WASHINGTON -- U.S. automakers are in dire straits. While non-U.S. brands are gaining market share, both GM and Ford have announced major plant closings and substantial layoffs. For some, these announcements have raised the specter of a return to the policies of the 1980s, when the United States imposed "voluntary" export restraints on Japanese importers. But new conditions faced by today's producers, consumers, markets and politicians should prevent us from re-using tools that were not even successful a generation ago.
The two remaining traditional U.S. automakers -- General Motors and Ford -- are both experiencing major losses in their U.S. operations. The reasons are manifold, ranging from restrictive union contracts and high health-care costs to poor model choices and rapid market shifts. The upshot is a dramatic shrinking of these companies, both as employers and as market players.
Ford has announced plans to close up to 14 plants and eliminate up to 30,000 jobs. GM also plans to reduce its workforce by 30,000 and shutter 12 plants.