I was hoping to say something original and provocative about the Big Three’s recent attempt to get a government bailout, but I’m finding myself drawn to the ‘survival of the fittest’ camp. It sounds like they could use a shake-up; the North American auto sector has had this coming after years of mismanagement and ambivalence to customer needs.-This isn't as big a deal as they're making it out to be. These companies aren’t going anywhere in the long-term. North Americans will still need cars once this awful recession is over. And once the dust settles, auto manufacturers will emerge from this crisis leaner and meaner than the bloated incarnations they are now.-Moreover, people need bailouts, not corporations. The government should save the money they would otherwise waste on these companies and spend it to support those people who are about to lose their jobs. Giving the Big Three a wad of cash would only result in a retrenchment of the current paradigm. What’s needed is a complete collapse so that the auto sector can reinvent itself for the 21st century.-It sounds heartless and Darwinian, but it’s true. Recessions and shake-ups happen because corporations that work within uber free markets cannot self-regulate. The banking/credit crisis has proven this. Capitalism works to eat itself, which is why we get correction periods every now and then. The current recession is merely the elastic band swinging back from its over-extension.-http://ww w.sentientdevelopments.co m/2008/11/big-three-in-bi g-trouble-too-bad.html
America has no good small cars, and that's why Japanese companies are really getting momentum. Honda is the perfect example of a company that's focused on fuel efficiency with even its SUVs being among the most efficient. Honda has some of the biggest hits here, the Fit and the Civic. It's going to be a while before the Chevrolet Cruze gets here, or the Volt. Ford is bringing over some cars from Europe, and Chrysler, well, that's whole different story.
Not only do they need to use this to reorganise, but they need to plan for the future. People will not be able to purchase on credit for quite some time, because they are simply tapped out. But when they DO start buying cars again, they will probably be thinking of the price of fuel rising dramatically like it did in the past three years. When it comes time to replace today's vehicle fleet, in two or three or four years, the current car manufacturers will be ready. They can pretty much write off this year and next year. Few cars will be bought. They will make losses, as people will just buy parts and keep their old cars running for an extra couple of years. But there is a boom in economical cars coming. I suggest all car manufacturers get on the bandwagon now, or face the fate of British Leyland or Nash.
A reader writes:- Ford has owned a majority stake in Mazda for decades. Nearly every vehicle in Mazda’s lineup is platform shared with a Ford, Lincoln, Mercury, or Volvo.- Until last year GM was the majority stake holder in Subaru. GM sold off their shares to Toyota. Ditto Isuzu.- Mitsubishi has been kept afloat for decades by Chrysler. In the 80’s and 90’s about half of the entire lineup at Chrysler was platform shared with Mitsubishi. Engines and transmissions are still shared today.- Toyota and GM share a factory in California. The factory produces the Toyota Corolla, Toyota Matrix, and Pontiac Vibe.- BMW has used GM automatic transmissions on and off for years. BMW paid GM to develop the automatic transmission in the BMW 5-series and Cadillac CTS- GM, Chrysler, and Mercedes Benz have a joint venture to build hybrid powertrains.- Chrysler alone, backing out of a deal to buy automatic transmissions, forced transmission manufacturer Getrag into bankruptcy. Getrag supplies transmissions for every auto manufacturer.- Ford and Nissan buy their hybrid technology from Toyota.- All of the auto manufacturers share suppliers. Any one of the Domestic 3 failing would likely take out the other two and severely damage the foreign owned companies ability to continue to operate here. That’s not to say they don’t need to reorganize, but to even do that they have to be able to make payroll and buy materials. That is what this loan is about. Additionally, to the foreign governments who are planning to protest any bailout by the US government as unfair to imports, the imports have been getting their own “bailout” for years via socialized medicine and other government subsidies.
I was hoping to say something original and provocative about the Big Three’s recent attempt to get a government bailout, but I’m finding myself drawn to the ‘survival of the fittest’ camp. It sounds like they could use a shake-up; the North American auto sector has had this coming after years of mismanagement and ambivalence to customer needs.-This isn't as big a deal as they're making it out to be. These companies aren’t going anywhere in the long-term. North Americans will still need cars once this awful recession is over. And once the dust settles, auto manufacturers will emerge from this crisis leaner and meaner than the bloated incarnations they are now.-Moreover, people need bailouts, not corporations. The government should save the money they would otherwise waste on these companies and spend it to support those people who are about to lose their jobs. Giving the Big Three a wad of cash would only result in a retrenchment of the current paradigm. What’s needed is a complete collapse so that the auto sector can reinvent itself for the 21st century.-It sounds heartless and Darwinian, but it’s true. Recessions and shake-ups happen because corporations that work within uber free markets cannot self-regulate. The banking/credit crisis has proven this. Capitalism works to eat itself, which is why we get correction periods every now and then. The current recession is merely the elastic band swinging back from its over-extension.-http://ww w.sentientdevelopments.co m/2008/11/big-three-in-bi g-trouble-too-bad.html
America has no good small cars, and that's why Japanese companies are really getting momentum. Honda is the perfect example of a company that's focused on fuel efficiency with even its SUVs being among the most efficient. Honda has some of the biggest hits here, the Fit and the Civic. It's going to be a while before the Chevrolet Cruze gets here, or the Volt. Ford is bringing over some cars from Europe, and Chrysler, well, that's whole different story.
Not only do they need to use this to reorganise, but they need to plan for the future. People will not be able to purchase on credit for quite some time, because they are simply tapped out. But when they DO start buying cars again, they will probably be thinking of the price of fuel rising dramatically like it did in the past three years. When it comes time to replace today's vehicle fleet, in two or three or four years, the current car manufacturers will be ready. They can pretty much write off this year and next year. Few cars will be bought. They will make losses, as people will just buy parts and keep their old cars running for an extra couple of years. But there is a boom in economical cars coming. I suggest all car manufacturers get on the bandwagon now, or face the fate of British Leyland or Nash.
A reader writes:- Ford has owned a majority stake in Mazda for decades. Nearly every vehicle in Mazda’s lineup is platform shared with a Ford, Lincoln, Mercury, or Volvo.- Until last year GM was the majority stake holder in Subaru. GM sold off their shares to Toyota. Ditto Isuzu.- Mitsubishi has been kept afloat for decades by Chrysler. In the 80’s and 90’s about half of the entire lineup at Chrysler was platform shared with Mitsubishi. Engines and transmissions are still shared today.- Toyota and GM share a factory in California. The factory produces the Toyota Corolla, Toyota Matrix, and Pontiac Vibe.- BMW has used GM automatic transmissions on and off for years. BMW paid GM to develop the automatic transmission in the BMW 5-series and Cadillac CTS- GM, Chrysler, and Mercedes Benz have a joint venture to build hybrid powertrains.- Chrysler alone, backing out of a deal to buy automatic transmissions, forced transmission manufacturer Getrag into bankruptcy. Getrag supplies transmissions for every auto manufacturer.- Ford and Nissan buy their hybrid technology from Toyota.- All of the auto manufacturers share suppliers. Any one of the Domestic 3 failing would likely take out the other two and severely damage the foreign owned companies ability to continue to operate here. That’s not to say they don’t need to reorganize, but to even do that they have to be able to make payroll and buy materials. That is what this loan is about. Additionally, to the foreign governments who are planning to protest any bailout by the US government as unfair to imports, the imports have been getting their own “bailout” for years via socialized medicine and other government subsidies.