Automotive Industry --- Introduction
Auto makers are going to have to change their thinking in the near future if they want to continue to make money. With fuel prices creeping closer to $3 a gallon again, consumers are having to purchases vehicles that are economic regardless of personal preferences to make and/or model.
However, last year alone, approximately 49 million new cars were sold worldwide. An estimated 800 million cars and light trucks were on the road in 2006, consuming nearly 250 billion gallions of fuel. With China having more people able to drive and buy cars, the auto industry is still going to have plenty of money. But it wont neccesarily come to the US auto makers.
US auto makers have focused much of their manufacturing on SUV's and high margin trucks, while neglecting economical cars and hybrids. Many, if not all, foreign companies are making a killing with hybrids that are very economical. Toyota has responded to the increased demand for hybrids by raising the price and scheduling more to be produced.
In the US, the auto industry employes about 3.4 million people between retailing and manufacturing. That does not include people employed in car dealerships. Many people will be hurt if US auto makers don't figure out a way to keep their share of the market. US consumers have not been impressed with the hybrids made by the “Big 3” auto makers in America. The hybrids are not comparable pricewises or economically to those made by foreign companies.
Business is still booming, however. The “Big 3” still have whopping profits listed, and are working hard to come up with fuel effecient versions of the cars they already have, including the large SUV's.
One of the problems the auto industry is concerned with is the high cost of labor union employees. It is much more cost efficient for the auto companies to send work overseas, then to pay highly skilled workers in the US. US workers are paid well, and recieve large benefit packages including pensions, as well.
Union leaders in Toledo worked out an agreement with a Jeep Wrangler manufacturing plant to allow auto part suppliers to take over work once done by union workers. This deal save about 800 jobs and saved the plant many dollars, allowing them to stay in Toledo.
by Nathan.Smarty 19 years ago