– Steve McDonagh can be contacted at smcdonagh@vbjusa.com
LET THEM FAIL?
The automobile had a more fundamental change on our society than computers or Facebook or Twitter will. The automobile, for the first time, made it possible for anyone to be anywhere. Granted it took longer than an airplane flight or teleconference call, but until that time, we lived in rather homogeneous communities that were almost exclusively self-supporting and self-contained.
The automobile gave the everyman the chance to see the ocean, Niagara Falls and the Grand Canyon.
Cars became a necessity and rather than two chickens in every pot, we wound up with two (or three) cars in every garage. To put two cars in every garage required more and bigger car manufacturers. So the U.S. companies grew and foreign companies grew until the market became saturated with more makes and models than you could count or remember.
Full disclosure: The auto industry (GM) kept me and my brothers and sisters in shoes and clothes even during prior tough economic times.
So while it is easy to say “just let them fail,” we were the unabashed consumers who wanted more and more and didn’t care what it took to get it made or where it was made as long as it was shipped and delivered to the nearest dealer. This, in turn, resulted in the proliferation of dealerships – they became as common as McDonald’s.
This week’s news that General Motors and Chrysler will close almost 2,000 dealerships between them is not good news. Thousands of people will be out of work, and thousands more who relied on those businesses and their employees to support their own business will feel the pain as well. In the end, the restructuring of the auto industry and the closing of thousands of dealerships, including local dealers, should help the auto industry survive and operate as more efficient businesses.
The dealers who remain open will be substantial employers and will no doubt operate more efficiently. Hopefully the remaining dealers will need to hire some of the people who will lose their jobs when the dealerships close. Even though we are thousands of miles from Detroit, it is important to all of us that the American car manufacturers don’t disappear. It is part of our heritage and I believe that if the difficult choices are made and executed, they can and will survive as bigger and better businesses than they were before.
