US Automobile Business Faces Tough Choices

For the most part, the major news media in the United States has ignored the problems and pain being suffered by thousands of workers at Ford, GM and Chrysler. Only a few short months ago banner headlines and lead stories on the big three television network news programs were talking about all the financial problems facing Ford, GM and Chrysler in the years ahead. In a nutshell, American automobile buyers do not trust the quality of American made cars anymore and they are turning to Japanese manufactures when the time comes to invest in a new car.

Under funded pension funds, out of control increases in health insurance costs and a growing reluctance of American buyers to invest in domestic automobiles are all to blame for the growing problems facing the big three US auto makers. For a long time now I have felt like the only long-term solution to this growing problem is for Ford, GM or Chrysler to be forced into bankruptcy and then reorganized in a way that would allow these companies to continue to make a profit. Now however, I believe there might be another possibility for success without seeking protection from a US Bankruptcy Court.

There has been talk of foreign auto makers desiring to either merge with US auto companies, but to date none of these interested party's has made a successful move at a merger or take over. Probably the biggest issues holding back a better managed foreign automobile company from purchasing or merging with US automobile companies are problems involving long term pension promises made to workers and the tremendous amount of debt that has been accumulated by these companies over the years. In the current political environment I don’t see the US Congress stepping in and changing insurance and pension legislation to make these new mergers possible, either.

So what UAW and white collar workers are faced with is a lose/lose situation when it comes to job security and a hope for a long and financial independent retirement. I can not see how Ford and GM will be able to make the type of changes, in the long run, which will be required to return to profitability. Right now, all any of these companies are doing is treading water and trying to put off the inevitable as long as is humanly possible. In some ways the major US automobile companies remind me of the US Federal Government. At some future day there will be a “day of reckoning” and the only thing either the federal government or the big three auto companies can do is kick the can down the road a little while longer and leave these problems, unfixed, to future generations.

Read more about the Big Three:

Chrysler Pink Slips
Toyota Leads GM
Ford Motor Troubles
Tattered Image Issue
Pain At Ford

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