General Motors (GM) has steered around competitors to remain the world's #1 maker of cars and trucks, with brands such as Buick, Cadillac, Chevrolet, GMC, Pontiac, Saab, and Saturn. GM also produces cars through its Holden, Opel, and Vauxhall units. Other operations include Allison Transmission (heavy-duty automatic transmissions) and GM Locomotive (locomotives, diesel engines). GM also has stakes in Isuzu Motors, Suzuki Motor, and GM Daewoo Auto & Technology. Subsidiary GMAC provides financing. GM discontinued the Oldsmobile brand in 2004. GM has been selling off non-core assets including stakes in Fiat and Fuji Heavy Industries (Subaru), as well as its locomotive manufacturing business.

Although all automakers are facing the tough challenges of global overcapacity, brutal competition, and rising fuel prices, the biggest roadblock to GM's success has been health care costs. GM has made progress in lowering production costs and increasing productivity but its successes have been obscured by the huge amounts of money it spends on health care. GM spent $5.4 billion on health care in 2005, or nearly $600 from every car the company sold. And this figure does not include the huge sums GM spends on pension pay-outs.

Ford Motor began a manufacturing revolution with its mass production assembly lines in the early 1900s. Now the company is firmly entrenched in the status quo as one of the world's largest makers of cars and trucks. It makes vehicles with such brands as Aston Martin, Ford, Jaguar, Lincoln, Mercury, and Volvo. Among its biggest successes are the redesigned Ford Mustang and F-Series pickup. Ford owns a controlling (33%) stake in Mazda and also controls the Land Rover SUV nameplate. The finance subsidiary, Ford Motor Credit, is the US's #1 auto finance company. Ford has sold Hertz, the world's #1 car-rental firm. The Ford family owns about 40% of the company's voting stock.

In early 2002 Ford outlined a plan to revitalize the company after staggering 2001 losses and a plummeting stock price. The plan called for trimming costs, improving its relationships with suppliers and dealers, and introducing new products.

Initially the plan seemed to be working. Ford's North American automotive operations were profitable in 2003 and 2004. Then the problems started mounting. Severe pricing pressures, rising health care and raw materials costs, skyrocketing fuel prices and a shift away from large SUVs, and brutal competition (chiefly from Japanese rivals) contributed to North American 2005 losses of $1.6 billion and North American market share slipped to an all-time low.

These myriad challenges offset Ford's product-based recovery announced in 2002. Despite a host of new models launched in 2004 -- including the new Focus, Five Hundred, Freestyle, Mercury Montego, and the highly anticipated Mustang restyle -- Ford couldn't turn the corner.