Time of reckoning for U.S. automakers, newsmakers

U.S. Sen. Richard Shelby, R-Ala., could have been talking to a huddled room full of newspaper publishers Thursday when he told the Big Three auto executives why he had trouble supporting a car industry bailout, considering the dismal economic record of domestic automakers and their broken business models.

Sen. Shelby wondered aloud whether providing more money to the reeling U.S. automakers would amount to “propping up a failed industry for a few months,” according to CNN.

While there does not appear to be any sort of federal bailout on the way for newspapers, and things haven’t gotten quite that bad for the industry quite yet, things certainly haven’t looked up for quite a long time.

There have been continual reports of staff reductions, newsroom buyouts, and general business contraction, as the seemingly endless erosion of advertising revenue to the Web has been compounded by the economic downturn’s downward pressure on revenue from potential advertisers.

And the response of many newspapers, by cutting the best staff and continually downsizing and degrading the quality of the paper, seems to be one that follows a business model doomed in a similar way to that of the automobile industry.

They retain high-paid advertising and business staff and Internet gurus, whose salary and benefits make it impossible to retain the people that make a newspaper both better than the competition and attractive to readers – the writers and the editors.

One good thing for news organizations in general is that people will never cease reading the news, whether it happens to be on a computer, a piece of paper, or an iPhone. But the old-style newspaper, built on the old model of traditional advertising revenue and associated staff, is dying a slow death, and it’s time to recognize that.

Like the automakers, newspaper people need to accept the fate of their old business structure and make the change to operations increasingly based on the Web, with a streamlined structure with less advertising and support staff.

Until news organizations recognize the harsh realities of this new age of news, there will be no bailout, from the free market or from anywhere else.

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1 Comment

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One response to “Time of reckoning for U.S. automakers, newsmakers

  1. You’ve got the number on newspapers! It’s astonishing even to a cynic how slowly the newspapers are changing their business models. You can get 100x the news you care about by setting up your Google Reader, or even just checking your favorite sites. In my opinion, the faster the old guard gives their top talent blogs and marketing support for said blogs, the quicker they’ll match revenue to cost. They’ll find superstar bloggers among them who pay for themselves ++, and the ‘ol newspapers will still get to carry the top-read articles in the morning edition! Hey I think there are many ways to save an industry with such incredible talent in it.

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