Concern for Big Three automakers?

• Position: Indiana Indicators

Overall, conditions for the motorvehicle industry could be a lot worse. Even though sales in the last model year were down, 2001 was still the third-best year for sales on record. Gasoline prices, while still volatile, have not proved to be the major disruptive force that some had feared. And the industry has been largely spared the painful strikes that have plagued it in the past.

But there are a number of unsustainable trends that could rip this veneer of normalcy away very soon, especially for the Big Three automakers. One is that companies are running out of cash. Inventories have been depleted by the unprecedented generosity of the zero percent financing programs initiated after September 11, but so have company coffers.

Instead of serving as a shot of adrenaline to jump-start sales and get the industry rolling, the hugely successful incentive program now looks more like a sell-off in advance of a long, cold winter. That's because cash-strapped GM, Ford and DaimlerChrysler are not ramping up production to replace depleted inventories of new cars, even though October sales were up by more than 26 percent. That's not a good omen in a business that often requires a good selection of products to close a sale.

And the Big Three no longer split the U.S. car market amongst themselves. Asian carmakers, many with sizable production capacity located in the United States and in Indiana, now collectively account for more than one of every four cars and light trucks sold. In some states, the ratio is nearly half. Moreover, the new facilities of such transplant companies as Toyota, Honda and Nissan have, in most instances, a sizable cost advantage over the older infrastructure of the Big Three.

There are, in fact, 18 different car companies that sell more than 2,000 cars per month in the United States. The strong dollar has helped create this situation, but the economics of the industry still require volume, And with Oldsmobile, Plymouth and Camaros already pronounced dead, don't be surprised if the casualty list of the shakeout still ahead contains more familiar names.

But the gun isn't simply aimed at company executives' heads. It's aimed at the leadership of the United Auto Workers union as well. Their surprisingly strong defeat in the attempt to organize non-union employees at the Nissan complex in Smyrna, Tennessee, reveals the...