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Future cars in a present recession

Janet Babin Mar 21, 2008
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Future cars in a present recession

Janet Babin Mar 21, 2008
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TEXT OF STORY

Scott Jagow: The New York Auto Show opens today. Of course, there’ll be a lot of talk about cars of the future. But U.S. automakers really have to focus on the present. That includes an economy that might be in recession. Marketplace’s Janet Babin reports from North Carolina Public Radio.


Janet Babin: GM’s playing with its balance sheet, and Ford’s cutting costs, again, and Chrysler’s lowering production.

David Sedgwick with Automotive News says that’s really all U.S. automakers can do to weather an economic train wreck. Cutting production will mean smaller profits, but that’s better than unsold inventory piling up on dealer lots.

Sedgwick’s especially concerned about the future of Chrysler and Ford:

David Sedgwick: They both have a cash cushion, although we think Chrysler’s cash cushion is pretty thin, and if I had to worry about any one automaker in the short term, it would be Chrysler.

Especially if a recession sparks a price war. Sedgwick says that would be especially hard on Chrysler.

But GM’s not up to speed, either. As gas gets more expensive, consumers want smaller cars, not exactly a Big 3 specialty.

I’m Janet Babin for Marketplace.

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