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Us Automobile Industry Competitive Decline U.S. trade deficits Abstract (Summary) It is argued that the current US trade deficit is neither due to unfair trade practices,
GM JIT OVERVIEW The global automobile industry has become increasingly competitive and the previously dominant "Big Three" manufacturers of Ford, General Motors
environment in which GM is operating General Motors, while they are the largest automobile maker, are currently going through a decline in sales. Their competition
approach. Other Japanese car manufacturers such as Nissan and Honda soon followed suit. The global automobile industry has not been the same since. The efficient
an additional 10% capacity. This additional capacity is coming on line in the face of expected decline in demand. The industry can be described as highly competitive
Submitted by arthiraani on June 12, 2008
Category: Business
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U.S. trade deficits
Abstract (Summary)
It is argued that the current US trade deficit is neither due to unfair trade practices, nor is it due to high unit labor costs and low productivity. The trade deficit reflects an imbalance of national saving below investment. US prosperity in a competitive world depends on US productivity growth and the country's ability to maintain a stable economic environment. The US must grapple with the hard issues of devising the means to boost productivity with policies that: 1. foster greater private capital formation, 2. increase investment in infrastructure, 3. expand research and development expenditures, 4. improve the quality of education, and 5. stimulate entrepreneurial activity.
This paper will discuss our trade deficit and what it implies about our ability to compete globally.
We've had this trade deficit for over a decade. Some people, and a number of policymakers, see this as a symptom that we've lost our edge in international competition. Here's their diagnosis of the problem: Foreign competitors are able to take markets away from U.S. producers because they have some important advantages. In particular, they have lower wages, superior technology, and "unfair" trade practices.
What's their prescription to fix the problem and return U.S. industries to competitive health? They'd like to see the government try to manage international competition by taking a more protectionist stance and targeting certain industries for special support.
My own view is that this analysis is off the mark. I do not think the trade deficit is due to lower wages, superior technology, and "unfair" trade practices abroad. On the contrary, I think we can find the sources of the trade deficit in certain macroeconomic fundamentals--namely, our own government budget deficit and our investment and saving patterns. Moreover, I don't think the trade deficit is necessarily...
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