For a born and bred Michigander it's hard to say, but I'm afraid the Big Three automakers, GM, Ford, & Chrysler, are soon to be no more. It is hard to imagine life around here without them, but cold hard realities can no longer be denied.
Our local auto parts subcontractor, Lear Corp, just laid off several hundred UAW members, leaving a skeleton crew of a hundred or so to finish up. This cuts the guts out of our small town economy, and with that many good jobs gone it's going to be very tough around here for a lot of honest, hard-working families.
After watching Rick Wagoner and company in front of Congress today, the whole community is feeling scared, sad, and defeated. The price tag for a no guarantees bailout is up to $90 billion (for companies with a total stock value of less than $10 billion), and there was no good answer as to how that money will change the fundamentals.
A few facts:
- In spite of all the hot air about new ideas, new cars, and new quality, the cars Detroit makes are second rate. I've been a loyal, buy-American guy my whole life. I've got two vehicles now. A Ford Ranger pick-up with about 80,000 miles on it, long out of warranty is falling apart. The doors don't close right, the check engine light comes on every few thousand miles for another $200-$300 dollar repair bill, and the transmission is starting to act up. My other car is a KIA. It was inexpensive to begin with; it's a tight, well made machine that performs beautifully and has a 100,000 mile warranty. Take your pick, folks.
- Detroit has a fatal legacy of crappy quality and dishonest dealings with its customers that goes back as far as we can remember. The products produced from the 1970's to the 1990's were just plain awful, and allowed Asian and European companies to gain a loyal customer base. The only reason American car companies have any customers at all is patriotic loyalty and our taste for big gas guzzlers. Quality has improved from crap to tolerable, but there's is no reason to believe the lost market share will ever come back.
- The supposedly revolutionary new designs that Detroit needs the bailout money to produce are already second rate. Taking electric and hybrid car designs as an example: Why should anyone buy the much touted Chevy Volt with an eighty-mile range when Toyota, Honda, and BMW have already announced plans to market price-competitive electrics with twice the range. Customers will, using past experience, expect the alternatives to be more reliable, better built, and all around superior in quality. When deciding to buy a whole new type of transportation, why should they expect Detroit products to be anything but trouble. In conventional designs, we see example after example of superior engineering: 7 speed, dual clutch, automatic transmissions; ultra-durable, clean-burning, lightweight Diesel engines, 50 MPG hybrids, etc., etc.. Detroit is ALWAYS playing catch-up, and always playing badly. There is NO evidence that the bailout money will change this pattern. In fact, GM's recently announced marketing plans for next year are 40 plus models of the same-old, same-old.
- The management culture of the Big Three is simply hopeless. They just don't get it and they never will. November's and today's hearings are all the evidence needed. The chance is gone, the credit crisis is just the final nail. As hard as it is to say it, the sooner the funeral, the sooner we can rebuild. I'm sure better managed companies (who may be from Stuttgart or Tokyo, but who are already building cars with American workers right here in America) will pick up the pieces and life will go on. Old brands names like Jeep and Ford will probably survive, but tragically small towns all over this once great country will never be the same. I'll keep fixing and driving my Ford until the wheels fall off, but sadly expect my next truck will be built by Toyota.
- Lastly, damn Wall Street and the bankers, and the Republicans and their short-sighted, selfish policies. And, damn the classist, racist culture of Detroit that failed to protect and educate its citizens, and took what were the richest, most productive cities on the planet and ran them straight into the ground.