The news for the US automakers gets worse and worse. Sales dropped 30% in October and with the continuing crisis on Wall Street, lack of consumer credit, lots full of unwanted vehicles and an approaching tsunami of default auto loans, things don't look like they're getting better anytime soon.Detroit is continuing to lobby Washington for bailout cash and although President-Elect Obama has offered assistance for the development of fuel efficient vehicles, those funds may be too late to save the industry today. So is it time to give up on the US Big 3 Automakers? Painful as that sounds it may be the best path since, even with large cash injections, Detroit cannot exist in it's current form. A glut of dealers, products no one wants to buy, bad loans and hugely complex and restrictive labor practices are not going to be fixed cheaply or fast and the clock is running out. Both publicly traded brands are currently worth less than their physical infrastructure.
I can envisage a scenario where Tata Motors (Mkt Cap: 81.52B) buys Ford (Mkt Cap: 4.73B) but a combined GM (Mkt Cap: 3.15B) and Chrysler looks to be best left on the curb to be picked over by the parts pullers.
