We’ve spent a lot of time at this blog discussing the problems of General Motors, Ford, and Chrysler. The Detroit Three have certainly faced more than their fair share of difficulties because of the economic troubles gripping the global markets. One of the things we have not done, however, is give the future consideration when it comes to these companies. What should the Detroit Three do and what could the Detroit Three do to regain their composure and reliability on the world stage?
Without a shadow of a doubt, the word “bankruptcy” rings some bells. This would allow automakers to slash costs, reduce unnecessary dealers, and scrap union contracts until there’s no tomorrow. Naturally, the downside is that consumers will experience even less confidence on the automakers and sales may slump even further. A bankruptcy may allow some companies to cut their losses, though.
On the other hand, the “bailout” process is enticing for some. The bailouts, which will likely come with a host of preconditions, could offer the car companies a much-needed injection of cash. The conditions will likely be related to quality control and the creation of new green technology, something that will sell well in the eyes of the consumer. If car companies accept the bailout cash and do what they’re supposed to do, they could recover nicely.
Naturally, one wonders where the bailout money will come from (the consumer) and what will happen if bankrupcty is the option (jobs lost, contracts torn up). In the end, are we seeing a new era of Chevy cars and Ford trucks? Is the idea of conventional dealerships a myth to be remembered in the past only? Only time will tell.
