Why Will the American Auto Industry Fail?
Following a system of management, distribution, and production that was destined to fail (call it “Sloanism” if you’d like), it is a miracle that there are any American auto manufacturers in existence today. The entire system is fatally flawed, has been for decades at least — maybe always like this. It’s the Henry Ford plan, whereby the customer can have any color he wants, as long as it’s black. And this is exactly what we’re seeing during the GM/Chrysler shutdown: no new vehicles until the old ones sell. Dealerships as Scapegoats Dealers were strong-armed (under threat of losing their franchise) into taking inventory when they knew they couldn’t move it, just so The Corporation could pretend that the unsold vehicles were someone else’s problem. In order to move any inventory at all, in accordance with the Laws of Economics, the companies so desperate to keep the wheels moving in order to keep their unit-costs down, were forced to offer rebates to the customers, via the dealers. This
