2009: The end of the US auto industry
GM's financials haven't been this bad since the Great DepressionFor some time I've been wondering how much a drop in gasoline prices coupled with a weak US economy would inhibit the big green push to hybrid cars and electric vehicles. Consumers, I've worried, might lose interest as automakers struggle just to survive.
Predictions for that struggle have just become even more dire. In 2009 the global auto market could suffer an"outright collapse" due to limited credit and a poor economy according to JD Power.
Is the the auto industry, as we know it, over?
Labels: Hybrid Vehicles
posted by Dahcredyns at
10:20 AM
17 Comments:
Let's hope so...it's been one gigantic, wasteful, pathetically decrepit dinosaur.
I don't hope so, Noz.
There is no doubt that most of the last several decades of US automaking have been, well, shameful.
Still, I hope for a new US auto industry to emerge from this crisis. An industry that realizes it must reinvent itself, driven entirely be efficiency and innovation.
I think that's possible. Maybe not likely, but possible.
I don't think it's all doom and gloom.
These companies have made such a mess of the environment for the past 60-80+ years that most of them could transfer their jobs to green jobs and environmentally responsible positions.
As they say, for every door that closes, another opens.
I think it would be a good thing long term....but no one wants to feel short term pain...so no change....business as usual.
"I think it would be a good thing long term....but no one wants to feel short term pain...so no change....business as usual."
That's pretty much hitting the nail on the head I think.
Do you think it's getting any better, even if slowly?
Unfortunately, it seems like pain is the only thing that will force change. I just hope it isn't too much pain. Moreover, I hope that pain doesn't lead to a little change, but a fundamental change, a new enlightenment.
I don't think things well get better until other things are outright given up.
I don't think we have an option for transitions as we have come to understand.
We need a new start in many sectors...one of which is the automotive sector.
The impact doesn't need to be as great as everyone fears so long as people's value structures change.
In the current climate where people value SUV's more than their childrens's futures, it's not surprising change is slow and painful.
are people's value structures changing?
for instance, hybrid interest went up when gas prices went up. it wasn't a change in value structures, it was just economics.
too often people's values seem to be driven purely, or mostly, by what's in it for me, without any or little regard for how what's in it for them affects others.
nrThe both of you have missed very dangerous facts that should be noted. First off I am a mechanic that personaly made the decission myself "not" to buy from the "big three". I've been a tech for 25 years plus now and yes "dahcredyns" I've read your posts many times but sometimes you miss the mark on the big picture that some youth do not clearly understand that you had better! And I don't say/write this lightly. We are a country always within 7 years of war or warlike activity weather it be behind the scenes or all the world to see (weather you / anyone else myself included like it or not) we need these facilitys to make....yes our war machines...loose this and you also loose valuble abilitys that take far to long in wartime to master again.Just sit back before you tap out a reply (please I have great respect for your many blog ins so please do the same for mine and agree many times infact) think for a moment of the many things that go on behind the scenes....theres the many plants across the country (many closing right now infact) that make the vital little parts that go to so many "things" in this nation of ours. Case in point may be Russia they can't make "anything" of quality "except" war making equipment and they actualy "profit" from "making" little trouble spots around the world for us.(Right now remember Putin is ex KGB all they have of value is "Petro dollars" (stated clearly by McKane in the debate the other night which noone really truly understands right yet) Look what has happened to our space agency. It has had to aprove through congress so that we can "pay" Russia to resupply our astronauts in the space station. Thats right they have an excuse all the time to further master there balistic missle program and WE FUND IT. Both of you must be very careful and mindful of the full implacations of what you speak. I am a mechanic but watch very closely the big picture. My mother was Navy nukes and you can't possibly imagine what it means to be unable to plan / design / implament / model / test / put into actual production / test actual project / mass build / dispatch on grand scale to all branhes etc.... Sorry as I could go into the whole auto thing but I've been talking cars for 32 years alone thought I'd hit the otherside of the coin that really noone and I do mean noone ever talks about that is so vital to you and me and all of us having this great country alive and well.I bought a Tundra (more American built than any Ford truck and/or Chevy I researched it) too make my own personal point! But will refuse to ever in my power let Ford or Chevy go under. Unfortunatly Chrysler will be impossible to save as everything is being let go overthere (too long of a story that one too get into at this time). Take care and do please look into this and think for yourselves on this. Noz don't ever think that if the three OR "two" for that matter ever were gone that that would be good for all! Competition breads great things you may not know the auto industrys beginings to fully understand. Henry Ford built the same car for twenty years because change didn't make sence to him. He felt you just make it better but always keep it the same! By the way......he was a socialist NOZ....do you think the banks right now holding all Americans morgages / credit history etc is a good thing? We like it or not are at this time a socialist country.....ya ever wonder why the Dow is still down? The banks and others don't want "Big brother" as a loaner/issuer...... Remember what I write here ....careful what you wish for...........
ANON:
Where do I start? First off...next time you post something...please USE spaces so it's easier for us to read.
We are a country always within 7 years of war or warlike activity weather it be behind the scenes or all the world to see (weather you / anyone else myself included like it or not) we need these facilitys to make....yes our war machines...loose this and you also loose valuble abilitys that take far to long in wartime to master again.
You are WRONG on ALL accounts. Being this ludicrous machine of war that does nothing but destroy is what has gotten us in this mess. Besides the moral issues of being utterly inhumane, war brings nothing but misery, destruction, and long term costs that we cannot repay. Are you that near sighted that all you can see is 7-10 years down the road and that's it? What sort of legacy are you leaving for your children?
Just sit back before you tap out a reply (please I have great respect for your many blog ins so please do the same for mine and agree many times infact) think for a moment of the many things that go on behind the scenes....theres the many plants across the country (many closing right now infact) that make the vital little parts that go to so many "things" in this nation of ours.
Really? Is that why we are shipping all the jobs overseas and having everything made else where?
Case in point may be Russia they can't make "anything" of quality "except" war making equipment and they actualy "profit" from "making" little trouble spots around the world for us.(Right now remember Putin is ex KGB all they have of value is "Petro dollars" (stated clearly by McKane in the debate the other night which noone really truly understands right yet) Look what has happened to our space agency. It has had to aprove through congress so that we can "pay" Russia to resupply our astronauts in the space station. Thats right they have an excuse all the time to further master there balistic missle program and WE FUND IT.
So what? What's wrong with sharing technologies? Isn't that a step towards a better, more humane world? How else is humanity going to prosper and move away from this stupidity of war and conflict if we don't do such things? Perhaps if you stopped thinking less about military and more about humanity, we'd live in a better world.
I bought a Tundra (more American built than any Ford truck and/or Chevy I researched it) too make my own personal point!
If you really cared, you'd have bought a 4 cylinder car that gets you around, pollutes less, uses less resources, uses less materials, is more efficient, and leave a smaller harmful footprint on the environment so your children and children's children have something left to enjoy. So what did you do? You went an bought a Tundra that's lucky to get 15 MPG...well done...you show by example of what's wrong with people in this country.
But will refuse to ever in my power let Ford or Chevy go under. Unfortunatly Chrysler will be impossible to save as everything is being let go overthere (too long of a story that one too get into at this time). Take care and do please look into this and think for yourselves on this. Noz don't ever think that if the three OR "two" for that matter ever were gone that that would be good for all! Competition breads great things you may not know the auto industrys beginings to fully understand.
That's your prerogative to think that but I can tell you that you are dead wrong. You are wrong because you don't seem to understand that if crappy companies go under, they make for better ones. We're at a point in our human evolution that we cannot keep companies around that do not work for the sake of keeping them around. We need to move forward...there are PLENTY of companies out that would thrive if GM and Ford weren't there to fill everything with crap. You've got it completely and utterly backwards.
We will never progress forward if we never embrace change. We are at a point that change is needed more than ever. And not just small changes, huge changes. We can't sit around and worry about a few companies that make frankly things we can do a little less of...cars...when there are far far bigger issues to deal with.
I'm afraid we're not going to be able to fight our way of this one. This is a global issue...and if you're going to have a McCain style of approach this, we're utterly doomed.
Best of luck to you.
anon-
I'm not calling for the end of the auto industry. I cited a study that claims the auto market is going to get worse next year than this year.
Look at GM and Ford's stock. GM's stock has touched levels not seen since the great depression. Their market cap, when inflation is accounted for, is worse than during the great depression.
That's reality this year. Can they survive next year if it's even worse than this year? That's the question I concluded my post with.
Finally, I don't disagree in the importance of the US auto industry. I want them to survive, but I want them to survive making products that end foreign oil dependency. For decades they made only products that increased foreign oil dependency. They gave up the market for small cars because foreign oil gas-guzzlers were more profitable.
And I'm not allowed to criticize this?
Please.
In even recently, after 9/11 and two oil wars in Iraq, the Big 3 still didn't change their product mix?
How can that be?
Sure one wouldn't expect them to change over night, but after 9/11 and another trip to Iraq, it had to be obvious that dangers associated with foreign oil dependency were obvious.
Yet, not one of the Big 3 did anything for several more years, and they didn't do it then until Toyota proved that a vehicle like the Prius could sell.
Protecting America didn't mean anything. Only money.
What nobody seems to be talking about is the tremendous opportunity in these down times. When I was a little tyke back in Detroit Michigan Chrysler almost went under. The sky was falling, almost everyone panicked except a select few that saw the opportunity in a very cheap stock price. They gathered up thousands of shares at $1.50 a piece and made small fortunes twenty years later.
Remember as much as you despise these companies for what they have done to our planet and country they are a vital part of our nations economy. Toyota and Honda are just as guilty, when was the last time you visited Japan? Their factories pollute as much as our domestic ones do.
Hybrid sales are just a tiny fraction compared to the overall sales of Toyota, Honda. They sell hundreds of thousands more gas guzzling trucks and SUVs than they do the Prius and Insight. Overall GM cars/trucks have better milage than Toyota does and the Tundra is one of the worst milage trucks on the road.
The U.S. auto industry is in trouble but it will rebound and reinvent itself, they are like a large freighter always slow to change course but once they do watch out. You can pick up GM and Ford stock at bargain basement prices right now! If your one of the select few to take advantage of this historic opportunity you'll look back in 20 years and thank me while your driving your brand new Hummer HX Electric Vehicle.
I was from and my family is from Oregon. My dad worked for a mill amidst the Timber industry mess, some of which do to the spotted owl. My dad moved on and survived. Many lost jobs but were 'retrained' for other things. This article, though dated, is a great example of what can happen.
http://query.nytimes.com/gst/fullpage.html?res=9C02EEDF1F3DF932A25753C1A962958260
jeff - you might like my last post then.
still, i do disagree that GM has more efficient vehicles than honda and toyota.
they might make more models, but they don't sell 'em as well.
GM's overall CAFE is a good bit lower than both Honda and Toyota. More important, take away the flex fuel credit that GM receives and their CAFE score would be far lower.
Ultimately, for me, I'm pissed at the Big 3 because of foreign oil dependency. After 9/11, there was no excuse not to change. American automakers should have taken a stance to develop foreign-oil dependency freedom fighters because it was the right thing to do, the American thing to do.
That's the kind of leadership I expect from American companies. Call me naive, but I say its their corporate responsibility.
as far as toyota and honda - i made a post recently Do automakers suck. i included honda and toyota.
last anon-
great article. i've read it before and i agree in general. change is scary. often, however, what it leads to is so much better than what previously existed.
that doesn't mean i want the US auto industry to collapse, but if they can't survive doing the right things, then change (via their collapse) is the necessary path and it should not be stopped by government intervention.
dahcredyns,
I would also add that the public is just as much to blame as the corporations. If they didn't buy the SUVs the Big three would have stopped making them long ago.
We all know Big Mac's are bad for us yet it's still the number one seller at McDonalds. They won't ever stop making them unless the public stops eating them or the government bans them. So who's to blame? I say everyone involved..
jeff-
agreed.
why is gas so much cheaper in America than in Europe for example? Why aren't the billions it costs to protect oil tankers, oil facilities, etc, added into the cost of a gallon of gas?
the government and military have a vested interest in keeping cheap gas.
so let's through their hat into the ring as well.
Dahcredyns:
"Yet, not one of the Big 3 did anything for several more years, and they didn't do it then until Toyota proved that a vehicle like the Prius could sell."
_________________________________
I completely agree with you. I am so totally baffled why, from a business standpoint, GM et al let this happen. The Prius came out 10 years ago and Toyota has been making incremental improvements to the point that it is now the 13th best selling car in America.
This isn't about trucks and suvs. If Americans want them and the big 3 can make money on them, then so be it. But in the meantime they have produced NOTHING to compete with the high MPG imports like the Prius (and don't tell me I can go buy a POS Aveo). There are entire market segments they have completely ignored. And I keep hearing that they "make cars that Americans want" What??? That is just such a lame thing to say, especially since 9/11, and it is a recipe for runner-up status. How do you think Toyota has been able to bump GM from the top spot? I hate to see GM fail, and I hope they can reinvent themselves, but if they had heeded the many many warning signs, they (and we, by extension) wouldn't be in the mess we are in.
My brain is numb.
"But in the meantime they have produced NOTHING to compete with the high MPG imports like the Prius (and don't tell me I can go buy a POS Aveo). There are entire market segments they have completely ignored. And I keep hearing that they "make cars that Americans want" What???"
I am, and have been, equally as bothered.
There haven't been any consumers for the Honda Civic, for example? Hello?!
Just as cheap gas has retarded the American auto consumer, I guess huge SUV profits retarded the US auto industry.
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