Give Me Innovation or Give Me Death
Wednesday, June 15th, 2005
By Mitchell Clark, B.Comm. for Profit Confidential
Perhaps that’s a little too harsh. What I mean to say is… Give me innovation or give me a German car! It’s no wonder the domestic automobile producers are struggling, as their kind of innovation involves trying to save as many dollars as possible on the production line. For a German car manufacturer, innovation is all about making a car function better for the driver. Period.
I like to harp about this subject, and, for any of you thinking about writing in to tell me that I shouldn’t support foreign car makers (in particular the Germans), hold your horses! I lost a lot of family members during World War II, and we think about their sacrifices often, but that story is history. Besides, credit is due where credit is due–Germans make great cars.
Don’t get me wrong, despite the fact that I’m often critical of GM, I own a 4X4 GMC Sierra extended cab pickup truck, and it’s a great vehicle. In fact, I often refer to that truck as “old faithful,” because she’s very reliable and has been able to get me through anything. Nothing in this world compares to this trustworthy piece of Detroit iron. But for 50 large, do they have to make it with such chintzy plastic in the interior? And I don’t trust my dealer’s mechanics either. This is my beef with Detroit.
The Japanese automakers make some very good quality cars that hold up for a long time, but they could bore you to death. I have to give them credit on service, however. At my local Toyota dealership, every Saturday there’s a huge lineup of vehicles as the dealer offers free car washes to its customers. When your car or truck is getting washed, people browse at the new models, drink coffee, and talk to salespeople. That’s smart business. Talk about building long-term customer loyalty!
Notwithstanding GM, Ford, and Chrysler’s financial problems, the good news is that Detroit is starting to come out with some truly great cars. I love the Chrysler 300 with the Hemi engine. It has bold styling, a great engine, and rear wheel drive. Mark my words, the popularity of front wheel drive cars is over! The new Ford Mustang is awesome, and the retro style really works. I also love the new Cadillac, and it has to be said that the Chevy Malibu really is a great car for the money.
From a stock market perspective, all the bad news concerning the big three is now fully in the marketplace. Perhaps this is why Kirk Kerkorian just bought 40.9 million shares of GM stock. A big-time turnaround seems to be in the offing. I hope it is.
I’ll finish up by saying that all the big three manufacturers need to do is offer more driver innovation in their vehicles. Make exciting cars with fewer models to chose from, and your finances will turn around. Oh yeah, with a little innovation on the service side, the domestic market will come back to you in droves. I know I will.
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Mitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.
