Saturday, November 22, 2008

The Big Three

Everyone I think who was born and raised in Southern Ontario, or many of the America's Great Lake States can intrinsically feel the importance of the automotive industry. The Big Three North American produces are GM, Ford and Chrysler. They have in many ways shaped the 20th century in almost every respect. Ford introduced mass production and refined efficiency that allowed for a great manufacturing boom.

The automotive industry shaped a way of life, they gave us access to a freedom of movement that was unheard of in the past. The predominance of the car in our society has changed our infrastructure, our cities, our culture, our way of life and where we live. These have been for the positive and the negative, for all the freedom there is urban sprawl, for all the employment there is pollution.

The dynamic new landscape of globalization has been felt particularly strongly through the auto industry. When globalization rears its head because a factory is moving to a far away land its impact is felt particularly hard when a plant is shut down and hundred lose their jobs devastating a community. There's another side though, and that's foreign competitors coming to North America, one only has to look on the road to see all of the Hondas and Toyotas to see what's happening. North America used to be a reliable market for the auto industry, but now the consumers look for what's cheap, and what works.

The auto industry is now in serious crisis. They have their hands out again, seeking money to stay afloat while the world economy loops about in its tailspin. On one hand I think from a business point of view it would simply be best to allow these companies to declare bankruptcy and go through the painful process to restructure themselves. They suffer terrible inefficiencies, and if they are not fixed they will merely return to our governments' capitals, hat in hand. The downside is the economic maelstrom that would unleash. So many individuals, families, communities, regions, and countries are dependent upon these manufacturers that if they fell the fallout may be incalculable.

I throwing good money in after bad, it's a bad idea as an individual and worse as a government. These Big Three need to prove that they've found a realistic solution to their problems, possibly be simplifying their operation, is it really necessary for GM to have twelve brands (Buick, Cadillac, Chevrolet, Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall)? What are the real differences between a Buick, Chevy, Pontiac or Saturn car, it just costs more in marketing.

If the auto industry fails it would be a truly incredible and awful sight for the ramifications on life in North America. It's something that paying now merely delays it for another day, but that day may inevitably come sooner rather than later.

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