What Is Next In The US Automotive Industry For Ford, GM and Chrysler.

Implications: Ford announced it was bringing six European vehicles to the US market and GM announced it was closing four truck Plants and adding shifts and new products to other plants.  While driven by the marketplace and predominantly by the price of fuel, this represents a departure from past downturns.

Analysis:   Since post World War ll, the Asian automotive companies gained US market share immediately after each recession at nearly twice their normal market share rate.  The analysis showed that during each recession Ford Motor, General Motors and Chrysler cut back substantially on new model investments and when the recession ended each had a new product line “hole” that took 3-4 years to close once they resumed their design and investments.  The Asians manufacturers led by Toyota on the other hand continued with their cycle plan,  even increasing their new product pipeline and at recession end, were ready to offer the buying public a fresh lineup of vehicles to choose from. 
Listening to the news coming out of Detroit, Ford, GM, and Chrysler in mid-year 2008 has Ford completely revamping its lineup by 2010, bringing over six European small vehicles into the US, converting three truck plants to produce small cars and doubling hybrids by 2009 , GM closing 4 truck plants, adding a shift to produce more Malibu’s and Pontiac G6’s, negotiating for incentives to build the Volt in Detroit and   preparing for the new Cobalt and G5, with Chrysler out looking for partners like Nissan, Chery, and maybe Tata to assist it in getting product to the dealerships with minimal investment. All three are spending heavily in Powertrain improvements necessary for improved fuel economy.
Execution is always the key, as is liquidity but what is different this time from the past is while to varying degrees all are investing now, not simply relying on cost reductions, layoffs, and downsizing to get them through.  That approach hasn’t worked in the past and won’t this time either.  Product, Product, Product is the answer, at the right price of course!!