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
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)
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(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.
(Read more auto industry stories.)