Monday, November 23, 2009

Choices and Options

Last winter, when the US Automotive Big 3 were in trouble, or at least 2 of the 3 were in trouble. They had a lot of choices. Choices that determine whether they were going to make it, not just in 2009, but 2010, 2011, 2012 and beyond.

GM and Chrysler had to set a strategy that would change how they were going to operate. They had a chance to set a new strategy.

They had several things that caused them to be unprofitable in the past: onerous benefit packages, poor supplier relations, too many brands that broke down the market segments too finitely, re-tooling new models every year, etc.

Bankruptcy allows them to renegotiate the benefit packages.

They got rid of some brands.

Not sure what they've done about supplier relations.

However, it's pretty certain that they will still put out new models every year, wasting millions or billions of dollars in tooling and production line changes. Instead they should try letting the 2011 Chevy Malibu be like the 2010 Chevy Malibu. See if anyone notices.

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