Carmakers Facing Harsh Reality

Many of the world's leading CEOs in car manufacturing are learning a simple truth, perhaps for the first time: it ain't the 1950's anymore. While the automobile industry built a powerful empire in the post WWII economy, largely fueled by America's new obsession with personal mobility, today the only thing seeming to take a drive are profits--and they're heading southbound.

According to the Los Angeles Times, General Motors Corp., Chrysler, Ferrari, Rolls-Royce, Land Rover, and Suzuki Motor Corp are all withdrawing from the nation's premier auto show in Detroit, and several have pulled out of other leading shows in L.A., Chicago, and New York. The Times writes:

"'Clearly, we're affected,' said Andy Fuzesi, general manager and co-owner of the L.A. Auto Show, which has nearly 20% fewer exhibitors at this year's show compared with last year, when nearly 100 companies paid to show their wares to more than 1 million visitors at the Los Angeles Convention Center. 'Everybody is clearly reassessing where they spend their money.'"

Through October, US auto sales took an overall plummet of 15% compared with last year, with Subaru being the only manufacturer to actually sell more cars this year than last. Some manufacturers actually have some models to work up enthusiasm about, such as Chrysler with three new electric concept vehicles, but are instead unloading the price of running a display onto its network of local dealerships The Times also quoted Barry Toepke, a public relations executive at automotive firm RWB: "Corporate usually shoulders a big part of the expenses."

GM and Ford also lost a combined $30 billion in the first nine months of this year, spurring them and Chrysler to recently lobby for federal aid amidst the current bailout talks.

Obviously the auto industry is taking a hit like everyone else in the suffering global economy. It could be mostly temporary, but with greater enthusiasm for public transportation, and more awareness of global warming, it's difficult to say whether or not traditional, gas-fueld vehicles will ever return to the same profit status again. With GM recently announcing plans to lay off 55,000 employees, it's also difficult to say how the rest of us plan to deal with it.

Read More Articles at WeEarth.com

Want to Shop with the Earth in mind? Check out our Earth-minded Marketplace!