The Business Facilities Blog

Tuesday, April 8, 2008

Beijing drivers carry a torch for Detroit

The biggest status symbol in China isn't a Mercedes, it's a roomy, six-passenger Buick.

That's right, General Motors' venerable sedan is the most sought-after vehicle for the rising middle class in the world's most populous nation.

If Detroit's downtrodden automakers have their way, this will not prove to be a fluke - say, like the French having a peculiar fondness for old Jerry Lewis movies - but rather will be the shape of things to come overseas.

According to the lead story in today's Wall Street Journal, some of the same factors that caused Detroit's auto giants to cede their place at the top of the world's auto producers to Toyota may now prove to be a springboard to a revival of U.S. automotive hegemony.

The Journal reports that all those lean years of downsizing and forced concessions from the auto workers' union have now positioned U.S. auto plants among the most cost-effective in the world.

Factor in a weak dollar - which makes U.S.-made goods cheaper for overseas buyers - and plenty of available plant capacity, and suddenly GM, Ford and Chrysler are poised to invade overseas markets.

Chrysler actually is shifting production of minivans and Jeeps from Europe to the U.S. to take advantage of lower costs and available plant capacity, the Journal reports, and Ford is considering ramping up exports if it can match GM in bringing its labor costs down. GM, meanwhile, reportedly is planning to build a new small car in Lordstown, Ohio, that would be geared to overseas sales.

Toyota, which successfully invaded the U.S. automotive market by building assembly plants in America that did not use union labor, is said to be very concerned about GM's new labor pact with the United Auto Workers. The tables have turned.

Exports of U.S.-made cars and light trucks have more than doubled since 2002, notching $50 billion in sales last year. U.S. carmakers are aggressively targeting buyers in more than 80 countries, including huge emerging markets in Asia and South America.

If GM's ambitious plans come to fruition, Chevy Malibus made in Kansas and Michigan soon will be rolling down the streets of Rio de Janeiro.

And if the Tigers can find some decent pitching, Motown soon may be roaring on all cylinders.

posted by jack rogers at

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