There are two automotive industries in the U.S.

Excellent commentary from Fareed Zakaria on the split automotive industry in the U.S.

Best part:

CNN: So you are against the bailout?
No. But the reasons the CEOs of Ford, GM and Chrysler present — that they will restructure, they are still competitive, they will change — are bogus; they won’t. The best argument for the bailout is that it is the most cost-effective jobs program that the government can run in the short term.

We’ve been saying that for years 😉


12 thoughts on “There are two automotive industries in the U.S.

  1. World Peace says:

    This is the great chance for Government to take over the auto industry to make the real things happen.

    Make hybrid car’s charging process more robust; may not need any charging station.
    Make car paint or windows or both to become solar panel to charge the battery.
    Make wheels of the cars charge the battery when in motion. This would be same technology as wind mill. Rotating wheels will charge the battery. Or Active wheels.
    Make vibration of the car, like the shock or brakes, to charge the battery.
    Install wind tunnel which can also charge the battery in right places of the car.

  2. Just wondering says:

    Well, the expert opinions of a foreign correspondent on a manufacturing industry…while the sins of the past appear to be the point of all of this discussion…let me point out a few things….The US car companies absolutely rule the light and medium duty truck business, which can’t be a bad thing cause Nissan and Toyota want in..and Nissan got out as they can’t compete and Toyota has had less than stellar success in competing…even tho they put the factory in the heart of truck country-Texas. It is completely plausable that the domestic OEM’s will build high quality in the small car market. Further, anyone know who dominates the China market-GM hands down. Who is very competitive in Europe as well as South America…so apparently the miserable management doesn’t work there eh? Same for Ford. As for hybrids, well all you tree huggeers taht believe it is the answer…GET’s CO2 negative when you look at the total CO2 footprint (includes battery production) and collectively won’t ever be a meaningful share of the market. Why, because when the consumer figures out that the $35,000 hybrid needs $6,000 worth of batteries after 5 years, that will be the last one they buy. And finally, the amount of US content in these non domestic car builders is quite large (of course due to poor quality and high prices) and if you think that when GM or Ford or Chrysler stop building there is enough volume at the supplier to stay are a boob…there will be a black hole and they will all go down…no suppliers, no car business. Lastly, if ALL of the imports account for more than the Detroit 3, how many car builders are there versus the 3 in Detroit…Geez, lets use logic here and not the hyperbole that sells YOU Fareed…for YOUR benefit…another talking head…

  3. Carol Blanchard says:

    We need tax reform. For forgeign countries to be getting our auto dollars is nuts, and always has been. The Free Trade has to end. We need mirror trade. If a country only allows us to bring in 5000 American cars to thier country, then guess what we need to make the playing field even and do the same. There are so many imbedded tax dollars in the American car, that is why they cannot compete. We need to level the playing field once again. Also we need to identify the fact that the Republicans want to break the Unions so that they can get back in power in 2012. Mitt Romney plans to run for sure and wants Fox News to break the Unions with lies and propaganda all day long until he suceeds. He is such a snake as he promised to help the American Auto makers when he ran, then just as soon as the Republicans lost, he and other Republicans have been hell bent to break the Unions as a pay back for President Obama getting into office. The forgeign companies down south do not hire minorities like the Big Three. They get tax breaks from the senators and govenors, and have been building to this day in history for years.

  4. Jim says:

    Its a self serving commentary. Its also completely untrue, though it is the picture southern republicans want to paint (along with the idea that ANYONE in the big three beyond upper management makes 70 a hour)

    The industries they talk about both got MASSIVE bailouts from their home countries, as well as got huge state tax breaks from republicans controlling those states. Those states also got massive kickbacks from Germany and Japan in the term of loans from those countries which is why they are not in as dire state as the north states who have relied on the currently republican controlled senate and presidency to try to get federal funding.

    The are also blatantly anti-union, union busting any attempt by their workers to form up which they have multiple times so its not this rosy picture the senators want to paint it. Mainly of concern is healthcare, because these companies dont pay for it for their workers, which is not a issue in their home countries where government provided healthcare is in place, but in the US is, since they now have to use their salary or a loved ones salary or benefits to have healthcare. Many go without and are fired since they have minimal sick leave.

    Its also a complete lie that the big three have done nothing for environmental concerns. All but Chrysler have extremely competitive lineups with GM having the overall worldwide BEST MPG average of ANY major automaker. They have also tried to get even better foreign cars from their lineups at Opal and Chevy Europe into the country but been stopped due to different safety regulations here v abroad since the US highway safety commission puts emphasis on damage and cost of repair to the car over occupant safety, and the European one puts emphasis on occupant and pedestrian safety over car damage.

    The big three screwed up their buisness models somewhat, but in ANY time other than now it would not be a issue. What we have here is banks who where given 700 BILLION to provide loans to companies to continue operating (operation loans a standard practice in industry where you may not receive your profits until near the end of the fiscal year) withholding them, completely. Thus causing the big three to have to spend their profits on operations. Once that money runs out, they are bankrupt with NO ability to make money, and no bank willing to make a loan since they are using the money to buy other banks and extend their business through other means. Its a scam, basically, and its not CEOs who everyone who wants to give the finger to who are going to suffer this one, its the workers, and businesses who provide to those companies, the people who sell those cars, and their families. We are talking chemists, forgers, miners, engineers, you name it.

    And there is nothing this “other industry” is going to do about it. They are going to swoop in and take their plants and close them down for good. They are not going to expand, they are going to consume. But the people who profit from this, the Senate republicans from the southern states who are making millions in kickbacks from Toyota and Honda, and VW, are NEVER going to let you the average citizen know this.

    If the big three collapse you are looking at the literal END of America as a superpower. There WILL BE NOTHING LEFT.

  5. Matthew Mueller says:

    I think one key element that is being overlooked is why Detroit has been slow to jump onboard alternative fuel vehicles. The two most obvious factors have been kick backs by the oil industry and the Bush White House eliminating incentives to create fuel efficient and alternative fuel vehicles (on behalf of the oil industry).

    “Deregulation” in auto manufacturing meant that the Oil industry had the greater influence to their bottom line and as publicly traded corporations. Wonder if the Bush administration is re-thinking it’s stance on the Kyoto treaty because it seems the Big 3 would have be in much better shape had they been working towards meeting the benchmarks of that treaty.


  6. Hope says:

    Amen Jim. A few things to remember about Michigan and the carmakers 1) We would not have had the manufacturing capability to win WWII without them 2)The economy would have totally tanked following September 11 had the auto companies not offered 0% financing 3) the unions that you geniuses abhor created the 40 hour work week and the 5 day work week. Maybe you’d prefer that your 11 year old daughter work 60 hours a week sewing shoes together 4) The car companies and the unions were the catalysts for the American middle class. 5) Your non-union wage would be much lower and you probably would not have health insurance through your employer if not for the unions. The Republicans who voted this down mostly did so, not out of true principle, but because they are protecting the foreign auto makers that manufacture in their states. Senator Shelby of Alabama has given incentives totalling in the billions to lure car companies to his state but he won’t help the companies that helped build America. How un-american is that? About as un-american as Zakarias comments.

  7. JGer says:

    Right on Jim and Hope, someone needs to stand up for this industry. All this crap about American cars not being good cars is just that…crap! I own a 2008 Chevrolet and can tell everyone that it’s the best of the 10 cars I’ve owned in my life, including the one foreign car I had (sorry, that one was a mistake on my part). These companies are the backbone of our economy and have lifted so many in my home state of Ohio into the middle class over the years. This so-called journalist is yet one more example of the media, especially CNN, spreading lies and deception about the US car industry.

  8. Yuh-hwang says:

    Fareed Zakaria missed one key point. Those international companies are not the industrial base of our country. Yes, they do some research and design in the U.S.A., but most of their works here are assembly jobs (including supervisions, marketing and plant management). Any modern country needs an industrial base and Japanese companies would never be this base – the key technologies, management skills and profit are staying in Japan. Yes, those Japanese companies provide jobs, but those workers are essentially working as a hired hand in a third work country – assembling and selling cars. The same work as done in many other third-world countries. Yes, those Japanese plants here are bigger than those in many other third-world countries, but it is simply because we have a bigger market.

    It is critical for our government to save the real U.S. auto industry, which is THE base of many other manufacturing industries. The Big 3 and the UAW have to change, but to eliminate them would cause irreversible long lasting damage to our country – it could be the beginning for us to fall into a third world economy. People who promote the idea that Japanese companies can be the U.S. auto industry are either short sighted or bought by the Japanese lobby.

  9. John says:

    This is becoming a new trend in America. If some one says anything that makes sense and you do not have a solid counter argument, just call it un-american and unpatriotic.

  10. BJ says:

    Another commentary from someone who doesn’t have a clue what’s going on in the automotive world. CNN’s coverage of this is so biased it makes me sick. Ford has more hybrid vehicles on the road today than any other manufacturer. Why is it these so-called “experts” never bother to do any research, and when will CNN give some forum time to those who do know and follow the car industry? Can’t wait to hear stunning commentary from a food critic on politics, or a hairdresser discussing foreign affairs. That makes as much sense as this clown talking about things automotive that he has no idea about!!!

  11. Li says:

    “GM having the overall worldwide BEST MPG average of ANY major automaker”

    Can’t argue with that, especially when getting an average of 28 mpg in a 2008 Corvette.

  12. […] 15, 2008 · No Comments We got a lot of comments on the Fareed Zakaria story last week. We think this article deserves attention to, so here we go: Warren Brown at the […]

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