Domestic Carmakers At A Cross Roads
By Lance Winslow
US automakers are having a rough go of it. Many believe this is because of fuel prices. Most of the cars on the sales lots are SUVs, which are high profit items for manufacturers and dealers, but not desired by consumers presently. People want inexpensive cars to operate, ones, which use less fuel. This current paradigm is not too dissimilar to the last major down turn in US automaker problems when Japanese automakers seized the advantage by mass producing less expensive and more economical vehicles.

Ford has cut its next fiscal year earnings and is advising investors it is tightening its belts to offset the slow US vehicle sales. The last twelve months have seen a big decrease in sales for Ford, General Motors and Chrysler. Chrysler has not been as bad off as Ford and GM. Ford is cutting off bonuses and cutting its work force by huge numbers in the 20,000 range. Both Ford and GM have had their credit ratings cut to junk status and some wonder if this is also a sign of them reneging on their under funded pension obligations?

Meanwhile both