Two of the big three automakers are in bankruptcy. Many of us are shocked, others expected this for several months. A couple of decades of failure by Detroit have finally brought us to this point, but pointing fingers will not solve this problem. So, the question is: Where do we go from here? Where is the automobile business heading? Is there life after bankruptcy?

There is no denying that these bankruptcies are a bitter pill to swallow, but in the end it will be for the best. Big changes have been needed in Detroit for several years—negotiation of union contracts, elimination of dead vehicles, and cutting the fat out of a out of control overhead will now happen because of this bankruptcy. These changes should have been made years ago; however, Detroit decided to give the patient a few band aids, rather than the complete transplant that was required.

Detroit is now cutting the much needed fat from its overhead and eliminating many of the vehicles Americans no longer want. GM and Chrysler will emerge better than ever. Chrysler will be out of bankruptcy in the next few weeks and GM should be out before summer ends. Sales should be sluggish for the next few months and should begin to improve by fall for GM and Chrysler. Toyota, Honda, and Hyundai will continue to gain market share through the summer, while GM and Chrysler’s share will decline. By fall GM and Chrysler will begin to gain back market share.

2010 auto sales will improve over 2009, because more vehicles are currently being scrapped than built. With our growing population, the need for new automobiles will continue to grow through the next five years. So, while this may be a sad day for many, it is just the beginning for the automobile industry in the United States.

Tom Letizia is the president of Letizia Ad Team-Automotive marketing division, a full-service advertising agency specializing in automotive. He can be reached at 702-870-2362 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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