The U.S. auto mobile industry in an a shambles. Why?
Well, there are several contributing factors, such as higher labor costs, but there is one big reason. U.S. automakers don't make fuel-efficient vehicles that can compete.
Chronically, the automakers have planned on a short time horizon. They didn't invest over the long term, and they're unwilling to change the status quo. Ford, GM and Chrysler have too many inefficient trucks and SUV's, and their manufacturing processes take too long to retool. That's why cars like the Pontiac Grand Prix don't change body styles for 5 years or more, whle Toyota Camry gets a facelift every year or two.
Though the automakers developed hybrids, electric and fuel cell vehicles, they did so primarily as a PR move, with no intention of shipping green machines to the public unless they were absolutely forced to do so. Toyota forced their hand, and now American cars are playing a sad game of catch-up.
This myopic strategy has been ongoing for the last decade. Everyone knew the U.S. car industry was doing it.
What could have changed this? CAFE! Increasing average fleet fuel efficiency standards. The government could have forced the U.S. auto industry to build more fuel-efficent vehicles.
This would not only have made our carmakers greener, it would have made them more competitive over the long term.
Why didn't it happen? Because the Republicans insisted that it was better to let business play their game instead of having government get involved. Oh, and political contributions from the automakers might have had something to do with it, also.
It's really very simple. When you look at an industry, there are limitations in how the marketplace works. Most U.S. corporations don't have a long-term strategy. They're obsessed with short term profits and stock prices. Meanwhile, other governments write articles of legislation that force their industries to plan for the future. Consequently, their corporations are safer, greener, and more citizen friendly, and more competitive.
I'm all for free trade, but if we're going to take down trade barriers, why should the U.S. compete with one hand behind its back?