The Changing U.S. Auto Industry: A Geographical Analysis

The Changing U.S. Auto Industry: A Geographical Analysis

The Changing U.S. Auto Industry: A Geographical Analysis

The Changing U.S. Auto Industry: A Geographical Analysis

Synopsis

Drawing on rarely used archive material and recent interviews with industry officials, this book examines the radical changes which have affected automobile production in recent years.

Excerpt

The changing geography of automobile production

Henry Ford once said that history is bunk. What he meant was that history could not teach him how to revolutionize the production of automobiles. However, Ford never said that geography is bunk. To the contrary, the Ford Motor Company owed much of its early dominance of North American automotive production to geography. At a time when the location of the North American automotive industry was largely accidental, the Ford Motor Company adopted a strategy for locating plants which proved successful for more than six decades.

Ford actually told a Chicago Tribune reporter in 1916 that ‘history is more or less bunk.’ During a 1919 libel suit he brought against the Chicago Tribune after the newspaper called him an anarchist and ignorant idealist, Ford explained ‘I did not say it was bunk. It was bunk to me…but I did not need it very bad.’ Although Ford failed to identify the correct year of the American Revolution, the jury still found the newspaper guilty of libel but levied a fine of only six cents (Nevins and Hill 1957:137-139).

When the Ford Motor Company was founded in 1903, southeastern Michigan, especially near Detroit, had recently become the national center of automobile production. Under the influence of Ford and later General Motors Corporation, most of the components that go into motor vehicles were built in southeastern Michigan, as well, but most final assembly plants, where components are attached to vehicles, were located elsewhere in the country, especially near population concentrations in the northeast, south, and west coast.

Then in the 1980s, the long-term locational pattern suddenly shifted. As long as General Motors held nearly one-half, Ford one-fourth, and the Chrysler Corporation one-eighth of the North American market by selling almost exclusively 200-inch-long gas guzzlers, there was no reason to tinker with the geography of motor vehicle production. (The us industry continues to measure the length of vehicles in inches.) But the United States and Canada became a battleground for global competitors. Japanese firms, having captured one-fourth of the North American market in the 1970s by importing small, fuel-efficient vehicles, further expanded sales in the 1980s by building plants inside the United States and Canada in communities not traditionally associated with motor vehicle production. Roughly one-third of the vehicles sold by these so-called Japanese

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