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American Economy
By tdnestor | July 29, 2008
What America drives, drives America,” says the slogan of the American Automobile Manufacturers Association (AAMA), the trade association of the three American car manufacturing companies—Chrysler, Ford and General Motors. And the influence of the automotive industry can hardly be overrated. It is the country’s largest manufacturing industry, contributing $260 billion a year to the economy. Those three companies rank among the world’s largest corporations, with a combined employment base of nearly 700,000 and a total payroll in excess of $35 billion annually. Together with their suppliers and dealers, they employ 2.3 million Americans in more than 4,000 facilities and 18,000 dealerships throughout the United States. According to the AAMA, one out of every seven jobs in this country is automotive-related.
With that said, let’s look at some statistics
Domestic parts content for new vehicles sold in North America†
General Motors …………………………………………………..78%
Honda ………………………………………………………………..59%
Toyota ………………………………………………………………..48%
BMW ………………………………………………………………….11%
Infiniti ………………………………………………………………….10%
Kia ……………………………………………………………………….3%
Hyundai…………………………………………………………………3%
Lexus ……………………………………………………………………2%
Honda ………………………………………………………………..59%
Toyota ………………………………………………………………..48%
BMW ………………………………………………………………….11%
Infiniti ………………………………………………………………….10%
Kia ……………………………………………………………………….3%
Hyundai…………………………………………………………………3%
Lexus ……………………………………………………………………2%
†Source: 2005 AALA Report, Automotive News Data Center
Jobs per 100 vehicles sold in the U.S.††
GM, DCX, Ford ……………………………………………………..22.4
Japanese Cos. ………………………………………………………15.5
Japanese Cos. ………………………………………………………15.5
††Source: GM estimates based on BLS
GM, Ford, and Chrysler face unprecedented competitive challenges from auto producers around the world. The statistics shown above gives you an idea how the foreign auto manufactures affects America’s economy. With American consumers turning to the foreign automotive market looking for a more economical vehicle, due to the runaway gas prices, it has become a bigger challenge for the American auto manufactures to stay competitive. In an effort to stay competitive the American automobile industry is faced with downsizing their companies and laying off their work force. They are also buying out or offering an early retirement to their older workers that are in the higher wage structure and replacing them with younger workers at a much lower pay scale. This has to be done to stay competitive with the foreign market which does not have the overhead cost as the domestic manufactures.
A lot of the foreign auto manufactures are building plants within the United States while our own domestic auto manufactures are downsizing. Then they convince the American consumers that they are contributing to the American economy the same as the domestic manufactures. The charts above shows you some bearing on those thoughts. Toyota is pressing GM as the No 1 auto manufacturer in the world and at the present trend, that will be happening soon.
The American Automobile Industry, “The Heartbeat of America” is getting smaller while the foreign auto manufactures are taking a bigger bite out of our economy. We, as consumers buying foreign autos, are giving “The Heartbeat of America“ to the foreign market. Can we afford that? Can we afford to “Just Give It Away”? As consumers, we need to give this a lot of thought the next time we are looking to buy our next automobile.
The American Automobile Manufacturers Association’s slogan is “What America drives, drives America,” That phrase tells you how important it is to make sure that the American Auto Manufactures remain “The Heartbeat of America”.
Some more food for thought. I am sure everyone is familiar with how the American economy is affected with the foreign countries controlling our oil products and the price of gas at the pumps. Will it be any different if foreign countries control our automotive industry, the “Heartbeat of America“?
Now that enough Americans are buying foreign automobiles to have a big affect on our economy, take a look at what is happening? GM, Ford and Chrysler have downsized and a lot of their workforce have lost their jobs. Companies that depend on the auto manufactures have either gone out of business or cut production which causes additional layoffs. Most employee of the Big 3 that are still working either had their wages decreased or for an extended time never received a wage increase to keep up with the cost of living. New home production has almost stopped, more jobs lost. People can no longer pay for their existing homes, foreclosures way up. Home values have dropped, has Yours? If you bought a new foreign automobile for what ever reason, was it worth the value that your home value decreased???
The American Automobile Industry, which has been at the heart of America and the central role in the development and growth of the American economy, deserves a serious look when it comes time for your investment in a new automobile and our faltering economy. You are not only buying a new car, but also buying into your future and your children’s future.
I am a General Motors Employee and have seen up front what has been happening over the past few years. The opinions that I have expressed are my own personal opinion. What is Your Opinion? Everyone has an opinion, let’s hear yours. It cost you nothing to express your opinion here.
Topics: General Blogs | 10 Comments »
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