It is difficult not to read electric vehicles, EV news without hearing how bad Detroit is doing.
The gist, this is that we have aggregated in the space of a day.
Seeking Alpha, no less than 5 stories. First look gist, the all-time low-level bonds of the big 3 make dirt cheap low bonds that could quadruple in a few years. Hopefully…
Then there is the will they, won’t they survive story. The gist is the big 3 scare congress by saying: “Help us survive the worst financial crisis in a quarter century or the U.S. economy will suffer yet unimaginable pain.” Scare tactics.
And Peter Morici, economist and professor at the University of Maryland School of Business testified Tuesday at Congress with the car makers. The gist, the losing market shares of the Detroit 3 over the last decades is because of higher labor costs, due to higher wages than competition, benefits and work rules, poor management decisions, and less than fully supportive government policies. Than answer? Chapter 11 reorganization, with the hopes to reemerge with new labor agreements, reduced debt, strengthened management, and produce cars at costs and quality comparable to the Japanese and foreign competition built in the U.S..
The Wall Street Journal feels GM deserves support. Oh wait, Mr. Wagoner wrote the story… silly us. The gist, when Mr. Wagoner says vague things like: “At General Motors, we have been responding to fierce competition here and abroad by transforming our business. Over the past decade, we have taken tough actions to cut costs, at the same time investing billions in fuel-efficient vehicles and new generations of advanced propulsion technologies.” many are left wondering exactly what is he concretely and measurably talking about and where are the results? And as for the rest: “The future of the domestic auto business is critical to the health of the U.S. economy. It is a vital engine of economic growth and a foundation of economic stability. It remains a path of upward mobility for millions of American families. For America to compete in the global marketplace in the 21st century, it needs a strong manufacturing base and a vital domestic auto industry.” is a good example of management speak.
In DetNews, Mr. Wagoner explains himself but it is painful. The gist, it’s not our fault, it’s the crisis. Though this can be argued, its a thin one. A company needs to have contingency plans if it wants to have a chance when problems happen. It wasn’t the case in Detroit. A company needs to be competitive when other offer cheaper, better products with lower labor wages. Sorry Mr. Wagoner, this doesn’t add up. It’s vague at best.
That’s it for a run of news around the fate of Detroit. How does this effect our electric cars, we hear you say? Plenty. While the big, heavy, strangely managed big companies frantically try to stay solvent, smaller, lighter, more agile true innovators have shown electric cars do work, are a current reality while foreign makers continue their worldwide dominance.