Rough Times Ahead for the US Car Industry

Both Ford and General Motors have announced savage cuts to their workforce. Ford is set to close 14 plants and sack 25,000 to 30,000 workers while GM intends closing nine plants and laying off 30,000 workers.

Both companies are facing stiff competition from Japan and Korea and both companies are said to be burdened with the costs of healthcare and pensions for workers but is that the whole picture?

Of course, it’s easy to blame others and say that the Asian manufacturers can produce a cheaper product that the big two simply cannot compete with but is that really the case?

It seems it might be more a case of producing vehicles that no one wants to buy. After all the other major US manufacturer, Chrysler, actually gained market share last year and the three major Asian competitors, Hyunda, Honda and Toyota all have plants in the US.

Admittedly they don’t have all the costly overheads that the US companies have but they are making cars that the American consumer wants to buy.

Will the same thing happen here in Australia?

There is no doubt that Toyota is definitely selling more vehicles overall than Holden and Ford but the Commodore and Falcon are still the two most popular vehicles in the country. Ironically it’s Mitsubishi – an Asian manufacturer – who is struggling here.

Rough Times Ahead for the US Car Industry
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