For one of my MBA classes, I had to pick and discuss an article relating to globalization and/or the world economy. So, I picked on entitled "Down and out in Bloomfield Hills". It was actually on the cover of the Wall St. Journal this week. Here is what I wrote. Keep in mind that I had to put a bit of a "pro globalization" spin on it, which makes it a little harsher towards the working men and women of the UAW that are probably going to be royally screwed:

Discussion of “Down and Out in Bloomfield Hills” and “Delphi’s Deep Cuts Heighten Detroit’s Crisis”, WSJ April 1,2006

This article is a poignant discussion of the issues facing the Detroit area in light of ongoing downsizing at Ford and General Motors. The Detroit area has been going through some very difficult changes over the past few years as profits at Ford and GM have dried up. One could easily argue that the Detroit area would be better off without foreign competition. First let’s take a look at what happened to the Detroit automakers.
The US auto industry, with the exception of the Volkswagen Beetle, was primarily a domestic industry until the mid 1970’s. At that time, Detroit was making gas guzzling vehicles that were of poor build quality. Japanese companies such as Toyota, Datsun (now Nissan), and Honda showed up with fuel efficient high quality vehicles. Since then, Detroit has watched its market share erode.
Fast forward to the present. Truck and SUV sales, the last bastion of strength for Ford and GM, are drying up in light of high fuel costs, and the companies were not prepared with compelling fuel-efficient alternatives. As a result, profits are in a tailspin. Since the Detroit economy is heavily based on the automotive industry, from executives in Bloomfield Hills to factory workers in Taylor, everyone is hurting. People who don’t even work in automotive are having financial troubles, especially in service industries such as personal care and in restaurants. Michigan has lost 21,000 jobs since November alone. Delphi Corporation, a Tier 1 automotive supplier, has filed for bankruptcy, and in attempting to renegotiate union contracts, the resulting strikes could also bring its biggest customer, General Motors, into bankruptcy.
The pain felt in Michigan could have been avoided had the Japanese automakers never come to the US. Michigan’s economy would clearly be better off had everything remained status quo. Ford and GM would not be closing plants and reducing office staffs. Million dollar homes in Bloomfield Hills would not be on the market for over a year, and my house in Dearborn would not be going down in value. The foreclosure rate in the Detroit area is higher than any major metro area in the country.
Fortunately for US consumers, we do live in a global economy. Had the Detroit automakers continued in an isolated economy, they would have continued to make vehicles of questionable quality and low value to the consumer. The onslaught of Japanese competition drove improvements in quality across the board, and the price of vehicles relative to inflation, has actually gone down in recent years. As other international companies, such as Hyundai, enter the market, US consumers will benefit even more.
The people losing out in the globalization of the US automotive market are the unionized workers in the US. These are people who, with little education, have jobs that pay them $27/hour. Having grown up in Livonia, which houses many UAW employees, I know that these are people that tend to spend all of their money and save very little. They went to work at age 20 and were paid handsomely for rather simple tasks. They counted on GM or Ford to always be there for their pension and medical benefits.
As Detroit struggles, southern states, where the international car companies have built plants, are reaping the benefits of economic growth. Indeed, Toyota just built a plant near San Antonio, TX, while Ford and GM have announced closure of over 10 plants in the next few years. In China, automotive suppliers are now setting up shop to supply car companies globally. Workers in China will now benefit from higher wages and steady jobs, unfortunately, at the expense of workers at US companies like Delphi.
The current situation in Detroit is a great example of how Globalization and the World Economy will cause some short-term pain in certain regions, but will overall benefit the world. Ford and General Motors will either cease to exist as we know them, or they will emerge as stronger competitors. Consumers in the US have benefited from foreign competition, and workers in other regions of the world are benefiting from newfound jobs.

Ok, so this is how its going to work.

If you want to ask a car question, simply send an email to: carlos.sundat@gmail.com

I'll be better about posting on here if I get more emails there.

My car news:

Sold the Protege for $400.
Registered the SVX for a cool $80. Swiftly proceded to grenade the transmission. Well, it goes forward, but just not backwards anymore. Hopefully it is something simple, we'll see.
Started driving the Miata again and installed some new speakers. Love that car.
Test drove a Mazda 3. I want one pretty badly, but buying a new car is such a bad idea right now for me.

That's about it.

Oh, and here's a cool link from the past...its from when I raced my 1988 Audi at the $2004 Grassroots Challenge: http://moonpatrol.org/~craig/audi.htm

Question from the greater Boston area:

If I'm accelerating hard in 4th or 5th to get up to speed on the highway and
I see the tach rev up to 3500, 4000 with no associated power... and I have
to ease of the accelerator to get the feel of power back...

When should I replace the clutch?

Well Terry, it depends on how much you mind being stranded on the side of the road. As long as you have some sort of roadside assistance (AAA or likewise), I'd just keep driving it until it won't go anymore. Chances are you don't have much time left though, and your clutch is most likely to fail at an inopportune time on a cold morning.

There is a possibility that it is slipping because oil is leaking onto the pressure plate / driven disc. Have you noticed any oil leaks?

hey folks!

Last night I was the designated driver for my buddy Scott's bachelor party. I got to drive around in his 5-speed Lexus IS 300. It was much more fun to drive than I had anticipated. With 70,000 miles on the clock, it felt very tight. I got into my LS afterwards, and I admit it felt a bit sloppy. Totally different markets for the two cars, but it made me wish that Lincoln had a BMW 3-series or IS 300 competitor.
I leave for Switzerland today. Whenever I go to a foreign country, I spend way too much time looking at the cars. Its amazing the stuff that Europe gets that we don't...like the 45 mpg diesel Focus, the Mondeo, etc.
I now own an SVX. I've recruited my buddies Keith and Jake to run it in the $2006 Grassroots Motorsports Challenge with me. The car _will_ have nitrous, unless we discover some serious problems in the next month.
My Protege is still for sale. I even bled the brakes and adjusted the neutral start switch, which increased the value by approximately $5!

The past few days were pretty fun. One of the great parts of my job is that I get to evaluate pre-production vehicles from time to time. We took a fleet of cars down to the Cincinnati area and put them through their paces. There are some really nice roads, I had no idea how hilly it is down there. It was 65 degrees on Thursday, and we were able to drive with the top down. Of course, we woke up on Friday and it was 30 degrees. Now its 5 degrees in Michigan...I hope this is winter's last stand.

There are a lot of Honda's in Ohio. I wonder if that is because they build most Accords and Civics in Marysville. Honda and Toyota are trying to paint themselves as American companies, and its hard to argue when you figure how many Americans work for them. Still, the majority of these company's profits flow into the Japanese economy.

We hung out with a girl who works for Toyota in Northern Kentucky. They make Camrys down there, and she drives an Audi A6 (which makes her incredibly hot). I wonder how many Toyota workers drive competitor vehicles. It is definately a no-no to drive a non-American car if you work for an American car company.

I'm selling my 1991 Protege for $600. I am having a hard time deciding if it is worth that much. Most people would say a running / driving car is worth at least $500. I paid $700 for my first car, and it was a bucket of rust. This little Mazda doesn't look too bad, and other than a slightly weak clutch, it should last a long time.

I'll be replacing the Mazda with a 1992 Subaru SVX. They are one of the oddest automotive creations in the last 20 years. AWD with a flat-6 engine, and goofy side glass (see picture). I'm paying $300 because it needs some work, and I'm hoping to enter it in the $2006 Grassroots Motorsports Challenge. With the addition of nitrous, I'm hoping for 13 second 1/4 mile times. It has 180,000 miles on it, so it might just explode. We'll see.

I just went for a ride in a 2002 BMW M5. The car is amazing...so much power, so smooth. Too bad a used one still runs $50K! My friends who work for The General brought it by. The car was a benchmarking vehicle for the Cadillac CTS-V. It still had the Nürburgring stickers on it.

Speaking of GM...they lost $8 Billion dollars last year. Its amazing to think that only 30 years ago the federal government wanted to break them up due to anti-trust laws. I really don't feel that sorry for GM as a company, but I do feel sorry for the 300,000 people that work there. Its amazing how some poor management decisions are killing a once great company. Let's delve into GM's product line.

Saturn. What in the world...they had such an opportunity with Saturn. Anyone would buy a Saturn just because of the sales/service experience. Then the Ion came out. What a fugly piece of junk. Everything about the car is cheap, the only person I know that likes hers came out of a 1986 Cavalier. Now GM is closing the Spring Hill, TN plant that makes Saturns. They spent $1 billion to open that plant, and it is one of their nicest facilities. The biggest reason they are closing it is because there is a separate union contract so they can easily lay of the workers. Sad.

Chevrolet. Who buys Chevy's? As far as I can tell, only rednecks and rental car agencies buy Chevy's. I take that back...the Corvette is an amazing piece of machinery. I will admit, the Cobalt is a nice small car, but since Chevy's "brand equity" for cars (not trucks) is just about zero, they have to put huge discounts on the Cobalt. If that car was badged as a Honda, it would sell like hotcakes.

Buick. Did you even know that was part of GM? The last Buick I drove was as a rental when I went to Boston a few years ago. It was AWFUL. It made the Taurus look exciting. What a waste of raw materials. Please send Buick the way of Oldsmobile soon.

I should mention Cadillac as the crown jewel of GM. Their lineup is outstanding, and it is clear that Lincoln is envious of what Caddy has done. Lincoln has decided to emulate Caddy's new badging system, as evidenced in the Zephyr to MKZ name switch. I, for one, really liked the Zephyr name. And if the Escalade didn't have enough bling for you, the new Navigator might just do it.

I yearnfully looked at my Miata tonight. It sits peacefully in my garage...thanking me for not subjecting it to another Michigan winter. In its 11 years on earth, I believe this is the first time it hasn't been subjected to the salt slurry found on Michigan's roads. I think I'll put it back on the road after spring break. Then I can sell my '91 Protege...for cheap. Know anyone that wants a $400 car that runs/drives well?

I've been thinking about dumping the LS and picking up a Protege5. I would love to have all 4-cylinder vehicles in my fleet, as I drive a lot. The LS sucks down premium at a rate of ~ 24 mpg...I'd save ~$80/month if I got a car that used regular at a rate of 30 mpg.

In Michigan economic news, Toyota won't be opening a plant here anytime soon thanks to the UAW. Did you know that Michigan has the worst unemployment rate in the country now? Maybe that's why my house has only gone up 1% in value in 3.5 years...

Trivia question: what was the largest displacement AMC engine ever made?

So, the whole point of this is to provide a forum for giving car advice. I'm not sure how that's going to work, but for now it's fun to rant and rave a bit about cars.

Today I gave some advice about a 1994 Honda Civic. T's friend was going to call Car Talk, and my she told her that I'd do a better job. Thanks for the vote of confidence, T! Anyway, Laurie is having a problem where her car just dies while driving. If she holds the key in place, the car will keep running. It needs a new ignition switch, and the car parts place wanted $250 for the part! In 30 seconds, I found her a new keyswitch for $80 on eBay. Hopefully she can find some shady mechanic to put it in for $100 or so.

By the way, I love eBay. Some knucklehead has bid up a Mercury Marauder brochure I have on there to $12. Pure profit, baby...I got it for free at the auto show a few years back. Its amazing what people will buy.

I'm in desparate need of a truck today...I have to pick up a free stove, oven, and dishwasher in Ann Arbor. I can't justify buying a truck, but it would be nice to have something with cargo abilities. I'm thinking a Mazda3 hatchback might be the perfect car for me, but they are impossible to find used for a good deal. A new car payment goes against my "less is more" philosophy when it comes to stuff.

In Detroit economic news, Ford laid off almost every contract engineer yesterday. A friend of mine was walked out after working there for 8 years. He has to figure out how to feed his wife and kids now. Scary. When I got into this business 6 years ago, I never would have thought it could come to this. Next week, a big round of layoffs is supposed to happen. More people I know will lose their jobs.

Message to all: please buy American cars so the metro Detroit area doesn't turn into a gigantic Flint.