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Failing US Auto Industry - Essay Example

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Failing US Auto Industry

In today's environment you improve yourself. You need to be better than him to compete. There's no mercy. It's competition" (2006).
The fact of the matter is, that there are a multitude of issues than can be highlighted for the sake of listing causing for the failure of the automobile industry. But at the end of the day, the industry has only itself to blame. The reason is that it is not a sudden occurrence that this happened. Everybody saw it coming, and it has been a gradual decline for quite a few years. Therefore, the industry should have been responsive and responsible enough to have reacted earlier.
Many specialists argue that they have not seen as much innovation in the realm of auto industry as should have come out of the US in the uni-polar world. With the technological development in the rest of the fields soaring above conceivable heights, the automobile industry seems to have gotten stagnant, with no new ideas giving the industry the necessary 'kick'. It is not that research is not going, but that the lack of the application of the same is the major reason.
There are many who would point fingers towards the congress, at not taking the correct steps when the market from Asia should have been checked. Instead of giving a genuine growth atmosphere to the local automobile industry, not only the vested interest of a certain few in the congress brought in Asian products, it also staggered the growth process within the local industry by anti-growth policies.
3. Labor Policies
The auto sector and its subsidiary division seemed to have the most troubled waters in as far as the labor cost were concerned. Skilled labor came very expensive to the industry, which itself was trying to deal with the pension woes. There was more being asked from the industry in terms of fringe benefits than it was able to reap through sales. Surprise and drastic job cuts did no good to their cause either, and only increased lack of faith in the system, whereby the employee burnout rate increased overtime.
4. Selfish monopolies
The big three have been having their times, wherein their own sales have soared but they did not contribute for the industry in return., the result has been indigenous growth of the companies, and no support for the sector at large, when the companies started to keep their own interests in the prime position, and gave no interest to the bigger picture, two things happened. Firstly, they themselves are now feeling the after chocks of their selfish treatment. And secondly, the smaller companies even face the question if their existence as they are very much now at the verge of bankruptcy.
5. Customer dissatisfaction
Even though American cars were being sold, the domestic manufacturers paid no heed to the fact that why were the customers actually attracted to the Asian products. Just buying American was not a good enough reason for the clients, as they would want more. The Asians now rightfully becoming the gurus of innovation, especially in the past two decades had much to offer to the customer, which was only a dream for the stringent national companies in the US.
6. High raw material costs.
Katrina is now only an excuse. It is a recent happening, and the dent in the ...Show more


The US auto industry has been in quite a bit of criticism since the past few decades. Despite seeing a few boom zones, the over all trend has been far from promising. The obvious reason turns out to be the fierce competitors from the Far East, but there is much more to than meets the eye…
Author : hubertzulauf
Failing US Auto Industry essay example
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