Why hasn't someone started a brand new U.S. car company without all the pension obligations of the Big Three?

Question

You would think it's a no brainer: Get ten or twenty billion bucks and start a new car company with lower wages, less generous health benefits and no pension obligation, and you could sell cars for much less money and still make a profit. No more high school drop-outs making $50/hour!

Maybe Bill and Warren can start one!

Answer 1

$10-$20B isn't exactly chump change. Assuming you could get this together and get over the entry cost to put up a manufacturing facility, the existing players have spent ages building competitive barriers. You need to establish a network of dealers, get a labor pool who won't unionize, do the advertising and brand building, get designers, have a product that somehow sets itself apart from the pack, set up a supplier network and logistics, and somehow overcome the cost benefits from the economies of scale that the current players have.

Nevermind that most car manufacturers make a good chunk of their profits from financing the purchases of their vehicles, not from the actual car sales. It would be difficult to have sufficient financing available to build this from the ground up without another ongoing business.

BTW- Saturn is a branch of GM

Answer 2

Because the entry barrier is enormous. The capital investment is so large that most countries can't afford it, let alone a new entry company for a fiercely competitive market with ever thinning margins.

Answer 3

When China starts making cars for sale here just like the Koreans, one might as well sound the death knell for US Car Manufacturing.

Answer 4

and who would work for this company???