Hard Times for Detroit

Yesterday's big news came from GM...30,000 people will lose their jobs in multiple US and Canadian auto plant closings. It's worse than it looks:

Through October, the U.S. auto industry, including car manufacturers, supplier and auto dealers, announced 89,016 job cuts. With the latest reductions at GM, and 4,000 salaried job cuts announced Friday at Ford, the industry is on track to meet, or possibly surpass, the 2001 record of 133,686 job cuts in one year, said Challenger, Gray & Christmas, an employment consulting firm.

Forbes was somewhat predictable in its response, their lede was "General Motors is finally getting real." Fortune was pretty snarky...their Street Life columnist asks "Why does GM still exist?" And the UAW was predictable in its response: "It's not our fault."

The press, both general and automotive, have consumed millions of barrels of ink and acres of forest over the years offering up solutions to this problem. The answer, when you come right down to it, is pretty simple: product. The US auto industry will continue to experience decline until such time as they offer cars that people want to drive, at a cost they can afford. GM only offers three vehicles I want to drive right now (here, here, and here), and two of them are out of my price range.

The situation is just so sad. GM is still the world's largest auto manufacturer, but one wonders "For how long?" The hour is getting late...

(Full disclosure: I lived in Detroit for ten years. I worked for Electronic Data Systems (EDS), once a wholly-owned subsidiary of GM. A lot of my friends work for GM.)