Auto Industry Takes Top Spot. In The Doghouse

Bertel Schmitt
by Bertel Schmitt
auto industry takes top spot in the doghouse

In their never-ending quest for excellence, the U.S. auto industry is number one again. The auto sector has been voted “the most financially troubled industry in the United States next year,” writes Reuters.

Last year’s top dog was homebuilding, which was bestowed the coveted title of “Most troubled industry for 2008.” For 2009, that crown goes to the autos.

The auto industry received top honors as the result of a survey by the Turnaround Management Association, taken during the first two weeks of December.

Retail, hurt by sliding consumer spending and a drastic cut in credit availability, is seen as the second-most distressed industry for the coming year, up from 6th place last year.

The poll surveyed representatives from 213 companies with TMA membership. The respondents said a Chapter 11 bankruptcy filing was the most appropriate solution for zombiefied automakers.

This poll is no joke. It is a closely watched indicator for a small industry of bankruptcy lawyers, turnaround managers and liquidators, who move merchandise and equipment of failed businesses. “They are expected to be quite busy next year,” TMA said.

Even that shadowy business has found reasons to kvetch: “Although liquidation sales have fared better than regular retail, they are not generating historic returns,” Tom Pabst, chief operating officer of asset management firm Great American Group, said. “Fewer buyers for machinery, equipment and fixtures are driving down values. We expect liquidations to remain active through 2009, but returns will be impacted by economic conditions.”

Nevertheless, the TMA is preparing for a boom year: The TMA’s recent 20th Anniversary Convention attracted 1000 attendees. Keynote speeches were given by General Colin L. Powell and Bob Woodward. Speakers like these easily command six figures on the rubber chicken circuit.

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  • LALoser LALoser on Dec 30, 2008

    More distressed than the banking? The industry that brought the would to a dead stop, bankrupted countries, has governments dumping un-countable amounts into it from the US, China, Britain, Oz, Russia, and many more? Remember Citigroup? In one Sunday night Billion$ were dumped into it with a whimper. Then the bankers say they do not have to tell us where the money went...yes, the auto companies are worse-off....

  • on Dec 30, 2008

    Pretty soon there won't be any industries left in America. Well maybe ethanol if the government can afford the billions of dollars required to subsudize them. I wish I had an unlimited amount of money like the government. Where do they get all that money?

  • GregLocock Two adjacent states in Australia have different attitudes to roadworthy inspections. In NSW they are annual. In Victoria they only occur at change of ownership. As you'd expect this leads to many people in Vic keeping their old car.So if the worrywarts are correct Victoria's roads would be full of beaten up cars and so have a high accident rate compared with NSW. Oh well, the stats don't agree.
  • Lorenzo In Massachusetts, they used to require an inspection every 6 months, checking your brake lights, turn signals, horn, and headlight alignment, for two bucks.Now I get an "inspection" every two years in California, and all they check is the smog. MAYBE they notice the tire tread, squeaky brakes, or steering when they drive it into the bay, but all they check is the smog equipment and tailpipe emissions.For all they would know, the headlights, horn, and turn signals might not work, and the car has a "speed wobble" at 45 mph. AFAIK, they don't even check EVs.
  • Not Tire shop mechanic tugging on my wheel after I complained of grinding noise didn’t catch that the ball joint was failing. Subsequently failed to prevent the catastrophic failure of the ball joint and separation of the steering knuckle from the car! I’ve never lived in a state that required annual inspection, but can’t say that having the requirement has any bearing on improving safety given my experience with mechanics…
  • Mike978 Wow 700 days even with the recent car shortages.
  • Lorenzo The other automakers are putting silly horsepower into the few RWD vehicles they have, just as Stellantis is about to kill off the most appropriate vehicles for that much horsepower. Somehow, I get the impression the OTHER Carlos, Tavares, not Ghosn, doesn't have a firm grasp of the American market.