Friday, November 7, 2008

Continued bad news from U.S. automakers

Reports from Detroit, Mich., that General Motors Corp. and Ford Motor Co. suffered bigger-than-expected quarterly losses cast further doubt on the survival of the U.S. automobile industry in the global financial crisis. The two largest U.S. automakers said they would aggressively cut costs in the fourth quarter, according to the Reuters international news service. But the two companies, whose share prices have tumbled in recent years, reported spending nearly $15 billion in the quarter just to stay in business. "The issue in short-term liquidity is the state of the auto industry and so we said we're going to put all our efforts on focusing on that issue for now," GM chief executive Rick Wagoner told CNBC television. Let's make this easy for you -- build better small cars that compare favorably with those being built in Japan and Germany. How hard is that to understand? It's more than 30 years since the Arab oil embargo put the world on notice that it would have to be more efficient, yet U.S. carmakers seem not to have heard. Instead, domestic output has involved poor-quality vehicles and heavy-duty lobbying for tax breaks. Why is it still not a crime to run richly profitable and esteemed companies into the ground?

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