Trend: Chrysler, Ford, and GM are facing bankruptcy — Honda and Toyota will gain market share with well-designed energy-efficient vehicles that Detriot refused to produce.
Michael E. Lewitt, President of Hegemony Capital Management, describes why the Big Three are headed towards bankrupcy in the August 2008 Market Letter.
Link: Hegemony Capital Management - Funds.
The latest news out of Detroit makes it abundantly clear that the endgame for the Big Three is going to be massive bankruptcy restructurings. One would hope that politicians in Washington, particularly the two Presidential candidates, would begin formulating national energy plans that include restructuring plans for the American automobile industry. No viable energy plan will meet this country's needs without creating the proper tax and other economic incentives to build fuel-efficient vehicles. Rather than continuing to be one of the problems that lie at the heart of the American economy, the recovery and revitalization of the auto industry could be a major component of an economic and energy policy that could lead this country out of the difficult times we are experiencing and are doomed to repeat unless we take some bold steps right now.
via John Maudlin
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