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Posts Tagged ‘auto bankruptcy’

Walk down memory lane – 2003 – pretty accurate prediction

Posted by Bill Sluben on August 21, 2009

Happened along an article written by Jeffrey Garten of Yale School of Management Businessweek written for the 9/1/03 edition. In it, Mr Garten predicts that “before this decade is over, the U.S. auto business may go through some of the agonizing downsizing and even bankruptcies seen lately in steel and airlines.” And that “when the day of reckoning comes, two options will emerge: bankruptcy and bailout.”

Not that alot of pundits couldn’t accurately predict the demise of the big 3 with the bloated cost structure, huge pension obligations, and an industry that had 30% overcapacity (in 2003 nearly 20 million vehicles were produced globally…and consider that only 48 million were sold and on average consumers buy a new car every 3-4 years) and better product offerings/quality in the past from Asian entrants.

It wasn’t like we didn’t have the ingredients for a bonfire…we just needed the spark of the worst economic downtown in 70 years to watch the auto industry go down in flames!

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