Despite Big 3, US Auto Industry is Healthy
An editorial from today's WSJ:
"The U.S. auto industry as a whole is healthy and the troubles of GM, Ford and Chrysler are by and large unique to those Detroit players. This is an important distinction, because the auto executives who met with Mr. Bush are keen to present their current woes as industry-wide. And the Big Three are counting on Michigan's Democrats in Congress, who now find themselves in the majority, to help make the case.
GM posted a $10.6 billion loss last year and has closed plants and offered union-worker buyouts. Ford is downsizing its workforce in the wake of weak sales. Both companies are responding to self-inflicted wounds that result from weak product lines, plus labor deals with the United Auto Workers that include generous benefits and pensions, as well as GM's notorious Jobs Bank that pays thousands of workers for not working. GM is paying for the health care of more retired workers (and their dependents) than of active employees.
GM, Ford, Chrysler and their enablers in the new Congress would have you believe otherwise, but outside of Michigan the U.S. remains a great place to produce vehicles. Consumers have more choices in what to drive and better quality than ever. And prices are competitive. Government intervention in a market this healthy can only increase the chances that it won't stay that way."