The Big 3's market share is shrinking. The automakers and their suppliers must get used to the idea and manage their operations accordingly.
It's not because dumb people run the auto companies in Detroit. It's inevitable. It's a tough market, and it's going to get tougher, as Chrysler group CEO Dieter Zetsche told the Detroit Economic Club last week. There will be more competitors from overseas, notably China and possibly India, and there will be more North American factories built by European, Japanese, Korean and maybe even Chinese automakers.
From year to year, one automaker or another will be up or down, but in the aggregate, Big 3 market share isn't going to come back.
That doesn't mean that General Motors, Ford Motor Co. or the Chrysler group ought to stop fighting for every sale, every one-tenth of a point of market share. But Big 3 execs must manage on that basis. That means acknowledging what is happening and taking the steps needed to preserve the enterprise so it can prosper with a smaller slice of the pie.
No one likes to lay off employees or close assembly plants. But two decades ago, Ford put itself on the road back to profitability by closing 15 factories worldwide from 1981 to 1987, including three North American assembly plants. That recovery, which included improving quality and adding great new products, should be a template.
It also makes sense for the UAW and the Big 3 to reopen their contracts and tackle thorny issues that can't wait until the contract expires in 2½ years to be resolved. Those issues include pay for laid-off workers and reducing health care costs.
Automakers also must be prepared to make concessions on white-collar benefits and even executive compensation.
More than ever, this is the time for common sense.