Detroits' Big 3 in Big Trouble Again - a Case of Too Little Too Late ?

The CEOs of Chrysler, Ford and General Motors during the grilling by Congressmen


Production Operator


One of the Hundreds of Suppliers to the Big 3 - Seaway Bolt Company


One of GM's Basic Cars


Chevy Volt - GM's first Electric Car


Chevy Camarro, Hoping to be a Bestseller Again ?

Everybody and his mother has an opinion on whether the Federal Government's bailout loan of US$ 25B
to the Big Three car companies will really make a difference to them surviving this Global Financial Crisis. One camp is the compassionate one which says " Save them, look at the downside, if they go, they will cause a total of 1 million jobs lost and maybe hundreds if not thousands of co-related companies from direct vendors to indirect suppliers like the towns and cities where the Big 3 have their factories, the shops,restaurants,newspaper vendors, ice-cream parlors etc. etc. will all take a hit, as far as business is concerned"

The opposing view held by several economists and which I favour (right or wrong) is this ; let the capitalist forces decide. If businesses all follow the rules of revenue generation and profit creation then those companies which suffer years after years of losses and always requiring money to shore up capital are firstly not taking care of their shareholders and key investors.To make matters worse, the big 3 car companies were known mainly for making petrol guzzling SUVs, huge MPVs and were very slow to focus on the future trends of Green manufacturing such as the EURO standards of carbon monoxide emissions (EURO IV and now V),something which the European makes were onto since signing the Kyoto Protocol in 1992 to cut Greenhouse Gas emissions (3 gases are carbon dioxide, carbon monoxide, and CFC gases like R13 and R23). The US has always rejected the implementing of the protocol citing China's increase in Carbon emissions as the reason. The point here is that the US is the biggest emitter of Greenhouse Gases on a per country basis since the 2nd world War,2 x times more than any developing country !. Another key point is that China has signed and ratified the Kyoto Treaty while the US of A has NOT! One need look no further than the current US President to realise that the whole issue is about oil and a country overly dependent on oil for energy and the President whose family is in the oil business is a symbiotic relationship.

"You buy the big gas guzzlers, I ensure the gas stays cheap, everyone is happy, XXXrew.. the rest of the world "

Then came 2008 and the oil prices spiked tremendously to a high of almost US$ 150 per barrel.So what happened, everybody and their mother started switching to smaller, greener (hybrids like the Toyota Prius) and even taking public transport. The Big 3 saw their sales plumment, along with the collapse of their SUV and MPV markets.So they go cap in hand, to plead the US Congress for a bailout of US$ 35 B. The same old story and excuses abound.

The reason that, the failure of these companies will result in x numbers of jobs and lives in jeopardy due to the financial fallout. OK, now Congress has approved US$ 25 Billion to give them an extension,again for how long ? One certainly hopes they have the products for the new generation and expectations of car owners which is so obvious :

a) Fuel Economy - We owners don't want to be highjacked by the oil barons again and again
b) Greener Cars - Lower CO emissions which pass the latest EURO V standards
c) Reliable Cars - People still prefer Japanese cars due to their perceived reliability

My only viewpoint is that THE BIG 3 HAD IT COMING. If they had difficulties making consistent profits during the so called boom years after September 11 2001, they will have even more difficulties NOW. Good Luck to Them !! If they go under, so be it. BITE THE BULLET.