The Financial Times
October 4, 2012
By Steven Rattner
Falling sales. Too many factories producing too many cars at excessive cost. Mounting losses at manufacturers. An urgent need for action. That’s what my colleagues and I found when we took up our posts as members of President Barack Obama’s auto taskforce and that is what confronts European carmakers today – except without a taskforce or a central government to ram through the needed changes.
Battered by the European sovereign debt crisis and recession in countries from Italy to Britain, car sales within the EU are on track for a fifth consecutive year of decline. Yet, notwithstanding increasingly shrill cries of distress from industry executives, absolutely nothing of consequence has been done to staunch the bleeding.
Meanwhile, the restructuring of the American motor industry – admittedly helped by stronger economic conditions and recovering sales – has resulted in profits at every carmaker and expanding employment.
That stark difference in health results not just from weaker economic conditions in Europe but, perhaps more significantly, from the region’s stultifying structural problems. Most importantly, the lack of a sufficiently robust central governing authority makes establishing anything that even faintly resembles Mr Obama’s auto taskforce unimaginable.