33Nick

3 Scenarios for The Future of the Auto Industry

It would seem worse case scenario, that the companies would be sold off in pieces and bits. But that doesn't mean foreign investors would automatically want to buy a US based car factory. And what would be so wrong with it? Is it only normal if we invest abroad and not the other way around? Surely new blood wouldn't be bad in our car industry.

If the dollar keeps on going up, as it has, this would favor local VCs and investors and hopefully pull together new companies that are more adapted to modern demands.

Hopefully, the new startups and technology companies involved with electric cars and hybrids could pickup some parts of the big 3 and grow to replace our ill adapted cars.

There are many alternatives and I don't think we should concentrate on the worse cases. After all, many far reaching companies have been in this situation and we are still here as a nation. What comes up, will come down, and go up again.

Is One Automaker Default Almost a Sure Thing?

There are two things that worry me about GM and in general the way business is done and hopefully was done.

GM is spending a $5 million party at the Detroit auto show to show its line of vehicles that is currently not selling well. It's kind of the Microsoft way of doing business, if it doesn't sale, throw money at it until it does. I would rather see GM use that $5 million by working on bringing in practical vehicles they sell elsewhere and innovate.

But by probably waiting for a "lending hand" from the government and the bad antecedents it already set, it feels GM is not that motivated to work it out on its own. It's a tricky situation but I would rather see that company use that money with research instead of partying.