Tuesday, April 21, 2009


Where will your next GM car be made?

by Larry Geller

American automakers—to bail them out or not to bail them out, that is the question. They have built gas-guzzlers at a time when concern for the environment is rising and were dealt a blow by high gas prices last year. Now they beg to be saved. Should we?

I have long wondered if, by a certain year (say, 2015), the only cars made in the USA might be Hondas. US automakers just can’t figure out their own business.

The current bailout question is complicated by the sad fact that our government rushes to throw money at bankers (it only took them a couple of days to find trillions to shower on Wall Street) but feels that this unionized business sector isn’t deserving of the same consideration. You know and I know that it is the union factor that makes the difference. Yes, here is a chance to weaken or bust the big unions. We should not be surprised by this example of Disaster Capitalism.

But I’d like to return to my prediction. Why, first of all, should the automakers even want to make cars in the USA? We make little else at present, and so much of an “American” car is made overseas anyway. Why not, um, get rid of the unions altogether and just close down the auto plants? Oh, not right away (that might be a wee bit unpopular at present, so best not to talk about it while asking to be bailed out). But that might be the business plan.

Whether or not Detroit gives up making cars domestically, competition from overseas will intensify. I’ve been tracking India’s Tata Motors. They could possibly make US-made auto manufacture an untenable option, or they might one day even buy up our formerly all-American icons altogether. If we’re lucky, they might outsource some of their business to us.

Far fetched? Check this out, from autobloggreen:

Tata Indica

(If you click the link or the pic, the article has more pictures of this car)

What’s more, Tata is trying its best to become and to be considered an eco-conscious manufacturer:

[JJ Irani, a director for Tata's automotive business] and a few of his colleagues are currently visiting a number of large European companies in an attempt to pick up a few pointers on how to improve their eco-credentials. [autobloggreen, Tata Motors look to Scandinavian companies to raise eco-awareness, 4/21/2009]

I picked 2015 pretty much at random many years ago (actually, I thought at first that it might be Indonesian cars that ultimately put Detroit out of business, so shows what I know). Regardless of the date, when we can buy eco-friendly cars at significantly lower prices, that will be it for US auto companies. Unless, of course, they simply import and re-sell the foreign made cars instead of making their own here. Just like almost everything else we buy now. Why not cars too?

Besides, to whom can Detroit sell expensive cars if Americans don’t have jobs to pay for them? How to “Buy American” if domestic cars are unaFordable? If it’s a choice between an out-of-reach American car vs. having wheels at all, it will be cheap wheels that win the auto race.


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