Is it true that New study says automakers playing game of chicken with world overproduction?
KPMG’s 2010 Global Auto Executive Survey reports that the majority (88%) of automakers say the North American car industry is building more cars than the market can supply. The taxpayers are funding the overproduction with billions in subsidies to GM and Chrysler. The US and Canadian governments are propping up these companies in a futile attempt to rescue companies that aren’t smart enough to scale back. When an industry overproduces substantially more of an expensive product than the market needs, the participants are playing chicken to see who will go out of business first. That is the game world automakers are engaged in with production of cars estimated at 11% to 30% more than the demand. “More than 10 per cent of survey respondents said the North American industry is overbuilt by at least 40 per cent.” “General Motors received $52 billion US in government aid from Washington, and has already begun repaying $6.7 billion of that. GM chair Ed Whitacre surprised watchers on Friday by
KPMG’s 2010 Global Auto Executive Survey reports that the majority (88%) of automakers say the North American car industry is building more cars than the market can supply. The taxpayers are funding the overproduction with billions in subsidies to GM and Chrysler. The US and Canadian governments are propping up these companies in a futile attempt to rescue companies that aren’t smart enough to scale back. When an industry overproduces substantially more of an expensive product than the market needs, the participants are playing chicken to see who will go out of business first. That is the game world automakers are engaged in with production of cars estimated at 11% to 30% more than the demand. “More than 10 per cent of survey respondents said the North American industry is overbuilt by at least 40 per cent.” “General Motors received $52 billion US in government aid from Washington, and has already begun repaying $6.7 billion of that. GM chair Ed Whitacre surprised watchers on Friday by
