My fall hiatus is officially over. After weeks of being dormant I have finally decided it's time to get back into the groove and be the writer I claim to be.
Most of you are aware of the reports we see each day of the severe economic downturn the US is experiencing at the moment, with the most notable victim currently being the domestic auto industry which is facing what may be its biggest crisis ever. The auto manufacturers did not notice the downside immediately. In fact, it took a number of years and much profit was made, but they should have known better.
Those of you who have known me forever might recall that as a child, I wanted to be the president of General Motors some day. It was a pretty lofty goal and, I might add, quite specific. But when I was a child, GM, and the American auto industry as a whole, was still building fascinating cars people wanted to buy. Little did I know at the time people's desires were changing rapidly. Unfortunately for GM and their cohorts, they did not seem to realize this either. Little by little, the company allowed the car side of its business to erode. However, it wasn't very evident initially since there were still many millions of loyal GM buyers returning year after year to purchase Cutlasses, Malibus, and LeSabres. The only problem was that the average age of buyers of GM cars was continuing to rise and slowly generations of steadfast customers were fading away only to be replaced by a new breed of customer who saw no value in the American nameplate. The new breed of consumer could sense the American automakers had little interest in making quality cars (as opposed to trucks) people wanted to buy. With a few exceptions, the American automotive industry conceded the passenger car business to Asian and European competitors and instead put more on emphasis and muscle in selling trucks and SUVs. They foolishly sought after short term profits over long term stability.
This motive led to marketing their truck based vehilcles as an alternative to a passenger car. And it worked. As long as gas was cheap, the public bought into the idea gleefully. The automakers insisted they were giving the public what they wanted, however, a closer examination of their advertising game plans read differently. While most commercials for American passengers were somewhat sedate (that is if the car was advertised at all), ads for trucks and SUVs showed the cars being used not only for transportation, but as life transforming vehicles which would somehow revolutionize your somewhat dull listless life in to one of great adventure. Something a passenger car could never hope to accomplish.
Ironically, the car companies never really touted safety as a selling point - but they figured the public would instantly equate the heftier size to a safer driver experience - even if it wasn't true. And the public continued to buy into the myth. But as the price of fuel quickly rose, the supposed "practicality," "safety," and "sportiness" of SUVs and trucks was suddenly less desirable and customers have turned away in droves.
And now that strategy is haunting them in a big way. The Big Three now find themselves with their pants around their ankles, seemingly unprepared for the tumultuous times. To be fair, Nissan and Toyota also invested heavily in the American Truck and SUV market and also reaped huge profits. But unlike their American counterparts, they never totally sacrificed their car business to rental fleets and instead made quality sporty coupes and sedans people wanted to be seen in.
While I have nothing against trucks and SUVs (OK maybe I do a little), what are these companies going to do? Can they really survive as they are? There are some who say the United Auto Workers (UAW) union bears a great portion of the blame - at least in terms of labor costs. While that may be true, GM, Ford and Chrysler were building too many cars people found undesirable. It's actually sort of ironic since American cars have been proven to be as good as or even more reliable than their foreign competition. So what gives?
Perhaps it's perception and a past record of shoddy workmanship American cars were known to have. And while the days of atrocious cars are long gone, the memories linger in spite of the facts. It's too bad in some respects since the automaker's sins of the past have caught up and potentially affect thousands perhaps even millions. Two of the big three begged for and received bridge loans, but will this be enough? Unfortunately I have mixed feelings about whether they should have been helped. For the sake of workers and other connected industries, it's an obvious yes. But then I think of their lack of foresight and I seriously wonder if they deserve it.
Maybe I'm the one who made the mistake when I ditched my dream of becoming the president of General Motors. I've always wanted to ride in a private jet.
Well, I've gotta scoot...