Tom Krishner, of the Associated Press, did a great piece on the ongoing struggles of the Big Three auto companies.
Just as I alluded to in my post on Tuesday the Big Three will have to become more innovative if they hope to reclaim their thrown from the Japanese Auto makers. Before they can do this though, they will have to adjust some things internally. Specifically:
1) Legacy Cost. Considering that GM, Ford, Chrysler charge an additional $2000 per vehicle to cover the costs of retired UAW members smacks of "What do we do now?" The Big Three is essentially financing the benefits and pensions of workers that have long retired or passed. Although the auto makers agreed to pass the costs of the pension onto the UAW where will they get the cash to fulfill this contractual obligation?
2) Create New Innovations. The Big Three must start thinking in terms of creating fuel efficient vehicles, and off loading the huge SUV's that brought them early returns, but have been an incredible financial drag for the past 5 years.
3) Someone has to be the bigger person. What do I mean by this? The Big Three and the UAW have to sit down at the table and discuss how they can help each other. This is not about who has the leverage, or who has the juice. This is about business partners down to their last cent struggling to prove their relevancy to the world.
Come on folks! Let's get it together.
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