Can U.S. Automakers Recover?
It’s now official: the three largest
So will this move by all three companies be a long or short term solution? Why do you think these companies have been slow to adapt their auto-lines to the more fuel efficient models that most of the world demands? With the cost of gas prices today, is this the chief reason that these companies are losing business? Or is it because other auto companies manufacture better vehicles?
7 comments:
It is sad to see that another wave of huge layoffs from GM, Ford and Diamler Chrysler is occurring. One would think that with the cost of gas rising almost everytime you walk out the door, automakers would rethink the type of cars and trucks they produce. I believe that these companies have taken huge hits because other companies, such as Toyota, have come out with more fuel-efficient vehicles. The layoffs that are going to occur in the new future will change many people's lives and, undoubtedly drive the unemployment rate up.
The US auto market has been
competing with foreign automakers many years. They run neck and neck since the foriengn automakers(refers to Japanese automakers like TOYOTA)has the advantages of producing fuel-efficient autos while the US autos are more appealing at the lower price and more safety.Competition should leads to benefits for customers. To compete with foriengn automakers do not mean the US automakers should sacrifice the safety of auto to persue feul-efficient. Besides, I don't think layoffs are always showing the company is doing bad. Sometimes it means that the company is growing more efficiently or healthier.
There are many reasons can response to why largest U.S. automakers are drastically cutting back their labor force. As mentioned above, a more and more intensive competition in this automobile market may be one of the reasons. Another one can be a recently increased minimum wage which brought up the cost of labor to a new peak. If U.S. automakers want to recover, one efficient solution can be move their plants to other countries where labor cost is much cheaper, like China, India, etc. There are many successful examples about what many other manufacturers, like Nike, did in last decades. However, since many capitals in automobile manufactures are not quite movable and have been developed in Detroit, for example, for a longtime, it requires automakers to make a painful decision whether they should give up what they have already invested in Detroit and move their factories outside U.S.
I hope in the future that the American auto makers can learn from the foreign automakers on how to make more fuel efficient cars. If they could do this and continue to have their normally high safety ratings the market for American made cars could increase, helping more and more of these auto workers in a job.
I think the cutbacks are due to gas prices and foreign auto makers making better, longer lasting vehicles. The gas prices can be looked upon as a short run while the vehicle quality is looked at as long run. If price of gas goes back down or stops rising, then the companies will stiff be facing the problem of quality. Domestic companies need to be able to keep up with foreign companies to solve this problem.
Clearly Auto production is a strongly competitive market and understandably companies are constantly forced to make changes in order to remain in the market. Unfortunately sometimes these changes can mean lay-offs. These companies say they laid people off in order to recoup their loses, but I think that they are just lazy, and find that to be the easiest solution to a big problem. Lay-offs are definately a short term solution.
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