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Why American auto industry is in crisis? (2009)

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At the turn of 2009, many American auto manufacturers are calling for government assistance to enable the continuity of their business. Around the world, manufacturers want to reduce their activity against a decline in demand, this time it happened so fast that they didn't see it coming quickly and they have been hit hard.

When Henry Ford made history by applying a business model (buy now/pay later) little did they, or people realize that later it will be taken as a reference model for the World Economy. One hundred years later, the market changes challenged this model.

The economic turmoil was in front and in full force, with serious consequences to businesses which were unable or ready to weather the storm. Is it an industry that is doomed? However, such difficulties may well push one to find alternative models for the Auto Industry.

In all cases, these calls for help, which are currently the subject of much attention concerning the bail out fund. That is to say that beyond the threat of bankruptcy due to lack of cash, the question is how to meet the long-term problems of the sector with falling business profitability and regarding a sector in crisis, forced to temporarily close its plants in order to adjust supply to the steady decline in demand.

The other continents are not far behind. Although the most affected part, are companies in Europe and Asia that are in a difficult position. The French Renault, for instance, temporarily closed two of its plants and expects to reduce its production by 20%. Same for Peugeot SA, who says it wants to drastically lower much of its production. In Asia it's Nissan, Mazda and of course Toyota , who see their sales decline.

The failure of today and perhaps the disappearance of the major automobile industries are the expression of a deep global economic change. Western industries, in general, tend to decline, and that too in many areas. In the end, it is learned that the consultations held at the U.S. Congress to distribute 15 billion dollars to the manufacturers failed.

Although the U.S. government tries to convince Congress of the importance of aid, it is reasonable to ask whether the United States, and the wider Western world, have not resolved to rid the industry of aging, this they call the "Dirty Business Part of manufacturing", to refocus on a healthy economy, based on a generalized servicization.

Viable for almost exactly a century (Ford 1908 to 2008), the American model car is now out of breath. More profitable and competitive enough, it puts into question a long-term logic, convicted, will disappear in the coming years. One can see the most major restructuring of this automobile giant in the global market.

Industries, mainly in Asia, will begin to grab the market share that was formerly owned by General Motors, Ford and Chrysler. It is reasonable to ask whether, in the longer term, the Europeans (including Germany and France are the main representatives) will not come to an end similar to this.

Tags: American auto industry; Ford; GM; Chrysler in crisis;

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