What happen to the Auto Industry now?

[wendywindy]

I heard a lot of rumor that US auto industry will fall due to Global recession. And not only US, even the biggest car manufacturer(TOYOTA) announced that they loss $5billion last year.

What could be the other possible reason of the downfall of this industry?



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"In less enlightened times, the best way to impress women was to own a hot car. But women wised up and realized it was better to buy their own hot cars so they wouldn't have to ride around with jerks." -Scott Adams

[GasSavers_maximilian]

The US auto industry has had trouble for quite a while before this recession, but it certainly is making things much worse. Unfortunately, the big three consistently made labor concessions and other decisions that traded short term gain for long term costs. I don't think the US decision to go with mpg standards for vehicles (vs gas taxes) and then to create loopholes even for those helped either.

I know those two observations are part of a very complex situation and there's more going on, but I'm trying to capture the spirit of the situation in just a couple of lines.

[GasSavers_maximilian]

I keep hearing vague predictions of the dire consequences to our economy if GM were allowed to fail, but never any serious attempt at specifics. Since the best case scenario is that GM would survive in a much reduced size, with much lower paying jobs, and that there would most likely be some expansion of foreign car maker activities in the U.S. were it to go bust, and that the resources put into saving GM could be used to grow the economy in some other manner, what is the bottom line? Once you throw in the suppliers to GM the picture gets pretty complicated, but someone, somewhere has got to be able to quantify the impact GM's failure would have, even if just to the minimal extent of putting it within a wide range of dollar values.

[bowtieguy]

i believe if people are paying attention, auto sales may never return to what they once were. the days of buying new and trading every 2-3 years are likely over for many.

see...

http://www.gassavers.org/showthread.php?t=10067

irresponsible management, overbearing unions, over pay, over benefitted(pensions), and consumers keeping their cars longer all contributed to the auto maker downfall.

they need to evolve w/ the times. cut costs, remanage, lower prices, control or eliminate unions, etc to survive. NO MORE bailouts, let them go bankrupt and learn!

[DRW]

Good points. Is the gov't bailout enabing the auto industry and banks to become a welfare industry?

Why can't we let them fail and let them remake themselves in a way that is sustainable in the new economy?

[GasSavers_maximilian]

Creative destruction is always a part of progress, but our social safety net that can ease the transition of workers from one industry to the next has really been let go. I think that's what's really contributing to so many being change averse.

If we hadn't systematically messed up our educational system, we should've largely moved on from the need for manufacturing by this point in our development.

[bowtieguy]

one thing i agree w/ in this new executive administration is the need for new energy especially in regard to jobs. i don't agree w/ taxing both "old" energy and ultimately the consumer as well however.

we've created a monster in terms of dead end jobs. look at how many CVSs, 7elevens, gas stations etc that we have. that's not to mention how many similar individual products by companies and manufacturers. look how many models are being discontinues in the auto industry.

our economy, even healthy, can only support so much business and so many products. competition is a good thing, but like anything else moderation is key.

if i were looking for a job, i'd look not at the ones that have an "overinflated" need, but ones that would sustain thru difficult times and look to the future. that's not to say some just need whatever is available NOW, but they should continue to search.

[GasSavers_maximilian]

If anybody's interested in some economics sorts of podcasts, I like Marketplace for more day to day things, and NPR's Planet Money for more in-depth stuff. They're both highly accessible. The Economist has some interesting things, but only a small amount is released free each week (basically an advertisement for their newspaper).

All three are available via iTunes. Podcasts are my preference as I can work/drive while listening to them.

[GasSavers_maximilian]

Originally Posted by bowtieguy

if i were looking for a job, i'd look not at the ones that have an "overinflated" need, but ones that would sustain thru difficult times and look to the future.

Three words: Aging Baby Boomers.

[GasSavers_maximilian]

Originally Posted by bowtieguy

i don't agree w/ taxing both "old" energy and ultimately the consumer as well however.

But don't you think the stated costs of energy options should reflect their actual costs? Or do you mean taxing them above and beyond that point?

Hey! I know! I'll let you clarify and stop guessing.