The Big Three US car manufacturers are being roundly criticized by US politicians of every persuasion for not adjusting their business models to the “new world” – the new world being one where oil ceases to be the “de facto” fuel. They had decades to prepare and they failed to do so and now their business models are broken. Hence a multi-billion dollar bailout is necessary.

We can set aside the fact that the auto-manufacturers that did get it right (Toyota, Honda et al) have also seen their US sales collapse and are looking at a bleak business landscape at the moment, because they are at least tooled-up for the economic revival, whenever that occurs, and Motown is not.

But the recession is exposing a whole series of business models that are broken. The news yesterday that the Tribune publishing group was writing its name in chapter 11, should have come as no shock to anyone, but it did appear to shake a few commentators. There are two forces that commonly push a company into bankruptcy.

1. The first is that demand for the primary products collapses. Everyone understands this reasonably well.
2. The second is when the costs that a company incurs do not relate to its profitable activities and suddenly the business environment changes. This second situation is pernicious, because a company can go for a long time incurring costs that are paid for by other profitable activities, but eventually something happens to expose the disparity and suddenly a competitor rises up that cannot be stopped.

This second situation can happen to a company, but it can also happen to a whole industry. The recession is going to be brutal for both companies and industries, who are being slowly suffocated by the second of these forces. The suffocation is going to accelerate naturally because the cost disparities are going to be accentuated.

So here is a list of industries under immediate threat:

• Magazines and Newspapers: Advertising revenue is collapsing everywhere, and magazines and newspapers are losing revenues accordingly. Did I say ad revenues are collapsing everywhere? Sorry, I failed to mention Internet advertising where 2009 is expected to set a record for low revenue growth of only 12%. That’s a forecast, but I think it’s an underestimate because the effectiveness of a good deal of Internet advertising can be measured and I think that could be very attractive. Poor old publishers: what part of the word “Internet” did you not understand.
• Book Publishers and Book Sellers. They never got it. They still don’t. I have one word for them all. Kindle. (Are you worried by the fact that the Kindle is sold out until February and it’s only just December. Did you even know that?) Kindle will burn you down.