Snake oil salesman, um, I mean Nobel Prize economist Paul Krugman is once again doing what economists seem incapable of not doing: making a prediction.
This time he says the US auto industry is doomed. Presumably he means the Big Three, not the transplants from Asia and Europe. Though, if the Big Three are gone, at least from the US, then presumably the political pressure on Toyota or Daimler to locate plants here is reduced and they can all retreat to their slave labor camps in Mexico and China.
Of course, that is what Krugman really means. GM has long been trying to shed its dead capital invested here in the US. They know their capital is no longer worth a penny relative to what they can put in place in greenfield plants like those they are opening in Poland, China and Mexico. Of course, that same plant and equipment could be used to produce all sorts of useful products but such a transition would require some thoughtful planning, which is not the job of today’s socially irresponsible corporations.
Combine those new plants overseas with friendly police willing to kill union activists and the financial metrics are pretty darn attractive.
So, listen to Krugman and you too can buy cars with blood on them. Maybe Leonardo DiCaprio can make a movie about the new global auto industry.