2. AGENDA
• The Auto Industry
• Who Are The Major Players
• What Are The Effects NAFTA Has On The Economy
• Union Organizations Around The World
• The Rewards From The UAW
• Safety Concerns Within The Global Automobile Industries
• Conclusion: Opportunities & Challenges Per region
3. THE AUTOMOBILE INDUSTRY
• The automobile industry first began in 1769 when Nicholas J
Cugnot built the first Steam/Self propelled road vehicle
(military tractor) in France
• 1832 Robert Anderson built the electric carriage made in
Scotland
• 1885 Karl Freidrich Benz Built the first gasoline vehicle powered
by internal combustion engine, 3 wheeled , 4 cycle (cylinder)
4. THE AUTOMOBILE INDUSTRY CONT…
• 1886 Gottlieb Wilhelm Daimler and Wilhelm Maybach created
the 1st Gasoline 4 wheeled four stroke engine- known as the
Cannstatt-Daimler- Germany
• 1893 Charles Edgar Duryea and brother Frank Duryea made
the Gasoline 1st successful gas powered car 4hp, 2 stroke
motor and began the 1st American car manufacturing co.
7. BACK GROUND ON THE AUTOMOBILES
• From the unique Postwar in America, to the noticeable change
in cars in the late 50’s and early 60’s it wasn’t until the 70’s
that there was a threat in the foreign car industry.
• 70’s seem to be trying to make up for lost time and it the
industry was very unpredictable to say the least. Detroit was
afraid to change so they stuck to what they new best, keeping
reliable profits.
• They soon started to build too many cars that nobody wanted
which began to hurt them. US was producing from a vanishing
8. BACK GROUND ON THE AUTOMOBILES
• Accessories each year were sold more then the last yr.
• US produced 9 times the amount of cars than Japan
• In 1980 Japan became the world production leader and still holds that today,
compared to today where most Americans feel that Imported cars from
Germany and France are better quality.
• They apply pressure on suppliers and dealers they cut corners to have
effectiveness with cost.
• Detroit changed the publics perception of their products so that people
would continue to buy sedans and other models.
9. BACK GROUND ON THE AUTOMOBILES
• Blueprint for the modern Automobile was mainly perfected by
France and Germany
• When Gemany introduced the VW Beetle and this struck the 1st
postwar American Market. In 1974 following the Beetle was the
Rabbit and was the big rage for that time. This was a replicate
of the car in the Italian market.
• Shortly after events in the Middle East are what soon gave Japan
the status of being a major player in the industry.
10. BACK GROUND ON THE AUTOMOBILE
• GM’s flexibility of parts, quality became somewhat of the past. They soon adopted
style changes (reshape the grill, retooling the industry so they didn’t have to justify
the sales needed which was 200,000 vehicles needed to be sold at a minimum.
• Used better suppliers, Corners were not cut as much to keep the quality of what
consumers were used to.
• Toyota, Nissan and the rest resized and expanded the market that
Detroit abanded.
• Necessities soon became an advantage
• Key to survival was the turn around time on parts and
accessories. How fast can parts be received and be installed to
11. THE EFFECT NAFTA HAS ON GLOBALIZATION
• Companies and employees and are being helped by NAFTA and
are benefiting by from the lower Tariff rates changed to their
exports to Canada and Mexico.
• Many Tariff on exports to Canada were already low due to the 1989
Canada-US Free Trade Agreement (CUFTA), NAFTA has had the added
benefit nearly eliminating the once- common trade frictions among
North American countries.
• Ford, GM, and their employees are all benefiting from the cuts
generated by NAFTA.
• Mexican tariffs on cars and light trucks originating in U.S. or
12. THE EFFECT NAFTA HAS ON
GLOBALIZATION
• Passenger car tariff was reduced by 1.2 % in 1995 and
continued to be reduced until it was eliminated in 2003.
• Mexican Tariffs on heavy trucks was reduced by 2.5% per yr.,
beginning in 1995 until it was finally eliminated on Jan. 1,
1998.
• Mexican tariffs on heavy trucks (weighing over 8,864 kg) Cabs,
chassis, truck tractors, bus and specialty vehicles were cut from
20% to 18% by Jan. 1, 1994.
13. THE EFFECT NAFTA HAS ON
GLOBALIZATION
• These Tariff cuts made them have to assemble vehicles in
Mexico in order to sell there and now all auto producers were
subject to a “Trade Balancing System” (export more then they
import).
• Ford is now forced to buy much more parts from Mexican
suppliers and often didn’t meet the high quality & price
standards
• Less than maximum efficiency and exports to Mexico. Ford
14. THE EFFECT NAFTA HAS ON GLOBALIZATION
• Prior to NAFTA in 1993, GM exports to Mexico were just about
0
• 1997 they expanded to 60,000 vehicles and today its over
100,000 and assessments have been very positive
• In 1993 Chrystler’s American Motors Vehicles exports went to
Canada and Mexico. In 1998 they soon reached 66% and it
continues to rise (34,830 vehicles). Estimated today at 71%.
• The effects of decreasing trade barriers has allowed
15. UNION ORGANIZATIONS AROUND THE
WORLD
• In the beginning the U.A.W. helps to campaign against foreign
auto but now they work hand in hand with Japanese auto
producers. This can been seen in the Toyota Cali plant.
• In the past they produced more domestically than the domestic
autos are now produced abroad. More and more auto makers
produced U.S. assembly plants which hold about 25% more of
the U S motor vehicle workforce.
16. THE MAIN CHALLENGE IS THAT THE GLOBAL
AUTOMOTIVE
• Europe- is weaker as the region is emerging from a six-year
slump though the UK bucks this trend – here car manufacturing
volumes are on course to break all-time records by 2017.
• Russia-Sales have plunged down by 25% in August 2014.
• Indian-Meanwhile, the market’s performance has been
inconsistent.
• China – Growth in the world’s largest vehicle market – has
slowed, even though investments by most original equipment
manufacturers (OEMs), which are betting big on future demand,
17. SAFETY CONCERNS IN THE AUTO INDUSTRY
• 1800’s it created social and recreational opportunities and
changed Americans landscape
• Soaring rate of traffic deaths and injuries occurred
• 1910’s reckless driving, speeding, collisions and pedestrian
fatalities became new problems and later National Safety
Council complied accident stats which then began to promote
public awareness to safe driving, laws were formed and signals
and fines were soon given out.
18. SAFETY CONCERNS IN THE AUTO INDUSTRY
• 1930’s they came out with steel bodied cars & hydraulic
breaks,Improvements on roads and railways had major focus on
keeping them maintained
• 1932-1938 GM installed shatterproof windshields, AAA offered
Drivers Training, and the industry sponsored 100,000 mile (first high
speed turnpikes/freeways)
• 1950’s physicians and professors found concern with a person being
crushed if there was a collision and said they needed to be
“packaged” so they soon tried to find a scientific approach to test it
and there after seat belts came out.
19. TRANSPORTATION FATALITIES REPORT
1915-1925
Rail Road passengers /motorists or Pedestrians
1915-199/6,600 1922-200/15,300
1916- 246/8,200 1923-138/18,400
1917-301/10,200 1924-149/19,400
1918-471/10,700 1925-171/21,900
1919-273/11,200
1920-229/12,500 *This was due to Alcohol,
disobeying traffic
1921-205/13,900 rules and signals.
20. SAFETY CONCERNS IN THE AUTO INDUSTRY
CONT’D.
• 1950’s Dashboards, knobs, Intertube steering wheel, doors, handles,
Reflectors , odometers, & Cyberlite deceleration signal
• 1961- Seat belts were a major focus to help prevent injuries or
deaths. Test Crashes were used to see the impact on crashes and
tried to product better quality materials
• 1980’s M.A.D.D (mother against drunk driving) and National Min.
Drinking Act was formed .08% was the limit and an ignition interlock
breath analyzer would then prevent the driver from moving if they
were over
• 1990 seat belts were becoming more widely excepted and the state
legislature & state motor vehicle depts. approved the device for
21. SAFETY CONCERNS IN THE AUTO INDUSTRY
Increased electronics and software content:
• Cost of electronics and software is <20% of the cost 10 years
ago.
• Electronics systems contribute >90% of innovations and new
features Timeframe for new vehicle launches is 3–4 years, the
cycle for new vehicle software is measured in months.
• Technology is gaining more reliability then before and
operations can be done by calculations written and are easier to
correct if they need to.
22. CONCLUSION
• In the 1800’s France and Germany had begun the Global Auto
mobile industry. Later Japan joined in to become what then was
a great way to produce parts/and build vehicles.
• Chrysler/Daimler and Ford and WV wanted apart and so they
started to create some competition in the market place, yet the
U.S. soon came ahead due to NAFTA and our agreement with
Mexico and Canada.
23. CONCLUSION CONT’D.
• Although Tariffs were there this help to keep the economy
growing and employee more within the United States.
• Manufacturing plants within the U.S. have to keep up with
trends and continue to be more competitive in order to grow
and make profit.
• What was standard in the 1800’s is not even a thought in our
minds. From Steam engines, power 3 wheel vehicles 4 hp to
today’s V6, and V8 engines with sunroofs, XM radio, Navigation
and leather heated seats. Who knows where we are heading but
things consistently keep improving.
• Is the Electric car going to be the Major Focus for the years to
come?
