Tuesday, January 24, 2006
As you can see from the accompanying graph (source), that isn't exactly true. Most of the automotive industry expanded to reach foreign markets and capture new SUV buyers among boomers in the mid-1990s, a model that worked only for awhile. But it is worthwhile to see that what we've done is just return to the level of employment that existed in 1990. The cuts announced would reduce another 7% of the workforce, assuming none of the automotive companies outside the Big Three expand production.
While the Big Three are visibly shrinking, their combined moves do not spell the end of automotive manufacturing in the United States. But the geographic footprint has largely shifted south, where a new auto industry is flourishing.
Japanese, German and South Korean companies now employ 60,000 people, or about the same number by which Ford and G.M. have said they will shrink. But foreign makers are creating a younger, cheaper work force, sidestepping Detroit's unemployed and the higher pay and benefits packages that Detroit workers were getting.