I spent years as an auto mechanic in Orange County, California. The owners of Orange County domestic car dealerships lived in several of the choicest homes at the end of the Newport Peninsula. For quite some time I worked as a machinist rebuilding Volkswagen air-cooled engines at a factory in Santa Ana, California. At first, the shop was mostly fundamentalist Christians, like the owner. When he sold-out in around 1977 to a group of partners, the lines quickly filled with Hispanics.
I was majoring in Latin American Studies which had a heavy emphasis in Spanish, so my skills became more valued by the English speaking owners. I eventually left the job when I went to law school in LA, but I went back from time to time until the factory closed completely around 2001. The air cooled engine was a victim of new emission standards. The temperature range of operation of the engines made consistent emission control spotty at best. Even Mexico recently outlawed the old Bug as Taxis and the last factory in Puebla closed.
So changes have been the rule in the automobile industry for decades. American automakers have not been good at keeping up with required changes in their industry. Our domestic automakers fought against the turn signal. http://seekingalpha.com/...
American companies were hiring gaggles of lobbyists to fight emerging emission standards claiming they were "impossible", at the same time that the Japanese were hiring engineers and building cars that met those standards. This is not a forward looking group of American companies.
Just briefly to trace the current situation. The economic downturn and financial deep freeze has whacked the auto industry with two giant bats, evaporating more than ½ of its sales. This is not unique to US automakers as unsold car inventories are piling up by the acres all over the world. http://www.guardian.co.uk/...
The Big Three (Ford eventually said "no thanks") sought and got bridge loans from the Bush Administration on various conditions generally seen as hypocritical union busting by the Republicans. http://www.businessweek.com/...
US Sen R-TN Bob Corker, pushed bailout conditions after his state gave hundreds of Mill to Toyota and $577 Mill to Volkswagen AG, to incentive plant construction in his state. http://www.freep.com/...
The car companies are under pressure to shrink and become more efficient.
http://www.nytimes.com/...
The systemic problems are many, but three big ones seem intractable IMO. First, domestic automakers have THREE TIMES as many car DEALERSHIPS per car sold as the foreign companies. This adds greatly to the overhead required for each car/truck sold.
Secondly, American companies need to focus on fewer lines of vehicles. Only a limited number of car models are worth saving. http://editorial.autos.msn.com/... Instead, Chrysler alone plans to launch 24 models. That should work out to be about $5.00 of stock value for each new line of cars.
http://www.ft.com/...
Finally, Detroit needs to get serious about gas efficiency. After the bailout, I’m seeing a lot of new TV ads from Cadillac for their Escalade SUV Hybrid. WTF? When I sit in the lane next to one I can’t even SEE the sun, how green can this be? They just don’t get it. There is only a limited niche Obama market for their Cadillac Tank 1. http://cache.gawker.com/...
But there has been some movement to repackage since GM is thinking merger or sales games for Hummer.
http://www.ft.com/...
And GM is selling off its "Heritage Collection" to raise needed capital.
http://images.businessweek.com/...
But, what are the competitors up to? The new Prius Hybrid breaks 50 mpg.
http://www.hybridcars.com/...
Although a few years away, Toyota is developing a completely solar car to turn around its business. http://news.yahoo.com/...
Hyundai has developed a novel new car financing campaign, lose your job, send it back.
http://latimesblogs.latimes.com/...
The main problem is that US automakers will never be able to sell off all their Heritage Collection because they are continuing to roll off the assembly lines. No one in Europe will buy an Escalade that won’t even fit on some of the streets in the old neighborhoods. Our temporary gas price reductions will take the pressure off gas efficiencies in the short term. US automakers will then lose the long term battle.