Once upon a time, there was a Big Three far, far away . . . in merry olde England. In a move eerily similar to the pending GM-Chrysler merger, two of the automakers united to form British Motor Corp. (BMC). The folks in Detroit should learn a lesson from it, before history repeats itself.
These are spooky times in the American auto industry. Who could have imagined that General Motors would be looking for $10 billion in government aid to “rescue” Chrysler?
And, just when it appears that things can’t get much worse for Detroit, more foreign competitors are about to enter the United States and further fragment the market that was once controlled by the Big Three. Next year, several Chinese and Indian automakers will be selling vehicles through a small U.S. dealer network.
For instance, Mahindra & Mahindra Ltd. (Mumbai, India) already claims to have more than 300 dealers signed up through a subsidiary called Global Vehicles USA Inc. (Alpharetta, GA). It will be marketing a line of mid-sized diesel pickup trucks.
Until recently, it was hard to imagine that the Big Three would ever go the way of full-service gas stations and public pay phones. But, recent events have me starting to wonder if the once-proud U.S. auto industry will some day just wither away.
If you doubt that will ever happen, just consider what transpired once upon a time in a land far, far away . . . merry olde England. That country had a thriving auto industry for much of the 20th century. Today, there’s no major domestic automaker in Great Britain. Even niche players, such as Aston Martin, Bentley, Jaguar and Rolls-Royce are owned by non-British companies.
At the end of World War II, England was the world’s second largest motor vehicle producer. And, it had its own Big Three domestic automakers-Austin, Morris and Wolseley.
In 1952, Austin and Morris merged to create British Motor Corp. (BMC). The British government approved the merger as being in the public interest. Does that sound familiar? If the GM-Chrysler deal goes through, as some smart folks predict will happen sooner than later, history may end up repeating itself. Perhaps we can ever borrow a page from the Brits and call the new entity GMC.
I’m sure most people have never heard of BMC, but a brief history lesson reveals why that is. In 1965, the company became British Motor Holdings. A few years later, the name was changed to British Leyland Motor Corp. Today, British Leyland is long gone. The last remnants of the company were acquired three years ago by China’s Nanjing Automobile Corp. The only place you’ll now find an Austin or a Morris vehicle is in a museum.