Yale Economist Rick Levin, appointed to Obama's sci-tech task force and not the auto task force, believes there's room for no more than one American, Japanese, European and Indian automaker. We happen to agree. Sorta.
Y: On a different bailout front, what do you think about the auto companies?
L: I think the optimum number of U.S. auto companies is one. 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.
He's not the first to be saying this. We somehow seem to remember a book from a few years ago positing this same theory. While there's room for regional players beyond that, we tend to agree the market's most effectively optimized for one global automaker from each region. However, we don't see BMW, Daimler and VW/Audi/Porsche joining forces anytime soon and don't even get us started on Toyota, Honda, Mitsubishi, Nissan and whoever makes those cute bikes from Akira. [Yale Alumni Mag]