Monday, December 15, 2008

When Your Competition Wants to Save You ...

You know you have problems.  Many of the foreign automakers like Toyota have come out on the side of a U.S. automotive bailout.  Much of their reasoning seems sound.  They want to ensure that the industry is healthy overall.  They want to be sure that any suppliers which they may share stay in business.  They do not want to see the U.S. fall deeper into a recession thus stifling demand for their own cars.

But I really think they have a much more sinister agenda.  They like having the weak competition.  Think about it.  If you could play against the Washington Generals every night,why would you not?  Having manufacturers as inept as the Big Three give the likes of Toyota and Honda very weak competition.  Now imagine if one or two of the big three fail.  Say you have the Big One.  Would it not make for much tougher competition if you had to go against a lean mean American Manufacturer?

Worse yet, imagine if all the American Auto Manufacturers collapsed.  Now let us say a low cost Korean or Chinese manufacturer comes in and buys the assets of the failed Big Three.  Do you think the Japanese Auto makers want to see that?  Why should you as an American care?  Because strong competition can only benefit you.  If the Japanese actually face stiff competition instead of companies who lose billions of dollars, they will have no choice but to lower their prices, increase their quality, or both.  The winners in this would be the American Public.  The losers of course would not just be the American car industry, but it would be the Japanese as well who have benefited from the poor competition!

So why do I want to bailout the Big Three again?

1 comment:

  1. We need to stop more of the same. GM has had its chance to change. They could have hired different engineers and reinvented their cars. They could followed suit to go green 3 years ago. They could have done many things... but the truth is they chose not to. They made the decision to stick to the path with a dead end. I say let them!