Death Spiral?

Some days, at work, the mood is so black you would think that we Americans were in the same shape as MG Rover or Mitsubishi. We really aren't, yet.

I can't help but think, at present, that GM and Ford are in a death spiral. Unless something fundamental changes, in 5 years there won't be both a GM and Ford as we know them. An all-out collapse is unlikely, when you considering the economic damage that would ensue. What I see happening is a decline in market share, and erosion of financials, until GM is forced to re-organize under Chapter 11, and Ford is merged with a cash-rich competitor, such as Honda.

The legacy costs of the Big 2 have to be addressed. Without GM and Ford growing market share, the pension plans and healthcare costs are, like Social Security, not sustainable. And what do you think the chances of market share increase really are, given the ascendancy of Toyota, Honda, and Nissan? With Hyundai growing, and Bricklin getting ready to lob Chinese econo-boxes across the Pacific ocean?

The effects on the economy of SE Michigan will devastating, like a nuclear weapon.

(What do you think? Am I being too gloomy?)

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