Although the automobile manufacturing industry in the United States remains in the early 1990s as one of the pillars of the American economy, there is little doubt that the industry is in decline, and has been in decline for at least two decades. Inflation and price increases for technological advances have permitted automobile manufacturers to maintain growth in total revenues over the past two decades. In the context of units produced, however, the industry performance trend has been dismal. The proposed research study will examine the problems confronting the American automobile manufacturing industry in the 1990s, with a view toward assessing the industry's prospects for the early years of the next century.
Since the 1970s, American automobile manufacturers have faced increasingly stiff competition from foreign manufacturers. Fuel efficiency, meeting environmental protection standards, product quality, and cost are the main factors that have placed the American industry at a competitive disadvantage. Rather than address these issues head on, American automobile manufacturers have tended to seek governmental protection from imports, by claiming alternatively that (1) the American industry cannot meet the standards attained by the foreign manufacturers, and that (2) foreign countries discriminate against American made automobiles. For the most part, such claims are ludicrous. Certainly, American industry could attain the standards achieved by the foreign manufacturers if they were willing to sacrifice short term profits for long term gain as the Japanese automobile manufacturers do. Secondly, American automobile manufacturers need to question their own claim that foreign consumers would rush to buy American made automobiles while American consumers in increasing numbers show a preference for foreign manufactured automobiles.
To blame the problems of the American automobile manufacturing industry on the intransigence and...