Tuesday, November 18, 2008

To Save or Not to Save the Auto Industry

Here's my take, albeit the perspective of one with little training in finance and business other than dismal attempts at economics in college:

If the American auto industry had produced a superior product which could compete successfully against their European and Asian counterparts, they wouldn't be in this bind. With that, is the ability to have foreseen how the consumer would adjust to events outside of their control: rising gas prices, increasing concerns with carbon emissions, the fear of rising sea levels and their implicit connection with global warming and the melting of landbased glaciers - all of which preceded the current economic recession. This adjustment means increased interest in fuel efficient and hybrid cars. The best driving and most fuel efficient cars on the market are not American cars. The US Auto industry needs to adjust their market strategy and product development to align with what the American consumer is willing to buy and not insist that the US Government provide it with a bailout funded by public monies. That is, of course, unless they want to compensate me for the lost public services that my taxes would not pay for if they were redirected to bailout a private industry. Hey, I'll take a free car. Or, better yet, free service for my well-designed Japanese car. I'm not a proponent of a completely free market but if you don't want your industry to go under, produce a superior product and develop a long-term business strategy that will take into account a wide breadth of contingencies.