The recent decisions of G.M. and Ford will soon be taught in business school as an example of how not to run a business. Despite gas hovering at $3 a gallon, both companies seem determined to sell the public precisely what it doesn’t want: big trucks, bigger SUV’s and lumbering V8 engines.
Just yesterday, Ford unveiled a special new Shelby GT edition of the Ford Mustang. Billed as “the anti-Prius,” the muscle car has over 325 hp underneath its hood. No word on fuel economy. Ford also announced that it had scrapped plans for a sub-compact car. (Back in January, Ford promised that it would rush a sub-compact car to dealers in order to compete with Honda and Toyota. I guess it’s easier not to compete in the fastest growing segment of the car marketplace. Since March, Toyota has sold over 32,000 Yaris cars in the U.S. alone.) Plus, Ford still doesn’t have plans to revise the one small car it builds, the Focus, which was last updated in 1999. In the meantime, the Honda Civic has gone through two complete redesigns. And Ford executives wonder why nobody buys their cars.
Of course, GM isn’t much better. Their big news last week was the unveiling of the 2008 Chevy Silverado and GMC Sierra, both full-size pickups. Yesterday, GM announced that it was cutting $1 billion out of its mid-size car development budget. While the Toyota Camry hybrid enjoys three month long waiting lists, GM is happy to churn out crappy cars that only a rental fleet could love.
The Big Two still act like gas is going to be 99 cents again. But it isn’t. I just hope they wake up before they go bankrupt.