The Competitive Status of the U.S. Auto Industry A Study of the Influences of Technology in Determining International Industrial Competitive Advantage (1982) / Chapter Skim
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1 The U.S. Auto Industry in Crisis
1 The U.S. Auto Industry in Crisis
Pages 10-16
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From page 10... ...
The current picture is bleak: literally hundreds of thousands of people have lost their jobs; communities dependent on the industry have suffered devastating losses in employment and financial resources; all the domestic producers have suffered major financial losses; large f acilities have permanently closed.
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From page 11... ...
The strategic value of that industrial base is by no means limited to such applications. Ongoing process innovations, which enhance current products and make possible the creation of new ones, and competitive pressures for efficient production have made the industry a prime consumer -- and a major stimulant -- of technological advance.
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From page 12... ...
Thus, while the gasoline price shock of 1979 and shifts in consumer preferences may have affected the relative demand for domestic production, the low overall level of demand must be weighed as a major factor. It would be unwise to assume that the only problem is a lack of market growth.
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From page 13... ...
Failure to exploit long available technology, generous collective bargaining agreements, inattention to market development, a confusing welter of regulation, high absenteeism, artificially low gasoline prices, among other things, have all been cited in one place or another as causes of the current situation. Whatever the mix of truth and error in all this finger pointing, one thing is reasonably clear: Detroit's troubles are not just the result of any single discrete, isolated cause, such as an inappropriate product mix.
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From page 14... ...
A different interpretation is offered by those who see in the current problems of the auto industry the "natural consequences of maturity." This view, based on theories of the product life cycle in international trade, treats the development of such products as the automobile, computers, or television sets as a predictable sequence of stages from an uncertain technological "infancy" to a highly standardized technological "maturity." As production requirements change over the course of the life cycle, countries that enjoyed an advantage in the early stage of evolution will lose it at a later stage. Indeed, one of the main predictions of life-cycle theory is that the location of production will shift over time as the Droduct matures and its t-rhn~lms:,v diffuses.3 rat A · "- ·~~ Id ·~-v~~ Considered in these terms, the automobile industry is rapidly approaching a mature state, a state in which both product and process technology are stable and well known.
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From page 15... ...
If competition in the automobile industry between 1945 and 1978 occurred within well-defined technological limits and was dominated by marketing, styling considerations, and economies of scale, the proponents of the fundamental change view argue that competition in the 1980s and beyond will, once again, be heavily influenced by technological innovation. In this respect the industry will become much more as it was in its early years when product technology was changing rapidly and significant competitive advantage accrued to those who ~ .
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From page 16... ...
16 Chapter 10 develops alternative scenarios of the industry's futur and discusses their implications for public and private policies.
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