Thursday, May 26, 2005

My letter re. Ford & GM published in "The Economist"

I must take issue with the conclusion of your leader on Ford and General Motors (“Deal or bust?”, May 14th). You say their problems lie not in the factory, nor in the design shop, but in the $1,500 per car additional overhead for pensions and health care. However, you also state that both companies offer up to $3,000 per car in discounts. This is roughly $2,000 more than Japanese carmakers offer, yet Ford and GM's sales are still declining. Frankly, I believe that the problem Ford and GM face is that they are producing cars which nobody wants to buy and their marketing is poor—about a third of their sales are to fleets at even lower prices.

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