Such news sent the stock of the Big Three automakers hovering around their 52-week lows in December. The climate by then had changed dramatically from early 2000. In those first months, automakers battled for customers in the robust economy by cranking up production and offering generous incentives. November and December saw a wave of bad news, with Ford, GM and Chrysler announcing sales downturns and in GM's case, significant restructuring plans and layoffs. The industry's December sales were the lowest nonstrike monthly sales since February 1998.
Analysts say the automobile industry has entered a painful but necessary period of reorganization.
Already, consolidation has helped manufacturers improve production efficiency to an extent. This process was accelerated by the recent woes of the Japanese economy, which made Japanese automakers more receptive to alliances and buyouts. GM now has managed to acquire or take stakes in a group of partners that accounts for about 25 percent of the world s auto output, including Saab, Fiat, Suzuki, Isuzu and Fuji Heavy Industries. Ford and its growing stable of brands, including Mazda, account for another 13 percent, while groups led by Toyota, Volkswagen and DaimlerChrysler each account for another 8 percent to 10 percent. Companies such as BMW remain on the bubble and may be destined to join one megagroup or another.