Wednesday, April 01, 2009

The big three car companies

GM and Chrysler and perhaps also Ford are facing bankruptcy. The bailouts aren't and wont work. Dysfunctional companies go bankrupt.

Bankruptcy is not as bad as it seems. The skilled labor will be rehired by the new green car companies waiting in the wings, mostly California and Florida. The dozens of small EV and hybrid companies are at the point where they need to expand out of their converted warehouses and into proper factories so the big three's factories will be quickly acquired ant foreclosure. One reason why the three are being kept on life support is that they do defense contracts. However the vehicles they make are now obsolete. They can't do Hybrid biofuelled tanks, trucks or indestructible hummers. Others have demonstrated the capacity to do so. Defense will shift towards these new players. One company in Florida makes an armored bus. It floats, it can take an IED and when hit with a car bomb in Baghdad traffic it survived. Everyone walked out. As we move to robotic warfare these Rhino runners will become the command vehicle of choice. Detroit can't compete with that -- its been losing defense contracts for years now.

It also wont cooperate with some of the new players like the new EV car people, the universities and companies with new power plants. and
Detroit is doomed, these men will end up owning the factories.

However the names may survive. The names Ford, GM, And Chrysler may be sold off with a little surviving 'goodwill' to either the new players or their own design and testing facilities which are already doing a little external work to make the pay.

Check my Eestor post for another reason why the big three wont go green. Eestor may have them beaten already and they know it.

1 comment:

windbourne said...

It is still possible for us to save these companies, but I doubt that we will. The right way is to break them up. In doing that, AND either putting them through a bankruptcy lite or even giving some amount of money to these, it would make it possible for several or more to survive. Keep in mind that the failure had NOTHING to do with finances, Unions, engineering, or even sales. Ultimately, it was 100% management. What is needed is to break them up and get in new top management, then allow these companies to sink or swim on own. Ideally, the new companies would be pushed to be green. For example, the Hummer is VERY savable, by moving them to hybrids. In fact, it should have 2 small motor/generators. That same motor/generator should be used in passenger cars as a single.
Yet, I will bet that GM and Chrysler will argue for killing off the subdivisions, rather than allowing them to compete. Yet, that will ignore that other countries esp China is coming with a vengeance.