News / USA

Detroit Auto Show Hints at US Auto Industry Recovery

Kane Farabaugh

The 2012 North American International Auto Show has opened in Detroit, Michigan.  The annual showcase is the auto industry's premier event to showcase new cars and technology. This year's show comes amid stronger sales for Ford, Chrysler and General Motors. But despite new growth, analysts say business is not entirely back to normal as high unemployment nationwide continues to weigh on potential customers.

Ford CEO Alan Mulally's message at a launch event for the newly redesigned Ford Fusion sedan was direct: His company is profitable and growing.

"We are committed to 12,000 new jobs in our U.S. manufacturing facilities and we are on plan to have them filled by year end," said Mulally.  "We are also adding 3,000 new jobs in Asia-Pacific."

Ford's expansion comes after several years of profitability and marks a dramatic change in an industry that shed tens of thousands of jobs in the last decade. But, under new contracts ratified in 2011 with the United Auto Workers union (UAW), the "Big Three" Detroit manufacturers - Ford, General Motors, and Chrysler - are all bringing more people back to U.S. assembly lines.

"The fact that we were able to bargain to have all these jobs and investment here in this country I think is positive overall for all the manufacturing," said Bob King, President of the UAW.

King says some shuttered facilities in the U.S. will re-open under the new agreements and more cars will leave the U.S. for foreign buyers.

"For many years, there was not much export of vehicles to other parts of the world. All three of the companies will be doing major exporting of vehicles from the U.S.," added King.

Although it seems like good news for the American auto industry, in the wake of several government-sponsored bankruptcies, University of Michigan Economics Professor Bruce Pietrykowski says the turnaround is incomplete and that auto economics are in danger of faltering once again.

"Most Americans don't have the kind of disposable income that they had in 2000," said Pietrykowski.  "Most Americans are either unemployed or have seen their wages actually fall from when the auto industry was reaching its peak sales year."

Pietrykowski says what is fueling recent sales in the United States is pent-up demand by customers who delayed buying a new vehicle during the recession. He adds another barrier to further progress for the U.S. auto industry is directly linked to Wall Street and the housing market decline.

"Access to credit is severely constrained now, so Americans are less likely able to afford credit to buy the automobiles and are much less willing to extend themselves financially in order to purchase automobiles," added Pietrykowski.

Which is why at this year's Detroit Auto Show, automobile manufacturers are marketing new, smaller, more affordable and more fuel-efficient vehicles. They are trying to reach out to potential customers still waiting to buy a new vehicle, as they continue to weather an uncertain economic climate.

You May Like

China Announces Corruption Probe into Senior Ex-Leader

Former security chief and member of Politburo Standing Committee, Zhou Yongkang, being probed for suspected 'serious disciplinary violation' More

India, US Look to Reset Ties During Kerry Visit

This week's talks will be first high level interaction between two countries since Prime Minister Narendra Modi took charge More

Video Young African Leadership Program Renamed to Honor Mandela

YALI program, launched by President Obama in 2010, aims to build skills in business, entrepreneurship, public management and civic leadership More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Vietnamese Staging Chinese Product Boycott After Oil Rig Spati
X
Reasey Poch
July 28, 2014 7:18 PM
China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video ESA Spacecraft to Land on a Comet

After a long flight through deep space, a European Space Agency probe is finally approaching its target -- a comet millions of kilometers away from earth. Scientists say the mission may lead to some startling discoveries about the origins of the water on earth. VOA’s George Putic has more.
Video

Video Young Africans Arrive in US for Leadership Program

President Barack Obama's Young African Leadership Initiative has brought hundreds of young Africans to the United States for a six-week program aimed at building their knowledge and skills in fields such as public administration and business. Out of the 50,000 young Africans who applied for the program, just one percent was accepted. VOA's Laurel Bowman caught up with some of those who made the cut and has this report.
Video

Video In Honduras, Amnesty Rumors Fuel US Migration Surges

False rumors in Central America are fueling the current surge of undocumented young people being apprehended at the U.S. border. The inaccurate claims suggest the U.S. will give amnesty to young migrants from the region. As VOA's Brian Padden reports from Honduras, these rumors trace back to President Obama's 2012 executive order to halt deportations for some young undocumented immigrants already living in the United States.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.

AppleAndroid