The future of the American car industry is in serious jeopardy. The origin of the demise of General Motors certainly began within. It moved too slowly, its products are priced too high, its quality was perceived as being too low. One would think that a company as large as General Motors who has been able to withstand recession and boom times for about 100 years may have finally met its match. Another mistake was turning to the United States government for aid. Or is it a bailout?
Last week's forced resignation of the chairman of General Motors, Rick Waggoner, comes as a surprise if not a shock. At first, we don't know what to think. Is it the beginning of the end? And how soon will they end arrive? Then, we step back and analyze the situation and assess that may be Rick Waggoner may not be the right person to head General Motors at this time. However, what I find troubling is that it is the White House that forced his resignation. Politicians are now expected to have better judgment to lead an automobile industry than people who have been in the industry for decades. Obama did not like his plan for the future. Well, it was never reported what Obama was looking for. One can only speculate. Was he looking for the end of the gasoline powered car in a short couple of years to be completely replaced by electric automobiles?
There has been debate on whether or not the oil industries or the auto mobile industries have been looking to keep Americans in the gasoline powered automobiles. There have been unsupported stories for years stating that there is a better carburetor that would have given us 40 miles per gallon on a Ford LTD back in the 1970s. I believed that for a while until one day I told this story taking the angle that the oil companies had us over a barrel. Well, my friend Carl, who I was telling the story to, told me that there will has never been any evidence to back that up. As far back as 100 years ago, there were auto companies producing electric cars but they did not have the range that the gasoline automobile had. So it largely became a market solution that the gasoline powered automobile would prevail.
I don't believe that there are very many Americans that enjoy forking over millions of dollars each day to get to the oil companies especially the ones in countries that are hostile to American interests. Americans would also feel better about buying American cars if there was no doubt in their mind that they were the best in the world. Whether they are or not, the perception is they are not. And perception is reality. Americans like the idea of having new cars. But the cost makes it prohibitive to have a new car every year. Too much of the cost is over priced labor, both in the office and in the factory, and the cost of healthcare attributed to the workers of the company represents a large piece of the price of a car whether we know it or not. America needs some sort of an auto industry. We are far too great a nation to have to import all of our automobiles from other countries. Some sort of reorganization is needed with the American auto industry. The big question is, can we do it before chapter 11?