You simply can't ignore Europe
 | Keith Crain is editor-in-chief of Automotive News. |
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Luckily, there are some pockets of prosperity in Europe where the auto industry and certain auto brands are doing well.
But for most of the industry, Europe is a black hole that isn't getting any better, and it is affecting the United States.
As long as General Motors, Chrysler/Fiat and Ford Motor Co. have big stakes in Europe, what happens there will have an impact on the North American auto industry and the U.S. economy.
Monte Carlo may have been the wrong place to hold our Automotive News Europe Congress last month. If any place seems insulated from the troubles of the world, it's Monte Carlo.
Except for Volkswagen and its magic, most car companies are hurting along with the European economy. That's particularly true for GM and Opel, which must figure out something to do and can't delay closing an assembly plant until after 2016, as the company originally had agreed as part of a restructuring plan.
As North America continues to strengthen little by little, Europe will drain all the resources from GM if it can't get people to buy Opel cars.
Chevrolet is further weakening GM's position by siphoning off thousands of potential Opel buyers. Marketing two brands and maintaining two distribution channels will only increase the losses for GM in Europe.
Ford is simply riding the economy, and as the economy dives so does the blue oval. When the economy improves, Ford will improve as well. But in the meantime, it's a very expensive waiting game.
When Fiat first expressed an interest in Chrysler, everyone was pleased that Fiat was strong and could support and subsidize Chrysler. But it didn't take long before Fiat was in the tank and Chrysler ended up supporting Fiat. Fiat's strength in Europe has disappeared, even in Italy, and Fiat can thank its lucky stars that it has Chrysler.
One challenge for those companies is to convince the Europeans that this is serious and involves survival. But for the Germans and Italians, most employees still have the same mentality that U.S. auto employees had before the recession and bankruptcies. They don't believe it. They assume some miracle from heaven will save the day.
But it's not going to happen. And the dangers to those operations are as serious as can be.
It's a mess in Europe, and it's not going to get better anytime soon.
Let's hope that until it does, the Detroit 3 can keep their heads above water.
You can reach Keith Crain at kcrain@crain.com.
