Detroit — Just in time for the Democratic Convention (no, it’s not a conspiracy, auto sales are always released after the first of the month), the Detroit automakers recorded strong sales in August as the industry continued to rebound. But analysts are murmuring that the Detroit automakers are once again lagging their rivals just three years after the U.S. government restructured the companies, eliminating long-term liabilities but favoring Big Labor over production efficiencies.
Indeed, even as Democrats trumpet the UAW Bailout at their Charlotte convention, evidence is that the automakers are suffering from the same malaise as the rest of the U.S. economy: The worst economic rebound since WW2, as zealous Obama regulations and tax uncertainty dampen manufacturing growth.
“The auto industry always has a very strong bounce coming out of a recession, and this one is actually a little bit weaker,” Jeremy Anwyl of Edmunds.com told The Detroit News, challenging the administration’s claims that its bailout of GM and Chrysler is responsible for the rebound. “What’s propping it up is that the manufacturers are getting very creative with their incentives. If you culled that support, you’d see a decline. I don’t see the market as stable or upward ticking.”
All three domestic automakers lost market share with General Motors diving from 20.4 percent to 18.7 percent.
“Many people inside and outside the company had expected GM to be farther along given the boost it got from the federal bailout: freedom from debt, protection from labor actions, and a cash cushion from taxpayers,” wrote the Wall Street Journal’s Sharon Terlep in June.
And where Obama hails its Chapter 363 bankruptcy as a model for the rest of the economy, even GM’s top brass are questioning whether Chapter 11′s tough love would have been better for the company in the long run.
“The good thing about our bankruptcy is that it took only 39 days,” says Akerson addressing criticism that GM still has too many employees, models, and overlapping operations. “The bad news is that bankruptcy took only 39 days. If we had been there longer, people would have asked these questions and looked at these things.”
Looks a lot like rain for the Democratic parade.