The Domestic Automaker Future

The Obama administration is doing the right thing.

As scheduled on Monday, President Obama's task force told GM and Chrysler that the restructuring plans they submitted last month were *not enough*. GM's CEO, Rick Wagoneer, was forced out-- GM will have to come back with a much more far reaching restructuring. Chrysler was told that they'd have to complete a complex merger-of-sorts with Italian auto conglomerate FIAT.

Hooray! Why didn't they do this 5 years ago? Props to President Obama for doing the right thing, and standing up to one of his bases, the United Auto Workers.


General Motors
GM is way to big, has too many brands, too many dealers, too many plants, too many employees, too many liabilities. It's still largely a company that acts like it has 50% market share, as it last did in 1960. The Times reported yesterday that the company was likely to be pushed into a quick bankruptcy reorganization, yielding a "New GM" made up of Chevrolet and Cadillac. Who will get the International assets (where GM is quite strong in Asia, for instance)? Who will pay for all those retirees (the answer to this is probably you, the taxpayer)?

Chrysler
And Chrysler, well really, who cares? Fuck those Cerberus guys. Daimler looks like it got out at just the right time, since there is no value in the brands, the products, really anything. This automaker doesn't really need to exist (except, of course, for the employees, who are in a really terrible place). So, give Fiat a try. Otherwise, please turn out the lights.

Ford
The big winner is Ford, who saw the realities of the US auto market far earlier. Their CEO is not a Detroit lifer, and he leveraged the company to the hilt a few years back so that he wouldn't have to go to to the US Government. He's been shrinking Ford's workforce, even shrinking the size of cars it sells in the United States. And he has an automaker that will not be tarnished by federal bailouts and "bankruptcy." Ford will be better in the marketplace for this foresight.