Now that the federal government set the precedent of giving out money to companies that made bad decisions in their business processes, it seems that the lineup for handouts is getting quite lengthy. The latest companies to come through rattling a tin cup are GM, Ford, and Chrysler. While I am very concerned about the impact to the economy if these companies go under, I am becoming a strong believer in the statement that the bankruptcy process is designed for them. During my lifetime the US auto industry has repeatedly faced problems in alignments of their business, and they continue to have difficulty in adapting to a changing world. There is something wrong with a company that refuses to learn from their past mistakes. Giving them money as a loan at this point is like giving a fix to a heroin addict. I say let them go under, and when they emerge from this they will be a much stronger company that realizes that they have to learn to adapt like the rest of us. The demand for automobiles has recently taken a huge dive, but that means there will be increased demand for maintenance of older vehicles. Why aren’t they adapting to that market instead of whining about how they can’t continue to make money doing the same thing they have done for fifty years?
Even though Toyota, Nissan, Mazda, BMW, and Honda are all experiencing the same downturn in the economy, I haven’t noticed them coming out to ask for bailout money. Instead of pathetically rattling a tin cup, their management is working toward managing their business, which includes temporary closures of manufacturing plants, adjustments to product lineups, incentives to move vehicles in the marketplace, and other adjustments. Honda has even reported a plan to increase production on their Fit model in order to meet a shortfall of supply.
I would wish the “big three” the best of luck, and send them on their way. Being the biggest isn’t guaranteed, and they need to find a way to reinvent themselves or go the way of the buggy whip manufacturers.