Without a solution to the worst management across the industry, the big 3 in Detroit are likely to simultaneously self destruct, drag down suppliers, dealers and even import automakers.
The loss of business from GM or Chrysler is likely to bankrupt suppliers. Then since those suppliers also supply Ford, this domino effect could grow, affecting all of the big 3's dealerships.
So... ready to hear some screaming from stockholders? Today the price of GM dropped to the lowest it's been since 1945, about 3 dollars US. If you are interested in consequences of criminal mismanagement, golden parachutes, and what happens when lousy customer service, lousy quality, and lousy gas mileage all culminate at a historic time of record high oil prices, lots of competition from better performing, higher quality, and better gas mileage foreign manufacturers.... give the news a little attention every day to see what solution is arrived at.
I'm forecasting irresponsible political intervention in a supposed free market capitalist country where competition used to be allowed to thin the herd of the fat, slow, corpulent, and failing. There is a reason so many car makers went out of business in the 40's 50's and 60's, Nash, Studebaker, Crosely, Duesenburg, Packard, Kaiser, and so on. There is a reason Plymouth and Oldsmobile were canned in the past decade. Sometimes you have to cut away the diseased area to save the rest.
Only the strong survive.
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Monday, November 10, 2008
