Written by: Andy Watkins
Editor - BusinessDetroit.com
The media has been publishing story after story of a possible merger between two of the largest U.S. automakers this week. General Motors and Chrysler may become one very large auto company, but does this make any sense. If this does occur will it save them from going out of business, will it lower their overhead or will it just delay the inevitable distruction of both car companies. These are all great questions, but if it does happen, whoever does the buying the other will lay in waste. If GM decides to buy Chrysler in these uncertain times then it could destory their existence forever. Why don't they wait and just work on lowering their overhead internally first, get rid of all the bad assets, then merge as one making them a solid new company with little waste. If they decide to merge prior to the cut backs I fear that the UAW will fight them on every cut back the new company makes knowing perfectly well that they are in big trouble.
The merger between the two is a good idea because it will lower production costs, overhead and operation costs including labor costs. The auto industry needs less players in order for it to stay alive. Since the 1970's automakers have each lost market shares due to the large increase of new car companies around the globe. We currently have about 4 to 5 too many car companies, so if this merger does occur it will help all the automakers in the industry.
Tuesday, October 21, 2008
Wednesday, October 15, 2008
What's Next for the big three or should I say small 3
written by: Andy Watkins - BusinessDetroit.com editor
Well today the stock market took another dive and everyone is shaking their heads wondering what went wrong. Well, we in Michigan weren't surprised because we've been in this mess for the last 8 years or more. Due to the fact that General Motors, Chysler and Ford Motor started to close their plants down across the state of Michigan years ago to move them to areas of this planet with low paying wages.
I spoke of these bad decisions years ago and again months ago regarding this massive move of labor to a low economic areas in a fast growing economy in China. Well guess what I was correct in saying it was a bad decision and now the big three are in a very big mess, but don't worry our wondeful government will bail them out like usual.
This is another bad idea where our government uses our tax dollars to help companies who basically turned their backs on the hard working auto worker. We need to let the free market make the proper adjustments and trust me it will if we let it. We need to share our thoughts with the elected officials and tell them to stop bailing out all these companies. The elected officials claim they are doing to protect main street, well guys and gals your dead wrong...you are hurting us more then ever...you need to get out of the way allow the free market make the adjustments it needs to. Yes, main street will suffer, but I strongly believe we will suffer less if the free market handles it directly without the help of the U.S. governement, who many of the individuals approving these bailouts couldn't run a company if their life depended on it.
Well, what would happen if General Motors, AIG, or Chase Bank went out of business? Simple, the free market would allow solid companies the opportunity to increase market share, assets, credit lines, labor etc... and they would be able to become more stable and grow as needed due to the competition being less in that market. Then free market would suggest that a possible opening would occur at the lower end of the industry and new businesses would be born that are more effect and would produce a better overall product.
Instead, we've lost our minds and dumped billions on top of billions in hopes that bad leaders, bad policies, bad ideas, bad companies, bad CEO's would all just fade away. Now we've given them time to stay in the game and delay the economic rebound by years.
As always our state felt the first blow of this bad economy and we will be the last to recover thanks to our great automakers bad decisions.
Well today the stock market took another dive and everyone is shaking their heads wondering what went wrong. Well, we in Michigan weren't surprised because we've been in this mess for the last 8 years or more. Due to the fact that General Motors, Chysler and Ford Motor started to close their plants down across the state of Michigan years ago to move them to areas of this planet with low paying wages.
I spoke of these bad decisions years ago and again months ago regarding this massive move of labor to a low economic areas in a fast growing economy in China. Well guess what I was correct in saying it was a bad decision and now the big three are in a very big mess, but don't worry our wondeful government will bail them out like usual.
This is another bad idea where our government uses our tax dollars to help companies who basically turned their backs on the hard working auto worker. We need to let the free market make the proper adjustments and trust me it will if we let it. We need to share our thoughts with the elected officials and tell them to stop bailing out all these companies. The elected officials claim they are doing to protect main street, well guys and gals your dead wrong...you are hurting us more then ever...you need to get out of the way allow the free market make the adjustments it needs to. Yes, main street will suffer, but I strongly believe we will suffer less if the free market handles it directly without the help of the U.S. governement, who many of the individuals approving these bailouts couldn't run a company if their life depended on it.
Well, what would happen if General Motors, AIG, or Chase Bank went out of business? Simple, the free market would allow solid companies the opportunity to increase market share, assets, credit lines, labor etc... and they would be able to become more stable and grow as needed due to the competition being less in that market. Then free market would suggest that a possible opening would occur at the lower end of the industry and new businesses would be born that are more effect and would produce a better overall product.
Instead, we've lost our minds and dumped billions on top of billions in hopes that bad leaders, bad policies, bad ideas, bad companies, bad CEO's would all just fade away. Now we've given them time to stay in the game and delay the economic rebound by years.
As always our state felt the first blow of this bad economy and we will be the last to recover thanks to our great automakers bad decisions.
Subscribe to:
Posts (Atom)
Posts
