As I went over the materials from the class, I decided that answering the question, “Are the Detroit Three Back?” was one of the key points. So, what do you think? Are GM, Ford, and Chrysler doing well now?
Bloomberg suggests that these three companies that were “famed for hubris and mismanagement a few years ago,” are now doing much better. As we all know, GM and Chrysler went through bankruptcy. Although Ford did manage to survive without bailout funds, it still asked Congress for an emergency $9 billion credit line.
Today, they are all doing well. GM reported that they made $9.19 billion profit in 2011, and Ford and Chrysler reported their best sales since before the recession in March. This leads to the assumption that they are building cars that people actually want to buy now.
General Motors (GM) hopes that with their new model “Corvette Stingray,” they can get a whole new sort line of buyers, the ones same buyers who drive Audi or BMW. More importantly, GM wants to improve their reputation, which is known as a brand that makes lousy cars. If it succeeds, then it will be a new era for the American auto industry. One of my concerns about GM is that the price of their stock has to go to pay off the $49.5 billion bailout. Hopefully the price goes up soon for the repayment. Ford and Chrysler are also following GM’s strategy.
Also, the difference in quality of American cars and Japanese cars has reduced significantly, so the reputation of American cars has changed. Hopefully, this fact will help the Detroit Three to return to their former place of glory.