Detroit in the Cross Hairs

[tgagneguam]

'Detroit in the Cross Hairs' Part 1

The following keynote remarks were delivered by Richard E. Dauch, co-founder, chairman and CEO of American Axle & Manufacturing, at the Detroit Economic Club meeting on May 10:
Thank you Larry (Yost). Good afternoon ladies and gentlemen.
I am honored to be joining all of you in this forum today. The Detroit Economic Club, in its 70th year, does a superb job at aligning students along with leaders from business, government and the community to confer on everything from matters of local interest to international issues and world events.
Today, the topic of my discussion combines a critical world event with a matter of great local interest. If you live in Southeastern Michigan, you undoubtedly have felt the tremors relative to the structural change transforming the automotive industry. The epicenter of that change is here in the heartland of the automobile world. But, the fault lines undoubtedly circle the globe.
But the issue for you and me is Detroit. Ladies and gentlemen, like it or not, Detroit is in the cross hairs of world automotive competition.
If you look at the American auto industry in terms of vehicle production, with a Seasonal Average Adjusted Rate (SAAR) hovering 17 million units for 2004, you could assume that it is business as usual for U.S. automakers. But the significance of SAAR takes on a different meaning when you understand that there is a new generation of manufacturers that have become a part of the landscape.
Whether this change is viewed as a success or a setback, depends on whether your job is in Detroit, Michigan; Flint, Michigan; Marysville, Ohio; Smyrna, Tennessee; Mobile,Alabama; San Antonio, Texas; Tuscaloosa, Alabama; or Spartanburg, South Carolina.

CROSSHAIRS

When you come to the end of the article (Part 1), just click on the article's link to Part 2 ("Read Part 2") to complete the remainder of the comments, if you're inclined!

[actionjack]

Interesting and relates closely to how the USA functions with in the WTO (World Trade Organization).

Excerpt from article:
Manufacturers are unable to raise prices while domestic production costs are rising. Where is the brunt of the global competition coming from? Following are the populations of the key 21st century automotive competitors in alphabetic order:

1. Brazil with 176 million people

2. China with 1.3 billion people

3. France with 60 million people

4. Germany with 80 million people

5. India with over 1 billion people

6. Italy around 100 million people

7. Japan approaching 150 million people

8. South Korea with 50 million people

9. Mexico with 103 million people, and

10. The United States with 290 million people

That is a total of 3.3 billion people. On any given day, these countries and their citizens, every man, woman and child, are consumers of goods and services from the global marketplace. And, on any given day, 45 percent of these populations are at work in the labor force competing for jobs that will feed the voracious appetite of the global marketplace.


The WTO sets a Non Tarrif Mandate (NTM) for countries that are non industrialized. A few years ago China joind as a non industrialized country and received a 5 year NTM. When the USA got more involved with China last year the USA decided that the 3 years ago rule did not apply and China should have a full 5 years from that date last year. This means the export/import costs will be much lower with no taxes and creates a very lucrative situation for large Corporations to move their labor to China for at least 5 years from the USA or 2 more years from other.


Also, I agree with the author that we need to work together now and start saving our economy and livelihood before it has reached critical levels.

[gmsickofan]

That is a total of 3.3 billion people. On any given day, these countries and their citizens, every man, woman and child, are consumers of goods and services from the global marketplace.

Too bad half of them drive Toyota and Nissan pickups!

[tgagneguam]

Originally posted by gmsickofan@May 11 2004, 07:44 PM
Too bad half of them drive Toyota and Nissan pickups!

It's funny, but in some ways I actually see the fact that "half of them drive Toyota and Nissan pickups!" as an opportunity.

I'm not surprised that the Big Three enjoy a smaller piece of the USA pie; there are more competent manufacturers selling their wares to USA citizens. It follows that as more competitors enter the market place, there will be less share for the traditional makers in the long run. As initially demoralizing as that may sound, it also provides hope, because the same logic can work outside of the USA.

In the developing market of China, where GM is not the top manufacturer, the company is enjoying robust sales and profit growth simultaneously, much like Hyundai is doing on GM's home turf.

My concern, and where my skepticism lies most, though, is that GM, and to a lesser extent Ford and DCX, will squander the opportunity to make inroads in newly emerging markets. I believe that GM's, Ford's and DCX's global positions as top tier automakers will slip more as a result of their not enhancing their positions in India, China, and South Korea and less as a result of staving off the relentless import assault in North America.

Don't get me wrong; I'm not advocating for the Big Three to acquiesce their present positions in North America. But I wonder if more of their finite resources (financial, engineering, marketing, production capacity and the like) should be diverted to superlative performance in more profitable ventures.

I don't think that the Big Three have found the precise balance yet.

[New_Mexico_Sunset_on_Rt66]

Yea, we have to "choose" to be the best manufactures' of automobiles.

Urge your Represetatives to ease the regulatory burden on our manufactures'. That's one reason why jobs have been leaving California, for instance. Excessive Regualtions. have burdened our entire economy.

We need "common sense" regulation. That alone accounted for about 12% of that deficit.