Jerry Flint: Amputation Is Not "Slimming Down"

Edward Niedermeyer
by Edward Niedermeyer
jerry flint amputation is not slimming down

Jerry Flint in his latest Forbes columm:

Layoffs, product cancellations and product postponements in America’s once great auto industry are way beyond cutting into fat. ‘Amputation’ is a better description. Even as the government spends billions to save the American manufacturers—with billions more aid to come—it is fair to ask if there will be anything left to save.

Despite generously admitting that “Chrysler may survive,” Flint believes the Pentastar has far better chances under Marchionne’s Fiat than under Feinberg’s Cerberus. Not because Americans will fall madly in love with Italian cars, but because “Chrysler has thinned its employee ranks so severely that it probably cannot create new cars on its own.” And it’s a trend that Flint is seeing across the industry.

Ford’s Euro-model revival, GM’s Euro-Asian Cruze and LaCrosse, and Saturn lots packed with rebadged Opels, all point to a hollowing out of American development capacity. This impression is reinforced by the disproportionate impact recent product and replacement delays and cancellations have had on American designed and built vehicles.

Detroit is stronger in the truck business. This does not seem like much of advantage, because future mileage requirements being developed by the U.S. government and for California and will destroy this business.

His final line is a damning condemnation from a man who has covered the auto industry since 1958:

Even with government aid, Detroit will not be anything close to what it once was—not in our lifetime.

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  • ChuckR ChuckR on Feb 25, 2009

    PeteMoran - Renewable energy is like having a few Kruggerrands buried in the backyard - emotionally satisfying and even prudent if the SHTF - but not something you'd put all your net worth into. People have been flogging renewable energy since the 70's - only 20 years less time than they've been flogging fusion power. Big fusion is still an out and out failure in terms of process and renewable energy generally isn't a commercial success. I'm rooting for both, thanks, but I'm a realist. The US has had 20% of its energy provided by upscaled, beached Navy reactors, for fifty years now. Build some more and keep investing in the renewables and fusion too. Sooner or later, hopefully sooner, somebody will have a breakthrough that makes it unambiguously clear that the technology has arrived. Fun fact. Did you know there is only one company in the world that can forge a reactor vessel in one piece? They built the barbettes for the Yamato and Musashi. They are fully contracted through 2012-2013, IIRC. Not for barbettes.

  • PeteMoran PeteMoran on Feb 25, 2009

    @ chuckR You miss my point and make a ridiculous comparison at the same time. Fusion claims and renewable deliverables aren't really comparable are they now... please. If you hook yourself to a fuel cost (nuclear or otherwise), you pay for the ongoing cost of fuel AND the variability of the fuel price. The advantage renewable gives you is you pay a capital cost (pretty similar if not cheaper than conventional power generation) and that's it. The result? As near-as-damn-it fixed price energy, without a fuel input cost. It should be possible to deliver cheaper and cheaper and cheaper. Just as the Germans are already doing. Allow some lateral thinking, otherwise the USA is finished.

  • ChuckR ChuckR on Feb 25, 2009

    pete - fusion isn't feasible at all, while renewables merely aren't economically feasible. You can throw money at R&D for either (I hope we do), but neither is a reasonable economic option. I will gladly hook myself to the fuel cost of fission nukes in exchange for reliable and plentiful energy. Cheaper and cheaper renewable energy is nice, let me know when its actually cheap and reliable. And not subsidized.

  • PeteMoran PeteMoran on Feb 25, 2009

    @ chuckR There are subsides for almost every form of energy that you can think of, even ones that 'claim' to stand on their own economics. Coal, nuclear, gas...anything, they've received money or are receiving money. It would probably be helpful if you took the time to take a look at what Germany is doing. The energy input costs of that economy have been falling for 10 years while the USA's has been rising. China is more efficient with energy than the USA, so too Thailand, India, Russia, France, Norway, Philipines even Fiji! USA, laughing stock in more ways than one....