The Fall and Rise of the 'Big Three': Ford GM Chrysler For decades, the nation's largest automakers were referred to as the "Big Three," signifying their dominance not only in the U.S., but worldwide. In recent years, though, as Ford Motor (F), General Motors (GM) and Chrysler Group have struggled to maintain global dominance, a new moniker has emerged: the "Detroit Three."

"I think 'Big Three' fell out of favor because GM, Ford and Chrysler were shrinking rather quickly these past few years," notes John Neff, editor-in-chief at Autoblog, a sister site to DailyFinance on AOL. Toyota Motor's (TM) growth in the U.S. market allowed it to surpass those of Ford about three years ago and then overtake GM in worldwide sales in 2009, Neff says. "So calling them the 'Big Three' didn't quite fit anymore."

The recent financial crisis and recession only made matters worse, dragging down sales, forcing GM and Chrysler into bankruptcy reorganization, and compelling Ford to mortgage nearly all its assets to muster a turnaround. Out of the tough times, "the domestics," as Neff also calls them, have emerged stronger, better able to turn a profit while selling fewer vehicles.

The slowly recovering economy has helped, too. Ford, GM and Chrysler each recorded higher sales in 2010 than in 2009, one of the worst years in decades. Some of that sales growth, especially in Ford's case, came at the expense of Toyota, which stumbled throughout much of the last year as it struggled to deal with numerous safety recalls that damaged its reputation and led to record fines by federal officials.

Ford Has the "Bootstraps" Storyline

Of the Detroit Three, Ford is in the best shape, says Arthur Wheaton, auto analyst at Cornell University's ILR School in Ithaca, N.Y. "The auto industry is cyclical not only in sales, but it's also cyclical in terms of who's having momentum -- and momentum makes a big difference," Wheaton says. "It's the perception more than the actual car itself."

Unlike its crosstown rivals, Ford has benefited in part because it didn't submit to a government-sponsored bailout. Instead, the Dearborn, Mich.-based company took on massive debt, betting on a turnaround plan that reduced its number of divisions and focused on the core Ford brand. So far, the restructuring, under the guidance of CEO Alan Mulally, has worked well.

The perception that Ford in essence pulled itself up by its bootstraps is one that appeals particularly to Americans' "can do" attitude, Wheaton says. GM, by contrast, has been labeled "Government Motors" by some detractors for its government bailout, alienating some potential customers.

GM is eager to ditch that image, but it won't be easy as long as U.S. taxpayers still own a sizable chunk of the company. GM's initial public offering in November reduced the Treasury's stake in the automaker to about 32%, substantially less than the 62% it used to own. But it'll still be some time -- perhaps years -- before the government offloads all its interest in GM.

Further aiding Ford's position is that it has a two-year head start on GM and Chrysler in product development. While GM and Chrysler were working through their bankruptcies, Ford was designing new models and moving ahead with plans to improve its business.

GM: Make It Happen Faster

GM's newly named CEO Daniel Akerson has acknowledged his company's challenges, saying there is a gap in the product pipeline caused by what he called a lost year due to the bankruptcy. To remedy the problem, Akerson this week named Mary Barra as global product development chief, a title once held by automotive legend Bob Lutz. Barra, the first woman to hold the post, will oversee product development for GM's 11 brands worldwide -- and, as USA Today notes, her mandate will be to make it happen faster.

Though GM may be lagging in bringing new models to market, it does have an advantage over Ford in China, where GM is a dominant supplier. Cornell's Wheaton says it could be argued that GM's dominance in China allowed the company to emerge from bankruptcy. "That's what made them a viable company," he says, noting that GM sold more vehicles in China last year than it did in its home market.

Chrysler, too, faces a gaping hole in product development. The company unveiled a new Jeep Grand Cherokee midsize SUV last summer and will soon begin selling the tiny Fiat 500 subcompact. But the majority of its models are holdovers that have been part of the company's lineup for years.

Gas Prices Are the X Factor

Continuing to build on last year's sales momentum and growing market share will be key the Detroit Three this year. But the domestics face additional challenges including negotiating new contracts with the United Auto Workers and rising gas prices, which could impede sales.

Ford, GM and Chrysler have been able to recover in part due to steady oil prices that have made crossover vehicles and trucks desirable once again. If gas prices surge to more than $3.50 a gallon and stay there, however, consumers will likely begin looking for more fuel-efficient -- and less profitable -- alternatives.

At last week's Detroit auto show, U.S. industry executives said they hadn't yet seen any change in the mix of vehicles in response to rising gas prices, The Detroit News reported. But according to Deutsche Bank (DB) analyst Jochen Gehrke, for 2011, "the main downside risk to profitability was cited by many as a further rise in oil price."

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I just bought a 2011 Ford Mustang Premium V6 automatic and it's a nice car that has some serious power with the 3.7L V6 with 305 hp. Top pony car in it's class.

January 24 2011 at 6:33 AM Report abuse +2 rate up rate down Reply

Maybe if GM enginneers got back to designing cars and trucks like they had some style and not looking like another import they may sell more cars. I havn't seen one GM car I'd buy sense the mid 80's. Gm seems to like bowling ball style cars/coffens. Their auto's look just like all the imported crap and the style has gone right out the window. Who does GM designing ?????... must be the same enginneers that design the Jap Crap and others country crap coffens. In my opion there's nothing like sitting in a car and looking out the windshield over a nice shinny hood and have some power to boot with out breaking the bank. There was a time when the Detroit cars where less money because they were made in the USA but GM and the other 2 have their cars costing as much and more than the imports which should cost more do to they having to be imported from other conutries and special taxes and doc fee's. get with it GM and get back to the old days where a man or woman could buy a GM car and have a nice ride and put some style back into the cars like back in the 60's and 70's so a person can tell your style from all the rest. One more thing there is not any car worth over 15K. So get back to priceing your 4 wheels to where a person's second monthly bill is a new car....You just might sell more products and stop making yours look like all the rest on the street and have some pride in your product because your half round bowling ball cars are not big enought for a family and if you think they are then the CEO should sit in any back seat for a 3-6 hour ride and you'll see why you can't sell your product. If I were the CEO I'd gear up and start building the old styles all over and get back to full size and mid-size and lower those damn pickup trucks as they all look like there construction vehicals with a shinny paint job. Everyone dont like the jackup construction look as now we have to buy them and lower them to hook up to goose neck trailers or 5th wheel trailer or have the trailer tung re-done to work with your jackup construction trucks. There's no reason a pickup needs to be 3 foot off the street to the bottom of the door.
Get with it GM as it may be longer than you think before your, your own company again.

January 24 2011 at 4:32 AM Report abuse -2 rate up rate down Reply
1 reply to comp740's comment

What is it with you and bowling balls? Is it the bowling or the balls that has you so strung out?

January 24 2011 at 6:28 AM Report abuse +2 rate up rate down Reply


January 24 2011 at 3:09 AM Report abuse rate up rate down Reply


January 24 2011 at 2:51 AM Report abuse +5 rate up rate down Reply

Way to go Americas three. We must "Always" buy American no matter what we purchase. Lets help put everyone back to work by buying American. We need Jobs and Jobs will come when we purchase American made products. Let the big box stores keep their foreign merchandise. We will help our children and grandchildren

January 24 2011 at 12:49 AM Report abuse +7 rate up rate down Reply

OK folks here is how I see it. I told my neighbor that when I get a car, I will buy a FORD, not GM or Chrysler. GM and Chrysler had to take bailouts from the government, Ford however, never resorted to that. And my neighbor said Fix Or Repair Daily=FORD. I told him of the Ford Escort, which ran perfectly even though when we traded it in in December 2002, was eight years old. This Ford Focus ZTW, now eight years old, nine years old in December runs just fine. No problems whatsoever. Before my neighbor said Fix Or Repair Daily, I had never heard of the phrase. Every car, truck, SUV, crossover or van is going to have problems. Some more than others. Ford learned its lesson from the Great Depression back in the 1930s.

January 23 2011 at 10:53 PM Report abuse -2 rate up rate down Reply
2 replies to sdowns1470's comment

Ford was bailed out too - they took out massive bank loans.

January 24 2011 at 6:55 AM Report abuse +2 rate up rate down Reply

Its not really the cars that are bad,or the workmenship is shabby. Its the trying to save a buck mentality. they had a good engine in the 3.8, and good gas milage. But in order to save a few cents they changed the head gaskit in 1995. To save a few cents they had to replace thousands and thousands of engines.. I like to know what is it with the south, are they still at war with the north??? Why all the car plants in the south all foreign, and supplied with tax incentives and cheaper labor and cost? Why do the southern Republicans seem to want to distroy American conpanies in the north? They did a mnumber on the car companies, and now they compete in ala, with airbus(france) against Boeing???????????

January 24 2011 at 7:39 AM Report abuse rate up rate down Reply

only thing the union is fighting for is another dollar in there greedy pocket !!!.

January 23 2011 at 9:53 PM Report abuse -4 rate up rate down Reply
1 reply to alucky1128f's comment

Don't be angry at people who are just trying to put some food on the table to feed their family.

January 24 2011 at 6:56 AM Report abuse +2 rate up rate down Reply

Why should the CVS 'boy' make $7.30 per hour, and the CVS Board of Directors, each in 7 or 8 figures per year??? Greed, greed, my fren' the answer was blowin' in the wind. Why shouldn't someone manufacturing an American Dream machine, be making a 'get ahead wage'???? WHY IS THERE LAX LAW ENFORCEMENT, SO PEOPLE WHO DRIVE CARS CAN ACT OUT THEIR ANTI-SOCIAL BEHAVIOR?????? WUSSY IN, WUSSY THROUGH, WUSSY OUT. The United States needs discipline in a number of ways, before it returns to some of its promise and democratic ideals.

January 23 2011 at 9:07 PM Report abuse +5 rate up rate down Reply

DID you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? That's $3,800 on a $100,000 home etc. When did this happen? It's in the healthcare bill. Just thought you should know.
So, this is "change you can believe in"?
Under the new health care bill - did you know that all real estate transactions will be subject to a 3.8% Sales Tax? The bulk of these new taxes don't kick in until 2013 If you sell your $400,000 home, there will be a $15,200 tax. This bill is set to screw the retiring generation who often downsize their homes. Does this stuff make your November and 2012 vote more important?
Oh, you weren't aware this was in the obama-care bill? Guess what, you aren't alone. There are more than a few members of Congress that aren't aware of it either

January 23 2011 at 8:59 PM Report abuse -4 rate up rate down Reply
3 replies to falconsso's comment


January 23 2011 at 8:49 PM Report abuse -5 rate up rate down Reply
3 replies to alucky1128f's comment