US car sector on the verge of collapse
With news that Chrysler LLC and General Motors Corp are on the verge of bankruptcy in the US, the worldwide motor industry stands on the edge of a very deep abyss. The prospect that the two giants of the US sector will fall under government control and be highly influenced by union actions is something which nobody in the business arena would like to see, although it now appears inevitable.
There are serious concerns that under government control, with the help of the unions, these two giants would be redirected to produce vehicles demanded by Washington even if this is not in the best interests of consumers. There is also significant risk of substantial job cuts in the short term as the two companies, whether in bankruptcy or under government control, come to terms with the massive fall in demand across the world.
We have seen a similar situation the UK although unfortunately UK motor industry has already been decimated over the last 20 years with the vast majority of vehicles sold in the UK now imported from overseas. However, it will be interesting to see how the unions actually respond to their new responsibilities and whether suggested conflicts of interest do materialise.
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