Do General Motors' woes portend things to come for U.S. industry?

Published: 2006-04-07

WASHINGTON (CNS) -- The adage, at least a half-century ago, was "What's good for General Motors is good for the country." That was when GM made half of the cars sold in the United States. But now the worry could be: As goes General Motors, so goes the country. Today, GM sells only a quarter of all U.S. cars. Its stock price is lagging, its bonds have been reduced by Wall Street to junk status, and it is close to being outsold worldwide by Japanese automaker Toyota. In response, GM has tried zero-interest financing, employee discounts to all buyers and lower sticker prices, all of which have proven to be, at best, temporary fixes to sluggish sales. GM could have learned from the steel industry's upheaval a dozen years ago, according to Joseph Ezzie, an economics professor at Walsh College in North Canton, Ohio, an hour's drive from Lordstown, Ohio, where GM produced the Chevrolet Vega, one of the most derided cars of the 1970s. "The steel industry went exactly the same route, and the auto industry should have learned this 12, 13 years ago," Ezzie said.

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