While the automotive manufacturing business is a relatively un-complicated process, the logistics of compiling inputs to create a finished product has become more complicated in recent years. Most significant to U.S. investors are the "big three" automakers Ford (F), General Motors (GM), and Chrysler, all of which are finding different degrees of strife in the current downturn. Ford had taken the lead as the gas guzzling brand in the late 90's, releasing the Excursion model that was larger than the quarter-ton GM Suburban chassis yet with no additional seats. However, the rise in gasoline prices from $0.65/gallon on Jan 1, 2000 to $3.41/gallon on July 14, 2008 combined with increased awareness of the effects of greenhouse gasses catalyzed the widespread social stigma against inefficient vehicles.
Whether Asian automakers Toyota, Honda and Nissan had foreseen the trend towards efficient transportation or simply maintained their strategy of building the best automobiles in the world, Japanese brands took the lead as the largest producers of automobiles in the United States in 2008. Many argue that the UAW (Auto Worker's Union) disabled American companies from competing, yet the responsibility for a crippled U.S. auto industry lies with management. Thankfully Ford employed a CEO from outside the family, breaking the trend since Henry Ford pioneered the assembly line in the early 20th century. Alan Mulally, accredited with turning around Boeing before taking the reigns as Chief Executive at Ford, "set the wheels in motion" to streamline the production process across brands and lines prior to the economic downturn, allowing the company to avoid government assistance.
Rick Wagoner wasn't so skilled or lucky (
see Captain Wagoner Walks the Plank), ultimately failing the company and landing it in bankruptcy to be followed by 60% U.S. and 12% Canadian government stakes in the company. Seemingly similar to the French/German government ownership of the Airplane maker Airbus, the automaker won't see pure private ownership for some time. The bill to tax payers looks to clock in above $50 billion in loans to the GM after nearly $20 billion was provided to Chrysler before Italian Fiat bought the company.
While GM and Toyota produce nearly the same number of unites per year, Volkswagen outproduces Ford globally, followed closely by South Korean manufacturer Hyundai/KIA. The UAW, corporate leadership and governments involved with the Chrysler and now GM bankruptcies have all made concessions to keep the corporations as stable as possible throughout their transition, job losses and adverse consumer reactions could create more obstacles ahead.