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The Current State of the U.S. Automotive Sector
As the United States has struggled to work its way through the recession for the past 18 months, arguably no sector has been affected more than the Automotive Industry. Facing slumping sales, collapsed housing and financial markets and constantly changing oil and gas prices, the automotive sector has been suffering on all fronts. Not only have U.S. automakers faced significant challenges during this time, but foreign automakers have also been forced to deal with historic losses. During this tumultuous period, the Detroit Three have seen two thirds of its members forced into bankruptcy proceedings. But what has really happened and what does the future hold for these companies?
Chrysler LLC, now Chrysler Group LLC (Auburn Hills, Michigan), which has just emerged from bankruptcy proceedings, and General Motors Corporation (OTC:GMGMQ) (GM) (Detroit, Michigan), which has recently entered bankruptcy protection, will be facing tough yet interesting times in the coming months. Each company is being forced--in part by a U.S. government that has been financing their continued operation for six months--to face the fact that it has become too cumbersome, inefficient and sloth-like to operate effectively in the current marketplace.
Changes in leadership, cutbacks in brands and models, plant closures, and job cuts will be required for both of these companies to survive the evolutionary changes that are occurring within the automotive sector. In the case of Chrysler, although the company is now out of bankruptcy protection, the changes will continue for quite some time as the new ownership group must take a firm grasp on the automaker and make the cuts and modifications necessary for the company to survive in this new climate. In the case of GM, it first must survive the bankruptcy process and then continue to evolve into a fitter, leaner, more efficient automaker.
What challenges will each automaker face now and in the future? How long will these changes take? Who exactly controls the new Chrysler? Can GM survive this much change in this short a period of time? Click here to join David Pickering, Industrial Info's Vice President of Industrial Manufacturing, in this segment of "Navigating the Currents of Change," or to hear many others covering topics important to industry spending, including trends, outlooks and focus segments.
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