Hot on Facebook

Angry Dad Shoots Daughter's Laptop ... after she criticized her parents on Facebook »

Detroit Bailout Highlights an Industry That's Moved On

'Big Three' sink while other carmakers swim

By Kevin Spak, Newser Staff

Posted Nov 10, 2008 9:59 AM CST

(Newser) – The government seems poised to bail out the auto industry, but there are two auto industries, writes Joseph White in the Wall Street Journal. There’s the unionized, drowning Big Three, stuck with ancient product strategies and huge retiree health obligations, and the non-unionized, mostly healthy foreign-owned manufacturers. This second group surely wouldn’t get any government cash, but they’re the ones with viable business models for the global economy.

GM’s plea for government help is proof that the old way of making cars is over. If the government props up these companies, it’ll risk delaying the restructuring they so desperately need. With global competition, companies can only expect 10%-15% market share, not the 29% GM is built for. “Does the government want to get into the business of subsidizing job cuts?” White wonders.

[Images (3)]

[Quotes (1)]

The sign hangs over the logo on the grille of a 2006 Toyota Pruis for sale on the lot of a Toyota dealership in the south Denver suburb of Centennial, colo., on Sunday, Aug. 27, 2006. (AP Photo/David Zalubowski, FILE)

The GM logo hangs over an unsold 2009 Acadia sports-utility vehicle on the lot at a GMC Truck dealership in the south Denver suburb of Littleton, Colo., on Sunday, Oct. 12, 2008. (AP Photo/David Zalubowski)

Unsold 2009 Corollas and Matrixs sit at a Toyota dealership in the southeast Denver suburb of Centennial, Colo., on Sunday, Nov. 2, 2008. (AP Photo/David Zalubowski)

« Prev« Prev | Next »Next » Slideshow

Does the government want to get into the business of subsidizing job cuts — paying for retraining and relocation for those who lose their jobs?
- Joseph White

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

OTHER STORIES ON OUR RADAR

Getty Images

Which Celebrity Wants His Johnson Back? (NewsOne)

Man Impaled With Golf Club for Playing Too Slowly (HuffPost)

Odd Way Katy Perry Signed Her Divorce Settlement (CeleBuzz)

20 Hotties You'd Never Want to Marry (Bleacher Report)

We Can't Do That To Mom (Slate)

Partner Links

A snapshot of the day's best news stories.

View Larger Grid

All Today Yesterday Pick a Date

COMMENTS

Read the comment policy

Showing 3 of 5 comments

Guest

Nov 22, 2008 5:41 AM CST

Let the Big 3 go bankrupt. Use government money for CONSUMER car loans for consumers to buy Big 3 autos, should consumers choose to do so. These would be traditional loans. Just that they would be available in our current credit vaccuum. If the Big 3 still insist on building products no one wants, then no one will tap the government-backed loan instruments.

Guest

Nov 14, 2008 9:20 PM CST

If GM, FORD and CHRYSLER were producing this car, they would not be in Washington asking for our tax money. First legitimate ELECTRIC CAR coming to the market. Safe, reliable and affordable. Check it out............ Article: http://planetgreen.discovery.com/tech-transport/electric-c100-vehicle.html Video-You Tube: http://www.youtube.com/watch?v=hog9wpZCg8U BeGreen Advocate

Guest

Nov 9, 2008 11:38 PM CST

I'm hoping any bailout deal will require production of at least some electric vehicles, the rest should be modified for fuel efficiency. We know GM already produced very good electric cars that they chose to take off the market. Why not force them to begin production on them again? There could be a very nice silver lining to this cloud!

What's Popular Now on Facebook

Frisbees Are OK on LA Beaches

Angry Dad Shoots Daughter's Laptop

Wall Street Journal (Source Grid »)

Obama vows to help auto industry
Economic Times (India)

Why executives are ruling out bankruptcy
Detroit Free Press

Auto industry too big to fail
Chicago Tribune

Money

Chrysler • General Motors • Ford • auto industry • Big Three • Japanese auto industry • bailout

More Newser Stories

Chrysler Roars to $225M Profit

Finishes first profitable year since its bankruptcy

(NEWSER) - Call it a comeback if you want, because it looks like Chrysler is finally back on its feet. Detroit's smallest automaker posted a $225 million profit today to complete its first profitable year since its bankruptcy and bailout in 2009, the New York Times reports. The profit came on the back of $15.1 billion in revenues, up a whopping 41% from this time last year. More»

GM Reclaims World's No.1 Spot

2011 disasters knock Toyota into 3rd place

(NEWSER) - General Motors is back on top of the world less than three years after its bankruptcy and restructuring. The company is once again the world's top-selling automaker, with 9 million sales worldwide in 2011, almost a million more than second-placed Volkswagen. Toyota, which took top spot from GM in 2008, fell into third place after production cuts caused by the earthquake and tsunami in Japan and flooding in Thailand. More»

Saab Declares Bankruptcy

GM vetoes deal involving Chinese company

(NEWSER) - Saab finally threw in the towel today, after former owner General Motors once again vetoed a rescue plan involving China’s Zhejiang Youngman Lotus Automobile. Saab’s current owner, Swedish Automobile, filed for its bankruptcy, saying that "the company, without further funding, will be insolvent, and that filing bankruptcy is in the best interests of its creditors." Saab hasn’t made any cars since April, thanks to growing debts, Reuters reports. More»

Ford Recalls 129K Cars: Wheels Might Fall Off

2010-11 Ford Fusions and Mercury Milans affected

(NEWSER) - As far as reasons for a recall goes, this one's up there with the best: Ford is recalling 129,000 Ford Fusions and Mercury Milans because the wheels might fall off. The cars affected are from 2010 and 2011 with 17-inch steel (not alloy) wheels, reports Reuters . Ford has seen one case in which a front wheel fell off while the car was in motion and five more involving rear wheels. Apparently, mounting pads or rear brake discs that provide support aren't up to snuff. All the cars were built at an assembly plant in Mexico. More»

Car Sales Jumped 14% Last Month

Chrysler, VW saw huge gains

(NEWSER) - Americans may be worried about the economy, but they still need to get where they’re going. Auto sales beat expectations last month, rising 14% to 994,721, their fastest sales pace since August 2009, reports the AP . Chrysler led the pack: The automaker’s sales jumped 45%, Reuters reports. Close behind was Volkswagen, whose sales soared 41%; Hyundai, Nissan, and Ford also saw double-digit gains. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

Detroit Bailout Highlights an Industry That's Moved On