In the United States automotive industry, the term Big Three is used for the country's three largest motor vehicle manufacturers, especially indicating companies that sell under multiple brand names.
[7] Ignoring all other reasons for The Big Three's decline, and beginning with a fixed ideological/political premise that efficiency is best achieved by reducing the wages and working conditions of the lowest ranked employees, advocates of the neoclassical economic viewpoint argue that Union labor can result in higher labor costs than other multinational automakers, including those with plants in North America.
[8] The 2005 Harbour Report estimated that Toyota's lead in labor productivity amounted to a cost advantage of $350 US to $500 US per vehicle over American manufacturers.
[11][12][13] In order to improve profits, the Detroit automakers made deals with unions to reduce wages while making pension and health care commitments.
[14] With most of these plans underfunded in the late 1990s, the companies offered and provided retirement packages to its elder senior workers, and made agreements with the UAW to transfer pension obligations to an independent trust.
[15] In 2009, the CBC reported that the non-unionized Japanese automakers, with their younger American workforces, lower wages and fewer retirees would continue to enjoy a cost advantage over the Big Three.
Market incentives and subsidized leases were implemented to help sales which was crucial to keeping the plants operating at capacity, which in turn drove a significant portion of the Michigan economy.
More importantly such promotions drain the automaker's cash reserves in the near term while in the long run the company suffers the stigma of selling vehicles because of low price instead of technical merit.
The subprime mortgage crisis and inflated higher crude prices in 2008 resulted in the plummeting popularity of best-selling trucks and SUVs, led automakers to continue offering heavy incentives to help clear excess inventory.
[23] In 2008, with relatively high energy prices, a stagnant and declining economy and an overall tense market situation due to the subprime mortgage crisis, the Big Three were re-strategizing and adapting their operations idling or converting light truck plants to passenger vehicle cars.
On June 10, 2009, Chrysler Group LLC emerged from a Chapter 11 reorganization bankruptcy and its stake was subsequently bought by the Italian automaker Fiat.
[30] On January 21, 2014, Fiat bought out the remaining stake in Chrysler Group that it did not already hold from the United Auto Workers' employee medical benefit retirement trust.
Before Honda unveiled Acura in 1986, Japanese automobiles exports were primarily economical in design and largely targeted at low-cost consumers.
These made it competitive against the German imports like Audi, BMW and Mercedes-Benz, which by the time of Infiniti's release had overtaken Cadillac and Lincoln in dominating the luxury segment of the American market.
Unions and lobbyists in both North America and Europe, which was likewise affected, consequently put pressure on their governments to regulate and restrict imports to offset market imbalances at the time.
[45] Establishing US production facilities was also a significant step in improving public relations, along with philanthropy, lobbying efforts, and sharing technology.
[41] Toyota has always been by far Japan's largest automaker, and it recently overtook perennial world leader GM in both production and sales by early 2008.
The Toyota marque was valued at US$22.67 billion, ranking it ninth among all global brand names - automotive or non-automotive, edging out that of Mercedes-Benz.