Our slow recovery? Not so bad, really
 | Jesse Snyder is senior writer at Automotive News |
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It's hard to miss the contrast between U.S. and European auto sales. They are polar opposites these days. And the trend lines for both auto industries are accelerating -- away from each other.
U.S. sales are about to finish a third straight year of double-digit gains, with 2012 likely to be the highest percentage gain of the group. For Europe, it's the fifth straight year of decline, with 2012 the worst of the bunch and likely a 19-year low in absolute volume.
Yes, there is clearly a big difference in how the two industries responded to the 2008-09 crash.
The U.S. spate of managed bankruptcies, massive cost cutting and huge capacity downsizing -- such a neutral description for the horrid reality of shuttered plants, shattered investments and lost livelihoods of all those people who aren't part of the industry today -- was extremely painful. But ugly as the whole process was, it turned the U.S. auto industry around.
Europe didn't handle the crisis the same way. With rival auto-producing countries pitted against one another, each government's intervention was aimed at saving "our" jobs and making "them" take the downsizing. Naturally, downsizing didn't really happen.
Now, you can consider all the differences and perhaps even attach subjective values such as "virtue" to the big North American capacity reduction. I've heard all the arguments and have even made that distinction myself.
But, somehow, that feels like saying that of two guys who fell off the same cliff, the one who tumbled all the way down is smart and the one who desperately grabbed a spindly little branch that, until it snapped off, kept him from the jagged rocks below is dumb.
Because the frantic actions that both the respective auto industries took are relatively minor factors in what's happening now.
What's the overwhelming difference between the two auto industries? It's the overall U.S. and European economies.
Ours, despite its many warts and slothlike pace, is growing.
And all the separate and unequal European economies are not, really not. Until that complicated mass of machinery gets into sync -- something few see happening anytime soon -- Europe's auto industry is stuck.
Wow. All of a sudden, our sputtering, slow-moving auto biz is looking pretty good.
You can reach Jesse Snyder at jsnyder@crain.com.
