The deregulation of employment and finance: the Big Three in crisis

Some have said that the demise of America's three leading automakers (General Motors, Ford and Chrysler; referred to hereafter as the "Big Three") can be explained by a financial crisis that has revealed the inadequacy of the companies' cost-cutting and profit adaptation efforts. The parties responsible for this disaster are generally considered to be arrogant executives and inflexible unions focused solely on members' interests. If this were true, however, it is hard to see how the Big Three were able to make profits between 1983 and 2000 (asides from a temporary downturn in 1991-1992) nor how, in the new millennium, they made money in 2003-2005. The standard explanation also does not explain Ford and General Motors's good performance in Latin America and China since 2004 (Jetin, 2009), nor why GM, which basically had no presence in the Chinese market in 2000, has since become the leader there. The real questions are how GM achieved this remarkable success in a - and how to explain that a company widely acclaimed as a universal model for more than 30 years now - Toyota - has spilled so much red ink over the past two years, largely due to losses in the American market (Freyssenet 2009).