Auto CEO Blames Costs

Here is what a CEO of a leading U.S. auto company recently had to say at Detroit's Economic Club:

"Detroit - and the U.S. auto industry as this region has come to know it - is under fire from the rest of the world and will die a slow death unless Detroit's automakers, suppliers and unions come together with the state and federal government to solve the country's manufacturing woes, said the CEO of one of Detroit's largest companies and the head of the country's largest industrial trade group.

Exploding health-care benefit costs, rising corporate taxes and high energy prices place a tremendous burden on U.S. manufacturers and make them uncompetitive with the rest of the world, said Dick Dauch, chairman and CEO of auto supplier American Axle & Manufacturing. Furthermore, other countries are eyeing the U.S. auto market as a place to make money and simultaneously manipulating their currency or closing off their markets to make entry difficult for U.S. firms."

Yes, Mr. Dauch is right that continued efforts to reduce costs of doing business are important, but I would add that U.S. manufacturers, including those in the auto sector, need to do a better job of: 1) innovating; 2) giving consumers the best value possible; and 3) take a long view of competitiveness and not just the short term bottom line.

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