automobiles

I have to admit Senator Burr's VW Thing is pretty rad.

While some might prefer that he drive an American car, or a car that gets better than 20 miles to the gallon, I won't be so petty as to criticize Burr's choice of vehicle.

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.

(NOTE: this is the first of a [for now] two-part series.
the rest tomorrow)

For those of you not paying attention, the days of the American automotive industry driving the US economy seem to be visible only in the rear view mirror.

The fortunes projected for the industry for 2007 are an improvement over the previous year, but only because 2006 (and 2005, for that matter) were, to put it bluntly, brutal beyond belief.

How brutal?

GM lost at least $16 billion during those two years, and soon expects to lose at least $6 billion more to close out the relationship with its former Delphi division.