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).
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