Zack McTee

Bailing out the auto industry

stopwhispering:

squashed:

…On one hand, the auto industry is huge and hurting. If one or more of the big automakers failed, the whole country would be in significantly more pain than it is currently in. Additionally, the skilled laborers are already there, looking for jobs—and a turn around in Detroit would do wonders for the entire region. Similarly, it’s probably a good idea to keep our manufacturing base intact so we can have a diverse economy.

On the other hand, the auto industry is stupid. It has been focusing on larger and larger trucks and SUVs—apparently unaware that gas prices were likely to go up. Did a spike in gas prices surprise anybody? Or, rather, anybody who doesn’t live in Detroit? The Prius has been selling incredibly well. It’s not a particularly new car. But it still has no American competition. Apparently, somebody in Detroit looked at the huge profit margins from huge cars and decided that they should focus exclusively on the gas guzzlers. What could possibly go wrong? With incompetent leadership like this, we would just be wasting $50 billion…

 Word to this. I am no automotive industry expert — I’m sure that there are quite a few of those in the world — but the Detroit 3 should have got their shit together a long time ago.

I think the problem is that GM, Ford and Chrysler are too busy jumping on bandwagons, instead of actually building the original bandwagon. I mean, GM (I think?) sells hybrid versions of a lot of its cars, but I haven’t seen them really gain any market share with their “green” cars.

At this point, I can’t really tell what the (former) Big Three could do to reverse their fortunes. They pretty much sell their cars at the same price points as the Asian/European automakers,  their cars increasingly look like their competitors’ in terms of design and innovation, they market their cars in the same way, etc. It seems like they are selling products that are “competitive” (read: similar to what their competitors are doing), and still getting outsold.

The recent talks about a potential GM/Chrysler merger make me kind of uncomfortable, because all it would do is allow the two companies to streamline (read: cut jobs and improve operations) to help them cut costs. But, at the end of the day, these OEMs will still be selling products that are largely unpopular with consumers.

If the bailout does go through, and two of the Big Three do end up merging — some analysts now think it’s inevitable for the three to become two — the resulting layoffs are hardly going to inspire good will with consumers. And you can hardly use the old “Buy American cars” line when you are too busy outsourcing your supply chain just so you don’t go under.

I agree on every level. These people have been making far too many poor decisions for far too long. I think if we give them the money they need to be highly regulated and held accountable to make fuel efficient cars and look to the future, not the current trends. This being said, has anybody been paying attention to the GM’s Volt or the newly remodeled Aveo? The Volt will seriously change the auto industry, it can drive for 40 miles on one battery charge until the gas powered engine would kick in to recharge the motor. The average American travels a total of 40 miles per day, this would mean you could never pay for gas again. They have a prototype Volt and it will be available in 2011. I think GM should fold up all their brands (except Cadillac) and live under one car company called GM (which I think could make a sick logo too), they are spread to thin with all these crappy car lines that they have. Consolidate. Focus on making a few cars, really well.