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Let American Automakers Go Bankrupt

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American Classic Sleeper - Ford Falcon

They want in on a share of the bailout money? Heck no. Let GM, Chrysler, and Ford go down.

A combination of factors have led the the invariable decline of the American automotive industry.

My opinions as just another freaking observer on this? Keep reading if you’re so inclined…

Heavy Union Contracts Aren’t Cheap

The overhead that the Big Three have to pay per auto manufactured on union wages essentially amounts of an unfair competitive advantage. Imagine being a marathon runner and having to compete with ankle weights strapped on. The Big Three have (like a good number of American businesses in the manufacturing sector) been burdened with this extra weight as to not be price competitive with the rest of the world. It’s recognized that labor unions have a critical role to play in any capitalist economy, but the weight has swung too far in their favor. They have helped bleed the Big Three dry. Good job, guys!

The Product Line is Out of Touch

Even when the writing was on the wall regarding the relatively low cost of gas some time ago, the Big Three put all their eggs in one basket – focusing their efforts into SUV development. For a time, none of the Big Three even had a good economy sized car in development, never mind in production. Aside from the occasional rebadged vehicle such as the GM Aveo, there really was… nothing!

The Product Line Sucks

See above. By not actually expanding their research and focusing on just the SUV market, it was as if American automakers have forgotten how to build a proper 4 passenger sedan. They never could figure out how to clone the Honda Civic or the Toyota Camry. Now after the hangover from the SUV party (and it’s ensuing collapse) sets in, they really have put dug themselves in a hole.

The Credit Crunch and Economy Meltdown Double-Team

If you have too much inventory in hand, but can’t sell them because they require too much fuel to burn, and your potential customers are not able to afford them because the global economy is turning into a tub of burning diapers… well, it can be said that this part is fairly easy to explain and understand.

The Military Industry Really Doesn’t Need Them Anymore

The M1 Abrams main battle tank and M2 Bradley armored fighting vehicles are built by General Dynamics. The M113 APV is built by FMC. FMC stands for ‘Food Machinery Corporation’. Think about that for a moment.

If you have ever seen the design of the M113 (Think of a giant aluminum shoebox with tracks) you would realize it’s not exactly rocket surgery to construct. The complex parts to an Abrams are the fire control systems and the gas turbine engine that power it, which are not built in the same factory anyway.

The FMTV cabover truck family that the Army depends on is manufactured by a company I bet most of you have never heard of- Stewart & Stevenson Inc. The sort of investment required to build a factory churning out these types of vehicles really does not involve THAT much technology, tooling, training, and equipment.

Written by Tijger Tsou

November 21st, 2008 at 7:33 am

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