Thursday, December 4, 2008

Geared Up, but Going Down

The world wide auto industry has the capacity to produce 100 million vehicles per year.  In 2008, the auto industry just might sell 50 million vehicles.  This conundrum, known as "over-capacity" cannot be cured by government bailout.  Period, end of story.

A rose will bloom,
it then will fade
So does a youth.
So does the fairest maid. - Nino Rota

The auto industry, in fact EVERY industry, has geared up for growth that never showed up. Said growth will never show up again for autos.  The bloom is off this rose, and it ain't never coming back.

There will be many, many, many hearings on Capitol Hill in the coming years.  All of it hot air, and nothing more than a distraction.

Mentatt (at) yahoo (d0t) com


Anonymous said...

What about farm machinery? This area would also be subjected to the diminishing availability of crude oil.

Agricultural machinery would still be useful even if the US would go to an organic agriculture scheme. Converting over from petroleum based to organic agriculture would require a long period of soil adjustment ie addition of massive amounts of organic material to farm fields etc. Smaller tractors?

Greg T. Jeffers said...

Small change. The Mad Scientist says that GM will be renamed General Motorcycle & Moped