The cost of new cars has fallen steadily since 1998. But the real story is that American cars are finally seriously competing in the arena of design as well, giving buyers a smorgasbord of choices and more standard features.
An influx of car factories has been a boon to states such as Alabama, Kentucky, Tennessee, South Carolina, and soon, Mississippi. Workers at 6,300 Alabama jobs get paid up to $25 an hour, compared with about $10 an hour in the state's crumbling steel and textile industries.
Foreign manufacturers have grabbed 10 points of U.S. market share from the Big Three since 1995. And by designing, engineering, and building in the world's most profitable market, they can respond more quickly to changing consumer tastes and eliminate risks caused by currency fluctuations.
The union has so far been stymied in its attempts to organize foreign-owned factories. As more nonunion factories gravitate to the South, the union's clout weakens.
The Big Three
Forecasters say GM, Ford, and Chrysler will continue to lose share in the short term, forcing factory shutdowns and blue- and white-collar layoffs. Even after the U.S. market reaches a new equilibrium, Detroit may have lost its lead.