What The Car Industry Needs To Do In Order To Survive

The American car industry has been greatly affected by the economy

. There is no denying that Detroit has essentially been "reset." However, government bailouts aside, the question remains, what does the car industry need to do in order to survive?

Granted, the government bailouts received much criticism from many people, some of them may understand the economy on which Detroit was built and others may not. What needs to be noted is that this meltdown was years in the making. Ever since the 1970s Detroit has focused on pushing big cars. Even during the 1980s when carmakers like Toyota and Honda were dominating the American market because of high fuel prices, Ford, Chrysler and GM continued to push the "boats" that may look great, but couldn't ever compete with foreign fuel capacity.

Americans though, love their big cars. With the 1990s came the explosion of the SUV and suddenly every suburban soccer mom needed an urban assault vehicle in order to get Jennie to ballet practice. The cars, trucks and SUVs got bigger and bigger, and suddenly, Americans were broke.

The economy of Detroit, of Michigan really, was built on the automotive industry and the state is currently bleeding; financially, economically, and politically because of the crash of the automotive industry. While many people give a simple solution, "Just start making smaller cars," doesn't really fly in the face of reality. Why? Because for 30 years, the Big 3 did nothing but build factories and equipment for producing big cars and trucks, and the technology to simply "switch these factories over" is not there. Well, it could be there, but there is no money to do it because Americans are not buying cars right now and auto manufacturers have sky high expenses related to employee wages, healthcare, as well as sales profitability and marketing.

While the simple solution to the problem is to start producing the cars that have the fuel economy that Americans are suddenly interested in, American car companies are getting beat by foreign manufacturers because those companies abroad have been producing smaller cars all along. Hence, they do not have to "redesign" their companies in order to make a switch in technology.

The question remains though, even if the technology is there, do American manufacturers truly want to produce smaller and more fuel efficient cars? Or are automakers more worried about their profits and not about what the public is interested in buying?

There is opportunity for increased profitability in the future for the Big 3, but an attitude adjustment is needed. Big cars, trucks and SUVs will always be popular in America, but maybe automakers need to realize that a segment of the population is interested in something more, not only better fuel economy, but also protecting the environment. Now is the time for automakers to begin changing their minds in order to change their plants. Bailouts only go so far and if the American public is interested in developing a new mindset towards the type of car that they drive, the automakers should modify their opinion towards what they sell.

by: Levi Quinn

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