The 2012 North American International Auto Show 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.
