auto industry

So there’s a lot of conversation out there about car dealerships being told they won’t be selling cars for Chrysler and GM any more.

The idea, we are told, is to save the auto manufacturers money by reducing the number of dealerships with whom they do business.

I don’t really know that much about the car business; and I really didn’t understand where these cost savings would come from, but I was able to have a conversation with the one person I do know who actually could offer some useful insight.

Follow along, Gentle Reader, and you’ll get a bit of an education at a time when we all need to know a bit more about these companies we suddenly seem to own…and about the closure of thousands of local businesses that will make the news about our bad job market worse.

http://www.youtube.com/watch?v=IhZ5Rzqe_CU

The auto industry is undergoing a major transition. How can we set a course for its healthy development?

Automakers, by their nature, must make plans many years in advance. Right now, we have people designing products for 2015. That means that, if environmental standards are to be effective, it is crucial that we have very good collaboration between government and the auto industry. It requires smart regulatory practices, achievable goals, and a national roadmap we can depend upon.

We are in this thing together. It is time to collaborate.

Take emissions standards, for example. We understand the direction of the carbon economy. We embraced 40% higher federal fuel standards in the 2007 energy bill, and we fully expect a decade of rising standards, year by year, starting with the standards for 2011 to be announced in the near future.

Let's talk about why the Republicans are really willing to throw millions out of work and further cripple the struglling economy: union busting.

The first line in their Action Alert memo says it all:

When discussing the current state of the auto industry in the US, and it is evident that future trends do not point to likely profits soon for the “Big 3” (or Big 2, or 3 again if Daimler were to dump Chrysler) US automakers.

The labor cost problem is often referenced as an enormous issue that hobbles the industry going forward.

Design issues also take a toll, but that was the focus of a previous discussion, not today’s.

Instead, let’s look to how we might restructure the industry to create a new business model.

Before we begin, I want to point out that I am writing this from the point of view of a mythical auto company executive.

What I will propose will be potentially disastrous for the affected companies, their employees and retirees-but then again, it might just be their best shot.