The price of oil is starting to take a bite out of the automakers. Oil is knocking on the dreaded door of being $150 a barrel. Even previously seemingly impervious affluent motorists have reached the end of their tether. That $5 a gallon price tag is looking more and more likely.

It therefore should come as no surprise that Chrysler announced today that it is cutting 2,400 blue-collar jobs and cutting back production at two plants in St. Louis.

It will completely shut down its St. Louis South plant, home of the Chrysler Town & Country and Dodge Caravan, at the end of October. And it plans to cut back from two shifts to only one shift at the St. Louis North plant, where the Dodge Ram full-size pickup is built.

The US automakers seem to be reliving the nightmare of the 70’s. Japan reared its head, suddenly there were cheap, well built, and reliable cars. The US automakers griped to the feds, but it was too late. The Japs were here to stay. It was more than a wake up call, the very existence of US cars was in question. They did respond, suddenly Ford was not an acronym for Found On Road Dead. The domestic companies seemed to have weathered the storm.

The 90’s and the early 00’s showed a disturbing trend, the US manufacturers moved back into trying to capture the ‘large car’ market. Trucks, SUV’s, and Minivans were all the rage. What Soccer Mom wouldn’t want an eight seater vehicle to transport the entire team around? What rough tough guy wouldn’t want an Off Road vehicle? Even though the only time it went Off Road was when it was parked in the driveway.

The looming $5 a gallon price tag has killed sales of the big vehicles, and once again it is the foreign competitors that are winning. It is 1970 all over again. What does it take to get these dinosaurs to understand?

Simon Barrett

http://zzsimonb.blogspot.com   

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