Will The Big Three Still Be Around ?
High Noon is almost here, and GM, Ford and Chrysler are at last taking all the threats of the Obama Administration seriously... After decades of hoping, wishing and waiting like a Jack Johnson song, they are getting bitchslapped like a Jack Johnson right cross to the chin. Two different Jack Johnson's there, folks..
No, the Big Three will never be the same, and we say good for them. Detroit has been like crack addict that doesn't think they're addicted to stupidity. Worse yet, the endless begging of Detroit and Michigan's elected leaders trying to talk the rest of us into paying for a fat, bloated Detroit was tiresome. The American people are pretty smart, and can tell when a politican is just trying to save his/her job. No thanks...
So what are the changes? Here's a quick rundown of each, and what we think.....
Chrysler
Yes, they got the merger with Italian superpower Fiat. However, Chrysler is far from out of the woods. This is the carmaker that MERCEDES-BENZ couldn't save. They have the 300, and the rest of their lineup look like trucks. They have an identity crisis, and they are small enough that the economies of scale (i.e. the inherent costs of making cars) could kill them . They got their sugar daddy - now they need to look within...
Ford
The Blue Oval - which wishes that it's financial ledger looked sort of like a zero - hasn't asked for any cash from DC yet. They're close, but they know what comes along with taking money from them. The only problem is that thery're down to about 9 nine months of cash, and they don't expect to make any money until 2011. Of course, two years ago, they saw 2009 as another rosy year. Things change. They don't have quite the obesity issues that GM has, and the lineup could use a little revamping - like whittling down all the big, square trucks - but they should be okay if they tighten up, and stay away from DC...
GM
Say goodbye to the old GM. Pontiac? Gone. Saturn? Gone. Hummer? Gone? Twenty one thousand jobs? Gone. Hundreds and hundreds of dealerships? Gone. Locally, say goodbye to Mullins Motors, Big Country, Longstreet and probably Auddie Brown Chevrolet. All of the small town dealers that you're used to having will be gone. They are sucking GM's money dry in overhead - and the money is gone.
As good as a 20% payroll cut might be, it might not be enough. Car sales are down about 33%, so they're still falling a bit short - but it's a step in the right direction. Try as they might, they still are not making cars that compete with Toyota and Honda. Don't believe me? Get in a Pontiac G6, then get in an Accord. Get in a Chevy Cobalt, then get in a Toyota Corolla . Same with an Equinox and a CRV. They are plastic-y, poorly made, and they fall apart in two years. The long-term, 250,000 mile GM needs to be developed. Yeah, quality IS important...
Lastly, GM is asking for debt forgiveness from it's stockholders and Washington to the tune of $27 billion !! It would essentially turn that debt into equity, which sounds alot like the mess the financial markets were doing for lately. Another solution needs to be found with that....
Yes, the old Detroit is gone - and that's a very good thing. Have the union problems ben fixed? Probably not. But, some of that 500 pound duffel bag strapped to Detroit's back has been lopped off. They all might just make it........ but we'll see.
.
Gee Honey, It Looks Perfect For Waterboarding !!
