I must direct the people to this in depth article regarding The Big Three by By Keith Fitz-Gerald Investment Director Money Morning. It points out something very important and that is this:
In their rush to portray their industry as an economic linchpin and supplier of key future technologies – not to mention as a “victim” of the worst financial crisis since The Great Depression – the U.S. automakers are forgetting that their failure will not bring about a total destruction of demand. History is literally littered with failed companies. Demand for cars won’t fall off because the Big Three go under anymore than folks would stop buying beer if Annheuser-Busch Cos. Inc. (the maker of Budweiser that’s now Annheuser-Busch InBev NV) were to collapse and disappear.
That is a very important point. So what! The big three go under. As Fitz-Gerald put it:
What’s far more likely to happen is that Japan’s Honda Motor Co. (ADR: HMC) and Toyota Motor Co. (ADR: TM), India’s Tata Motors Ltd. (ADR: TTM), Germany’s Daimler AG (DAI) and Bayerische Motoren Werke AGChery Automobile Co. Ltd. and Geely Automobile Holdings Ltd., and other companies from around the world will happily fill the void .
Maybe this is exactly what we need, companies that will provide cheaper, more fuel efficient/ alternate fuel cars. I feel that American industries have lost their way by following the concept of planned obsolescence whereby a product is made to last just so many years then has to be replaced. What happened to that Pride in Product that used to exist in the old days when products were made to last, really last! Just recently one of my relatives told me that her washing machine had finally given up the ghost! She loved that machine and it lasted her over 23 years! That’s quality! She now regrets the fact that she has to buy a modern model that she says will probably never last as long as her now defunct machine.
I think that is the thing that the Big Three should concentrate on, making a product that last, that is cheaper than what they are currently making, that is fuel efficient or uses alternate fuel, and of course getting rid of those CEO bonuses! I don’t know the exact figures but with what the companies are paying in CEO bonuses they could open several additional small plants.
You can read Keith Fitz-Gerald’s article Here.
Tags: Daimler AG, financial crisis, Honda Motor Co., India’s Tata Motors Ltd., Keith Fitz-Gerald, The Big Three, Toyota Motor Co.
