The Automotive Industry (Myth20c - Ep191)

The transportation equipment industry, broadly defined, includes all manufacturers of road, rail, water, and air vehicles, making up the largest component of the US manufacturing sector, constituting 3% of value added in the economy in 2019 when including related industries such as steel and petroleum. It has declined from 6% of the economy in 1955, however, as American passenger car manufacturers were overtaken by the Japanese in the 1980s in units produced, with domestic production peaking in 1979 at 10 million and plunging to 2 million by 2019. Much of this decline has been replaced by foreign imports from overseas, as well as the outsourcing of parts and assembly plants to Mexico under NAFTA. The Big Three American automakers - GM, Ford, and Chrysler - now focus primarily on light truck manufacturing. Tonight, we discuss with an automotive insider how the industry got to where it is today, and how going forward the prospects for electrification and autonomous vehicles are set to change it.

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Adam Smith, Hans Lander and Hank Oslo

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-- References --

- MITI and the Japanese Miracle, Johnson (1982)
- Clinton Offers Job Training For Trade Pact Casualties, Bradsher (1993) - https://www.nytimes.com/1993/10/14/us/clinton-offers-job-training-for-trade-pact-casualties.html
- Princes of the Yen, Werner (2001)
- Toyota Surpasses GM as World's Largest Automaker, Does it Matter?, Evans (2009) - https://www.motortrend.com/news/toyota-surpasses-gm-as-worlds-largest-automaker-does-it-matter-3747/
- Foxconn replaces '60,000 factory workers with robots’, Wakefield (2016) - https://www.bbc.com/news/technology-36376966
- Contribution of the Automotive Industry to the Economies of all Fifty State and the United States, Hill et. al. (2017) - https://www.cargroup.org/publication/contribution-of-the-automotive-industry-to-the-economies-of-all-fifty-state-and-the-united-states/
- GM’s decline truly began with its quest to turn people into machines, Guilford (2018) - https://qz.com/1510405/gms-layoffs-can-be-traced-to-its-quest-to-turn-people-into-machines/
- Photos: L.A.’s mid-century smog was so bad, people thought it was a gas attack, Dundon (2018) - https://timeline.com/la-smog-pollution-4ca4bc0cc95d
- Musk Admits Automation At Tesla Factory Was a Bad Idea, Tangermann (2018) - https://futurism.com/musk-automation-bad-idea
- 22 Stats That Unveil the State of the US Automotive Industry - 2020, Arevalo (2020) - https://carsurance.net/blog/automotive-industry-statistics/
- Are We Inching Toward The Lights Out Factory?, Linder (2020) - https://www.forbes.com/sites/natanlinder/2020/06/17/are-we-inching-toward-the-lights-out-factory/#4740f5b859af
- Estimated U.S. market share held by selected automotive manufacturers in 2019, Statista - https://www.statista.com/statistics/249375/us-market-share-of-selected-automobile-manufacturers/
- United States Total Vehicle Sales, Trading Economics - https://tradingeconomics.com/united-states/total-vehicle-sales
- United States Car Production, Trading Economics - https://tradingeconomics.com/united-states/car-production
- Value Added by Industry - https://apps.bea.gov/iTable/iTable.cfm?isuri=1&reqid=151&step=1