The Future of U.S. Manufacturing
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The Jan. 5 editorial "Terms of Trade; Why the U.S. Lost Manufacturing Jobs, and How It Can Replace Them," was on the mark. The bailout of U.S. automakers will not save their industry in the long run.
Manufacturing by the Big Three represents the remnants of an industry that has been relocating to other places for 30 years. The subsidy would only slow this trend, which is likely to follow the pattern set by other manufacturing industries. At the turn of the 20th century, the heart of American textile manufacturing was in New England. Throughout the century, it relocated to the South to take advantage of non-union labor, and it eventually migrated offshore to find even cheaper labor. As foreign carmakers in the South erode the market share of the Big Three, burdened by high labor costs and low-efficiency cars, the pull of relocation will become stronger.
The solution is moving substantial parts of the industry to the South or to low-cost foreign sites, where U.S. subsidiaries are already producing cars more efficiently. Just as we import television sets with such venerable American names as RCA and Zenith without batting an eye, we will eventually be importing American cars and trucks with familiar names.
RANSFORD W. PALMER
Professor of Economics
Howard University
Washington
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