Motown Becomes Woetown

Good news came to all 300,000,000 Americans earlier this Summer - everyone of us was hired by the Big 3 automakers in Detroit. Yes that's right, each one of us now gets the employee discount. The same price every Ford, GM and Chrysler serf pays for their domestically made bucket of bolts.

The Motor City Madmen have once again reached a new low when it comes to selling cars. They are all so desperate to keep factories running so pension and health care costs can be met that they must churn out cars or perish. Yes, in the short run things will look good. However, the issue on the table has not changed - people still think Detroit still makes blah cars. The blip that all three will see in the short run will wear off quickly and they will all return back from Dreamland.

Throw out heavy trucks and a couple of models by GM (Cadillac) and Chrysler/Dodge and Detroit is still giving us a little better version of the cars we saw in Michael Moore's well done 1985 epic Roger and Me. Design, quality and marketing still win the war.

However, Detroit is not built that way. So hamstrung by concessions they have given to the UAW over the years, the Big 3 have a cost obligation that has completely dominated their scope for the better part of 15 years. It's all about volume, volume, volume and less about what people want.

The bottom line here is we should get used to the fact that good news coming out of Detroit will only arrive when moneylosing deals are thrown to customers. Right now the Big 3 are playing prevent defense just trying to survive the day. While they do that, Japan and even Korea for heaven's sakes, are running up the score on the legendary companies.

Hawk's View: I find the car industry fascinating (although I have a well known hatred of actually buying cars). Historically it has proven what is great about America. It is, to me, still what drives our economy. However, it is sad to see and industry that was once so great, be run as if it is taking cues from the Soviet Union central planning office. Detroit needs to get sober and find a middle ground with the Unions that will get costs in line. If it can't be negotiated than it may be time for a reorg to get this great industry back in the game.