Magazine article PM Network

Changing Gears

Magazine article PM Network

Changing Gears

Article excerpt

FORD MOTOR CO. lost nearly $12.7 million worldwide in 2006. In response, the Detroit, Michigan, USA-based car manufacturing giant plans to pack up 16 North American facilities by 2012 and move a majority of its business to Asia.

That initiative is well under way. In September 2007, Ford announced it would launch a $500 million project to build a factory in Thailand. And only two weeks earlier, the company cut the ribbon on another effort: a $510 million manufacturing center in Nanjing, China.

Ford's dealings are just the latest evidence of an ever-widening gap between the North American and Asian automobile industries. While auto manufacturers in North America continue to flounder-slashing jobs and closing plants-Asian operations are booming. Indeed, data from the International Organization for Motor Vehicle Manufacturers shows China was the world's thirdlargest producer of cars in 2006, behind only Japan and Germany.

Chinese production accounted for nearly 7.2 million motor vehicles-more than one-tenth of the world's total production. These production levels reflect 25.9 percent growth from 2005. U.S. production, by contrast, shrank by 6 percent in the same time frame. And Thailand will have a manufacturing capacity of 2 million cars within five years, according to Vallop Tiasiri, the president of the Thailand Automotive Institute, a government strategy planning organization.

Looking to turn things around, U.S. auto manufacturers are heading East. Beyond building production facilities in Asia, they're also investing millions of research dollars in the region as well. …

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