Friday, March 04, 2005

Taking Down the 'No Foreign Cars' Signs in Michigan

Danny Hakim has an excellent article in yesterday's Times about how Michigan Gov. Granholm is bending over backwards to invite a Toyota Technical Center. Michigan has been sufferring from job losses in past few years. As the article mentions, Ontario has taken over Michigan in terms of auto assembly Never the less, the Big Three have continued to loose their market share to Toyota and others.
What is really interesting in this is story is a chart which shows that Japanese car makers now employ more than 56,000 people in the US. In fact, calling Toyota, Honda or Nissan as Japanese car makers is going to be difficult. This plays out in the congress, where the Big Three, IMHO, will no longer be able to claim that they need to be protected from foreign manufacturers because of job reasons.
I am sure that the Big three, specially GM and Ford, realise that their strong hold in the light-trucks market is getting loose. As the capacity in that sector grows, the margins are going to shrink and that spells doom for GM and Ford given their healthcare costs. This is not something to dismiss easily. It is high time to shake up the operations, stop the bleeding in the form of incentives and get creative.


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