| |  | | Charles Devalle | Over the past month and a half, I’ve been looking very seriously into motorcycles. The reason why is simple – I’d get 50-60 miles to the gallon. To tell you the truth, I’m a little upset about this whole thing. Not because I wouldn’t enjoy the summer breeze blowing through my long, wavy hair while I ride a motorcycle, but because I have to actually think about ways to cut my gas bill. What really ticks me off about this whole deal is that this all could’ve been solved if Detroit would’ve learned their lesson back in the 70’s. But you should know how I feel because I wrote about it two weeks back. And it looks like I’m not alone either. Charlie said… Hey Charles, I love your 'right on' stuff. Lordy, if only the rest of the financial crowd could be as astute as you! Then Carol said… You are dead on with this one. Americans have to wake up to the future and invest/develop alternative sources for all kinds of energy. We blew it in the 70s, much to my chagrin. Write your representatives at all levels of government and insist that they stop trying to figure out how to get more fossil fuel -OIL. Corn ethanol is not the answer either! Stimulus/incentives must be provided and standards established by governments to divert this economy busting energy train wreck. And I really made an impression on Jack… Charles, nice to read a column from a greenie, tempered with common sense, as for drilling for more oil, let’s keep it simple, “better now than never". Yes – I have to admit I got a lot of slack from my ‘greener’ friends when I said that I was in favor of more drilling while at the same time being in favor of green energy. So many people think that if you’re for alternative energy then you can’t be for oil drilling. It’s almost like drilling is Coke and alternative energy is Pepsi. I have something to admit… I drink both. As much as I love nice comments, I also love the comments that force me to debate, such as this one from Joe… I find you to be a well-spoken and intelligent man. But the tone of this article makes me think that you missed a very important point here. The "Big Three" offer lots of models. They also monitor the market to see what sells best. The reason they sold so many SUVs is that we bought so many. I'm not saying that they've covered themselves in glory with well spent R&D dollars that have created impressively efficient vehicles. If what we've seen represents their best efforts in that area, then they're hopelessly incompetent and will eventually go out of business. I'm just saying that it seemed you were blaming the automakers for SUV sales. The blame should go to the SUV drivers. Most of them could find a mini-van that would exceed all demands they've ever placed on their SUV (except the cool factor). I'm just for giving credit where credit is due. Keep up the great writing. I really enjoy your stuff. You are right on with this one, Joe. The big three made big dinosaur sized SUVs because that’s what Americans wanted. We all know what happened to the dinosaurs, though. And here’s another problem with the big three. How long have gas prices been moving higher? Eight years now. It took eight years for the big three to respond to higher gas prices. They – for some stupid reason – failed to foresee future demand for more fuel-efficient cars. It took them until just a few months ago to start speeding up production of cars better able to meet the emerging demand for fuel-efficient cars. GM is releasing a new mini-car. Release date? 2012. And here’s the worst part – GM had two other designs for mini-cars. And they WON’T be bringing them into production (at least, they haven’t said they will). I think somebody needs to light a fire under GM’s A$$ and get production moving even faster on these small cars considering they ARE the future. And then there’s Ford. Sure, they are transitioning to a global platform. That means we get sexy Fords from Europe (I’m serious, they really are sexy!) shipped over to the states. While Ford is bringing these cars to market faster than GM, it’s still going to take until 2010 for the first one to hit our shores. And Chrysler… wait they aren’t bankrupt yet? Maybe next month. Either way, 70 percent of their sales relied on dinosaurs, I mean, SUVs. And if you take a look at every other car they make – they look like crap and are way behind the design/functionality/feature curve. Seriously, the interior plastics they use are cheap, hard, and don’t give you the impression of quality. Then they have all sorts of little spacing issues that you’d never find inside a Honda/Toyota/Hyundai. It took Hyundai two years to update their interiors. Now they have one of the nicest interiors you can find inside a car. Why hasn’t Chrysler done the same? Ahh, American ingenuity at work. Here’s why I think the big three are such dolts. In my time of researching the stock market, I’ve always found that any company whose sales rely too much on any one type of product is bound to get hit hard. If you’re a company that wants to make it past ten years, you diversify your revenue stream. That way should one product stop selling, you have a whole slew of other products that can make money. The big three had over 60 percent of their sales coming from SUVs and trucks. And they knew the entire time that if gas prices really shot up, sales would come crashing down. Yet knowing this, did they have any backup plan? Not at all. Did they think “Gee, maybe we should make a couple of fuel efficient cars just in case we get a repeat of the 70’s”? If they had, we’d have already seen some nice small cars from them at this point, and they’d be making money (or at the very least, not losing as much). Instead, what small cars they have, they can’t make enough. Meanwhile, their fundamental situation just gets uglier and uglier. More brands being sold… more layoffs yet to be announced… and no imminent sign of profitability for the big three. What’s the best way to avoid it all? Honda Motors (HMC). They rely the least on truck sales, have the best selling econobox (the Civic), have a revamped Accord, and plan to release more hybrid and electric vehicles. In this downturn, Honda will outperform Toyota. You can take my word on that. To your success, Charles P.S. To let me know what you thought of today's article, send an e-mail to: feedback@investorsdailyedge.com. | 
