Henry Ford is rolling over in his grave right now. Ford Motor Company recently posted a quarterly loss of $8.7 billion. That’s right, billion with a “B.” It’s a staggering, mind boggling, head scratching sum.
How can a company lose $8.7 billion in a single quarter and still stay in business? For the sake of the economy here in Southeast Michigan, I hope that Ford is able to implement their turnaround plan. If not, I hate to speculate what the outcome will be.
Speaking of this, haven’t these auto companies been ‘turning around’ for the past 5 years or so? Anyway…
Being involved in residential real estate investment here in Metro Detroit, this news definitely makes me bi-polar. On the manic side, I can see more foreclosures and distressed properties coming to market, driving prices down and presenting better deals. On the depressed side, I see more unemployment, more housing inventory driving rents down and more blight taking hold.
There are indeed two sides to every coin.
For anybody doing business here in Metro Detroit (or anywhere for that matter), I present this to you as the most compelling reason to develop a global business model. Being geographically dependent on your customers and suppliers (as Southeast Michigan is so dependent upon domestic based auto manufacturing) is a non-starter. As a 21st century business, you must learn to tap into the power of a worldwide customer and supplier base.
It has been said that, in business, you are either growing or dying.
The best part of this is that we have a choice; we can succumb to the pressures of economic change or we can make our peace with them and adapt.
As always, history will be the judge and jury.
Adam~
Great post. It’s sad to see the auto industry continue to slide. It slows everything down economically and psychologically. The problem for those of us that choose to stay in Michigan is that you can’t easily diversify. For example, if you’re a Michigan real estate investor, you’re part of the State economy unless you expand your investments to other states. However, that presents its own challenges of managing property long-distance. Many other Michigan small businesses depend on local customers and can’t easily go global. Perhaps the best opportunity is to have mulitple business activities that can help balance income out over the long term and you should be OK, even in Michigan.
John,
Thanks for the comment. I agree with your assessment of the downstream impact of the auto industry. Multiple streams of income is always a good idea!
Adam