U.S. Automobile Industry
It is apparent that the United States automobile industry is not as quite progressive as before. Every person who recognizes it – from President-elect Barack Obama, to the citizens around the country, to the chief executive officers of Chrysler, Ford and General Motors – holds a diverse solution for the troubled industry. However, the reality is that there is no single solution when it comes to the country’s troubled automobile industry. Unless the automobile companies strategically restructure their marketing concept and keep up with the industries’ changing pace, the automobile industry’s downfall will be almost guaranteed.
Overview Immediately throughout the post-period of World War II, the auto industry of the United States was observed both as a pillar and a recipient of American growth in addition to the country’s economic accomplishment. The “Big Three” manufacturers of the postwar era, Chrysler, Ford and General Motors, alongside the smaller domestic producers, Kaiser, Studebaker-Packard and American Motors, built a variety of vehicles that met the requirement of every consumer. Among foreign manufacturers, only Volkswagen and a small number of sports and luxury cars had small windows in the marketplace of United States.
Throughout the period, not less than one million Americans are working in manufacturing motor vehicles, parts and equipments. But the industry has changed considerably from the time when Chrysler, Ford and General Motors produced the irrepressible majority of light trucks and cars sold in the United States, and directly employed in excess of the aforesaid numerous workers themselves. During the 1950s, majority of the automobiles placed on the United States market were then produced by GM otherwise known as General Motors (Cooney and Yacobucci 5).
Recent Developments The United States sector in automotive manufacturing is very dynamic and enormous, yet its structure is shifting. Historically, every individual changes that took place within the domestic or global market the sales and production in the United States have remained superior. Nevertheless, the general picture of North America production is attended by apprehension within the industry created by the opening of domestic manufacturers by new international competitors (Cooney and Yacobucci 6).
The development of internationally based companies investing in the market of North America is mainly because of the strategy of alternative for importing; consequently, at the same time the Big Three struggled with concerns of downsizing. From the previously-prevailing position in the United States market, the Big Three at present only produce not more than 60 percent of all light trucks and automobiles sold in the country (Cooney and Yacobucci 5).
Their share in the market has been gradually declining, and some critics assert that the Big Three has been on the wrong side of every social, safety and environmental issue, from opposition to the standards of corporate average fuel economy (CAFE), Clean Air Act, and requirement of compulsory seat belt in the 1960s and 1970s, to slowness in alternative fuel development in vehicles nowadays (Cooney and Yacobucci 5). Currently, the smaller automobile manufacturers in United States have all moved out, and imports have surged, particularly from Asian countries.
The “transplanted” units of Korean, German and Japanese companies, which now assemble in North America, are having upward and significant market shares of their vehicles in the United States. Unfortunately, they have replaced the domestic market of the country’s smaller producers. Notwithstanding that General Motors and Ford cut production for years now, North America plants manufactured 15. 8 million trucks and cars in 2005. The large production occurred due to the production of 4.
9 million vehicles from foreign carmakers, an increase of half a million from 2004 (“The Good News About America’s Auto Industry”). By 2009, it is expected that the overall production will rise to 16. 8 million, when an anticipated 5. 8 million vehicles will roll off from the assembly lines of foreign-owned automobile companies (“The Good News About America’s Auto Industry”). Picture Source: Duke University, 2007 Foreign auto makers have set the tempo on productivity, forcing Chrysler, Ford and General Motors to be a pace behind.
Car production is changing hands, and at the expense of American automobile companies, automobile production from foreign owned companies is expected to go up in the United States. If the Big Three did indeed collapse, this would result to job losses that would cascade down from the actual manufacturing companies to parts and materials suppliers, distributors and subsidiaries, and to a multitude of other indirectly associated sectors (“Bailout For US Automobile Big-3”). Conclusion
With the escalating capacity of automotive manufacturing outside the United States, especially in Asia in addition to other transplanted companies, there are apprehensions that the motor industry may be generating a crisis to the American automobile’s market share. The consequence could include industry closures and accelerating rationalization, which could have depressing consequences for the industry, especially for the Big Three along with their U. S. employees. For decades, the automobile industry has been one of the major sources of revenue for the United States.
But because of the downward sales of American trucks and cars in recent years, the dealership of some small manufacturers was forced to close. Although for the moment, the big manufacturers are still in business, they are still experiencing unvarying severe declines in sales. The current crisis could misplace the symbolic yet significant position of the United States as one of the technological leaders of western industrialized countries in which the sector of automobile has long seized an iconic spot.
“Bailout For US Automobile Big-3.” 30 November 2008. People’s Democracy. 2 December 2008 <http://pd. cpim. org/2008/1130_pd/11302008_15. htm>. Cooney, Stephen, and Brent Yacobucci. “National Council for Science and the Environment. ” 25 April 2005. U. S. Automotive Industry: Policy Overview and Recent History. 2 December 2008 <http://ncseonline. org/NLE/CRSreports/05apr/RL32883. pdf>. “The Good News About America’s Auto Industry. ” 13 February 2006. BusinessWeek. 2 December 2008 <http://www. businessweek. com/magazine/content/06_07/b3971057. htm>.