Too many cars....

Too many cars being made by too many people means that something has to give. Add to that mix the way the recent rise in fuel costs has made people think about what they are buying. Even though the price of oil has come down, people know that when the economy picks up the price will likely rise again.

So the current situation does not look good for this industry. Even TATA has been caught short with its recent acquisition of Jaguar and Landrover. Whilst a wonderful move at the right time by Ford, it must be a shock to TATA. Toyota is seeing a massive increases in the cost per vehicle as the Dollar changes to the Yen as well as a reduction in sales. The difference is that Toyota is ideally situated with a good balance sheet and strong reserves of cash to be able to weather the current climate.

So in the midst of this unsettled automobile market place, we see the big three in America go to Washington to beg for some money. What do they do? They each take their company jet from Detroit to Washington to appear before congress!!!!!

Is nobody in these three major companies in touch with the perception of the world outside? Can they not see how ridiculous this makes them look? Wow, I am amazed at how insular people can become at a time when the world is looking for leadership to guide us through the next 18 months.

At a time like this there is a need to consolidate and work together. Why aren’t these people getting together to make massive reductions in wasteful costs. At the end of the day, there is a speed limit on the roads and so an engine only has to be a certain size with a certain level of transmission. Can’t these people see that working together on certain aspects of their business can actually save them? Standardize as much as they can and collaborate.

Boeing has become a designer of aeroplanes now and that has been a major step forward. If they had not made the switch, the likelihood is that they may not have survived till now. The big three automakers need to think what their role is and how they can work together to save their industry AND grow it.

Now is a time to think differently. I was hoping the three of them would have come with a joint plan as well as individual plans to Washington this week.

Maybe it is not that important to them after all!