U.S. Auto Industry Not Dying But Is Being Reborn

Dow Jones Newswire president Paul Ingrassia believes that the U.S. auto industry isn’t dying, in fact, it is being reborn.

This is because the U.S. auto industry is more than just GM, Ford and the Chrysler division of DaimlerChrysler. It includes Toyota, Nissan, Honda, Hyundai, BMW and all the "foreign" car companies that are expanding in the U.S.”

In his editorial in the Wall Street Journal Tuesday, Ingrassia describes the role of free trade in this regard. In just twenty years international nameplate manufacturing facilities in the U.S. and Canada grew from 2 to 23. Ingrassia explains, “These 23 account for a third of the vehicles built in the two countries, which long have had a free-trade pact for autos.

The assembly plants are just part of this buildup. "Foreign" car companies have engine and transmission factories in America’s heartland, engineering centers near Detroit and design centers in Southern California. Nearly 25 percent of U.S. and Canadian automotive employees now work for companies other than GM, Ford and Chrysler, Automotive News calculates, up from less than 7 percent in 1990. Expect that percentage to grow.” What’s next?

Automakers including Toyota and Hyundai are expanding their U.S.-based operations. Toyota about to open its sixth U.S. facility in San Antonio, Texas and Hyundai just this week will open its state-of-the-art Alabama plant. Ingrassia continues... “All this makes for interesting ironies. When John Kerry railed against outsourcing last fall, he certainly didn’t do it in front of the massive Honda assembly complex in Marysville, Ohio. It’s hard to condemn outsourcing when a Japanese company has outsourced jobs to your country.

Then there’s the matter of trying to define a foreign car these days. Is it a Honda Accord built in Ohio or a Chrysler minivan built in Canada? A BMW built in South Carolina, or a Ford built in Mexico? ... Far from dying, the U.S. auto industry is changing hands -- passing increasingly into the control of owners more effective than GM and Ford.”