Think everything will be hunky-dory by, well, 2012? (Watch the movie.) Fitch Ratings thinks the U.S. auto industry won’t get back on its feet anytime soon. Worse, the industry may be caught in an “airline-style” cycle of repetitive bankruptcies because of weak sales and a glut of production capacity. It is unusual for a U.S. airline (and many elsewhere) to not be in bankruptcy or not have been at some point.
Amongst the rating agencies, Fitch is the only halfway good one. They were the lone voice that had warned against the dangers of the collateralized debt obligations that brought the world to the brink of disaster.
In a report cited by Reuters, Fitch says that high fixed costs, the lengthy periods required to develop new products and chronic overcapacity will leave the industry “littered with failures—plants, product lines, brands and companies.”
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Tagged as Bertel Schmitt, boom and bust, brink of disaster, collateralized debt obligations, Fitch, fitch ratings, government money, Industry, overcapacity, production
Recent Comments
BombayBerke - I’m gay and drive a Mercedes and a Volvo, please tell me more about how “shit” my cars are.
Scoutdude - Sorry but this isn’t a case of maintained decay. This vehicle has had a make over at some point in it’s life. That is...
lilpoindexter - If my GF was shopping for a new car, and she told me she was considering one of these, I would be sad.
probert - I agree. With all the rabid Tesla bashing it is refreshing to see how the DOE money...
probert - It does mean something in terms of who controls the capital. A foreign company...
canddmeyer - Nice vehicle, or so it appears, but for that kind of money I’d lease it or look elsewhere.
CJinSD - I was still seeing these as daily drivers regularly in the ’80s. There were very few other cars from 1960-1962 still on the...
Luke42 - Yup — the car business, and many of the companies, are global. Which car is more...
CJinSD - I forget the exact details, but I believe it was because the government stated that in 1965 all cars used in government fleets had to...
Luke42 - One Ford is really turning Ford from an American company in to a global company. Note...