What are These Guys Doing Here?

I'm still trying to get my head around why Ford, Chrysler, and GM are coming here looking for "lines of credit" from the Federal Government...other than the fact that Wall Street won't back them.

Why is Detroit in trouble? I don't think it's necessarily the product. Dependning on who you talk to, the so-called "Big Three" make cars that pound for pound match anything made my Mercedes, or BMW, or Toyota, or Nissan, or any other manufacturer. Indeed American were honored as some of the best made cars and trucks in the world.



While a compelling argument can be made that some of the CEOs at American car makers are not as well educated as some of the CEOs at foreign (headquartered) car makers, the men at the helm of GM, and Chrysler, and Ford aren't ignorant. Academically, these are accomplished men, holding a wealth or corporate leadership and managment experience.

Is it the fact that people can't get financing for a car loan? No, I don't think so. I do think people were worried about the economy and they decided to forgo descretionary purchases like a new car. This and climbing oil prices of the last few months.

I also don't think unions, pension costs, and auto worker healthcare costs were the problem. Possibly one could argue, rather convincingly, that these elements, combined with the rapid rise in oil prices earlier this year, could be the "proximate cause" of the financial problems Detroit suffers. Another proximate cause would definitely be the demand, the the fufillment of demand, for SUVs.

But these challenges are what managers manage. If these challenges were not managed, was there a failure in the management of the automakers?

I haven't figured exactly what the problem is that led Detroit to this point. I do want to spend some time studying the Ford, GM, and Chrysler business models. In the meantime, while I'm not sure I'm 100% in favor of a bailout, If Congress does provide emergency short-term funding, they are 100% right to demand to see their plans as to how they will make their respective companies profitable, as well as how they plan to pay any moneis borrowed back.