Posts Tagged ‘Big Three’

Richard Florida
by Richard Florida
Fri May 1st 2009 at 9:20am UTC

Bailout Schmailout

Friday, May 1st, 2009

The New York Times asks leading experts whether America “needs an auto industry.” Robert Lawrence and Tyler Cowen both point out that Japanese companies like Toyota make cars very effectively in the U.S. with American workers. As Lawrence writes, the problem is continuously “framed” in terms of costs and competitiveness, but that’s not really what’s the matter. The real problem is about out-of-touch, outmoded, ineffective Big Three management.

We’re told Chrysler needs a massive injection of “cutting-edge Fiat technology” to survive. Huh, why? What were these guys doing? Did they just forget that… er… new technology might be important to their long-run future?

Robert Reich lays down the gauntlet on jobs:

What? Having General Motors or Chrysler cut tens of thousands of jobs in order to be eligible for a government bailout reminds me of “saving” Vietnam by bombing it to smithereens. Aren’t we giving these companies billions of taxpayer dollars to save jobs? If not, we’re just transferring money from taxpayers to GM and Chrysler bondholders and shareholders …

[T]he “American auto industry” shouldn’t be defined as auto companies whose headquarters are in the United States. The true “American auto industry” is Americans who make automobiles. At the rate the Big Three are shrinking even as they’re bailed out, foreign automakers with American plants may soon employ more Americans than the Big Three do.”

Your thoughts?

Richard Florida
by Richard Florida
Fri Jan 30th 2009 at 8:53am UTC

Who Is Us?

Friday, January 30th, 2009

Which car company is more “American”? A Big Three car maker which off-shores jobs and lays off American workers, or a foreign transplant that is ramping up production and creating jobs in the U.S.? That’s the famous question Robert Reich asked back in 1990 in a classic Harvard Business Review article.

The Wall Street Journal’s Joseph White updates Reich and asks “What Really Makes an American Car”?

Could there be a more American vehicle than a “Jeep Patriot?” Nothing on four wheels says American more proudly than Jeep, the rugged brand that helped America win World War II, and has ferried millions into our wild, Western spaces since.

Yes, in fact, there could be a more American SUV than a Jeep Patriot. A Toyota Sequoia would be one of them. The Sequoia is 80% “domestic” according to the National Highway Traffic Safety Administration, while the Jeep Patriot is only 66%.

The Treasury has pumped billions into two of the three American car makers with head offices in and around Detroit, hoping to avoid a collapse of what industry and political leaders call the U.S. auto industry. There’s lots of talk about the government supporting American efforts to develop electric cars and batteries, and some federal programs already established to do this …

Once you put down the flags and shut off all the television ads with their Heartland, apple-pie America imagery, the truth of the car business is that it transcends national boundaries. A car or truck sold by a “Detroit” auto maker such as GM, Ford or Chrysler could be less American — as defined by the government’s standards for “domestic content” — than a car sold by Toyota, Honda or Nissan — all of which have substantial assembly and components operations in the U.S.

So what should you buy if you want to buy a truly American-made car? For the 2008 model year, the government says the Ford Crown Victoria has the highest percentage of U.S./Canada content at 90%. The only hitch: It’s assembled in Canada.

Richard Florida
by Richard Florida
Sat Dec 6th 2008 at 10:30am UTC

Bailout of the Living Dead

Saturday, December 6th, 2008

Slate’s Dan Gross says the bailout really can’t work because the Big Three car companies are already dead.

The sad fact is that the U.S. auto industry has essentially failed. Even if car sales come roaring back from their current anemic pace next year, there’s no guarantee the Big Three will return to health, that they’ll be able to stay current on debt payments and raise capital from tough-minded investors. The executives and union leaders speak as if the bailout money is simply needed to tide them over until the sun comes back out. Exuding and instilling such confidence is a big part of their jobs. But increasingly, it seems that the federal funding they’re requesting is necessary to help manage failure, not to stave it off.

Richard Florida
by Richard Florida
Tue Nov 18th 2008 at 8:13pm UTC

Detroit’s Not to Blame

Tuesday, November 18th, 2008

I am sick and tired of people using ”Detroit” as a euphemism for the Big Three. Listen to GM chief Rick Wagoner:

“This is about much more than just Detroit… It’s about saving the U.S. economy from a catastrophic collapse.”

Detroit didn’t cause the auto crisis. Out of touch Big Three management did. For all its problems, Detroit – the city and the region that is - has assets and capabilities that go far beyond the Big Three. It has cutting-edge automotive design and technology, a broad-based supply infrastructure, great universities, a top-notch design community, a terrific airport, and perhaps the most incredible musical energy on the planet. The city and region can reinvent and rebuild but only by shucking off the dead-weight of the Big Three. And it is a shame for people to keep denigrating the city by invoking its name as a substitute for the Big Three.