A World Turned Upside Down

Folklore has it that a British band played that old ballad as Cornwalis surrendered at Yorktown.    To the British, the most powerful nation on earth, it most certainly must have seemed that the world was indeed turned upside down.  Wether in fact the story is true is secondary, for its sentiment fit the situation perfectly.

 While nowhere near a paradigm shift as the American Revolution, recent events in Detroit must seem almost as monumental to the vast number of Americans that depend on the auto industry for a living, and to the nation as a whole--particularly older cititzens who grew up with an all-dominating Detroit.  The fall has been breathtaking, for it happened in such a short time and was so deep that it caught everyone off guard.

We had opined here several months ago that there was a double standard being applied to the automotive industry during the government bailout process.  On one hand, with little scrutiny huge financial institutions were handed tens of billions of dollars as if it were pocket change, yet GM and Chrysler were asked for detailed plans about everything.  I watched many of the hearings on C-Span (ok, I’m a nerd) and they were second guessed by a bunch of Monday morning quarterbacking congressmen who’s “knowledge” of the dynamics behind the subject was obviously a mile wide and an inch deep.  Perfect for TV sound bites, but useless in crafting a solution for the ongoing viability of the industry.

That’s not to say the industry was blameless, because it has a lot to account for.  But it was caught up in an economic maelstrom--brought about by the financial industry, let’s not forget--that sucked in everyone, regardless of national origin.  Even Toyota, always the poster child of how to do things right, has fallen right along side everyone else.

Unlike many of the simpletons in congress, I get the sense that the American auto industry really gets it this time.  It has to change, and it has to look forward.    That means new technology, and new realities.  Do we all want to drive Suburbans on $2.00 gas?  Sure we do.  Do 90% of the people who buy one need to?  I think you know the answer.

I hate to get philosophical on everyone, but history teaches us unequivocally that great powers that don’t adjust to changing realities do not stay great long.  As the only western power to come out of World War II far more powerful than we went in, we were able to to enjoy an economic bubble of indulgence relative to the rest of the world for 50+ years.  That bubble was paid for by a generation that mobilized--and sacrificed in so many ways--for a fight for survival.  If anyone thinks we don’t owe a debt of gratitude to “The Greatest Generation”, they’re wrong.

Now we have our own new paradigm, so let’s roll up our sleeves and get to work.  Anyone counting us out does so at their own peril.  History teaches that, too.


This piece first appeared in the August 2009 issue of Collector Car Market Review.