On all counts, they deserve respect. There was a day and age when they were the most respected organisations in the world. They started the US automotive revolution and changed the way the world look at cars. But, contrarily, respect is no more a term one associates with Ford and GM these days, especially due to their constant flirt with bankruptcy. At the end of the first quarter of 2006, GM recorded losses of $323 million, while Ford reported a mammoth loss of $2.9 billion. With such unsustainable losses and rising operational costs, the two monoliths face the heat due to their own fl awed strategies. When the Japanese arrived in the US market in 1950s, there was a scramble among all auto majors. GM and Ford tried to compete with large scale production, which would reduce costs and allow them to offer better value. Unfortunately, demand could not catch up with supply, which led to huge inventories of unsold cars. Their fuel guzzlers did not find many takers due to high fuel prices. As sales didn’t match expectations, the costs became unbearable. Japanese majors like Toyota and Honda, on the other hand, worked efficiently and smartly, hence giving the Detroit majors a tough time. GM & Ford remain true symbols of American glory, as well as its downfall, in the past 25 years.
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Source IIPM-Editorial,2006
