This piece is the opinion of Roger Nasser and does not reflect the opinion of TundraHeadquarters.com (not affiliated with Toyota).

The latest solution to the American auto industry’s woes (while waiting for a government bailout), apparently, is to sell – either in toto or in pieces. That “strategy” is favored because it’s much less bloody than actually trying to figure out what’s gone wrong over the last 40 years.

Of course, none of the principals have accepted any responsibility in the sales slumps or financial losses. At Ford, GM, and Chrysler (the Detroit three), the management has been blaming the unions and the EPA. Dwindling numbers of overpaid autoworkers point their fingers at the salary packages doled out to management. Consumers lambaste the Detroit three for making nothing but gas guzzlers, but who was buying all those SUVs in the 90’s?

Of course, all of these excuses ignore the fact that Asian and European car companies selling products in the U.S. have many of the same issues to overcome, not to mention currency fluctuations and ever increasing international transportation costs. For the Detroit Three , blaming somebody else is more satisfying.

Selling off assets follows the “law of the sea” – when you’re sinking, you off-load dead weight. Or, in the case of Ford and GM, you off-load valuable cargo so you can keep the dead weight. In an effort to bolster cash reserves, Ford sold off Jaguar and Land Rover to Tata Motors of India, despite encouraging signs that both brands were on track to return to profitability. Volvo, which has been horribly mis-managed by Ford, is rumored to be the next major Ford asset available for sale. Jeep, the jewel of Chrysler, is said to be on the open market. Why sell the only brand that makes money, Chrysler?

GM is now shopping Hummer, with Tata Motors rumored to be a potential buyer. In China, where GM enjoys decent sales (probably because there’s no EPA), uber-successful Chinese car companies Chery and Great Wall may also be in the mix. Chinese-built Hummers conjure up an unfortunate picture – Hummers, instead of tanks, running over protesters in Tiananmen Square.

Then, there’s Chrysler. Daimler bought Chrysler in 1998 for $36 billion, to much fanfare and exultations of becoming the world’s biggest car company. Less than 10 years later, Daimler sold 80-percent of Chrysler to Cerberus Capital Management for $7.4 billion. Now Cerberus, encumbered by a car company whose profits are almost entirely dependent on trucks and SUV’s “can’t give [Chrysler] away on Seventh Avenue,” (to borrow an apt lyric from the Rolling Stones).

Watching giant companies fall is scary, especially given the potential for their falling on top of us. As an American, thinking about just how far Ford, GM, and Chrysler have fallen is just a little bit sad too – yet any sympathy for the Detroit three is quelled by the sure knowledge that:

  • Highly paid and criminally negligent auto executives should have seen it coming a long time ago.
  • Frightfully overpaid autoworkers should have known the ride would have to end eventually.
  • Irrational Wall Street investors refused to look at the big picture, emphasizing short-term profits at the expense of long-term viability.

The truth is, the collapse of the Detroit three has been a long time coming. Little econo-boxes from Europe and Asia were being gobbled up by young baby-boomers in the late 60s, breaking the tenuous thread of family brand loyalty. Concern over smog and scarcity of oil supplies aren’t the children of the 21st century. Born in the ‘70s, they’re now fully blown adults. The expectation that you’re going to get value for your automotive buck started with Ford, Olds and Leland, but now looks offshore. Toyota and Honda didn’t emerge yesterday as dominant forces – they’ve been creeping up on the number one spot for the last three decades. Little sputterings of innovation on the part of the Detroit three have fallen short of their goals (Saturn) or have taken so long from concept to introduction, we forgot they were coming (Dodge Challenger).

It’s difficult to generate much sympathy for the not-so-Big Three. Sympathy for the communities they once supported? Yes. For the convention-bound dinosaurs headed for extinction? No. Maybe from the ashes of the Detroit three, something that resembles a 21st century auto manufacturer will struggle free.

Popularity: 2%