Bailout, Shmailout

What’s happened to the auto companies? And what should we do about it?

There’s no question that the credit crunch has exacerbated conditions for the Big Three. Back in August Chrysler announced that because of insurance issues they were eliminating leasing as a financing option. The other companies quickly followed suit. Auto sales have fallen 30% since then.

But it’s also true that for years the only profitable vehicles coming out of Detroit were gas-guzzling SUVs and pickup trucks. Building your business plan around perpetually cheap gas seems short-sighted, at best.

So do we bail them out, or let them fail? One thing for sure: both management and labor share the blame. When a sports team loses over and over, it’s time to fire the coach. But when the players refuse to change the game plan, it may be time to fire them, too.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-04T15:28:53+00:00 December 2nd, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. –
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