I have selected the Rob Rogers “Dinosaur” political cartoon as my topic for this essay. In the cartoon, Rogers portrays the newspaper industry as a dinosaur who is selling newspapers. The newspaper in the dinosaur’s hand shows a headline stating “DINOSAURS IN TROUBLE / FORD, GM, CHRYSLER.” The irony of the cartoon is one struggling industry commenting on another struggling industry.
Most experts believe that the “Big Three” (3 major US auto makers- GM, Ford, and Chrysler) mismanaged their products, time, and money. This has greatly contributed to the crisis in the auto industry. The Big Three market share in 1998 was 70% of all cars sold in the US. By 2008, the market share had decreased to 53%. The Big Three focused their product lines around larger, fuel inefficient models (like the larger SUVs and pick-up trucks) for better profit margins. The Big Three used to make 15 to 20% profit margin on SUVs / pick-ups, while only making about 3% on smaller automobiles.
Rising fuel costs lead consumers to look for smaller vehicles with better gas mileage. Consumers believed that foreign auto makers had higher quality and more fuel efficient vehicles. The Big Three had been much slower to bring innovative, fuel efficient, yet appealing automobiles to the market.
Other problems also contributed to the decline of major US auto makers. All Big Three assembly plants were unionized. This meant higher labor, benefit, and legacy costs were given to the workers. Legacy costs are costs associated with pensions and benefits to thousands of retired employees. The 2008 “financial crisis and credit crunch” also hurt the Big Three. Auto makers had less access to capital and consumers had a harder time getting auto loans. The increasing costs of oil also lead to higher costs of parts and raw materials.
In September of 2008, the US government made the first of many “bailout loans” to the US auto industry. This has lead to increased government ownership and oversight of the Big Three auto makers. Of the Big Three, Ford was the only company that did not accept bailout money. The newest government sponsored deal is the “Cash for Clunkers” program. This program guarantees minimum trade-in values to consumers on older, less fuel efficient cars. The success or failure of this plan is still a matter of major debate.
Much like the auto industry, 2008 was a horrible year for the newspaper industry. Major newspapers in Philadelphia, Chicago, and Minneapolis declared bankruptcy. Many other newspapers did the same or simply shut down, including the 150 year old Rocky Mountain News. Some of the country’s largest newspapers are also struggling financially including The New York Times, Wall Street Journal, and Washington Post. Advertising revenues were 7.5 billion dollars less than 2007. As of yearend 2008, ad revenues had declined for ten straight quarters. Last year alone, 12,000 newspaper jobs were eliminated.
Major industry problems include declining circulation, lower advertising revenues, increased hi-tech competition, and higher printing and delivery costs. Younger people do not have long and emotional attachments to their local newspaper as their parents once did. More and more of the news is now read online. Many newspapers have eliminated their print editions and publish only online versions.
In my opinion, the printed newspaper may be a “dinosaur” facing extinction, but the US auto industry has a great chance for survival and success. As more people get their news from TV, computers, mobile devices, and satellite radio, printed news will continue to struggle and shrink. Many newspapers acknowledge this fact by moving to online editions only. Furnishing news online is a faster and more cost efficient method for delivering the news.
The US auto industry on the other hand is making strides towards improvement and longevity. Increased focus on consumers’ wants and needs will help improve their sales and market share. All three major US auto makers are currently producing or developing smaller, more fuel efficient models (like the Ford Focus) to compete with foreign auto makers. GM will soon introduce an electric car (the Chevrolet Volt) that can travel up to 40 miles purely on electricity before a small gasoline engine takes over. It is estimated that city driving will result in MPG of 230. Although the Volt will carry a heavy price tag ($40,000) it is estimated that future versions will be less expensive as the technology continues to develop.
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