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Big Three automakers, reinvented, eye consumers worldwide

GM, Ford, and Chrysler have reinvented themselves in the years since the Great Recession almost spelled the demise of two of the Big Three automakers. Their 'transformative' evolution puts them in a position to compete globally.

By Staff writer / May 7, 2013

Clockwise from top: Chevrolet Silverado, Dodge Dart dashboard, Ford Mustang, Jeep Wrangler.

Photos by AP and PRNewsFoto


Talk about a near-death experience.

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In 2007 two of America's three legacy automakers – General Motors and Chrysler – faced nothing short of oblivion, and Ford, though not in as dire straits, was feeling plenty of strain.

Six years later, Ford's Focus is by some measures the bestselling car on the planet. Domestic sales are beginning to rebound for all three US automakers. Profits are back, and it's again possible to find jobs in the American auto industry.

For an industry that has been fitfully (some would say futilely) trying to reinvent itself since the first oil crisis in the early 1970s, the comebacks verge on the astonishing – and they position the Detroit Three to be real competitors in the world's emerging markets, especially China.

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Their evolution has been "transformative, like nothing that ever occurred in the past for the American auto industry," says Mike Smith, a labor historian at Wayne State University in Detroit. "American automobile workers and companies are more efficient than they have ever been during any time in history."

Of course, GM and Chrysler had some help, controversially, along the way. But their $80 billion government bailout appears headed for a close: By early 2014, the US Treasury Department plans to sell the last 300 million GM shares it owns back to General Motors, as well as to divest its majority ownership of Ally Financial, GM's former lending subsidiary. Last year, the United States sold its stake in Chrysler to Italian automaker Fiat.

But not all is as shiny and bright as a showroom model gleaming under the lights. The three US carmakers are not even close to regaining their historic share of US auto sales, and union auto workers have had to accept significant cuts in their standard of living.

Still, when US sales of light vehicles surpassed 14 million units in 2012 – the highest year-end total in five years – Detroit heaved a collective sigh of relief. At least the numbers look to be trending in the right direction.

Some factors driving renewed sales are out of the industry's control: pent-up consumer demand for new vehicles, a loosening credit market, and an improving job market. All help bolster consumer confidence so that Americans feel freer to spend on big-ticket items after so many years of holding back.

But since the economic downturn, the Detroit automakers have made moves to steer their own destiny, refreshing their product lines to emphasize smaller, fuel-efficient vehicles that more of today's consumers seem prone to buy.


"Everyone is making a much better product with much higher quality that performs better and with better fuel economy," says George Magliano, a senior automotive economist at IHS Automotive Consulting in New York City. "Toyota and Honda used to have the auto world locked up. Now, there are all sorts of [domestic] alternatives that fit the bill, and the consumer's mind-set has changed."


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