I don't think Paul Graham's analysis of the US auto industry is accurate at all. Toyota is the number one manufacturer of automobiles right now and outside of

I don't think Paul Graham's analysis of the US auto industry is accurate at all. Toyota is the number one manufacturer of automobiles right now and outside of the Lexus brand, none of their designs are significantly more stylish than any GM product. Where Toyota was able to flank America was on quality. That advantage is pretty much over at this point as U.S. automakers have made huge strides in initial quality over the past several years and have implemented quality procedures on par with Toyota. In terms of style, Europe is well ahead of the U.S. but that is how they differentiate themselves. European cars are more expensive across the board than Japanese & U.S. If you look at the styling of Japanese and Korean cars, you're not going to see much of anything better than what GM and Ford are doing, yet Toyota, Hyundai, etc. are not having the difficulties that GM is having. Where GM is failing is in two things: marketing (mainly positioning and products) and labor. GM workers are making a lot more than Toyota assembly workers, especially those that have been around a long time. This problem is fixable with cooperation from the UAW but it's not going to be easy and a lot of buyouts will be necessary. The next problem with GM is that they failed to forecast the markets. They largely ignored the compact market, were behind the curve on crossovers, and didn't put enough money into their sedans. They put all their eggs in one basket with trucks & SUVs. Those vehicle sales were dropping off even before gas was $4/gallon. While their sedans have caught up to the Japanese in real terms, they still have a serious image problem and are still viewed as inferior. I haven't seen much advertising that really addresses these concerns. You can't reposition yourself overnight with advertising and you definitely cannot reposition yourself overnight with new/improved products but GM is on the right track. There are a lot of other macroeconomic conditions that get involved if GM does or does not receive bailout money but if they do get it, I don't think it will be wasted.