It was early 1981 and the so-called “Big Three” U.S. automakers were all on their backs. Chrysler Corp. barely dodged bankruptcy – thanks, in part, to $1.5 billion in federal loan guarantees, and Ford Motor Co. would incur $3 billion in losses during a four-year run that ended in 1982.
Chrysler, General Motors Co. and Ford were getting their clocks cleaned – by Japan.
Knowing that California, as a trend-setter state, would be a good place to assess how the U.S. carmakers were faring against the Japanese small-car juggernaut, my newspaper had sent me out from Detroit to assess the outlook for America’s once-dominant Big Three.
From the time I landed at Los Angeles International Airport (LAX) it didn’t look good. The number of imports I counted in the LAX parking lot was dwarfed by the number I saw on the LA freeways.
And in a stunning bit of candor, California Gov. Jerry Brown told me that the future looked bleak for Detroit.
As we all know, the Big Three ultimately beat back the Japanese threat, and weathered several lean periods that followed.
Then came the financial crisis of 2008-2009, and the “Great Recession” that followed. Two members of the Big Three followed the example set by the nation’s biggest banks and accepted government bailout handouts.
One automaker did not.
That company opted to go it alone. It has transformed itself into a high-tech powerhouse, is grabbing market share back from the top Japanese nameplates in their “home market” of California, and just this week unveiled a superb quarterly earnings report and boosted its forecast for 2013.
This company’s stock is up 72% over the past year, but don’t let that scare you off.