Auto Crisis

Invented in 1860 by Nikolaus August Otto, the combustion engine would come to be one of the greatest outlets for industry in history, allowing many great and famous corporations to be built upon it. Though there are many different automotive corporations, most are owned by a select few “mega corporations” which include GM, Ford, Chrysler, Daimler, Porsche and Toyota along with others. Unfortunately, through horrible mismanagement, the companies controlling what could have been a very lucrative industry are now on the brink of collapse. Though there are many reasons that have coalesced to cause this “auto crisis”, as it has come to be known, there are three major reasons, these reasons being Unions, the Credit Crunch, and low quality cars.

One of the biggest obstacles to a mega corporation, GM for example, is the United Auto Workers union, which demands that auto companies, American especially, pay for many of their workers expenses, most expensive being health care. In fact, GM last year dolled out five billion dollars to provide health care for over 1.5 million people, of which they employ only 150000. These expenses are so high, that the Detroit “Big Three” have to spend over ninety billion dollars on health care alone. Because of these expenses, the price of manufacturing the car goes up, so to keep the price reasonable, GM must cut corners on the quality of the cars they sell, leading to the next problem.

It has long been joked about how low quality American cars are, but the situation this put American car companies in is no laughing matter. In fact there are many people who refuse to even test drive an American car, regardless of any intent on a purchase.