When businesses swim in red ink, costs must be cut. It remains to be seen how well the exercise works for Ford and Chevy, but often cuts tear deeply into the fabric of a business. And since cutting costs is usually the primary strategy, and sometimes the only one, the business ends up worse off than before the cutting began. I fear that may be the case with Ford and Chevy. Here's why.
Their problems began during the '70s, when the Japanese car invasion began in earnest, which coincided with a gas shortage, rationing and a spike in gas prices.
Seemed like a clear message being sent by the marketplace. Oil is imported from unstable places and people were beginning to move to more energy efficient cars. Detroit mostly ignored the signs. Today, American 
automobiles (defined as those produced by American corporations) represent a minority of cars on our highways. And yet as recently as 2006, Ford and Chevy depended upon the sale of pickup trucks and SUVs for much of their revenues. To me, there appears a disconnect between American Automobile Manufacturers and meeting customers wants and needs.
How can cutting costs change that? Is their a future for Ford and Chevy? Do their marketing strategies seem relevant with their automobile manufacturing strategies? What do they have to do to regain market share from Honda and Toyota?
P.S. Seth recently wrote this: The interesting lesson for marketers is this: if iguanas had had predators and competition while this was going on, they never would have survived. Would this have been the story of American automobile manufacturers if Honda and Toyota et al had been around 70 years ago?
