The Return of Japan Bashing...

With GM posting record losses and the Big Three losing market share to Toyota and Honda, one can't help but wonder if the Japan-bashing days of the 1980's could come back. Here are some reasons why...

GM lost $1.6bn in the 3rd quarter alone this year. That's $1,600,000,000. That's a lot of zeros. In aggregate, losses for the year are expected to run to something in excess of $4bn dollars, which is significantly larger than the GNP of some countries (as an example consider Bermuda). Ford's losses were much smaller, but they have troubles of their own with falling market share and a growing number of pensioners. When companies start losing money they start cutting jobs.

Today, GM announced cuts of 30,000 workers in North America (likely to be mostly Union workers - in fact over 20% of Union jobs will be cut). This is on top of cuts announced by Ford and cuts Delphi and Visteon will need to make to shore up their businesses. The UAW is taking big hits (including those in my hometown), but it remains to be seen who they will take their anger out on.

To add fuel to the fire, according to the WSJ, Toyota is set to increase production by over 10% next year and will overtake GM as the leading auto manufacturer. The glory days of Detroit which seem to have passed decades ago, may finally, actually be gone.

I wonder how Michigan is going to survive this. The fortunes of the state follow the fortunes of the Big Three and these days that has just been down...