For such a nebulous concept, deja vu is a funny thing. Rarely does it slowly build on the person feeling it, instead coming on suddenly — usually after it's too late for the recognition to be a meaningful guide for one's actions.
With that in mind, look around. Pickups and utilities dominate the lineups of domestic automakers, yet there are troubling economic warning signs on the horizon. Upcoming labor negotiations between the Detroit automakers and the UAW look like they could get nasty.
Is this 2019 or 2007?
In reality, it's both.
To be sure, the challenges facing the industry today are not the same as they were a dozen years ago, when General Motors lost a staggering $38.7 billion, Chrysler was in the hands of private equity and Ford was mortgaged to the hilt in the midst of a turnaround plan yet to be tested by the Great Recession.
Record-high gasoline prices destroyed the value of fuel-guzzling pickups and other light trucks, resulting in chaos in the automotive leasing market — and in Chrysler's case, the loss of leasing altogether. A few months later, the collapse of the U.S. financial sector drove a stake through the heart of two of the Detroit 3, and almost brought down the U.S. auto industry.
But the most recent earnings by General Motors, FCA US and Ford — which each saw billion-dollar profits in North America — are an important reminder that, though the lineups and general economic conditions may look the same, today's auto industry is far removed from where it was a dozen years ago. Each company is not only in far better shape than it was in 2007, but its books are now buttressed — as is the case with the suppliers — to successfully navigate a pretty sizable recession, should one occur, so long as it doesn't drag on.
Some long-term legacy costs, including retiree health care, have been removed from the books through previous union negotiations. Fuel prices have stabilized. And mpg differences between cars and light trucks have shrunk dramatically, making consumer preferences for crossovers, SUVs and pickups far less vulnerable to unrest in oil-producing regions.
Threats ebb and flow, and new ones will certainly emerge. The industry would be wise to be vigilant and hedge its bets against the unexpected. But for now, the industry can breathe somewhat easier knowing that the horrors that began in 2007 get further away every day.