GM’s story is an old one — even for GM

[DainBramaged]

So the question becomes this: Why are so many people now rooting for the demise of America's auto industry? After all, in the early 1990s both BMW and Mercedes-Benz saw their sales fall in this country to barely over what Saab has been selling in recent years. And 15 years ago both Kia and Hyundai were considered automotive jokes — not to mention that both Korean carmakers were effectively bankrupt a few years later. Volkswagen's total U.S. sales in the mid-'90s were less than half the volume GM's new Malibu is achieving.

All of these car companies experienced incredible comebacks and did so in short order. People today spend in excess of $40,000 to buy a new Hyundai Genesis, although it is likely none ever made payments on a 1994 Excel. Then again, no one dismisses Hyundai's resurgence or new engineering brilliance by constantly throwing up their past products to marginalize their present vehicles. Much in the same way, no one discusses the fact that Honda's Acura division lost money in this country for more than a decade; but if GM has a division that is losing money — whoa, that's a big problem.

So what are we going to do if we lose most of our domestic auto industry? Import more automobiles to make up the volume? Wait for the Japanese and Germans to build more factories here to supply U.S. demand? Or give China the big opening they've been waiting for into the U.S. market?

And if we do, then how do we deal with another couple of million good-paying jobs lost forever, or another massive increase in our foreign deficit? That's right, we don't have any good policy options.

I've only been saying this for a year.............



http://www.msnbc.msn.com/id/30389457//

[flvegan]

1. I have not, and will not ever "root for the demise of America's auto industry"

Kia, Hyundai, etc are still damaged brand marques to me. AND, as impressive as the Genesis Coupe is (in the top HP trim) I'd not have one.

China...don't get me started on their shitty ripoff cars.

[Sen. Walter Sobchak]

2. few are rooting for the demise of the auto industry

many however object to throwing good money after bad when the probability of viable and competitive automakers coming out the other end are minimal. Detroit wasn't just smacked hard by the Bush depression, they have been in trouble for years and holding their hand through this isn't going to leave them any better off.

The problem for Detroit is they built their business around internal cross-subsudies, they became much too dependent on high-margin vehicles built on truck platforms. And while they managed to scrape by like this for decades they can no longer turn a tangible profit on the stand-alone sales of a basic small car. The economics that supported the old paradigm are gone for good since the demand for the high-margin vehicles is obviously diminished and will remain that way for years to come.

So even if Detroit could nuke the Honda Civic and Toyota Camry in quality, performance and price - they still probably couldn't make money on it. So, where is the viable business?