According to Maryann Keller, an automotive consultant and former investment analyst with more than 28 years of experience, there are two possible theories on which we could base the drastic intervention.
First, the auto manufacturers could start all over again by outsourcing major component systems and give up on the traditional dealers. Second, five or six giant companies should rule in a globally consolidated auto industry.
Despite the realistic economical intentions of these theory’s, they only make sense on paper. In practice the auto industry is a special case. You can say that this industry doesn’t work by the basic laws of the market and never has. This is namely due to enormous political influence. Over the last year only, governments around the world have pumped more than 100 bn dollars in the automotive industry to keep their champions going.
A clear exa
mple of this is GM’s Opel division. From the economic point of view, Opel should die or be reorganized. Instead of following this perspective, the German government did everything in its power to keep the division within her borders. Of course this takes higher investments than when they could shut the high-cost plants down and open new ones in cheaper countries. So the government forces Opel’s new owners to increase production to make a return on their investment. Which directly contains unemployment for many Germans.If we rather have to thank the governments or criticize them for their efforts remains questionable. Certain is that the automobile industry’s future won’t be different from its past. Even when it seems hopeless, political measures will continue to help them to survive.
Personally I believe that you can offer a helping hand but you can’t save everyone. Sometimes you need to make sacrifices so you can take a fresh start. Closing big companies in bad papers, despite the fact that they have a world-known brand, gives opportunities to upstart entrepreneurs and fresh investment capital.
We must remain critical towards government interference. Many entrepreneurs are struggling right now. Governments financial resources aren’t infinite. Where do they draw the line? On what do they base their decision to take measures or not? Many already feel like they’re left in the cold.
By Evelien Van Gaeveren
Source: www.businessweek.com
article:‘Why remaking the auto Industry makes no sense’
Link: http://www.businessweek.com/lifestyle/content/sep2009/bw20090929_277702.htm
Hey Evelien,
BeantwoordenVerwijderenYou’ve chosen a very good article and you’ve wrote it fluent in your one words. We can’t deny the fact that it’s not going well in the car sector, especially with Opel.
But, my article goes about the improvement of the economy and there is said that the government is stimulating people to buy a new eco-friendly car by giving them ‘eco-discounts’. So this is a good thing for the car sector to help them forward.
And I think that the car sector should respond more to this and that they should invest more (with the help of the government and other investors) in more eco-friendly technology and cars and that they have to stimulate consumers to be more environmentally conscious. Off course, the government should help the car sector to stimulate people by giving them more tax benefits for example.
Greet,
Livine