The automotive industry comprises 3% of gross global product. In many Western countries this number is higher (3.6% in the US)1
. Millions of workers worldwide are employed in auto manufacturing, auto parts, and supplies manufacturing as well as service and after sales care and other derivative industries. The auto industry produces more than 800 million cars globally. More than 250 million vehicles are produced in the
United States. Despite the numbers, the level of interdependence caused by globalization is hard to quantify. Suppliers and clients are spread around the world in a web of relationships and obligations to one another.
The economic crisis of the mid to late 2000’s did not have an equal impact across countries, companies, and employees. For example, in 2009, the dramatic impact of the recession followed by a restructuring in the US automotive industry was not fully mirrored in other mature markets in Europe or Japan. In the meantime, a very different trend was observed in major emerging economies with large domestic markets such as
China, India, and Brazil, which experienced rising output as well as increased sales of motor vehicles. Many opportunities for mergers and acquisitions were present around the world. The crisis may have been a chance for Indian and Chinese auto manufacturers to expand their markets and become world players. Chinese auto manufacturers, for example,have since cut into the markets of US car manufacturers – particularly where environmental standards are less stringent.
The poor performance of US automakers was exacerbated by the 2008 financial 1 Cole, David, et al. Car Research Memorandum The Impact of a Major Contraction of the Detroit
Three Automakers. PhD Thesis. Ann Arbor: Car Center for Automotive Research, 2008. 2 crisis, which was then held responsible for the automotive