A sea of cars–the auto industry resurgence.

President Obama visited metro Detroit auto plants today. Here are highlights and a few thoughts and questions about the auto industry. 
 
HIGHLIGHTS: 
  • I got the sense the President really liked the Chevy Volt.  As for the test drive, he was only able to go a few feet due to safety, so it was more like an “inch-along “. 
  • Why the Chevy Volt got attention:  According to Chevrolet’s website, “The Volt is an electric car that uses gas to create its own electricity. Plug it in, let it charge overnight, and it’s ready to run on a pure electric charge for up to 40 miles — gas and emissions free. After that, Volt keeps going, even if you can’t plug it in. Volt uses a range-extending gas generator that produces enough energy to power it for hundreds of miles on a single tank of gas.” ( I am intrigued by the car’s technology, reduced dependence on gas, and it’s look– something about those beautiful car “eyes”. 😀 )

  

Chevy Volt. Image retrieved from http://www.chevrolet.com.

 MORE HIGHLIGHTS:  

  • The President said  the Cash for Clunkers program worked to stimulate industry activity, despite the  naysayers who suggested letting the American auto industry sink.
  • New jobs were recently announced in the auto-industry, resulting in 55,000 new jobs since last June.
  • A male autoworker thanked the President and told him, ‘I needed to get out of the house’. The President suggested the guy’s wife probably liked the change more. 🙂
  •  “This is the first time since 2004 that all three auto companies are showing profits,” said President Obama. ( I knew we should have purchased Ford stock when it was at $2.00 a share!)

Ford profitability 2009
  •  One of the biggest cheers rose from the crowd when President Obama said he’d learned about the fate of Chrysler’s Sterling Heights Assembly Plant. Chrysler corporate headquarters attributes Sergio Marchionne, Chrysler Group CEO with credit for this decision: “Chrysler Group’s decision to keep the Sterling Heights (Mich.) Assembly Plant (SHAP) open beyond 2012 and add a second shift of nearly 900 workers in early 2011 was reached in order to support the company’s long-term product plan. After a careful review of all of our manufacturing operations, it became evident that more production capacity was needed and it made good business sense to extend the life of SHAP.” 
 

 

MY FINAL THOUGHTS  AND QUESTIONS: 

 Why did the auto industry  struggle  for so many years?  Was it more than the economy?  How will production respond to people being encouraged to save money and rely less on credit?

 

When I first moved to Michigan I was astounded by the sea of cars on a lot nearby–collecting dust, receiving rain, and waiting for buyers.  The auto  industry had sunk and maybe it was knowledge of the industry’s struggle along with images of rows and rows of cars that caused concern.  Also, the unemployment rate in Michigan was increasing.

Who would buy the cars?  Surely, the well compensated leadership has already thought this through, right?

I asked older acquaintances about their car-buying habits decades ago. Were there lots full of cars? How often did you buy a new car?   I asked them to describe the new car buying experience and they told me:

 “We only had one car.”

 “We bought used cars.”

“New cars were a luxury we couldn’t afford.”

“They might have had a few new cars, but  you had to order the car you wanted.”

Some shared their thoughts on why auto production shifted long ago from an ordering system to a sea of available cars. Speculations ranged from union influences to increased consumer purchasing habits, and combinations of both, along with other ideas. Yet, despite news of profit margins,  few reports are heard about more than a return to production and new technology.

How will the auto industry adjust to changes in buyer habits?

It is thrilling to hear auto workers have gone back to work. I hope and pray the cities  around the industry begin to show signs of life–Michigan needs it desperately.  But there is still something awry in a sea of waiting cars…

How did this happen? What have we done to reasonably make sure this never happens again? Is that even possible?

One can only hope the solutions have been found. 

Auto industry, America needs you!  You might be teaching the most valuable lesson around!

Caio~   

Kerstin

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