| nfluence of the Big Three is not only shrinking in the | | | | problems slowing the progress of the American auto |
| domestic market, but also declining as a force in the | | | | industry. |
| global economic landscape. The decline in sales and | | | | From a business standpoint, the difference in |
| productivity may seem like a result of the US | | | | production between Asian and American companies |
| automotive industry lagging behind as businesses, but | | | | demonstrates one area where the US industry lags |
| the problem has many complex factors. The industry | | | | behind. First, labor costs are one major issue that |
| itself is of course partly to blame, but there are many | | | | Japanese car companies have been able to control |
| influences that have led to the current status of | | | | through union relations. American auto workers' unions |
| American car companies in comparison with foreign | | | | have held influence over company executives, and as |
| car companies. | | | | a result, union demands reduce profit margins starting |
| First, the difference in car designs demonstrates the | | | | right on the factory floor. |
| intricacy of the problems facing American car | | | | Car companies are also plagued by their corporate |
| companies. In years past when the economy was | | | | structure. Ford initially solved a problem of |
| thriving, design matched the needs of the consumer in | | | | miscommunication and uncoordinated suppliers, but |
| the present, and sometimes the past. National trends in | | | | they created more problems down the road. Toyota |
| preferences were equally near-sighted, and car | | | | avoided problems of inefficiency and bureaucracy by |
| companies had no need to promote any other kind of | | | | creating small, efficient entities for supply and |
| car besides one Americans would spend more to buy. | | | | manufacturing. The inflexibility of American car |
| Foreign markets, however, created a more | | | | companies started from the suppliers upward, and |
| progressive demand, and the most noticeable force | | | | higher costs were felt at every step in the |
| was, and still is, the consumption of gasoline. In | | | | manufacturing process. The philosophy of centralized |
| European and Asian markets where gas is more | | | | control not only drove up costs but drove down |
| expensive due to higher taxes, saving money began | | | | innovation, leading to designs and ideas that were too |
| not at the car dealership but at the gas station. So, | | | | slow to react to market changes. |
| when deconstructed, the simple problem of design | | | | Finally, government policies have slowed American |
| differences becomes a multi-faceted issue where car | | | | innovation. Asian governments have used taxes and |
| companies, consumers, and government are all | | | | incentives to encourage their citizens, and the lack of |
| responsible. The balance and influence of all three on | | | | these kinds of programs has led to a stagnant auto |
| one another in this country is especially important when | | | | industry. In China, taxes on small, fuel-efficient cars |
| the car companies were once large, dominant players | | | | have been cut in half, creating increased demand for |
| in the domestic and global economies. So, the other | | | | small cars. As a result, manufacturers have been able |
| factors that have led to the collapse of the Big Three | | | | to charge more for their product at a time when |
| are actually all part of the same problem. But, the | | | | American car companies are slashing prices to |
| progress of the Asian auto industry highlight the major | | | | encourage sales. |