The Auto Industry and Energy
Over the past few years the Big Three have done a wonderful job increasing quality, decreasing legacy costs, and designing cars and trucks that are attractive to the American consumer. Ford and GM have increased their global reach and improved their world image.
These changes set the stage for a great comeback but they were not soon enough to overcome the massive credit crunch and Wall Street melt down. The Big Three have shown that under normal ups and downs in the economy, they are able to adjust their business plans to survive.
These are not normal times. There are very few businesses that have the ability to absorb 30% or more reductions in sales in a matter of months, especially with such labor and capital intensive products. Cutting production only increases the per vehicle costs. The capital equipment and buildings supporting these lines are expensive to maintain even if idle.
The auto companies are victims to external forces beyond their control. Being a free market capitalist, I do not take lightly government intervention but in catastrophes of this magnitude, government does have a role. It is time for the government to step in and help the auto industry bridge the short term gap in dwindling sales.
This isn't enough. We all know that the price of oil will drastically drop as we decrease our need for foreign oil. This means that a massive retooling of the auto industry to support the use of clean and efficient energy will require protections that encourage customers to purchase these new vehicles regardless of the price of gas at the pump. Two years developing an electric car for production is ludicrous if the moment they come off the line, people rush back to gas guzzling trucks and cars.
President Elect Obama has a chance to change our dependence in foreign oil while jump starting the American Auto Industry. A comprehensive energy plan that protects the auto companies from fickle consumers while motivating them to decrease the footprint of new entries into the USA market with US made components is a job creating, energy saving, and economically sound solution that will define who we will be as a nation.
David Birdsall
President
Birdsall Tool & Gage Co.
Birdsall Tool & Gage Co. designs and builds fixture gages, fixed gages, inspection and gaging accessories, ring gages, plug gages, thread gages, snap gages, electronic gages, mechanical gages, data collection gages, masters and setting gages, CMM fixtures, special tools and tooling with customer satisfaction in mind. Call 248-474-5150 or email us at blog@birdsalltool.com for more information about our company.
These changes set the stage for a great comeback but they were not soon enough to overcome the massive credit crunch and Wall Street melt down. The Big Three have shown that under normal ups and downs in the economy, they are able to adjust their business plans to survive.
These are not normal times. There are very few businesses that have the ability to absorb 30% or more reductions in sales in a matter of months, especially with such labor and capital intensive products. Cutting production only increases the per vehicle costs. The capital equipment and buildings supporting these lines are expensive to maintain even if idle.
The auto companies are victims to external forces beyond their control. Being a free market capitalist, I do not take lightly government intervention but in catastrophes of this magnitude, government does have a role. It is time for the government to step in and help the auto industry bridge the short term gap in dwindling sales.
This isn't enough. We all know that the price of oil will drastically drop as we decrease our need for foreign oil. This means that a massive retooling of the auto industry to support the use of clean and efficient energy will require protections that encourage customers to purchase these new vehicles regardless of the price of gas at the pump. Two years developing an electric car for production is ludicrous if the moment they come off the line, people rush back to gas guzzling trucks and cars.
President Elect Obama has a chance to change our dependence in foreign oil while jump starting the American Auto Industry. A comprehensive energy plan that protects the auto companies from fickle consumers while motivating them to decrease the footprint of new entries into the USA market with US made components is a job creating, energy saving, and economically sound solution that will define who we will be as a nation.
David Birdsall
President
Birdsall Tool & Gage Co.
Birdsall Tool & Gage Co. designs and builds fixture gages, fixed gages, inspection and gaging accessories, ring gages, plug gages, thread gages, snap gages, electronic gages, mechanical gages, data collection gages, masters and setting gages, CMM fixtures, special tools and tooling with customer satisfaction in mind. Call 248-474-5150 or email us at blog@birdsalltool.com for more information about our company.
posted by Birdsall Tool and Gage Co. @ 9:22 AM
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