View Single Post
Old 05-08-2009, 05:13 PM   #9
JaysonAych
 
JaysonAych's Avatar
 
Drives: 2002 Dodge Stratus
Join Date: Jan 2008
Location: Louisville
Posts: 429
I think that estimate of "one maybe two" isn't far off if you're simply taking into account the current market conditions and the way automakers are set up to make money right now, and not how considering how they would fare if they were more efficient. With all of the bigger automakers doing business in the US--both foreign and domestic--seeing their sales drop around 40%, that's a serious cut if your company is dependent on getting a small amount of profit per unit, but selling a huge amount of units. If you're suddenly selling 60% of what you sold a year ago, but still have the same large amount of overhead and infrastructure, it's nigh-impossible to get bills paid. And considering a year ago that each member of the Big 3 were operating with a dealer and factory network that assumed each company had another 7-10% market share than what they really had, as cutthroat as the competition in the US market is right now, 3 mainstream US automakers are going to find it difficult to survive.

Now, if companies go through massive restructuring, like the big 3 have been doing recently to find a way slash their infrastructure to better represent and support the number of products they actually sell, and make a larger profit per unit to sustain them when they're not selling as many, then yes all 3 can find ways to thrive. But not at the current level at which they're operating their respective empires. With the comparatively small amount of profit American automakers get per unit, there are not enough sales right now to split between them to where they could make more than what it costs to run their businesses.
__________________
Better make sure my passing lane change blinker works...
JaysonAych is offline   Reply With Quote