Wednesday, January 4, 2017

U.S. automakers doing fine without president-elect Trump’s meddling

By Daniel Griswold of Mercatus. Excerpt:
"Our incoming president has been a harsh critic of the North American Free Trade Agreement, but the irony of his targeting U.S. automakers is that, by virtually every meaningful measure, they are thriving in the zero-tariff North American market created by NAFTA. Consider:

· In 2016, more than 12 million cars and light trucks were assembled in the United States. That exceeds the average annual assembly of 10.7 million vehicles during the past 30 years.

· Real automotive manufacturing output, including parts and final assembly, reached record levels in 2016. Output has more than doubled since NAFTA went into effect in 1994.

· U.S. auto factories are operating at 85 percent of capacity, according to the Federal Reserve. That is well above the 80 percent that is considered normal and a full 10 percent above the industry average since 1986.

· Motor vehicle exports from the United States reached a record 2.6 million in 2015.

· Ford and GM are enjoying record profits from their domestic as well as international sales.

Total employment is down in U.S. auto factories compared to decades past, but this is due not to declining production but to impressive advances in productivity fueled by automation. And rising productivity means U.S. automakers can pay their workers more and still remain competitive in global markets."

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