The Big 3

A few people have asked my opinion of "The Big 3" auto makers and what should be done. So, here it is.

I think that we need to help out the domestic automobile manufacturers because this will directly effect everyone if we do not. I don't like bailouts. But, I feel that if we do not act on this one, it will send us into a depression. That's right, a depression. GM seems to be the most vulnerable of the three right now and from what has been said, if they do not get this bridge-loan then they will have to file bankruptcy. Contrary to what some believe, this would not cause GM to close their doors, at least not right away.

If GM filed bankruptcy, they would be able to reorganize and keep the company operating. But, by filing bankruptcy, many of the suppliers for the auto industry would be forced to close because they would not be able to collect on what is owed to them by GM. This would cause hundreds of thousands of jobs to be lost if not millions. Remember, each time someone loses a job, that is one more person that is not shopping at Wal-Mart or Lowes or Burger King etc. Eventually those supplier job losses would have a ripple effect throughout communities and cause non-auto related businesses to fail causing even more job losses.

The other problem is that the suppliers generally supply all 3 of the American auto makers. So if the suppliers start to fall and go out of business, it is only a matter of time before GM would go under anyway because they would not be getting the necessary parts they need. You may see all 3 go under if one of them files bankruptcy. You actually might even see a foreign auto maker (not Honda or Toyota though) go under due to ripple effect this would cause since those same suppliers work with some of them as well.

So, we should give them the loan.

Here is my advice to the big 3 though. They need to drastically change the way they do business. The top 2 auto manufacturers, in my opinion, are Toyota and Honda--in that order. The big 3 needs to look at how Toyota and Honda does business. Toyota has 3 product lines, Toyota- Lexus and Scion. Honda has 2 lines, Honda and Acura. GM has 7 lines, Chevy-GMC-Buick- Pontiace- Cadillac- Saturn and Saab. They also own 20% of Suzuki. Ford has Ford, Mercury, Lincoln and Volvo. Chrysler has Dodge, Chrysler and Jeep. GM and Ford really need to reduce the number of lines that they currently have.

If I were GM, I would sell off Saab and the interest in Suzuki. Then combine the lines to have just Chevy and Cadillac. Most of GM's lines are duplicates anyway. Anything you buy with the GMC name on it came off of a Chevy assembly line. To cut costs with tooling etc. it would only make sense. Mercury is just a duplicate of Ford products and I would cut that line if I were Ford. GM could have high end line which would be Cadillac and everything else could be run under Chevy.

One of the other things that has never made sense to me, is why the big 3 always cut a product a product line just when the name recognition is obvious to everyone. Can you remember when we did not have the Toyota Camry or Corolla, or the Honda Accord or Civic? Ford had a good thing going with the Taurus and Escort, Chevy had the Cavalier, Pontiac had the Grand Prix and remember the Dodge Dynasty? All of those products are gone. Along with all of the money spent on Branding. The #1 selling pickup in the world is the Ford F150 and it has never changed its name. The Buick LeSabre has always been a decent seller as well, once again though it has been around forever. Keep the product lines that are recognizable and bring back some that have been dropped. Chevy did finally bring back the Malibu and Dodge brought back the Charger which were good moves.

The other thing that the big 3 could do is reduce the number of engines that go into these cars and trucks. We don't need 5 different 4 cylinder options-none of which is a hyrbid or 4 different v-8 options. We need 2-3 4 cylinders with one of them being a hybrid. Same with v-6's and v-8's. Did it make any sense to anyone that the 1st hybrid that was put in a GM vehicle was an $80,000 Cadillac Escalade? WOW, now you can get 18 miles to the gallon instead of 13.