GRUNHERZ: Miko you have yet to link how the US carmakers overall low profitability (which I will agree is caused in large part by union contracts) is the cause of their dropping market share.
Oh, no! If I made that impression, it was a mistake on my part.
I never intended to imply the US car makers would go bankrupt because of unpopularity. I even said that a temporaty selection of not-so-great models was not the reason for their poroblems.
They are selling a lot of cars. They are just not making enough money selling them to cover their liabilities.
They are already bankrupt - their liabilities greatly exceed their assets.
In other words how are the unions to balme for the unpoularity of US made passenger cars.
The retirement and benefit packages, as well as extra capacity due to not-closure of the plants and not adopting labor-saving technologies as much as they could was mostly due to the union pressure.
Even the sources you list state the cause of dropping market share is due to poor car US designs and the fact that consumers prefer the Japanese passenger cars.
This period. Not in general. In general, they have more liabilities to retirees than the number of current workers could be expected to support.
would it not make sense for US automakers to seek higher market share instead of lower market share so they could spread their fixed costs over a large volume of cars.
I am sure that selling more cars will be good for them - if they make any profit per car sold. But even if they show good profitability, they will hardly accumulate enough money to cover their liabilities. Unless DOW rises drastically to add value to the pensin funds, or they knock out their competitors completely, there may be just not enougn money whatever they do.
Plenty of companies selling a great product failed for financial reasons. It's a pity.
miko
