The enormous demand for steel by the US armed forces in Vietnam paved the way for Japan’s small steel industry to grow several fold during the early sixties.That,in turn, created the opportunity for Toyota and Honda to penetrate the US auto market.
A similar opening is being provided to the Indian Services providers by the mad rush into Iraq by successive Republican administrations.While one could say that call centers in Bangalore evolved from some of the needs of our markets,their growth and diversification into markets not foreseen ten years ago is making the growth of India’s service industry inevitable.
Two very well publicized instances will suffice.Large legal firms based in new York and Washington are retaining Indian lawyers to prepare briefs at a fraction of the costs incurred here.Large pharmaceutical firms like Eli Lilly and Pfizer are outsourcing their research and drug discovery programs to Indian firms.Once again the driving force is lowered costs.
Even though the war in Iraq has not directly created this problem, its indirect impact on costs is what is driving the exodus of these services to India.And the tail end of the services tsunami has not begun yet.I mean the outsourcing of medical care to medical centers in India is just beginning and will reach tidal wave proportions within the next decade.
Any sentient being can see that the wars launched by the Republicans have managed to deliberately impoverish the nation even as they keep boasting that that they have made the country secure.
That,in turn, created the opportunity for Toyota and Honda to penetrate the US auto market.
What also created this opportunity was the US deliberately opening its markets to Japan in order to reward Japan for going along with the US on its war in Vietnam.
Paul Craig Roberts is very good on outsourcing:
Outsourcing the American Economy
not to mention they’ve been light years ahead of detroit…in terms of r&d, engineering, quality control, efficiency, and market savvy…which is, imo, the real reason they tanked.
stupid, short-sighted and profit motivated is as stupid, short-sided and profit motivated does.
vietnam and the price of steel had nothing to do with it…everybody’s in the same supplier mix…it costs what it costs. and at the end of the day, it isn’t a significant determinant vis-a-vis corporate strategies or market share. the american auto mfgs have worked very hard to earn the situation they now find themselves in by being exceptionally mismanaged.
the energy crisis of the mid/late 70’s was a damn sight more influential in their demise, and the energy crisis that’s coming down the pike is just going to bury them for good. personally, l’ve driven Honda’s since 1982 for all the above reasons…and l’m still driving the second one l bought.
frankly, they’re hoping the govt will bail their sorry asses out. as to that prospect, wake up and smell the concrete….the bailouts are over…done…kaput…the usa is busted.
Everything you say is true, but it’s also true that Japanese auto makers could not have taken market share from Detroit if the US had not made a policy decision to open up the US market to them. And that was done not to benefit American consumers, but to pursue US foreign policy. There is a definite connection between US imperialism and US manufacturing decline.
I find it remarkable that US auto makers have not been able to catch up with Japanese (not to mention European) auto makers, even after the Japanese started setting up factories in the US. It is organizational failure on a tremendous scale.
I’ve never bought anything but Hondas or Acuras.
One key fact that has speeded up the decline of American manufacturing is that corporations such as GM,Ford etc. have effectively been taken over by financial types from the Golden Temple at Harvard Business School.To these wizards,the slow build up of skills of the workforce and the production of quality products desired by people was not enough.They had to have their quarterly bonuses based on Enron like accounting every three months.
Engineers and designers who are mainly motivated by their pride in their crafyt were effectively sidelined by the Harvard B-School types.With that came the decline of quality and the gradual erosion of pride in their own work.These small things,of course, did not show up in the quarterly financial statement but were just as deadly working their silent magic.
For most engineers at GM and Ford the writing was on the wall when John F.(“Jack”,the Ripper?) Smith sent Robert Stempel packing and installed his man Rick waggoner as the new CEO of GM.
These are men who are quick buck artists,impatient with anything that lasted more than 6 months.To them even the idea of producing something that took several years would be enough to make their eyes glaze over.The compensation system that rewards them with bonuses based on their last quarter’s performance, with faith based accounting,does not make it easy for them to make decisions like the managers at Toyota or Honda who can invest ten or more years into a new technology.
We are now entering the twilight of the US auto industry.All because a lousy school like Harvard,infected by the same hubris as the United States at large, thinks it has all the answers.