Talk about a flat learning curve - the US auto industry was bailed out back in 2009 as part of the TARP stimulus package for the banking and auto industry, but they're right back to the same business practices that made them vulnerable to global marketing pressures. If things went south again, they'd be right back in the same pickle. Why?
Well, GM, Chrysler and Ford like to do things the old-fashioned way. Every time gas prices dropped, Detroit made bigger, less fuel-efficient vehicles, and sold them on styling. No need for the average urbanite to drive a sensible vehicle when s/he can have a two ton behemoth to pop down to the corner store for a loaf of bread in. I mean, you look GOOD in that SUV, right? In 2008 there were hundreds of thousands of gas-guzzling high-clearance 4WD vehicles sitting in garages all over the country that have never been off the pavement, thanks to the domestic auto industry's marketing and the public's gullibility. Hummers, Lincoln Navigators, Ford Expeditions - these vehicles are large enough to be seen from the moon.
When the 2008 crisis hit, Detroit was caught flat-footed. Gas prices soared, financing dried up, and people were worried about their jobs - IF they still had one. All Detroit had to sell was the same old boats. Car dealerships looked like marinas with hundreds of unsold yachts docked there permanently. The remaining auto market was leaner and heavily skewed toward smaller, more fuel-efficient imports.
The auto industry bailout required $80 billion of taxpayers money, all but $11.7 billion of which was recovered. That's actually a good deal, compared to the alternative - vulture capitalists like Mitt Romney picking over the carcasses, 4.15 million jobs down the toilet, and a $105.3 billion hit to government revenues if the whole industry had collapsed.
You'd think GM, Ford and Chrysler would have learned their lesson, and gone with a different vehicle lineup post-bailout, but NOOOO, gas prices are low and they're cranking out the behemoths again.
