Friday, November 21, 2008

big 3 brake 'em down

a few days ago Kenneth Lewis the CEO of Bank of America through his two cents in about he thinks is wrong with the car industry.

He feels that the car industry should consolidate.

Not surprising giving all the merging we are seeing in the bank industry that a head of one of the nations largest banks would have this view. Of course looking at how well the bank industry is doing and the fear that was/is going on about if one of these big banks fail it could bring down the economy (ooops to late :) and one of the big fears about the big 3 going down is that it have bad effect on the economy because of all the jobs that come from the car industry (2 to 3 million) this is poor ideal.

The problem with the American car industry is actually the opposite. the car industry doesn't need to consolidate they need to be broken up into smaller companies.

not only would it cut down on the fact that if a few of these smaller car companies go under it wont be the huge impact on the economy if one (or more) of the big 3 go down.

but we would have more market competitions

and one of the huge reasons the American car industry is in such a bad shape right now was that the heads of the company where to reluctant to make improvements on their cars. making them more fuel efficient, slow to adopt to green tech etc

the big 3 where slow to work on hybrids because they didn't thank they had to and the fact that they thought the market was to small for them.

sure if we broke down the industry into smaller companies odds are lot of those companies would have also flocked to SUV but likely some would have noticed that the market for green cars wasn't really that small and would have tried to services that niche (because really that market wasn't that small) and would have found them selves in a great position when gas prices shoot up.

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