Tough Competition
Loading...
Authors
Pradhan, Vishal
Issue Date
2005
Type
Thesis
Language
en_US
Keywords
Alternative Title
Abstract
Over the last few decades it has been increasingly
clear that the United States is slated to lose its
manufacturing base in favor for service. This has a large
effect on the automotive industry and specifically the city
of Detroit because jobs and production are being moved
abroad. This is mainly due to the increasing pricing
pressure that is passed on from the top to the bottom and
the bottom to the top, the widening global market which
brings quality products from low cost countries, and there
high initial plant investments. There are ways that parts
manufacturers in America can combat this problem and in
this paper I have written many ways a firm can survive in
the win or lose world of automotive, such as to align and
reduce the cost structure. In order to improve their thin
profit margins the domestic OEMs are attracted to not only
set-up production capacity in these fast growing countries,
but as a result also bolster the supplier base there even
further as they start to purchase more product from them to
service the low cost country market.
Majority of my research has been from what I learned during
my summer internship at a tier II automotive corporation
and the teachings of my bosses. There are so many examples
during the end of the 20th century and the beginning of the
next which shows how smaller firms are being eaten up
because they are not able to properly cost reduce. The
result is that only the larger businesses survive and grow.
Camaco, a tier II automotive parts supplier, has shown how
a medium sized company can grow into a large one if it
prepares itself correctly and uses its finances
appropriately. They have set-up joint ventures and their
own manufacturing plants at low cost country locations and
transfer significant production offshore. They are a model
for what a parts manufacturer can do to avoid the risk of a
takeover or closure.
Description
22 p.
Citation
Publisher
License
U.S. copyright laws protect this material. Commercial use or distribution of this material is not permitted without prior written permission of the copyright holder.