KEITH NAUGHTON | DRIVING FORCES

Chrysler, R.I.P.

The demise of an iconic American automaker.

By Keith Naughton | Newsweek Web Exclusive
Oct 31, 2008 | Updated: 12:53  p.m. ET Oct 31, 2008

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  • Posted By: demarvin @ 05/05/2009 11:43:47 PM

    THE SOONER THAT CHRYSLER AND GM ENTER LEGAL CHAPT 11 AND A JUDGE SELLS OFF THE ASSETS,THE BETTER FOR ALL CONCERNED PARTIES INCLUDING THR US TAXPAYER. WHAT FINAL FIGURE DOES OBAMA HAVE IN MIND TO PAY BACK THE UAW FOR BUYING THE ELECTION FOR THE DEMOCRATS,100 BILLION IN HANDOUTS,ONE TRILLION? HE IS POPULAR ONLY BECAUSE HE CAN GIVE MILLIONS OR BILLIONS OR TRILLIONS TO ANYONE WILLING TO KEEP HIS PARTY IN OFFICE,WHAT DID WE EXPECT FROM A "COMMUNITY ORGANIZER".

  • Posted By: CMM3 @ 11/22/2008 11:56:26 AM

    We are in an economic global war. Make no mistake people, America needs her automotive companies to survive and grow. The Big 3 are protection for the US. Whatever it takes to ensure the safety of "our" country you had better support doing it. Pull some money out of Iraq, Pakistan or Cuba and use our American money for America!

    • Posted By: mikeinphilly @ 02/19/2009 4:13:26 PM

      Why can't a foreign nation buy these automakers? For instance China or how about Saudi Arabia. They've been buying up our debt for years now so they have money. The provision is that they need to keep the manufacturing here in the US. They can inject new life into these automakers. Toyoto and Honda and Nissan now manufacture the cars in the USA. Walmart seems to be doing quite well. Maybe they might be interested in cars. They sell everything else.

      Mike in Philly

  • Posted By: Bernhard Meck @ 11/15/2008 12:10:25 PM

    Now I understand that bizarre proposed union of GM and Chrysler. Looks much like two gas-guzzler-profit addicted crackheads throwing their change together so they can buy coal for the cold winter!

  • Posted By: jrealty @ 11/11/2008 1:16:03 PM

    Why throw good money after bad? Let these companies collapse (as well as the financial companies like AIG etc..) and rebuild a leaner more productive company from the ashes of these dinosaurs. And I am in no way trying to minimize the pain this will cause but better to take the medicine now and get well eventually than to feed the sickness inherent in these companies with more money wasted on a business plan that's not working.

  • Posted By: jlgab @ 11/08/2008 8:27:10 PM

    How big are the multi-million dollar bonuses that all the execs in the auto industry get? Take those bonuses and sink that money into smart car production and/or research for more feul efficient cars. Oh, or is that too much like socialism? We need incentives for people to buy more feul efficient cars and higher sales tax rates or extra sur-charges for people who buy Hummers.

  • Posted By: Progressive American @ 11/07/2008 8:26:59 AM

    I think I a high schooler could run the Detroit Autocompanies better than those well educated Executives, who parade around acting like they have a clue. The american automakers business model has been broken for a number of years now and they have refused to fix it. Now they want handout from the government, ie the tax payer to bail them out, because they don't know how to run a profitable business?

  • Posted By: plquinn3425 @ 11/03/2008 5:33:32 PM

    GM has as many or more poorly designed vehicles than Chrysler. With all of its surplus cash, why doesn't Chrysler buy GM? I have consistantly watched and listened as American car executives have made the wrong decisions on almost every aspect of the car business for the past ten years. Why should ANY of them have any more credibility than the other?

    Quinn in El Paso

  • Posted By: mdromine @ 11/01/2008 10:25:28 PM

    I hope the writer of this is wrong. A once strong middle class worker force is what helps the economy function properly without that we are headed for some really hard times. I hope something can be done to save most of Chrysler and all the other jobs that depend on it. Japan and other country's have the US right where they want us, close to a financial disaster and major job losses. Americans need to wake up and support our own county and people. We send the vast majority for our wealth over seas, that makes no sense to me. I hope America wakes up before it to late.

  • Posted By: C. MacLean @ 11/01/2008 9:24:43 AM

    Perhaps someone can explain to me how allowing the government to bail out the dinosaurs in Detroit isn't socialism, but giving tax breaks to the middle class is? Hard to re-distribute wealth when everyone is poor.

    Yes, loss of 2 million jobs is critical, especially to those 2 million folks and their families, but will a bailout ultimately fix anything? If GM can't figure out how to re-trench it's own product lines and dealerships, how are they going to manage to do it for Chrysler? Better to spend the money on unemployment benefits for the families and retraining programs for the workers - all those green jobs that will supposedly revive the American economy need good workers, don't they? - than sink the money into any more corporate losers.

    A bailout now puts off the inevitable, at taxpayers' expense - best to just suck it up and let both comanies go down the drain, since that's where they are headed anyway.

    Why prolong the agony?

    • Posted By: TheVigil @ 11/01/2008 12:23:33 PM

      I don't believe in propping up any given industry long-term for the most part. However, if the auto industry completely collapses, I think we could see urban decay in Detroit and places like Flint that would make the current (and severe) problems in those areas look like children playing in the streets. I mean full-scale riots, looting, fires burning down entire city blocks, and gang warfare that looks like warlordism out of Mogadishu. Those areas need some kind of help and reinvention even if propping up the auto industry isn't the way to go.

      • Posted By: C. MacLean @ 11/01/2008 8:56:30 PM

        Agreed. The money is better spent on the families and job re-training for the displaced employees. No one wants to see Detroit, Flint and other towns go up in flames.

        I was born in Flint, in GM- built housing, as was my father, his father, and his father. My grandfather worked for Chevrolet for 30 years, my great-grandfather for Buick when it was still an independent company. My uncle held two patents as an engineer at GMI, and my father did his GMI internship at AC Sparkplug (now Champion). My cousin worked at the V-8 plant.

        I know more than most what GM and the auto industry meant to this country, and thousands of families just like mine.

        But to pour money into GM and Chrysler now just fuels the tragedy. The automotive work force is skilled and hungry, and they are the ideal work force to energize the new alternative energy industry that both Obama and McCain are advocating - they are a wiser investment than the decayed and dying auto industry.

  • Posted By: Quaizywabbit @ 11/01/2008 4:45:31 AM

    for a corp thats been around for a century, you'd think they'd budget for the bad times just like the rest of us...

    Unfortunately those college educated, idiots that live in spreqadsheets and not actually the real world, have invented "Just in Time'........yep same as trying to block a bullet with your bare hands........Leaves NO ROOM for error.........

    Go under already you greedy ass bastards.....

    • Posted By: michiganengineer @ 11/01/2008 9:47:13 AM

      college educated is not the same as idiot. The techniques you rail against (spreadsheet "living" and Just in Time Mfg) are what Detroit's competitors do and they do them well. The issues were, as it always seems to be, it to fight against the new paradigms that come up (needing to be lean, seeing that sooner or later, fuel prices would be very expensive, etc...) and then not invoking good long-term strategy in time to survive the paradigm shifts.

      Of course one would think a company would budget for the bad times just like "the rest of us." Interesting analogy. This is a debt ridden, living on borrowed time and resources, forgo savings, gimme gimme gimme now now now society...and I'm not talking of corporate America. I'm speaking of a huge number of our own citizens. Now why would we expect corporations to be any better than the individuals that lead them?

      • Posted By: Braes @ 11/01/2008 8:16:39 PM

        We punished Detroit. We did not give them the help they needed to compete.
        I thank you for being in Michigan and working to make us cars. (I take it you do/did.)
        We have 2 good US made cars here and love them.
        The Oil boys price shocked Detroit into horror this round. It wasn't Detroit or the cars, it was the Cartels.

  • Posted By: TheVigil @ 11/01/2008 12:09:36 PM

    My family had a Chrysler station wagon. It ran until the doors and leather seats and just about everything else started to fall off, and the engine was still running at that point. We had it for close to twenty years without needing major repairs more than maybe once or twice. It saw us through my sister's and my childhood up through my teenage driving experiences and served faithfully all that time.

    Whatever you want to say about them lately, they were a great company once. R.I.P., Chrysler, you will be missed.

    • Posted By: Braes @ 11/01/2008 8:12:41 PM

      I loved Chrysler.
      Cerebus Capital Management was headed by 43's ex-treasury secretary, John Snow.
      Another corpse of this administration spreading the damage.
      End the Regime on Nov 4 and return the middle class to prominence in America.

  • Posted By: Tea6 @ 11/01/2008 4:03:45 PM

    For the last 8 years we have had the Financial-Consulting-Free-Trade complex doing everything they can to hollow out Middle America. They did this knowing that large Asian and German export surpluses would have to be reinvested and flow through Wall Street. Good for the Wall Street money crowd, good for the McKinsey type consultants and bad for the rest of the USA. It is time to take our country back. Stop currency manipulation, end non-trade barriers and renegotiate one way trade agreements. Cheaper wages are probably the smallest cause of our current account deficit. We have had people with ideological free-trade blinders on making trade agreements with mercantilist governments and being taken to the cleaners every time. We need to separate foreign policy initiatives from trade and end the practice of giving one-way preferences to countries that agree to do some unrelated task for the US State Department.

    • Posted By: Braes @ 11/01/2008 8:10:26 PM

      Bring the Jobs back. Vote for the working class, vote Democratic.

  • Posted By: Vote Now @ 11/01/2008 7:00:38 PM

    Sarah palin when asked about becoming vp responded

    "As for that VP talk all the time, I tell you, I still can't answer that question until somebody answers for me, 'what is it exactly that the VP does every day......"

    After she had been the nominee for around 2 months she was asked again and this time said

    [T]hey???re in charge of the U.S. Senate so if they want to they can really get in there with the senators and make a lot of good policy changes that will make life better for Brandon and his family and his classroom.

    WRONG THE VP IS THERE TO STEP IN IF SOMTHING HAPPENS TO THE PRESIDENT ONLY THEY HAVE NOTHING TO DO WITH POLICY AND THEY DONT RUN THE SENATE!!
    If she doenst know what the vice pres or presidant does why would we give her the job

    Mccain has around a 40 percent chance because of his age in not being able to

    complete his term picking palin was about as smart as picking any other mrs Alaska contestant.

    Its not just that we disagree with her answers in alot of cases she doesnt understand basic questions
    like what is the bush doctrine, or what do you read.
    These are not gotcha questions!!!
    One of advisors recently said not only was she unqualified but said mccain picked her after 1 interview of about a hour
    and that even at mcdonalds you get 3 interviews.
    Members of her own campaign called her a diva and a whack job.
    They would know better then anyone else right now.

    So mccain gambled and he lost big. He ended up with a girl that cant answer questions that most of the people reading this can answer.
    at the same time mccain could never read this blog because he cant use a computer at all.
    I mean his wife has 100 million dollars get him classes or something.

    Am i crazy or do we want a computer literate president and a vp who can answer a least basic questions.
    If you read the rest of the articles on this site you would think the world is about to end
    So if thats the case these are the last 2 people you want running anything.
    let send them packing.

    ELECT OBAMA BIDEN NOW

  • Posted By: bearcub12350 @ 10/31/2008 8:12:31 PM

    gm deserves to go bankrupt. the cars are junk. they still think thy are invincible.

    • Posted By: jkhippchen1 @ 11/01/2008 4:13:59 PM

      No one at GM or any other car company thinks their invincible. They're all scared, hoping they can implement changes in time to ward off collapse.
      And just for the record: those "greedy bastards" that ran the auto companies gave millions of people a good living for many decades. Now that they're down, you want to stomp on them?

    • Posted By: Stevealmquist @ 10/31/2008 11:04:43 PM

      What was the last GM car you owned?

  • Posted By: Vote Now @ 11/01/2008 2:19:51 PM

    Sarah palin when asked about becoming vp responded

    "As for that VP talk all the time, I tell you, I still can't answer that question until somebody answers for me, 'what is it exactly that the VP does every day......"

    After she had been the nominee for around 2 months she was asked again and this time said

    [T]hey???re in charge of the U.S. Senate so if they want to they can really get in there with the senators and make a lot of good policy changes that will make life better for Brandon and his family and his classroom.

    If she doenst know what the vice pres or presidant does why would we give her the job

    mccain has around a 40 percent chance because of his age in not being able to

    complete his term

    picking palin was about as smart as picking any other mrs alaska contestant

    let send her back to the north

    elect obama biden now

  • Posted By: krisurrea @ 11/01/2008 1:00:29 PM

    Anyone else this blows that the government is expected to loan 10 to 15 billion so that GM can buy Chrysler for its cash? DUH! And then cut all the jobs and stop making the cars? Seems like a poor investment of OUR tax money. Seems like the union that is in both GM and Chrysler would be ready to come to blows over the fac t that GM is planning to slash 35k jobs. Seems like GM ought to have to employ those people if they want to be bailed out via a tax payer loan to make a buy out. Just laying it out is so ridiculous. "I need a bail out to buy something else." Anyone else see the problem here?

  • Posted By: krisurrea @ 11/01/2008 1:00:23 PM

    Anyone else this blows that the government is expected to loan 10 to 15 billion so that GM can buy Chrysler for its cash? DUH! And then cut all the jobs and stop making the cars? Seems like a poor investment of OUR tax money. Seems like the union that is in both GM and Chrysler would be ready to come to blows over the fac t that GM is planning to slash 35k jobs. Seems like GM ought to have to employ those people if they want to be bailed out via a tax payer loan to make a buy out. Just laying it out is so ridiculous. "I need a bail out to buy something else." Anyone else see the problem here?

  • Posted By: vstillwell @ 10/31/2008 1:39:00 PM

    It's just great watching my country slide down the toilet bowl. Now tell me how 40 plus percent of this country can vote for these stupid Republicans. Our infrastructure is falling apart, they got us stuck in Iraq on lies, they can't figure out how to fix our broek health care system (every other industrialized nation has), they stripped the financial market regulations in 2000. Why? Because God tells them to vote Republican? It's damn joke.

    • Posted By: TomPe @ 10/31/2008 3:08:20 PM

      So your answer is to vote for the party that supports unions? None of the auto manufacturers would be in this mess if not for the auto unions.

      • Posted By: TheVigil @ 11/01/2008 12:50:35 PM

        I think the more accurate thing to say is "The industry's problems have been badly exascerbated by the unions".

        The unions have been horrible to their employers. I'm pretty Blue right now but I don't support big unions. The auto worker unions' pensions are bankrupting the auto industry. Some sort of regulations need to be in place to curb union abuses the same way corporate abuses (theoretically) are.

        That being said, the industry really has blown it on safety and durability and car type selection for a decade or so. I'm a young man who owns a 1996 Nissan, and it hasn't needed major repair since I bought it with 120000 miles on it in 2002. I didn't drive it for a month; it still started. I haven't driven it for three months and the lights still turn on inside and it may actually start (I haven't tried). I *can't afford* a car that regularly needs repairs or doesn't work well after a few years, and a lot of Detroit cars do. I looked at buying a beautiful Ford Counter with 60000 miles on it used from a coworker until I found multiple reports of major necessary repairs starting about at about that mileage. And the choice to heavily invest in gas-guzzling SUVs and trucks in order to have the higher profit margins was just near-reprehensible. They did it *even as the gas crisis was starting* and only switched when $4.50 a gallon gas hit. That is shortsighted nearly to the point of idiocy and it's really hard to want to help that out.

        The unions have been awful, and so has the management of the industries, so the problems can't be completely blamed on one or the other.

      • Posted By: txxcc @ 10/31/2008 4:02:15 PM

        It is interesting that that party which purports to support unions are also the largest buyers of non-union made cars. Foreign makes hold 60-70% marketshare in states like Cal and Mass, which are hugely Blue states. While Republicans don't support the need for unions, they buy the vast majority of US, union-made cars and trucks. So who is really supporting the workers at these companies?

        Furthermore, given the cost structure imposed on the domestics by the union, trucks and SUV's were the only vehicles that could be produced at a profit. To be clear, Toyota, Lexus, Nissan, Mercedes and others all make/sell SUV's that get the same poor fuel economy as their US counterparts - the US companies simply made better products in these categories. The same Dem's that support the union but don't buy union-made cars then took to lambasting SUV's for their ecological shortcomings.

        I agree 100% that we need to reduce emissions, CO2 and dependency on petroleum - 100% behind that. But we cannot handcuff those same companies with highly restrictive employement laws.

        vstillwell - your comments are not only inaccurate but not constructive. While the failure of the banking system was due to lax regulation, the failure of the US auto industry is due to over agressive employment laws. While Republicans support corporate rights and the Democrats support worker rights, over zealousness in either direction is fatal and costly.

        The US is a great place to make cars - Honda, Toyota, Nissan, Hyundai Mercedes and BWM all makes cars in the US. And not one plant is unionized, by choice of the workers themselves. While the UAW was said they fight for job protection - with lots of Democratic politicians at their side - the result will be a massive loss of jobs.

        A balance of regulation and flexibility is what is needed to create a stabe, growing economy. Going too far either way results in the banking crisis or the failure of the US auto industry. Both are as costly and damaging.

        • Posted By: HinderedHindsight @ 10/31/2008 4:37:28 PM

          TXXCC- the failure of the auto industry was due to lack of competitive products combined with higher gas prices, combined with a lock up of the credit industry. It is short sighted for you to blame unionization. Auto workers have been unionized for a while- why hasn't the failure happened before? If unionization killed industries, then this would have happened already.

          This is not a case of who is buying what. Even IF democrats are buying foreign vehicles, the vast majority of the profit made during the purchase of any vehicle, foreign or domestic, is in taxes and financing. So even if they buy a foreign car, they're using American finance companies (which are now locked up) and are required to pay taxes in America.

          Everyone, including foreign manufactures have witness a decrease in sales worldwide. This is NOT isolated to American brands. American brands are being hit harder because in terms of quality and economy, American makes have a hard time competing. This is partially an issue of free market principles coming back to haunt us.

          Instead of posting higher restrictions on gas mileage (which would have forced auto makers to produce more efficient vehicles), Republicans chose to kill initiatives that would have forced Detroit to become more efficient and competitive with foreign companies. As a result, Detroit was free to focus on short term profits (selling bigger, less efficient vehicles) instead of long term (quality fuel efficient vehicles will ALWAYS have some demand, even if they don't make the big profits), hurting them now.

          If Republicans had backed higher fuel efficiency standards, Detroit would have been forced to develop cars to meet these standards- which would have made them more competitive today.

          As a result, Democrats flocked to foreign manufacturers for the fuel savings they desired, trying to use free market principles to get Detroit to change. I'm sure Democrats in highly populated cities would have loved to buy fuel efficient vehicles from America, but what do you do when someone doesn't offer the product you want? According to the free market principles which Republicans live and die (and pass laws) by, you go to the competitor. You can't blame Democrats for buying more efficient foreign vehicles- it's all part of the system that Republicans continually contend is the best one to use.

          • Posted By: txxcc @ 10/31/2008 4:56:40 PM

            The death of Detriot has been happening for 30 years - decline of market share and significant financial losses. GM has lost over $100b more than it is made in profit over the past 15 years, so this is a problem that has been happening. The gas + credit crunch is brought it to a head but the makings have been ongoing for 20 years.

            In terms of foreign cars getting better mileage, you need to do some research. Lexus, Mercedes, BMW, Audi and others all make cars with terrible fuel economy with V8, V10, V12 and even twin-turbo V12 engines. There are lots of American made cars that get 30+ MPG, and lots of foreign cars that get 12 MPG.

            The issue with the unions is that they lock in jobs and plants that do not make it easy for companies to change. 10 car companies make cars in the US - 3 are unionized and those 3 are in dire trouble. The 7 that are not unionized are not in dire trouble. Coincidence? No.

            I support free market principals and if companies can't change, let Darwin take its course. But you can't force a company to employee certain levels and type of workers at fixed wages and then demand they change when the competition operating in the US does not have those same restrictions.

            • Posted By: HinderedHindsight @ 10/31/2008 11:15:03 PM

              "The 7 that are not unionized are not in dire trouble. Coincidence? No."

              Yes, it is coincidence. What you fail (or neglect) to acknowledge is those same companies have a broader catalogue of products which are more innovative, and fit buyers of all levels, from the fuel conscious to those who seek a luxury marquee. Toyota produces more overall fuel efficient vehicles (and more of their vehicles get better mpg) than any domestic brand. In terms of quality, engineering, and luxury, German brands tend to be held in higher standing than any American brand.

              If you look at most top ten lists, there are few domestic brands, while they are overwhelmingly dominated by foreign brands.

              Top Cars in terms of quality:

              http://www.jdpower.com/autos/ratings/quality-ratings-by-brand/sortcolumn-1/ascending/page-#page-anchor
              Top 10 only has two domestic brands.

              http://www.consumerreports.org/cro/cars/new-cars/news/2007/04/top-picks-for-2007-4-07/overview/0704_top-picks-2007.htm
              All but two are foreign. In this list, 80% of vehicles are foreign.

              http://www.edmunds.com/reviews/consumerstoprated/2008/index.html
              At edmunds, there are arguably 8 domestic brands (since Ford Owns Mazda in the USA, I count them as domestic) vs 13 foreign brands that top their partucular category. In this top ten list, foreign name plates have 50-60% more cars which top individual categories.

              Unionization plays virtually no role in terms of sales or product diversity. Arguably, a union *might* make the sale of each car less profitable. But so far you have show no quantifiable evidence to that effect, and quite frankly, each claim you have made regarding foreign cars has been dubious at best, and contradicted by official sources. In every quantifiable way, foreign brands excel. This is why their sales numbers, quantifiably, have not suffered as much.

              I currently drive a domestic, and my next purchase is a hybrid Escape. It is the only domestic Id consider buying because it is the most fuel efficient SUV on the market. I put a deposit on the vehicle in August, and am still on the waiting list. At the time, the waiting list for my dealer (Seattle area) was only 3 deep. This is the problem, domestic marques are stuck retooling their factories for economical vehicles, and they currently aren't able to keep up with demand. Unionization has nothing to do with the product paths Ford, Chrysler and GM choose to take or the models they promote. Just consider how much R&D dollars in the last few years went into inefficient American vehicles which failed or cancelled. The dire straights American companies find themselves in is directly related to their product planning and marketing of products, and it shows in the standings that American brands hold in terms of quality and efficiency.

              I don't want to see American marques disappear, they have *a few* compelling products, and I have close family that work for them. But they are victims of free market economics, plain and simple.

            • Posted By: HinderedHindsight @ 10/31/2008 11:10:00 PM

              I have done research, and I'm about to embarrass you with it.

              "There are lots of American made cars that get 30+ MPG, and lots of foreign cars that get 12 MPG."

              First, Here's an official ranking of how green each company is:

              http://www.jdpower.com/autos/ratings/green-efficiency-ratings/sortcolumn-1/descending/page-#page-anchor
              Not one American company is in the top ten. On the whole, foreign companies have overall more fuel efficient vehicles. There is not one domestic brand which has a vehicle that gets 40+ mpg- you will only find foreign makes in the 40+ club.

              Second, sales of all those 4 brands put together do NOT surpass Toyota and Honda, where most fuel conscious sales (and most sales overall) occur. This is where you see the big shifts between domestic to foreign. Few people who are buying an econobox are going to switch to a BMW. If you're in the luxury class of purchases, your mindset is centered more around the marquee than the gas tank.

              Thirdly, if you care to make an apples to apples comparison, luxury vehicles such as BMW and Mercedes completely outclass domestic luxury vehicles such as Lincoln in terms of tech. And if you're fuel conscious, Lexus makes more hybrids in the luxury segment than all domestic luxury brands combined. I challenge you to try to buy a *Domestic* luxury hybrid. You can't do it. BMW is also making hybrids AND has a hydrogen 7 series. Name one domestic luxury brand that can compete in these vehicle segments.

              Do foreign brands make big uneconomical vehicles? Yes, absolutely. BUT they have more fuel efficient/alternative options. In almost every category, foreign brands have a much more diverse product portfolio and are considered to be leaders in quality. They're even beating American brands in segments domestics typically dominate and depend on for their sales (SUV's, trucks, etc). It's the American brand's fault for becoming sales dependent on expensive, inefficient vehicles.(continued in the next post)

      • Posted By: WalkerUSA @ 10/31/2008 4:21:50 PM

        You folk blame the politicians? It isn't Republicans or Democrats or Greenies or Libertarians. Our society is made up of selfish, cheating, self-serving hedonistic hypocrites, including you. You think "everyone for themselves" was only going to happen in New Orleans after Katrina? You ain't seen anything yet - this will take years to clean up and if democracies around the world survive at all it will be a much different world by 2020.

  • Posted By: jalaroc @ 10/31/2008 6:32:09 PM

    I remember 5-7 years back when Detroit was braying loudly about its brilliant strategy to go with the gas guzzling SUVS (while working hard to prevent an MPG requirements from being raised) because they would allow the largest profit margin which could then be used to buttress the companies' shaky finances. When sceptics asked how rising gas prices would affect those sales, they were basically blown off. I was one of those sceptics, although I sincerely doubt my views ever came to the attention of the automotive industry. The result does not surprise me. Only the amount of damage that can be caused by these greedy short sighted blunders is worthy of a raised eyebrow followed by a grimace. It is amazing to me that certain people loudly proclaim the brilliance of american management, our system of finance, and business in general when it seems we lurch from one self induced financial crisis to another brought on by greed and a lack of meaningful oversight. Now, we're bailing out detroit, so they can retool to build the energy efficient cars that the consumer has been asking for a decade now. I, as a consumer, sometimes feel like one of those vampire victims held in that industrial blood bank, being systematically drained for the benefit of a bunch of parasites who perform no useful function. Isn't it illegal to burn money? even if metaphorically????

    • Posted By: michiganengineer @ 11/01/2008 9:52:38 AM

      Good post. "Strategy" or lack of it is the key here. This is an example of a company that had a terrible strategy because it did not take into account the real and looming huge risk that would torpedo it - fuel prices. People have been saying it would happen sooner or later and most experts have stated that oil based fuels (gasoline) are going to increase as time goes on (minus the occassional recessions that lower demand and thus price) because the cost of supply is going up. Cheap easy to reach oil is slowly running out. There is a great deal of oil out there - but it is more expensive to have at it.

  • Posted By: nolarobert@yahoo.com @ 11/01/2008 9:08:13 AM

    The death of the US Auto industry is a symptom of seismic shift in the world's economic fortunes. It wasn't too long ago we proudly stated that what was good for GM was good for America. Now GM is desperately fighting to survive and it looks like they will have to cannibalize Chrysler to pull this off. In post-WWII America, we had the enormous power of GM, Ford & Chrysler to lead us as a dominant world industrial power through the 60's. It is amazing how the world has changed where Chrysler will be defunct, GM's future is uncertain and Ford fights to survive this turmoil. I do believe that the domestic auto industry will rebound through the use of advance technology but it may take another 10 - 20 years to see this resurgence. As for now, it is sad to see Mopar and the Hemi fade into our cultural consciousness. I wish the best of luck to the tens of thousands of auto industry workers who will be displaced. It is going to be a very painful experience.

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