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Cue Thelma and Louise

Guest blogger Rodger Low is a marketing and communications strategist with 15 years of automotive industry experience. Based in Los Angeles, he has worked with manufacturers such as Honda, Toyota and Subaru.

As we do with everything at this time of year, let’s take a moment to reflect upon the nation’s biggest manufacturing industry and at the same time its biggest head-scratcher. Just how did we get to the point where the US-based automotive industry seems on the brink of extinction.  The Once-Big-Three have now become the corporate equivalent of the Salvation Army – ringing its bell at every threshold in Washington, DC, and beyond to get whatever “bailout” funds it can get its hands on just to get through the short term.

But let’s take a closer look at the situation, and what has led us down this path to automotive irrelevance. Did this really come out of nowhere, born out of the recent credit crunch? Or were there signs over the past few years that might have prevented any or all of this?  If you listened to the corporate heads plead their case on Capitol Hill recently, they had no way of knowing that this sales slide was going to be so drastic and so prolonged, and that their cash reserves were so low.

Let’s Play “Guess That Trend”

Posted by Milos Sugovic

“The market makes the news – not the other way around” according to a blog post on The Big Picture. The argument: journalists report what happened, not what will happen. To investors, news is history, especially when it comes to stock prices, and what matters is tomorrow, not yesterday. 

I disagree: Tomorrow’s expectations are a function of today’s news. What else are expectations based on? Fortune-telling? The horoscope?

As “evidence,” the blog post refers to the last 30 years of Time Magazine covers and stock market performance, namely the Dow Jones Industrial Index, on the day of the issue release and ten years later. Here it is:

Whistling Past the Graveyard

Posted by Matt Purdue

So what to do with GM and friends? Fascinating story in the New York Times hints at how GM and other automakers are failing at the public relations game as they beg and plead for a bailout from the federal government (e.g. taxpayers). 

Michelle Maynard notes that op/ed writers, lawmakers and the public in general are blaming automakers for their own troubles. And in that very American tradition, we’re telling the auto industry to take its lumps and pull itself up by its bootstraps.  After all, the automakers have for years been fighting higher fuel efficiency standards, insisting on making gas-thirsty trucks and SUVs in a world faced with volatile fuel prices and a global-warming crisis. And many American cars have slipped in the reliability ratings behind even South Korean models from the likes of Hyundai and Kia. 

But what’s really going on here? Bottom line is that we Americans have a love affair with gas-guzzlers. For years, Ford’s F-150 pickup and its chief competitor, Chevy’s Silverado, were America’s best-selling vehicles. Now get this: falling gas prices have spurred so much demand for SUVs that workers at GMs plant in Texas who assemble behemoths like the Cadillac Escalade are expected to be on overtime for the rest of the year turning out these monsters. This is 2008. How much more evidence do stupid Americans need that the actions of their gas-pedal foot correlate directly with rising temperatures, volatile weather, melting icecaps and drowning polar bears? And, really, who is an auto company CEO to stop them from driving a Cadillac Escalade (12 miles per gallon in the city)?