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Merger, divestiture won’t rescue Detroit’s automakers


October 11, 2008/12.02

[Cross-posted] It looks like the American Big Three are doing pretty much what I warned them against in my ‘Saving Detroit’ piece presented to the Medinge Group in August.
   GM and Chrysler have had exploratory merger talks, while Ford may sell its controlling stake in Mazda.
   They have cited dropping sales, caused in part by their reliance on trucks and SUVs in years past.
   I can only say, ‘I told you so,’ when I warned of this exposure a decade ago.
   The sad thing is that GM and Ford make excellent small cars—just that they don’t let Americans buy them. In the meantime, they get trounced by the Japanese and Koreans in their home market—even though they’ve paid for the R&D of models that Americans would love.
   They needed to look at motoring commentators, examine the globalized tastes in small cars and learn to listen to their customers.
   But this was all too hard given the arrogance of at least the Big Two, GM and Ford, which have managed to weather hard times in the past.
   Their US operations have usually been mired in politicking and Ford, in particular, has often rejected the work of its Köln subsidiary for decades.
   Chrysler, meanwhile, fell victim to German brand mismanagement under Daimler-Benz AG. As a US company, the lean Chrysler of the 1990s was a business darling because of its rapid R&D processes and its market orientation. It even understood its three brands very well.
   Add to that the Americans’ obsession with short-term results—the problems that Medinge warned about many years ago, and which are also to blame for its ?nancial crisis today, and there are serious systemic issues to work out before things can come right for the Big Three. If they ever do. (Continued at

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Filed by Jack Yan

2 thoughts on ‘Merger, divestiture won’t rescue Detroit’s automakers

  1. I wish you were wrong what has happened to our country and the rest of the world,we need to do thing’s differently.Our industry needs to pro-active not re-active thanx

  2. I wish I were wrong about it, too, Loozegear—I enjoy the familiarity. I even admire it if it were not for the corruption within. The system itself, in my opinion, is not totally wrong, but we need to fix the way it operates.

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