Recession Impact on Automotive Industry

It doesn't take a genius to see that the automotive industry is being severely impacted by the recession. Many consumers are scared, and consumer credit is as tight as we have seen in decades. As a result, auto sales have plummeted.

The thesis of this series is that companies and individuals should be embracing the downturn...i.e., making the most of the changed circumstances.

So what is the automotive industry doing? Well, at least the (once)Big Three of GM, Ford and Chrysler are off to Washington to tell lawmakers that the Federal Government must bail them out or there will be a catastrophe across the land. Not exactly the kind of thinking that I am suggesting is involved with adjusting for the changed times.

Speaking of not adjusting, the CEO's of the Big Three were discovered to have each flown solo, by private jet, to the Washington (DC) hearings.

What were these three CEO’s thinking? It is precisely this kind of thinking that has me, and many others, believing that the Big Three do not deserve any special treatment. (I come to that conclusion with a very heavy heart for the ripple effect that will impact so many from a bankruptcy filing by any one of the three.)

I love the wisdom of Seth Godin and his recent blog post on What To Do About Detroit is a good example of embracing change in the automotive industry. Supporters of a government bailout will undoubtedly scoff at his mind stretching idea…but, then again, lets all scoff at CEO’s who don't understand the importance of personal role modeling in challenging times.

For a less radical approach to dealing with the challenges of the auto industry, consider Jack and Suzy Welch's recent Business Week column, GM - A Case Against the Bailout.

The point is that more of the same is only going to bring more of the same. Business and executive jets as usual are hardly evidence of adjusting for changed times.

Next up: A look at how the retail industry is responding to the recession.