Auto: The Resilient South
A great deal has been written about the complex and overwhelming challenges confronting the American automotive industry – mostly domiciled in the Midwest – in the last few decades.1 Researchers have demonstrated the rapidly shrinking portion of American-made new car and noncommercial light truck sales as a percentage of total U.S. sales: in 1997, the Big Three (General Motors, Ford, and Chrysler) accounted for 71 percent of new car and noncommercial light truck sales, while Asian automakers' sales totaled under 25 percent; by 2007, the Big Three's share had plunged to 51 percent while the Asian automakers' share had propelled to 42 percent. Toyota outsold GM in the first quarter of 2008 (2.41 million compared to 2.25 million) and there is speculation that 2008 will be the year when Toyota unseats GM in global sales.
Researchers have also noted the dire financial fortunes of the Big Three as they hemorrhage vast amounts of cash and battle a range of structural problems, including sizable pension and health care obligations. Concurrently, researchers have highlighted the thriving automobile sector in a number of Southern states, given the increasing number of foreign automakers establishing assembly plants in this part of the country. In stark contrast to the difficult fiscal positions of such states as Michigan and Ohio –primarily as a result of the contracting automobile sector – the industry continues to flourish in the South, generate billions of dollars in economic impact and create thousands of direct and indirect jobs.
In light of the negative effects of a slowing national economy, how is the industry currently faring in the South? Does it still continue to be a major player in the region's economic calculations? Learn how the automotive industry in the South is coping with the deteriorating national economy, one that is either already enmeshed or lurching very close to a recession.
Prior to delving into the industry's recent performance in the South, it is appropriate to quickly review why the region has attracted such an impressive roster of foreign automakers in the last 25 years or so. Researchers highlight the following factors:
Southern Legislative Conference and SLC are trademarks registered in the U.S. Patent and Trademark Office.