The Automobile Industry of the Future
It seems like only a few years ago when the Green Bay Packers would be playing several games on Monday night football. When that would happen, there would be a large amount of absenteeism at the Janesville GM plant. The managers at the plant would go on to remedy this situation by adding a bunch of TVs. How many trucks would get produce that many? I don't know, but apparently the employees had a good time watching football during a day at work. This coming Monday night may be one of the last for the Janesville GM employees to enjoy a night of hard labor and football simultaneously.
This scenario alone did not create the circumstances for closing a plant in Janesville, but it may have contributed at least in a small way. For many years, Janesville has been a proud producer of large GM gas guzzling vehicles. For years, the Janesville plant has also been demonized for producing large GM gas guzzling vehicles. However, this one plant is certainly not the only culprit for what is wrong with the automobile industry today.
Last week, the three Chairman of the respective automobile corporations traveled by private jet to Washington DC to ask Congress for a taxpayer bailout. Even though we have just entered this new era of taxpayer-funded bailouts, it seems like the tide is already beginning to turn. An important industry such as automobiles in America should not be disappearing from the American landscape after 100 years of existence. However, the way they are doing business cannot continue if they are going to survive and taxpayers cannot afford bail out after bailout.
It's not even about the cars. The big three are producing quality automobiles. But, if they're too high priced, Americans are not going to buy them. Hidden in the price tag of an automobile, is a huge retirement obligation, huge healthcare obligations, and a union wage which may be too high for the present market conditions. In the 1970s, the big three automakers were notorious for turning out cars of low quality. They were made with the mindset of planned obsolescence. The UAW was able to negotiate high paying generous contracts without the foresight to see that in 30 years they would be practically ruining the American automobile industry. In the 1970s, we also had our first oil embargo. Automobile manufacturers have focused on producing cars that would get higher mileage. Ford was producing the Pinto Pony MPG. This small car got about 26 miles to the gallon. Now after 30 years of research and development, Ford is now proudly offering cars that get about 26 miles to the gallon. Evidently, the research and development did not stay focused on improving mileage. The 1990s proved that greed was good for the auto industry. They produced SUVs which produced $10,000 per vehicle profit for the company by estimate. With profits like that, you would not think that 15 years later everyone was thinking bankruptcy.
What does the automobile industry have to do? Well, as were finding out there is no easy answer. Is producing hybrid cars and the only answer? Is ridding themselves of the retirement obligations enough? Will going out of business because for America? Is the auto industry going to take the same direction as the television industry did? The American producers of TVs have seemed to all but disappear having been replaced by Japanese imports. As consumers, it seemed to not have made that much difference. It has not improved the quality of the shows. However, I don't think America will be benefited to enter a time when Ford, Chevrolet, Dodge, et al., drive off into the sunset like the Plymouth, Oldsmobile, Rambler, Desoto, Hudson, Duesenberg, Hupmobile, Oakland, . . and the rest.
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