Saving the U.S. Auto Industry

After watching satellite interviews that President Obama did with each of Detroit's major news broadcasts, I glanced through the government's "Path to Viability for GM and Chrysler" document.

If I worked for Chrysler or one of its suppliers or dealers, I would start looking for a new job immediately.  The Obama Administration is very blunt in saying, "Chrysler is not viable as stand alone company."  If the merger with Fiat is not completed within the newly mandated 30-day window, bankruptcy is likely inevitable for Chrysler.

As for GM, it appears the Administration would like to do all it can to save GM but not under its current structure or the structure described in its February 17th viability report to the government.  For instance, the Administration says GM needs a more aggressive operational restructuring and that plan "must rapidly achieve full competitiveness with foreign transplants and more aggressively implement significant manufacturing, headcount, brand, nameplate and retail network restructurings."

That sounds like more plant consolidation, additional layoffs, even fewer brand and model offerings, and closing down dealers.

In its February report, GM indicated that it would sell or phase out HUMMER and Saturn, sell Saab, and likely phase out Pontiac.  That would leave GM with four core brands: Chevrolet, Cadillac, Buick and GMC.   But, with the government calling for even fewer brands, it is very possible that we could see Buick and GMC go away, too. With only Chevrolet and Cadillac surviving, GM would operate much like Toyota, Honda and Nissan which each market two brands in North America-- a standard bearer and a luxury line.

The Obama Administration plan also calls for technology leadership stating that "the new GM will have a significant focus on developing high fuel-efficiency cars that have broad consumer appeal because they are cost-effective, have good performance and are reliable, durable and safe."  General Motors already delivers on good performance; reliability and durability are dramatically better than they were in the 80's and 90's; and safety ratings are good.  Fuel efficiency is debatable.  GM boast 17 models that get 30+ MPG, but most of those aren't models that I would buy.  There is no thrill derived from driving a Chevy Aveo.  I'm not interested in driving a car with a four cylinder engine that only produces 106 horsepower and takes forever to get to 60 miles per hour.  Give me a V-8 equipped, 400 horsepower Camaro any day!

I also don't want a nerdy looking Toyota Prius.  Don't get me wrong.  The Prius is a good car. Everyone I know who has one, loves it.  I would love getting 48 MPG too. But, only if the car looked and drives like a Pontiac G8.  Also, while trucks and SUVs-- once popular and top-selling-- are not longer the darlings on dealership lots, there will always be a market for them because of their roominess and versatility. 

The bottom line: I really don't want the government telling me what kind of car I can or can't buy. Which means I don't want the government telling the auto companies what kinds of cars they can or can't manufacture.

Oh, Good Evening!