Sunday, September 30, 2007

How American is the Mustang Car Revisited?

Now that GM and the UAW have reached an agreement that will be copied by both Ford and Chrysler which relieved the US manufacturers from the burden of uncertainty in delivering health care you would expect the US car manufacturing to recapture market share wouldn't you? Not so fast.
Back in 1987 the proportion of cars sold in the US that were not manufactured in North America surpassed 27%. But as Honda, Toyota, Nissan and others flocked into the US that proportion dropped to almost 10% by the late 1990's. That is no longer the case. Last year 23 % of automobiles sold in the US were manufactured outside the US, Mexico and Canada. I am afraid that the trend will continue . What that means is that at best the new UAW deal might reduce the rate of increase in the hemorhaging experienced by the big three but that it will not reverse the trend. If anything I would expect GM, Ford and Chrysler to import more cars to the US. Is car manufacturing the next textile industry? Is the US destined to become a services economy and is that something to worry about?

1 comment:

Anonymous said...

This new deal Gm has made with UAW is wrong i believed. It is forcing American Car Companies to bulid American Cars in foriegn countries. WHich in return puts American Citizens out of jobs. In return can be one of the major causes of our economy in a reccession.

Raymond Gregg