Thursday, March 23, 2006

US Auto Makers Driving Themselves Into The Ground

A recent posting in the ControlledGreed blog mentioned a posting in the blog of Douglas McIntyre which suggested that GM may be able to turn around much faster than many anticipate. He attributes this to a perceived willingness by the UAW to discuss many cost/union issues that could drag GM into bankruptcy. He suggests the UAW would want to avoid this, since many GM pensioners (and soon to be ones) could have their retirements wiped out by a GM bankruptcy.

While this might be true in the short term, in the longer term, the trend of declining market share is going to continue. Unfortunately, I think it's hard to be positive on the long-term of any of the American-based auto makers.

Until they start producing cars with decent reliability, I think they will continue to be, at the very least, on the edge of perpetual trouble. People will forgive a lot of things, but in today's world building a lousy - read unreliable - product, isn't one of them. GM's long-term problem -- and Ford's and Chrysler's for that matter -- isn't cost!

Until the US makers of autos stop filling the "pages of shame" ("Avoid these used vehicles") in magazines like the respected Consumer Reports, it can only be one long decline ...


The Confused Capitalist

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