A few weeks ago, I talked about the slow death of GM and the people who depend on US manufacturing. This week we have similar news from Ford.

While I am very pleased to see the decline of the SUV, I am less happy to see the further decline of our auto industry. I grew up in Michigan and it's already a much bleaker place than it was in my childhood with little hope of improvement. (Although i was intrigued by the idea of Toyota, a thriving car company, opening its next plant in Michigan.)

Ford Looks to Close Plants, 
Shed Jobs in Overhaul

Moves Seen as One Element Of Broader Strategy Review Amid Losses, Falling Sales

By JEFFREY MCCRACKEN Staff Reporter of THE WALL STREET JOURNAL

December 2, 2005

Weeks after rival General Motors Corp. announced plans to eliminate 30,000 jobs next year, some details are starting to emerge about job cuts and plant closings at the U.S.'s other big auto maker, Ford Motor Co.

Though Ford's plan, dubbed the "Way Forward," is still being formulated and is subject to change, the nation's second-largest auto maker is likely to shutter assembly plants in St. Louis, Atlanta and St. Paul, Minn., according to two people familiar with its product plans. Also slated for closure are an engine-parts plant in Windsor, Ontario, and a truck-assembly plant in Cuautitlan, Mexico, said these people.

Together, the plants employ about 7,500 workers, roughly 6% of the company's total North American work force. A Ford spokesman declined to comment on the plan, which is expected to be unveiled in January.

...

Yesterday, the company said U.S. sales fell 15% last month -- the worst of any auto maker -- and cut production targets for both the fourth and first quarters. (See related article1.) Especially hard hit were sales of trucks and SUVs. Ford Explorer sales have collapsed this year, falling nearly 52% in November from a year earlier despite an extensive redesign of the vehicle.

Ford once sold as many as 400,000 Explorers a year and ran two Explorer plants on overtime. This year, it will do well to sell more than 240,000 -- a single plant's worth.

"Gone are the days when we are going to sell 400,000 Explorers [a year] without incentives," said Ford sales analyst George Pipas, commenting on November's results. "It's sayonara."

Putting concern for citizens aside and thinking in economic terms however, we have an major oversupply of cars. I recently read someone's comment: "If GM stopped making cars, would anyone not have a car?" And of course the answer is no, they would just buy someone else's car.

If Ford and GM cannot make money and we have an oversupply of cars, would the industry be better off without one of them? (This is the same question the airlines are facing.) We talk a lot about our "free market" but we keep a lot of dying companies around on life support because its too hard to let go but that isn't necessarily the best thing to do.