North American Car Companies In Danger

I recently met with a man who has an interest in the franchise to bring Chinese made cars into Canada. He showed me an SUV he was driving -- it was a solid well built, if slightly old-fashioned, vehicle.

He told me he could sell it, at a profit, in Canada for about $25,000; which would be about $15,000 cheaper than a comparable vehicle.

He told me he could sell a stripped economy car for about $7,500. Finally, he said the cars met California safety and emission standards.

Now, do I believe everything he said?

Not really, but even with an allowance for exaggeration his story led to a clear conclusion -- North American car makers are in deep trouble. The problems are deep seated and it may be that no amount of government help (except perhaps tariff walls -- but those pose other dangers) can help save the industry.

And with that I refer you to today's story about Ford:


Ford reports biggest quarterly loss in its history

One of the world's oldest automakers, the Ford Motor Co., posted its worst quarterly performance in company history Thursday.

Ford posts $8B quarterly loss

Ford lost US$8.7 billion in the second quarter as buying trends shifted away from gas-guzzling trucks and SUVs towards fuel-efficient small vehicles and hybrids.

Thursday's net loss factors in $8.03 billion in write-offs due to large declines in U.S. truck and SUV sales. Shares dropped $3.88 per share in the second quarter, compared with a year-ago net profit of $750 million or 31 cents per share.

Link to whole story:

http://news.sympatico.msn.ctv.ca/abc/home/contentposting.aspx?isfa=1&feedname=CTV-TOPSTORIES_V3&showbyline=True&newsitemid=CTVNews%2f20080724%2fFord_motor_080724