Big three automakers in trouble?

[Demetrius J. Williams]

As we all know about the economy and the issues we face in the US, what does everyone think about bailing out the big 3 US automakers (Ford, GM, Chrysler)? I have posted a few links below about what I have read so far on autoweek.com. Should we spend additional dollars to take care of these company's? Have they become so huge to where they have now lost focus on what is important? Please take a moment and read over these and let me know what you think. Also feel free to comment on the comments that are made at the end of each of these three articles.

The big 3 http://www.autoweek.com/article/20081120/FREE/811209981

Article on GM http://www.autoweek.com/article/20081202/FREE/812029979

Article on Ford http://www.autoweek.com/article/20081202/FREE/812029992

[Alex Gibson]

Demetrius, you're right - it may not be that they are too big, but the three have definitely lost focus on what is important: selling cars.

A prime example is GM and their OnStar system. The general public loves OnStar, but does not want to pay a premium for it. When sales started to stagnate and move to other manufacturers (specifically Toyota and Honda), GM responded by pushing their amenities like OnStar even more heavily. What they failed to realize is that people buy Toyota and Honda because WYSIWYG - they are simple and effective.

To put it another way, why does one buy a C-Class Mercedes? It is more than just about getting from point A to point B - it is about power, status, etc. The person that wants to get from point A to point B does not buy a Mercedes. That person buys something simple and effective (and in the recent world environment, affordable and fuel-efficient) like a Honda Civic. No frills, nothing overly fancy, just a car to get you from one spot to another.

Even if the bailout happens the three need to step back, lose the arrogance, and refocus on what will sell cars.

[Jared O'Toole]

Here's Seth Godins take on what to do

http://sethgodin.typepad.com/seths_blog/2008/11/what-to-do-abou.html

He basically says let them fail. If they fail so many smaller car companies will form causing a rush of innovation in the industry.

I can't say I disagree

[Jessica Booth]

This is such a hard topic!

Coming from Michigan, this not only effect our economy as a whole, but my entire family! My father has worked for Ford Motor Company for too many years to name, and to make matters worse, six other family members are employed at Ford. I think it's obvious to see they made poor choices in their business strategy. But, if we made that same argument - why did we bail out Fannie and Freddie? Didn't they make poor decisions as well?

It seems that it has passed in Washington, but my worry is will it change anything?

In addition to simple the auto makers, you have all the supporting businesses that are relying on business from the three auto makers to survive.

Along with out horrible housing situation here, and failing businesses - Michigan has seen plenty better.

At least the Red Wings are doing good. :)

[Tyler Fishback]

I don't want to see the economy fall harder than it already is right now. I think the bailout should happen, but with very strict guidelines..IE: We must see 50% more production of fuel efficient cars by 2012. Get rid of 50% of the gas guzzling SUV's and adopt methods like Europe have; we need cars that are efficient.

On the topic of status and the "cool" appeal, the big three definitely need to re-evaluate their system on a whole. (I agree with Alex). The recent branding (past 3-5 years) that Cadillac has done with their cars has worked well in my eyes--GM on a whole should take that approach. American cars need a REVOLUTION.

I propose a question--what can be done to make American cars cooler? Nothing else---just cooler?

[Harsha Desai]

I can see that this will definitely hurt the American economy especially when they are at their most vulnerable point. America made a big mistake when they bailed out Wall street, because they have now set a precedence. there is little accountability in transactions like these. The government can't be managing corporations when they need to focus on improving the education and health care system in the country so that it may start competing with our BRIC countries.

Fine , lets say we do bail out the auto makers , they'll survive another six months maybe a year. But the economy is slowing down. There isn't a demand for the cars, and its not simply because of the Credit crisis. They have been posting poor earnings for the last few years. The money that is used to bail out workers should rather be spent on reskiling workers. It time ppl realise that employement is not a life time gurrantee. It's harsh but its the truth. Individuals need to make themselves empoyable or entraprising. the sooner we realise that the sooner we start progressing.
I agree with Seth Godin this fallout will results in a boost of innovation :)