How does that make it more difficult, exactly? Wouldn't that mean a bigger market share for Ford?
Possibly, but nowhere near enough of an increase to make up for the increase in price that the suppliers would require to stay in business with such a huge loss in sales (that one of the big three going under would cause).
"Even though Ford isn’t experiencing a “cash crisis,” a GM or Chrysler bankruptcy could take a substantial toll on Ford because suppliers would suffer. Asian markets, which are “financially healthy,” would also experience production difficulties, CNN Money reports."
Also:
"Although the Big Three may not get the loans they desire, they have demonstrated that the economy would suffer in their absence. For example, the Ann Arbor-based Center for Automotive Research indicates that “that 1 in every 10 jobs is directly or indirectly affected by the automobile industry and the failure of the three Detroit automakers could result in the loss of 3 million jobs in the first year,” according to the Detroit Free Press."
Economics is sort-of a hobby of mine. I had to take some classes in college, including a global economics one, and I've been following money news every since. I was actually against the financial (Wall St) bailout at first, until some people convinced me that it was necessary. Unfortunately, they didn't stick with the original plan (to buy up toxic assets), and instead decided to "recapitalize banks." I have a lot of issues with the new plan, but that's for another time and place.
However, bailing out Detroit it SO much more important than bailing out Wall Street was! For every job lost on Wall St, another 1-2 might be lost. For every job lost at Ford, GM, or Chrysler, TEN jobs will be lost. In addition, prices of vehicles will go up at least 5-15%, parts suppliers would go under--making it very costly/difficult to find replacement parts for your vehicle, and when the auto market does eventually regain its footing, the money would eventually end up in Japan, Germany, etc.; and not Detroit.
The are other things that frustrate me, too. One is that everyone wants to blame the Big Three for their current issues. However, past government actions--in part--put them in the position they are in today! Here is a good article about that:
Commentary: Can the Big Three survive a bailout? - CNN.com Don't disagree with me unless you've read that article first. :smile:
In addition, the Big Three were planning on flex fuel being the next step in getting (at least partly) away from gasoline. I'm not 100% sure, but I think the government gave some indications that an infrastructure would arise to support this, but nothing ever did. The goal is energy independence and increased fuel economy/affordability, and in the U.S. we have many sources of "flex fuels." However, in Japan, they do not have those resources, so they went with electric hybrids. Oil and gas prices skyrocketed, and without a real flex fuel push, the Japanese companies were holding a golden goose, and the U.S. companies were left holding the bag, so to speak. R&D is expensive and time-consuming, so when you spend years going in one direction it's very hard to just make a 90 degree turn and compete with people who have years of experience, development, and re-tooled factories.
The American public generally lives ten years in the past when it comes to cars (among other products). They still think that American cars are crap and get horrible gas mileage, which is simply not true anymore. GM has over 30 cars that get over 30 highway mpg on the new (lower) EPA estimates. The Ford Focus and Chevy Cobalt get the same mpg as a Civic/Camry. Warranties are very similar, and the quality of the cars has just simply improved since the 90s. But the general public refuses to see it. Ironically, it's the same as when the Japanese started putting out good cars...but because they were junk in the past, it took about a decade for the public to accept them.
The public also screams about how the Big Three don't provide fuel efficient cars (which I addressed above) or hybrids (also addressed above, in addition to that there ARE American hybrids, but a lot of people don't seem to know that). However, who will have the first mass produced electric car? Chevy, with the Volt. Ford has a hydrogen fuel cell F-250 that is supposedly coming out soon. These companies are headed in the right direction, and have honestly been held back by past government decisions. I'm not saying they aren't to blame at ALL, but they're totally worth saving, and we honestly need to save them.
Lastly, another thing that people LOVE to ignore, is that until oil spiked over the last few years, they were providing vehicles that the American public wanted and demanded. Now that we don't want them anymore, we're trying to yell at them for not anticipating such a quick change in our wants/needs. If we were very mpg conscious before it started hurting our checking account, we'd be in a much better position today.