My Take on The Auto Bailout

I for one am glad the current plan failed because it was too fast and we still have no idea if it would help in any way. The Big 3 need some serious restructuring. I saw a graphic at Forbes which showed GM’s sales by division. Chevy was 61%, the next three were GMC, Pontiac and Saturn all under 10%. The only other significant ones were Cadillac and Buick. I say GM should close down or sell all but these 6 brands (aka Hummer, Saab). In fact GM should just be Chevy + Cadillac like the Japanese automakers are (core brand + luxury brand). The other 4 can be spun off into an independent entity and completely restructured.

Same with ford. There have been rumors of a Volvo sale for over a year now and finally that is closer to being reality. Ford which seems to be the best off amongst the big 3 also need to do something about reducing from from Ford-Lincoln-Mercury to just Ford-Lincoln. Who needs the same car under multiple names?

If Toyota needs to offer 0% financing you know the whole industry is in trouble. Do we really want to prop up all three automakers? Is it better to let the weaker ones close? I have only driven a Chrysler car once (a Dodge Caliber – brand new rental that had only driven a couple of 1000 miles) and I can say that it is the worst car I have ever driven. It took that spot from the Kia Rio. Do we really want to throw money at carmakers when all they will do is come for more in a few months. I say take a wait and see approach and see what happens or literally force restructing down their throats if they want any money. I’m still of the opinion that bankruptcy is a better option. It works for the airlines and it might work for the automakers. I’ve seen articles about no service if dealers close, lack of parts, plummeting resale values etc. as a side effect of bankruptcy. Well most of those will happen anyway. Plus people who go to the dealer for every little thing will realize how much they were gyped once they go somewhere else for service. Resale values are already plumetting. There are millions of big 3 cars on the road. If one of them no longer will supply parts, someone else will.

If you bought a big three car and are worried that your car will drop significantly in value, talk to CA homeowners and you will realize that your problem is not that big. Just keep the damn car, don’t sell it!

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