by Tabitha Akery

Created on: December 02, 2008   Last Updated: December 08, 2008

US Auto Manufactures have always depended on the American people to buy their cars. Known as the big three, General Motors (GM), Ford (F), and Chrysler (DCX) have been the face of the American automobile. Now teetering on the brink of bankruptcy, their future outlook is uncertain. If bankruptcy occurs, then the face of the American Auto Industry would change. So can these car companies come back stronger than ever, or will they be crushed under the weight of the competition that still remains strong despite declining sells?

The biggest question facing these companies is whether or not consumers will buy a car from a bankrupt company. There is no true measure to figure out whether customer loyalty will outweigh their concerns about honoring warranties or getting their cars serviced. The worry is that the customers who are really looking to buy will turn to their competitors to buy cars. If this happens, then it is a death sentence for the American car company.

The stock numbers are dropping fast for the big three. The declaration of bankruptcy will make any stockholder's stock worthless. The stockholder will not be able to recoup the losses of such an investment. The urge to sell is becoming stronger everyday, further driving prices down. Such a downward spiral may not be stopped. Those who wish to buy car stock will lean toward more stable companies such as Toyota (TM), Honda (HMC), and Nissan (NSANY).

At the moment, fear is driving the economy. Such fear has led to drastic variation in the stock numbers from day to day. Investors are uncertain of whether that day, they will make money or lose their shirts. The stock market has become a gamble and finding the right stocks to invest in, requires an intense look at the business and its operations. This is true for car companies as well.

When investors look at the big three car companies, they see three big flaws. The flaws are cars that no consumer wants to buy, big unions, and bad management. Such flaws make potential investors leery of placing money into such stock, even if they own a car by that company. They will tend to place their investment money in more stable companies, which for car companies, would be their competitors.

The competitors have learned to efficiently produce cars that consumers want to buy. Often, they have lower overhead costs and show good management. The strengths are a sign that the company will regain their value when the stock market stabilizes. The investors expect to make a huge profit when the stock market stabilizes and stocks come back into value.

In order for the big three to regain their rightful place, as the face of American cars, they need to undergo massive changes to their infrastructure. Reorganize their framework so that they can be more competitive. A serious look needs to taken at what consumers want to buy. Research needs to be directed at making their cars more efficient and better made. They need to look back at what made them great to begin with. Implementing such changes could draw more investors to their side.

Finally, the fierce competition for car buyers is becoming more intense. Consumers are going into survival mode. Unemployment rates are rising everyday with more layoffs expected to come. Getting consumers to spend their precious money on cars is now more difficult than ever. If Ford (F), General Motors (GM), and Chrysler (DCX) hope to survive, they must get the American people behind them again.

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