WINDSOR — GM, the papers say today, spent $6.9B in the third quarter of this year.
Of course it did.
This year General Motors celebrate their 100th anniversary. They say they will be bankrupt in a few short months.
The unfortunate truth of modern America is is you have no credit, you can’t get no car.
That’s how bad things are.
The car industry is America’s greatest industrial tradition. Cars are what America is known for and what it has always believed it stands for. So a few years ago, when Honda and then Toyota became the biggest selling cars in the USA, that was bad.
But this is worse.
Let’s look at the numbers quickly. The automotive industry in the United States:
employs 355,000 people
indirectly supports 4,500,000 others
offers pensions for 775,000 retirees or survivors
provides health care insurance for 2,000,000 Americans
Those are some serious numbers. At the moment however, there is not enough revenue in the business to support those people. Something has to give. Recently Ford announced that it was cutting its workforce by 10%. But that is just the tip of the iceberg.
This is an industry that has changed. It’s no longer a licence to print money — or to support a countries population. It’s getting close to yachting and professional sports as a way for people to lose lots of money fast. Maybe John DeLorean was a leader in that.
Porsche announced last week that it earned eight times as much from options on VW as it did on making cars.
That’s got to hurt.
So what is to be done?
The car manufacturers need to rethink their model. And they need to start with the people who work for them and the communities they live in. Undoubtedly, if they try to hold on to too much of the old, they will simply close their doors faster. They need a radical change… a bit like the one America voted for last Tuesday.
Nothing can be sacred… except for people.
There will have to be massive layoffs. There will need to be a big change to the way that people rely on these companies for their health and retirement. But Ford, Chrysler and GM need to do all this without losing the faith and support of the millions and millions of Americans who want them to succeed.
Do these names ring a bell?
They are from a list of more than 600 defunct car manufacturers in the USA alone.
We don’t need any more names on that list.