Friday, December 12, 2008

So the Big Three Collapse: Is That a Problem?

There may be Americans who don't know that the Big Three automakers in this country are ready to fold. But my guess is that they don't watch the news, or get out much.

The conventional wisdom seems to be that, if General Motors Corporation, Ford Motor Company, and Chrysler go bankrupt, unemployed auto workers will be thrown out of their homes, Big Three executives will have to cut back on their trips to Starbucks, and the American economy will collapse.

There's a bit of truth to that.

  • America makes more cars than any country
    • Except Japan
  • The automobile is an important part of American culture
    • Although not what it was in the fifties
      • Laptops, anyone?
  • A whole lot of people are employed by the Big Three
  • A whole lot more people's living depends the spending habits of auto industry
    • Line workers
    • Executives
    • Everybody in between
I don't doubt that there would be a lot of trouble and personal hardship, if GMC, Ford, and Chrysler go the way of the Taylor Aerocar; the conservation-minded Enger; the advanced hybrid Owens Magnetic; or the Zimmerman.

On the other hand, I find it hard to believe that Americans will stop buying cars, trucks, and other machines to get them from place to place.

Yes, quite a few will start buying imports. My guess is that they'll buy them from dealerships that are in America - so some of the money will go right back into the local economy.

I have trouble believing, though, that nobody of the several-hundred-million people who live in this country doesn't want to open an automotive design and assembly company, and have the brains and background to do it.

It's been a long time since a new automotive company has had a chance to get started, with three 800-pound gorillas sitting on the American car market.

Time for a Real Change?

I know what it's like to be laid off. It happened to me over two years ago, and that's not the first time I've lost a job. That's not something I'd wish on anyone.

But, maybe it's time for GMC, Ford, and Chrysler executives to get their golden parachutes, consign some of the existing products to automotive museums, and make room for people who have plans that will work in the 21st century.

There's no question that some people who've worked on the same production line for years - or decades - will have a rough time adjusting. On the other hand, entrepreneurs may soon be able to employ a huge number of very trained people with years of experience in automotive assembly - and (I hope) an ability to learn.

The down side is that, right now, it looks like getting financial backing is going to be tricky.

Real Change in America: It's About Time

It's been a century, since America's automotive industry took radical innovation seriously. Most of the early-1900s startups didn't last long. Many, from the ABC to the Zentmobile and the enigmatic Zip, only lasted a few years. But, while they were around, people were paid to make the cars - and some of the new ideas were successful.

American has tried having an automotive industry that's a sort of three-way monopoly. Maybe it's time to try something else.


TAO said...

Your post brings up alot of interesting points...which most blogs being focussed on ideology seem to miss...and that is we do have other options.

People tend to forget that there are small towns, small business, and something other than do we bail them out or don;t we?

Wizard said...

I agree it's no use pumping more money to save failed executives. They'll squander public money much easier and faster than they squandered opportunities for their once proud companies.
I believe it will be best if someone who knows how to run a successful auto making company takes over.

Brian, aka Nanoc, aka Norski said...


Thanks for the good words. And, that's a major point I wanted to make: America does have options other than resuscitating GMC, Ford, and Chrysler.

I'm not sure what you mean by your reference to small towns and small business, but I'll take a shot at a response.

I live in a small town (population about 4,000), and run a small business. Attractive as a federal 'bailout' of my business would be, it

1 Isn't likely to happen
2 Would probably come with strings attached that would be more trouble than the cash is worth
3 Wouldn't be anywhere near as welcome as the various levels of government staying out of the way

Brian, aka Nanoc, aka Norski said...


Agreed. Which I hope will be one of the conditions, if the major automakers do get a piece of my tax money.

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