Richard Levin, president of Yale, is the only economist on the President's Council of Advisors on Science and Technology, which presumably gives his thoughts on the auto industry more than a little weight. And Levin, who was recovering from surgery at presstime and unable to comment further, thinks the industry will shrink. A lot.
In an interview with the Yale Alumni Magazine, Levin foresees the virtual end of national automotive competition. And in the U.S., the Big Three could become--The Big Zero?
"I think the optimum number of U.S. auto companies is one," he said. "Maybe two, but certainly not three. The worldwide auto industry is going to shrink, to a Chinese firm, a Japanese firm, an Indian firm, a Korean firm, a European firm--and an American firm, I hope, but there's a chance there will be zero U.S. auto companies if we don't do this right. There are a lot of assets in America--technological assets, know-how, skills, and labor. But I think a managed reorganization is the right approach. The companies need to shed their legacy costs. The government can offer protection to current workers and retirees."