without rebate program) developed and while they deal with worker legacy issues.
Giving a bailout just keeps them from going bankrupt while they try to get a higher % of americans to buy their cars. They have not suceeded in doing that over the last 20 years.

]]>