Every time I hear a news report about the problems of General Motors or Ford, I get pissed off. Their current problems are all their own damn fault. I heard years ago that pretty much ALL of their profits came from high-margin, cheaper-to-build, gas-guzzling trucks and SUVs. So, now that the price of gasoline has inevitably gone up and consumers are buying fewer of their profitable vehicles, these companies are in poor economic shape. Shocking! Who could have predicted such an event!
My astounding observation is corroborated by The Truth About Cars:

We’re looking at two strategies here. Toyota: build affordable transportation for the masses at a quality level that slightly exceeds expectations relative to price. GM et al: build oversized, under-engineered and fuel inefficient cars for people who don’t care about money while palming off sub-standard cars on mainstream customers. Is it any wonder that the truck-crazed domestic manufacturers lost mission critical market share to the transplants?

Categories: Economics