General Motors, the American British Leyland
In 1979, the voters of Britain went to the polls. The result of that election would go on to have repercussions that can still be felt today. The voters made a brave choice. A first for British politics. The good people of the British Isles voted for a woman. At the time, the British car industry had a few problems and as a result government money, our money, was used to prop up an ailing industry that produced bad cars, badly.
Controlled by the unions, British Leyland was doomed to failure, but had to be supported to avoid the losses of hundreds of thousands of jobs. So it was. Billions of pounds were used to keep a company going that built cars that people did not want to buy. Old technology, poor build quality and union strikes all contributed in making the British car industry a laughing stock worldwide.
So what happened to the British car industry? Simple, it collapsed. Over the following years the profitable bits were sold off to companies that could make cars people wanted to buy. The bits that nobody wanted died a slow painful death, notably the Rover brand that finally curled its toes up in 2005.
Fast forward thirty years and American voters have just been to the polls. The voters made a brave choice. A first for American politics. The Good people of the U.S. of A. voted for an African American. As you know, the American auto industry is having a few problems at the moment and as a result, government money, your money, is being asked for to prop up an ailing industry that produces bad cars, badly.
Thirty years ago in Britain there was a huge push to buy British. A great idea apart from the fact that the goods you were buying were inferior to those manufactured by the Japanese and the Germans. No doubt there are those over the pond who currently espouse this as the cure to their industries woes, unfortunately, it didn’t work here and it will never work there. Germany and Japan produce cars that sell in every market in the world. People dream of owning a Mercedes Benz or a top of the range Lexus. Not many people look to General Motors for their next dream car.
With all of America’s big three deeply in trouble and even more deeply in debt, Barrack Obama will have a difficult choice to make. Invest billions of public money to support an industry, that to onlookers seems doomed to failure, or don’t invest and let capitalism take its course. Either way, this American dilemma certainly bears a striking resemblance to the fortunes of the UK car industry and we all know what happened to that.
To survive in any form, American manufacturers must try to build cars that will sell in all markets, domestic and overseas. The problem they face is that overseas manufacturers already do this and if we’re being brutally honest, they do it quite well. So instead of wasting all those billions propping up an ailing industry, why not buy Mercedes or Toyota and move them to the US? It may cost you more in the short term, but in the long term you’ll have a car industry that builds quality cars that people will want to buy throughout the world. The alternative? Well, take a look at British Leyland.