With all the news about the hurting auto industry, loans
from the government, bankruptcies and acquisitions, people tend to lose sight
of the fact that the whole automotive world, (something which has been a big
part of my life and the lives of millions of others), has been turned on its
head. Sure it may not seem like a big
deal, but this is arguably the largest and most important industry on the
planet. The products people buy from it
touch our lives daily, inspire us, and allow us the ultimate freedom,
mobility. Cars and trucks are aspirational
objects that we often depend on do to just about everything else in life, we
judge people by the vehicles they drive, and some people dedicate their lives
to careers or hobbies revolving around vehicles.
From the corporate perspective, let’s put it this way, there is hardly a single manufacturer or automotive brand that hasn’t gone through substantial change in the last 5 years, and the pace has recently accelerated. GM, the formerly largest corporation on the planet that sold almost half the cars we bought in the U.S. is a much smaller version of itself and in financial desperation. There are a lot more competitors and other factors that made this happen, but that’s just the beginning in describing our upside down automotive world. The second largest American car company, Ford will probably take over as first, the third largest is now mostly owned by Italian auto company, Fiat, part of which GM owned in the 90’s and sold at a major loss before turning it around. Fiat, (or its Alfa Romeo division), hasn’t sold vehicles here in more than 20 years and now they have control over many of Chrysler’s old dealers. Even crazier is the fact that GM used to own part of Subaru, and now Toyota owns part of them. BMW used to own Land Rover, sold them to Ford and now Tata, (a huge company in India that sells everything from tea to telecom to steel), bought Land Rover and Jaguar from Ford. So a company from a country that was a British colony now owns one of Britain’s historical car brands. Had enough craziness? Well, BMW owns MINI which was purely British, but even more importantly, they own the British ultra luxury brand Bentley while Volkswagen owns Rolls Royce. Then there are the Swedish car companies. Saab had been owned by GM for quite a while, but they just sold the brand to a small Swedish supercar maker Koenigsegg. And now it’s reported that Geely, a Chinese company with a not-so-great safety record is looking to buy the Swedish brand Volvo which is known for safety. In the last 10 years, we’ve lost the brands Eagle, Geo, Oldsmobile, and Plymouth. What’s going on? I feel like I’m in a blender. GM has closed down Pontiac, also sold Hummer to a Chinese company, sold Saturn to Penske who’s associated with racing, Hertz, and AutoNation. The latest news says they plan on selling cars from many different international companies under the formerly all-American Saturn badge.
As if this wasn’t all enough, another Indian motor vehicle manufacturer, Mahindra and Mahindra is going to start selling cars here and Tata is planning on bringing the groundbreakingly low-priced Nano over. GM’s European division Opel has been sold to both a Russian investor and Magna, a Canadian parts supplier. Think about it. A parts company owns a car company. I don’t know whether I want to buy a Chinese Volvo, an Italian Chrysler, a Malaysian Saturn or an American Chevy. I do know that I would rather support the U.S. auto industry to keep more jobs and profits in our country. So, now that my beloved Saab brand is Swedish again and not owned by GM, I doubt that I will buy another new one. I think I’ll be buying a Cadillac, Chevy, Ford or Mercury. But those Fiats and Alfa Romeos do look pretty cool. And I could support my home country a bit more by buying an Indian Jaguar, but Jaguar is not really my style. Mercedes, BMW, and Volkswagen are doing alright with their government-sponsored health care and pensions that reduce costs to the company for vehicle production. But there’s news there too. Mercedes dumped Chrysler and Volkswagen is largely owned by Porsche. Honda is doing OK given the circumstances while Toyota is hemorrhaging from perhaps trying to grow too fast. At least the Japanese car companies can thank their government for not only health care and pensions, but for currency manipulation and trade restrictions. All we need now are for the French to bring Citroens or Peugeots to the U.S. and the car market free-for-all will get more confusing. As it is, I’m in an automotive daze. I’m waiting for the dust to settle and I don’t know what to make of it yet. Maybe I’ll just build my own car, (or buy a bicycle).
As a self-proclaimed car fanatic, which is nothing new to anybody who knows me, I took to heart the recent news that Toyota surpassed GM for the top global sales thus far in 2007. It's sad even though the health of a corporation is not necessarily defined by selling the most of a product. As any business expert will tell you, there are many other factors involved. What's saddening about this event are the causes of and the effects of it. I notice a sense of Anti-Americanism that is pervading the auto industry. This industry deserves special attention because it is the backbone of our country's industrial base, and when combined with its broader cultural, safety and environmental impacts, I would argue that it is the most important industry on the planet. Our world would stop without it, (figuratively of course), as so much commerce depends on cars and trucks.
decided I had to test drive one. I clearly remember the day I test drove a similar car and how this non-impulse shopper felt as though I just had to buy one. I remember how I struggled with the affordability factor for a person who had only started working three years earlier. My friend said to me on the phone "You're not gonna buy a Saab." It indeed was beyond my price range, but with the sweet lease deals at the time and a GM employee discount, I was able to make the transaction reasonably affordable. So I leased it and then as I lived with it, I began to love it, so I had to buy it when the lease ended. And it's been with me ever since.
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