Is The Turnaround By American Automakers Real?

Much has been made on the news the last few days about how Ford and General Motors actually turned a decent profit in the last quarter. Of course, officials at the two companies would like for us to believe they have solved their problems, and are on the road back to dominance.

But the truth is that these profits were made on the backs of the workers. The executives have not turned the companies around. They are not now making better and more dependable cars that people want more than foreign imports. They have simply fired tens of thousands of American workers, and that will not sustain their profits in the future.

The truth is that these companies are losing more market-share every day. A couple of months ago, Toyota passed GM and became the leader in car sales worldwide (and they didn't have to fire thousands of workers to do it).

Even worse, for the first time in the history of the auto industry, the market-share of U.S. automakers has fallen below 50% IN THE UNITED STATES! Foreign cars now have a larger share of the market than American cars in our own country. Instead of driving forward, U.S. automakers are still pedaling backwards.

In July, GM, Ford and Chrysler (which will soon be American-owned again) only had a 49.5% share of the U.S. market. This figure includes U.S. owned foreign brands such as Saab, Volvo, Land Rover and Jaguar. If you exclude these cars, the market-share falls to 48.1%.

Don't let them fool you. American automakers are still in a lot of trouble. They need to start producing cars that excite the public -- cars that are dependable, fuel-efficient and attractive, or they'll be driven out of the business. It may already be too late to turn things around and regain the trust of the consumer.

The next few years will tell the story. They must innovate or perish.