• AUTOMOTIVE NEWS»
• BREAKING NEWS»

• Article Tools:
• Print
• Email
• Order Reprints

Meteorologists characterize the confluence of low-pressure areas and other conditions into a single, powerful combination as the basis of a so-called perfect storm.

One is shaping up now in the global economy in general and for the auto industry in particular.

The carbon dioxide emissions debate, the overvalued euro, high raw material costs and persistently high fuel prices by themselves are ingredients for a downturn in the German auto industry.

But add the growing worldwide banking and financial crisis and the exorbitant wage demands from IG Metall, and the outlook becomes even darker. How dark? Even the go-go Russian auto market has slowed to mere single-digit growth.

As a result, few of the industry's large companies -- whether suppliers, automakers or dealer groups -- are able to keep the profit pledges they made at the beginning of the year. Daimler, for example, has shaved its profit forecast for this year by 1 billion euros, to 7 billion euros ($9.6 billion), following Mercedes-Benz production cuts totaling 80,000 units

It's not clear how long this crisis will last. But it's certain that the world will look different afterward.

Wall Street no longer will be the center of the international finance world, just as Detroit no longer is the center of the automotive world.

It seems justified to blame the gathering storm entirely on Wall Street, which triggered the financial crisis with its short-term perspective and its complete failure to manage risk. In their pursuit of fast profits, speculators regularly take productive industries with them into crisis.

But it is worth remembering that German automakers and suppliers also have profited handsomely from Americans who believe they can "buy now, pay later -- or never." A huge chunk of U.S. consumer debt has paid for the purchase of Mercedes-Benz, BMW, Audi and Volkswagen cars and trucks.

That's why we all have a stake in trying to stop the gathering storm.

You may e-mail Guido Reinking at greinking@craincom.de