He has got it backassward ..... when margins turned upside down, Honda and Toyota didn't stop building product, they doubled down on product. They didn't idle nearly half the capacity, they made sure that capacity was full. They didn't add product complexity they removed it.
Nearly every thing we suggest here is wrong, and fundamentally misunderstanding the cost and manufacturing structure. 25 plus year I have been trying to explain the role of capacity and utilization here and it falls on deaf ears.
Sale volume is not about popularity, quality, even a specific product. It is about capacity... and not even macro-capacity... Micro-capacity. A single tool issue can decide sales volume. Demand is what defines margin.
The job of the CMO it define what the most you can charge for a product and make sure the capacity is optimized as well as margins.
But But But see they are over priced and demand creates volume issue..... Well I wish it was that simple the thing is with nearly half your capacity idle. Brampton, Belvedere, Windsor. Model change overs in Jefferson, and Warren .... Not to mention engine plants. Not down for a few month down for over a year. Your trying to cover your fixed cost over too few units.
The best thing this guy can do is get product being built in his idle capacity ....... A utilization comes up the cost per unit comes down, cost comes down margins rise and pricing across the board fall.
I get it we are interested in product because that is fun part... I am expert, I know what people want, the same thing I want..... talking about utilization and capacity is booooooorrrrrringggggg.... not sexy......................... BUT what is biggest issue at STLA in NA... NO PRODUCT. No Charger, No D segment Dodge CUV, Old minivan, Old Durango, Old Compass, No Cherokee, No Renegade, No Challenger, No Dakota, Long 1500 Change over... No No No No NO product and idle capacity. Operationally the company is in pure chaos.
moparinsiders.com
. Again you just can’t overstate the magnitude of ineptitude on display.
