The Technician

Issue date: 7/30/09 Section: Opinion

Since 2005, when General Motors began falling into a fiery financial pit, they have lost over eighty billion dollars. That is enough to purchase and fill 13,455,360 dorm rooms with beer bottles, which could fill Thompson Hall 3,964 times! However, they just got hosed down by the US government, who now owns over sixty percent of what is left of an American legend.
While GM's survival is now ensured, the days of GM topping the sales charts are over. GM is shrinking rapidly, losing the majority of its presence in Europe, as well as nearly a quarter of its presence here at home. GM's core European brands, Opel and Vauxhall, are being sold to parts supplier Magna International. Saab has been sold off as well, and it's the same story for GM's US brands. While Chevrolet, Buick, Cadillac and GMC will continue to struggle in the horrible American auto market, the same can't be said for Pontiac, Saturn, and Hummer, who are currently on their deathbeds.
The situation is not much better at Chrysler. Earlier this year, the company filed for bankruptcy, which was inevitable after an abrupt divorce with Daimler in 2007. Without the luxury of Daimler's riches, Chrysler found itself unable to stay competitive in the ever-changing automotive market. Chrysler's only hope remains in the hands of internationally-focused Fiat, who now owns twenty percent of the company. With Fiat's experience in smaller, more fuel-efficient vehicles, Chrysler has one last shot at becoming a prominent automaker.
There have also been major changes to the management of both companies. Chrysler CEO Robert Nardelli, who has led the company since its sale from Daimler, has been replaced by Fiat's secret weapon. CEO Sergio Marchionne has a history of saving companies from the brink of disaster. At GM, a far more controversial shakeup has occurred, at the request of the White House. GM CEO Richard Wagoner, a thirty-one year veteran of the company, was forced to resign after failing to stop GM's slide into financial ruin. President Obama chose Fritz Henderson, who has nearly a decade less experience within GM, to replace Wagoner as CEO.
In sharp contrast, the situation in Dearborn appears far brighter. Ford is the only automaker that hasn't come running to Uncle Sam for help. Since Ford has taken responsibility for its own problems and has taken actions to resolve them internally, the company's stock has seen a 600% increase in the past eight months. For nearly a year, the company has watched as their piece of the market increased as their competitors' continually lost ground.
Bottom line: Ford knows how to handle itself. Due to a sixteen percent increase in production, the company is now in a position to become the largest automobile producer in the United States, surpassing "Big 3" rivals Toyota and GM. If Ford succeeds, it will be the biggest for the first time since Henry himself was running the show seventy-eight years ago.
If other automakers can find the nerve to do what Ford has done, we might just see a turnaround in the auto industry and maybe in the economy as a whole.

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