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For better and for worse, the trend in the globalizing environment in certain industries is for bigger and bigger cross-border companies and/or alliances. In the auto industry, the precursors have been Renault and Nissan, though other attempts have failed (Ford-FIAT, Daimler-Chrysler).
I believe the open skies agreement between the US and Europe for the airline industry is now in force.
In the US, the banking industry has consolidated around three money-center banks and two investment banks now with commercial bank charters, and I expect those numbers to decrease and cross-border mergers in the next several years, maybe even within a year, first among US and European banks, then Asian, and after that Latin American.
As for the domestic US auto firms, one of the major issues is the cost of labor and so-called legacy costs. What do you think is more likely:
1) the standard of living for the average worker globally will tend to rise to US/European standards of the 1950s-1990s levels, or
2) the standard of living for the average worker globally will tend to decrease towards, say, Chinese or Brazilian levels?
Take stock of the numbers and do the math.
Starting from a global perspective, the overall standard of living will rise, but not to US/European levels of the "golden age".
Mergers of huge Fortune 500 Companies like banking where they have incredible ability to control the industry and prices, has not worked very well. Many companies are getting so large that they become to big to fail, like AIG. When there is only one car company in America then we will see a situation where there is little reason to be innovative or cut costs.
I definitely want to see the Big 3 starting to do something for themselves, before coming to the taxpayers, hands extended, asking for a bailout so that they can continue "business as usual".
These are businesses for heaven's sakes...and sometimes businesses FAIL. Mine could. Just what chance would I have of getting a bailout??? Zero! But before it ever got to that, I'd be out there, contacting other guys in the same business, asking about mergers, business deals, or even going into reorganization (in which case, you're still in business).
Whatever are the Big 3 thinking? They say that negotiations with the UAW "will take time". Well, if we don't give 'em any money, maybe that would speed things up!
I would like to see Chrysler fail as I would like to reproduce some of their classic cars in the future if I ever get into the auto business. Would also like to see the end of the current UAW and new competitive unions mixed with non-union employees.
Mergers of huge Fortune 500 Companies like banking where they have incredible ability to control the industry and prices, has not worked very well. Many companies are getting so large that they become to big to fail, like AIG. When there is only one car company in America then we will see a situation where there is little reason to be innovative or cut costs.
Quote:
tallrick
Would also like to see the end of the current UAW and new competitive unions mixed with non-union employees.
To be sure, the record of big-time mergers, including the auto industry, is spotty.
Again, for better and for worse, that is the trend. Also the trend is for the relative wages of average workers to come down towards a lower standard than what prevailed in "golden age" US/Europe: part of this struggle now with the US Big 3 is to come into line with this trend.
I'm not saying that I like it or don't like it, it's simply what I see.
evidently, they don't have to do any of this because it looks like they are going to get their bailout from the TARP money. bush never met a spending package that he did not like. i would be glad to see just one political party be conservative in their spending, especially on these risky ventures.
3 big, sick companies will not be cured by becoming one big sick company. Can anyone remember British Leyland?
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