Slip-sliding away, slip-sliding away...

"Domestic" auto sales (Chrysler + Ford + GM) have fallen below 50% market share, and are not likely to recover any time soon, if ever.

But market share doesn't so much matter; the important thing is for the domestics to be sustainable, profitable businesses at the size they wind up at.

How likely is this? It is hard to say. I personally think that GM and Ford are large enough that they might pull itoff, with concessions from the UAW, product updates, and relocating production of low-margin vehicles to low cost countries.

Chrysler, I think, is a tough problem, because they aren't strong enough to stand on their own. Whoever winds up with Chrysler will have to join into alliances with other automakers to keep Chrysler's product pipeline full. If Chrysler's new owner is only interested in making a quick buck, there is a real chance that most of the company will simply evaporate, as the valuable pieces are sold off.

The "elephant in the room" is the massive legacy cost of the pension and retiree health care obligations. These costs mean that the domestics are significantly underwater--for each vehicle they build, they have less money available to put into content. The problem seems intractable, and at some point it will have to be dealt with. Either retirees will be thrown under the bus, or we will see some of the largest bankruptcies in American business history.

Either way, it will be excruciating.