Timeline Strategy Consulting

Auto Sales: Good News on the Horizon?

I'm a little confused here. You drew me to the article with a headline about auto sales, but in the end it's only about selling cars as a way to sell satellite radio. That's misleading.

But if we are to discuss what the headline says, your conclusion about the auto industry sounds like what a junkie always says about their current state. Just get them one more hit and everything will be OK. What happens next time oil goes to $150 a barrel? Does GM, Ford, or Chrysler have any real innovation that can stand up to Toyota or Honda then? If they think this 'economic storm' is temporary they are sadly mistaken. I understand the need for them to get some cash flow but if my tax dollars are going to a bailout, for which I am not opposed in principle, I want to know that my investment is sound.

For instance, what should and will happen to the Janesville, Wisconsin plant that has produced 1,000 Tahoes and Suburbans per day during cheap oil? GM should take the pain and say that they are keeping that factory open to produce the first high-volume alternative energy vehicle. A country that re-tooled 20% of its manufacturing capacity in 18 months during WWII can and must put tremendous energy into getting these plants re-tooled not in years, but in months. The point of singling out the Janesville factory is partly symbolic, and partly practical. There needs to be a consortium between university research, the Federal government, and auto makers to make these ideas happen in the present, not in 10 or 20 years.

Until then, any good news is an illusion.