The Big Three Are Facing New Problems and its Good – ValueWalk Premium

The Big Three Are Facing New Problems and its Good

The Big Three Are Facing New Problems and its GoodThree years ago, Ford, GM and Chrysler were on the brink of collapse. The three American auto companies were in deep trouble and the government had to bailout two out of the three (Ford didn’t take bailout money). Now they are facing a new problem, they aren’t making cars fast enough to keep with demand. That’s right! American cars are flying off the lots faster than we have seen in a very long time. The problem is that excess demand can raise prices of the cars because there will be shortage.

This can be an issue for sure but look at the numbers. Three years ago, they had a hard time staying profitable and selling cars. Now they can’t make them fast enough and sales are estimated to come in at 14 million this year, beating 2011’s 12.8 million. The other good news is that the big three are hiring again. More than 38,000 jobs were added last year by the auto makers and another 13,000 job openings are on their way to help increase the workforce to increase production. But it doesn’t stop there; analysts are prediction that if demand continues and sales reach 15 million by 2015, than an additional 20,000 jobs could be added.

This is great news and an impressive comeback made by the American autos. Certainly critics of the bailout must agree that it was a good idea. Not only did you save three American icons and thousands of jobs but now they are adding jobs because their cars are selling so fast.

As a staunch nationalist and a Ford man, I am glad to see that our legacy was not only saved but now thriving. I believe the autos needed 2008 to make big changes. Toyota and other international car companies were destroying American in sales and quality. After 2008, they stepped back, got rid of the dead weight and went back to basics. GM and Ford went back to what makes America great, muscle cars. The Mustang and Camaro are back to their old rivalry and both are selling like hot cakes.

It is good to hear that something positive came out of the bailout. American is back and in full force. Our legacy was threatened but we managed to get stronger while the competition got weaker.

That’s the American way.


Saved Articles
Here’s a Tip: Read What Professional Investors Read

ValueWalk Premium is for investors looking to improve their investment process AND keep up-to-date on the latest industry trends.

It’s THE resource for value investing and hedge funds.   

And with a free three-day trial and $29.99 per month thereafter, it’s a value in its own right.