How the U.S. Car Makers Will Look in the Future Blog Post at Automotive.com
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The Detroit Three - In Name Only

How the U.S. Car Makers Will Look in the Future

Posted December 4 2008 01:12 PM by Edward A. Sanchez 
Filed under: Opinion, Ford

Assuming they survive into 2009, the American auto industry of the future may look quite a bit different than the industry today. And I don't just mean pie-in-the-sky hybrids and hydrogen fuel-cell cars. I'm talking about the nuts-and-bolts of the business, the manufacturing and operations.



Namely, my prediction is that only a small overall percentage of the companies' vehicles will actually be produced within the United States. Maybe 10-20 percent. The rest will come from the companies' manufacturing facilities around the world. Mexico, South Korea, Thailand, India, Brazil, Turkey, even South Africa. Only a few high-end, niche models will truly be assembled in the U.S. such as the Corvette and some Cadillac models.

Now if you want to use the broader term "North America" then we'll see a manufacturing presence for some time to come. Canada has been a major manufacturing center for the Detroit 3 for some time, and will likely remain so. Currency fluctuations aside, Canada's single-payer health care system unloads a significant burden off the automakers that they'd have to shoulder themselves in the U.S. Likewise, Mexican industrial wages are a fraction of what they are in the U.S., and until that parity is reached (likely not in our lifetimes) it will continue to be an attractive manufacturing base.

Already, the bulk of GM's worldwide sales are outside of the U.S. That trend is likely to continue. So why duplicate platforms and tooling around the world when similar models can be efficiently produced in one location?

I'm not saying I'm necessarily keen on seeing the decimation and out-sourcing of our domestic industrial base, but the trend is clear, and it's not likely to reverse course anytime soon. The best bet for Detroit, line-workers and the automotive industry, is that the so-called "green belt" jobs being talked about by many in the incoming administration, stay within our borders.

But those jobs will likely require much higher educational levels and technical skills than many of the current UAW workers currently possess. Re-education and re-training will be mandatory. Entitlement to a high-paying job with a high-school diploma is no longer a birthright. Certainly, many entrepreneurs have succeeded with a degree from the "school of hard knocks," but the pot of gold certainly didn't land in their laps out of the sky, and the belief that it will is naive and childish. Until we as a nation get past our success entitlement mentality, and realize we might actually have to put some effort toward achieving success, we will continue to see jobs of all levels migrate elsewhere.



COMMUNITY COMMENTS
sarahsmile90   (December 4 2008 07:18 PM)

Ouch! That was a bit harsh for our autoworkers. I'm not saying that I don't agree with some points, but this is all these people have known and to learn something new for the older workers is a challenge that some may not be up to.
If your predictions are correct, and all jobs will be outsourced, what would be the point of saving the US Automakers?
 
joela   (December 4 2008 11:37 PM)

i understand your view, melville248. can't reply to your first observation but to your second one, well, to me it would be a crying shame to lose great cars like the ford mustang, chevys, and the dodge ram. america builds wonderful cars even if they have to be built in mexico or canada or whatnot.
 
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