Fortune's Alex Taylor reports that "The president-elect can do more for the auto industry than anyone since Henry Ford."Taylor lists plenty of do's and don'ts for Obama: Do consider a prepackaged bankruptcy, don't tell companies how to do business, raise the gas tax and more.
All good advice to be sure, but will it really matter? As I see it, General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler have to do two things in order to become viable again: build cars that can compete in the marketplace on quality and price and reduce their cost structures by enough to achieve profitability.
I'm not sure that Obama or anyone else outside of the executive suite can do much to achieve either of those goals.
Will low-interest loans help? In the short-term, of course: Any company that's running out of money will last longer if you give it cash. But whether these companies will ever become viable again is out of Obama's hands.
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Reader Comments (Page 1 of 1)
1-02-2009 @ 5:00PM
gallardo Eduardo said...
Wright!!!...Alex...in few seconds Obama can save the auto and steel industries:
Proclaming the "buy national".(after an previus recicling)
During his campagne, He promises:" cars will be building by american workers, not in Japan, nor in Corea"
Words more or less it is recorded.
1-02-2009 @ 5:08PM
Ashram said...
Can Obama save the American car industry? NO!
Only the American automakers can save themselves. What it's going to take is the making of some REALLY tough decisions that WILL earn them scorn from many people in the short term and possibly even the long term.
Basically, the big three needs to trim A LOT of fat and, unfortunately, this means a lot of people are going to lose their jobs and lose money.
As it stands, the big three will need to lop off dead limbs to survive or let the infection spread, killing them all off.
1-03-2009 @ 1:46PM
Randy Beebe said...
why does everyone blame G.M. for the current situation.They sold big cars and trucks because that was what everyone was buying.How can they be expected to produce cars that no one is buying.that would make them the stupidest executives on the planet.Get real people,no one wanted small cars untill gas hit 4.00 a gal. Now that gas is down again a lot of people are already reverting to the big cars again.Stop believing all the bad stuff about G.M. its just propaganda created by the southern Asian transplants and there payed for congressmen.
1-04-2009 @ 2:01AM
Edward said...
The problem of US Auto industry is lack of innovation in the brain of executives, not the compensation of UAW workers, the salary of workers only count 10% of the total cost to build a car. Many years ago, Apple computer was almost bankrupt due to lack of innovation, however, as Steve job came back, by building the new products, I_pod, I-Phone with a lot of innovations and new ideas, Apple build a new products people want to buy and create a new market , the products are not cheap, and Apple still pay its employees with high salary and benefit comparing to its competitors, but Apple made record profit and hold huge market share , why ? because Apple build products people want to buy , even it is more expensive.
1-04-2009 @ 2:11AM
edward said...
Well, GM can survive if it can build the following type of car,
a car with two segments, with 6 cylinders .
This car can work as an SUV if two segments were put together with 6 cylinders running when the gas is below $3. However, when the gas is over $3, this car can be reassembled by the owner as a fuel efficient car with only three cylinders running . This car can not only fly as a small airplane , but sail on the water as a boat , and this car can sell for $30k to be affordable for most American consumers , this car can not only run on Gasoline, but Hydrogen( generated from water) , electricity, or natural gas. When gas is expensive, the engine can be switched to hydrogen or natural gas
1-19-2009 @ 6:56PM
Rich said...
The Big Three don't make enough profit to pay the pensioners let alone the stock holders.