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Date: 12 March 2013
Contents
History of automobile industry in United States..........................................................3
Evolution of automobile sector during 1980s ..............................................................4
Factors affecting the price hike of automobiles during 1980s .....................................5
Effect of 1980s auto industry transition on employment .............................................6
Impact of globalisation on automobile industry during 1980s......................................8
Conclusion....................................................................................................................10
Works Cited...................................................................................................................11
List of Figures
Figure 1: US market share 1999-2006, Big three vs. Foreign competition....................5
Figure 2: US and worldwide annual motor vehicle production, 1946-90......................7
Source: Automotive News (Detroit, MI, Crain Communications as cited in Singleton 19)
From January 1979 to July 1980, the employment dropped by 335,000. Motivated by
the demand of the hour, American automakers launched compact cars with smaller engines
and greater fuel efficiency to increase sales. This lead to the employment recovery. However,
it lasted only for 11 months , which resulted in generation of only 11,000 jobs. The period
between 1981-82 witnessed maximum drop in employment (185,000 jobs June 1981 and
November 1982) as a consequence of drop in production by 14 percent.
After November 1982, the initiatives were taken by US automobile industry for
economic expansion. The US automakers started focusing on cost reduction and quality
Conclusion
This paper presents the changes underwent by automobile industry in US during 1980s. The
factors that lead to the downfall of three big automakers in US during 1980s, the rise of Japan
in the automobile sector and its influence on US automobile industry, corrective actions taken
by US firms to meet the challenges imposed by Japanese vehicle imports, impact of downfall
of US automobile economy on employment, and globalisation have been discussed in detail
in this paper.
The major changes in US automotive industry started during 1890s, which led to the
emergence of three big automakers- General Motors, Chrysler, and Ford. The three
companies, meeting several ups and downs through their journey, dominated the US
automotive market during 1980s. At the same time, they started facing strong competition
from Japan based vehicle manufacturing firms whose products were of better quality and less
expensive, gaining good hold in US market. Buy American campaign were initiated by
native people to promote the sale of US produced vehicles, so that production houses can be
prevented from shutting down. On agreement of both Japanese and US governments, a joint
venture was formed between Toyota and General Motors in 1984, giving rise to NUMMI
(New United Manufacturing, Inc.). Cars were manufactured in NUMMI under the name
plates of both General Motors (Nova, Prizm) and Toyota (Corolla, Toyota truck). During this
Works Cited
Aizcorbe, Ana. Japanese Exchange Rates, Export, Restraints, and Auto Prices in the 1980.
Monthly Labor Review. February 2007. p. 17-22.
Bhandari, Surendra. An Analysis of Toyotas Marketing Strategy. 2007. Web. 11 March
2013. <http://ssrn.com>
Charleston, Gregory A. Globalization Drives Big Changes for U.S. Auto Industry.