TPM Reader J on the automakers …
As a 30+ year veteran of the auto industry let me make the difference very clear; the banks can exist without the auto industry. The same cannot be said for the reverse. The automobile business from the manufacturers down to the consumers rely on banks for one reason or another.
While the current economic situation has brought the oversight deficiencies in the banking industry to the forefront, the automakers have spent the better part of the last 40 years ignoring their core businesses and focusing on short term profits and muddled business plans. Anyone with a clear view of the industry knew this day was coming, it was just a matter of when. The fact that banks aren’t making loans in order to buy cars just accelerated this downfall.
I was meeting a friend in the GM building in downtown Detroit about 18 months ago and was astounded to learn how few people there were actually involved in making cars and how many were involved with other GM business interests.
In Chrysler’s case, this was a weak company driven into the ground and thoroughly looted by it’s “merger” with Daimler-Benz. It was funny going to hotels around the Chrysler headquarters in Auburn Hills and thinking you were in Germany due to the huge number of German speaking guests. Each staying for long periods of time on the company dime and all being charged to Chrysler.
Ford has been the most proactive of the three and should be alright with minimal interruption, although any changes in the basic labor agreement with the other manufacturers will impact Ford union employees as well.