Ford, General Motors and Chrysler have undergone massive decline in the past decade. Their status as the Big Three to the Detroit Three symbolizes their fragility in a market which once revolved around them. To once again claim profitability, the aforementioned automotive companies have restructured their corporate agenda such as relocating factories from north to south causing massive job loss in North American communities centred around the automotive industry, this intern caused massive economic downturn which are still very much in effect. In this paper I will discuss the rise and fall of the North American Auto industry, the restructuring of the industry and the effect in which globalization has played. I will conclude by briefly looking
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Offering smaller more compact cars poised them in a good positon for when the oil shock first hit in 1973 though this rise was extremely short lived, so much so that plans to manufacture small cars by the North American industry was terminated in 1974 when oil prices fell. In 1979 the second oil shock hit where oil prices were permanently raised causing the Big Three to venture into the small car market. The products they produced quickly gained the reputation of being ill engineered and of low quality. The underperforming models failed to tame the loss of profit from the foreign imports. An example of the extent of this profit is vehicle production in Japan which grew from 300,00 units in 1960 to almost 11 million units in 1982. The success achieved by Japanese automakers apart from superior quality and fuel efficient vehicles was the lean production techniques set up by Toyota, with this system it includes low inventory, just-in-time parts deliveries in which products are not mass produced and stored they are produced and acquired only when demand is needed, and programs for quality and production. The crisis coincided with the period between the 1950’s to 1989 which saw the North American Auto Industry expand into Canada and the American South into the right to work states. States which prevented employers from excluding non-unionized workers this generally …show more content…
Globalization has forced the auto industry to break up into smaller number of assemblers. This intern is being matched by parts suppliers on a global level which produce parts for the assemblers. This ever growing international supply chain is shifting the North American industry to move the finished vehicle production to lower wage economies which drastically impacts the production workers in the Mid-West. Permanent restructuring is causing loss of power of unions, if we look to the UAW which is main union representing autoworkers in the U.S. and a massive labor organization it has gone from peak membership in 1969 with 1.5 million to where it currently sits with a little over 500,000. Without a strong backing of a stable union workers are being forced to make drastic compensations such as reduction of wages, benefits and working conditions due to this restructuring. The cost of health care and pensions are no longer guaranteed to be provided by the Detroit three but are shifted to the worker and the constant threat of offshoring looming overhead allows for little negotiation. Job security is increasingly becoming a thing of an ever distancing
Offering smaller more compact cars poised them in a good positon for when the oil shock first hit in 1973 though this rise was extremely short lived, so much so that plans to manufacture small cars by the North American industry was terminated in 1974 when oil prices fell. In 1979 the second oil shock hit where oil prices were permanently raised causing the Big Three to venture into the small car market. The products they produced quickly gained the reputation of being ill engineered and of low quality. The underperforming models failed to tame the loss of profit from the foreign imports. An example of the extent of this profit is vehicle production in Japan which grew from 300,00 units in 1960 to almost 11 million units in 1982. The success achieved by Japanese automakers apart from superior quality and fuel efficient vehicles was the lean production techniques set up by Toyota, with this system it includes low inventory, just-in-time parts deliveries in which products are not mass produced and stored they are produced and acquired only when demand is needed, and programs for quality and production. The crisis coincided with the period between the 1950’s to 1989 which saw the North American Auto Industry expand into Canada and the American South into the right to work states. States which prevented employers from excluding non-unionized workers this generally …show more content…
Globalization has forced the auto industry to break up into smaller number of assemblers. This intern is being matched by parts suppliers on a global level which produce parts for the assemblers. This ever growing international supply chain is shifting the North American industry to move the finished vehicle production to lower wage economies which drastically impacts the production workers in the Mid-West. Permanent restructuring is causing loss of power of unions, if we look to the UAW which is main union representing autoworkers in the U.S. and a massive labor organization it has gone from peak membership in 1969 with 1.5 million to where it currently sits with a little over 500,000. Without a strong backing of a stable union workers are being forced to make drastic compensations such as reduction of wages, benefits and working conditions due to this restructuring. The cost of health care and pensions are no longer guaranteed to be provided by the Detroit three but are shifted to the worker and the constant threat of offshoring looming overhead allows for little negotiation. Job security is increasingly becoming a thing of an ever distancing