Burns

The Big three are going to be the big three losers.  The big three I am talking about are Ford, GM and Chrysler.  Will these companies be able to fend off the out of country companies like Honda and Toyota.

Toyota says that they are right here in the states, but because the radio is put in the car here in the states doesn?t mean it was built here.  The United Auto Workers can be blamed for both helping and hurting the American car producing industry.  The Union and its leaders are costing the Chrysler group an estimated 1.5 billion dollars on the year because it refuses to negotiate health care coverage for employees because those losses are not significant enough.    The cross-town rival Ford and GM had however lost a significant sum of money, they lost 1.6 Billion and 5.4 Billion, respectively, last year and the UAW helped lower that by asking some members to make some consessions.  By comparison the Ford retirees will be paying around $2 per day for coverage of their family and less than a dollar for no family.  Current employees have also forgone a $1 / hour pay increase to help the companies financial woes.

By rejecting the healthcare cuts today for Chrysler, they are just setting up for larger cuts in other markets where the American people will have to pay more for an American made car.  Are these American made cars better?  I don?t think they are and I will probably not buy one when I graduate.  Right now my mind is probably going to go with a Nissan unless somehow a Ford Edge finds its way into my price range.  We just don?t make cars good enough for the average person to maintain and operate.  The large engine cars of the past that have driven American working men and women are no longer needed.  We can get around in a four cylinder car that get better gas mileage and costs less.  Many of Chryslers new designs are for SUV?s and trucks and in this market there is no room for these vehicles.

Ford may be able to make the switch to the smaller cars, but is running low on profits from the explorer sales boom of the nineties and the F150 boom over the last 15 years.  These vehicles are not selling as well as they were and as Ford continues to pour resources into these vehicles they will continue to lose money.  Jaguar has always appeared to be a luxury car, but has not been pushed hard enough in my opinion as a luxury car.  I picture it below a Cadillac or a BMW and I think it should be on the same level as those vehicles.  I realize that they have Lincoln, but who drives a Lincoln or Buick that is under the age of 65?

While the Health Care problems may be causing huge problems for the auto makers, there are many other problems in the American auto industry which I think need great attention in order for it to survive.  Without the UAW?s support and willingness to work with employees we could see all three companies demise by the end of 2010.