Automotive Industry and Free Trade Agreement
Stratsim
Stratsim simulation: Marketing Strategy and Implementing
Summary
More than one million Americans are employed in manufacturing motor
vehicles, equipment and parts. But the industry has changed dramatically since the
U.S. “Big Three” motor vehicle corporations (General Motors, Ford and Chrysler)
produced the overwhelming majority of cars and light trucks sold in the United
States, and directly employed more than that many people themselves. By 2003,
most passenger cars sold in the U.S. market were either imported or manufactured
by foreign-based producers at new North American plants (so-called “transplant”
facilities). The Big Three now dominate only in light trucks, and are being
challenged there by the foreign brands. The Big Three have shed about 600,000 U.S.
jobs since 1980, while about one-quarter of Americans employed in automotive
manufacturing (nearly 300,000) work for foreign-owned companies — and that
excludes Chrysler, which was acquired by Daimler Benz of Germany in 1998.
These changes have had major effects on the structure and location of the U.S.
motor vehicle industry. Michigan has been the state most directly and adversely
affected, losing about 100,000 auto industry jobs since the late 1970s. Most other
Midwest auto belt states have either held steady or posted gains in total industry
employment, even if they have lost Big Three jobs. Some southern states, notably
Kentucky and Tennessee, have been the largest net gainers of jobs in the industry.
The transplant vehicle manufacturers virtually all began and have remained non-
union; the United Auto Workers (UAW) union has lost more than half its members
since 1979 — from 1.5 million to less than 700,000. Big Three representatives state
that they are now burdened with health care and pension costs of as much as $1,500
per vehicle in competing with foreign-based companies and have sought tax relief
from Congress to
Stratsim simulation: Marketing Strategy and Implementing
Summary
More than one million Americans are employed in manufacturing motor
vehicles, equipment and parts. But the industry has changed dramatically since the
U.S. “Big Three” motor vehicle corporations (General Motors, Ford and Chrysler)
produced the overwhelming majority of cars and light trucks sold in the United
States, and directly employed more than that many people themselves. By 2003,
most passenger cars sold in the U.S. market were either imported or manufactured
by foreign-based producers at new North American plants (so-called “transplant”
facilities). The Big Three now dominate only in light trucks, and are being
challenged there by the foreign brands. The Big Three have shed about 600,000 U.S.
jobs since 1980, while about one-quarter of Americans employed in automotive
manufacturing (nearly 300,000) work for foreign-owned companies — and that
excludes Chrysler, which was acquired by Daimler Benz of Germany in 1998.
These changes have had major effects on the structure and location of the U.S.
motor vehicle industry. Michigan has been the state most directly and adversely
affected, losing about 100,000 auto industry jobs since the late 1970s. Most other
Midwest auto belt states have either held steady or posted gains in total industry
employment, even if they have lost Big Three jobs. Some southern states, notably
Kentucky and Tennessee, have been the largest net gainers of jobs in the industry.
The transplant vehicle manufacturers virtually all began and have remained non-
union; the United Auto Workers (UAW) union has lost more than half its members
since 1979 — from 1.5 million to less than 700,000. Big Three representatives state
that they are now burdened with health care and pension costs of as much as $1,500
per vehicle in competing with foreign-based companies and have sought tax relief
from Congress to