November 10, 2008

Ford, General Motors & Chrysler running out of time

CARS - America's automotive industry is collapsing, but the end result is that it will probably just shrink and adapt.

Ford, General Motors & Chrysler are all seeking a government bailout, but frankly that would be rewarding them for bad behaviour. They were building SUVs during an oil shortage and American car buyers are now looking for small and fuel efficient cars... in other words Americans are buying more cars from Toyota, Hyundai, Honda and European cars too. Lets face it, American cars aren't known for being small or fuel efficient, thus they're just not selling.

Detroit's Big Three aren't even that big any more. Toyota passed Ford several years ago to be North America's 3rd biggest automaker (Toyota's factories in North America build more cars/trucks than Ford does). Toyota alone has 15 manufacturing plants and 32,000 people employed in the United States, Canada and Mexico, or a total of 175,000 jobs when dealers and suppliers are included.

Toyota you will notice is weathering the current economic climate just fine. They're not bogged down by unions and the public perception is that Toyota builds quality cars/trucks, and they're fuel efficient thanks to their variety of hybrid models including the Prius.

What is selling a lot right now is "eco-cars", but General Motors, Chrysler and Ford have failed to pick up the slack on that. Despite coming out with the Ford Escape Hybrid, the GM Volt and similar initiatives they are still producing a large number of regular cars, trucks and SUVs that are just not selling like they used to be.

What they need to do is to finally start mass production of hydrogen cars. General Motors has been working on designing hydrogen models for years now, but they've been dragging their feet on mass production. They are building them in small numbers and giving them to celebrities and politicians to try out...

But the distribution system for hydrogen isn't done yet... again because they've been dragging their feet on it.

If Detroit's Big Three wants to survive in the new "green" economy they need to get their act together or get left behind. Stop being wishy-washy and just start mass producing hydrogen cars already.

Other models aren't selling? Cancel production of them. Time to retool the plants and start building nothing else but hybrids and hydrogen cars.

It is that or bankruptcy. Now is the time for American innovation, not squeamishness.

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