When Lee Iacocca was the president of Chrysler back in the 1970's he had this idea about building a car that was partially manufactured in Europe, America and Asia. The concept was to bring the best of the world's automotive knowledge together and build a car that would surpass anything on the market at the time. His peers laughed at him.
American labor unions revolted and foreign nations were reluctant to share their technology. Even international shipping companies were cold about participating because they saw the plan as something that would decrease their profits. Lee was a genius. Everyone else missed the boat.
Automobiles today are very rarely made in one country. Jaguars are still one of the finest European cars on the market but their engines are made by Ford in Detroit. Hondas are Japanese cars that are assembled in America. And almost all of the guidance chips and computer elements for Chevrolet, Chrysler and Ford are made in Japan or Taiwan. The international shipping companies who were against Iacocca's idea are now making billions in revenue from the transport of auto parts across the seas of the world.
The automobile industry was a pioneer in the concept of outsourcing that has revolutionized the way that business is done. By utilizing lower labor costs and better technology along with international shipping they showed the way for others and developed a business model that has been followed by men far less capable than Lee Iacocca. Electronics and computer companies have taken the concept to a whole new level, manufacturing components that are universal to every product they sell.
The downside to the consumer in this approach is that replacement auto parts for their car now need to come from overseas and the cost of international shipping is passed on to them. The international shipping companies are making more money as are the automobile manufacturers but the consumer is taking the hit. Of course, the price you pay provides you with improved technology and longer lasting vehicles that are better on gas. The mix of different technologies also provides comforts and options on vehicles that might not be available otherwise.
International shipping companies do still transport whole automobiles. Certain companies, like Toyota, build and assemble their vehicles in Japan and then have an international shipping company transport them overseas. An interesting fact about this procedure is that a good amount of the raw metal that is used in the manufacturing process is purchased from the United States and transported to Japan by the same international shipping companies that bring the cars back. If you look at the process this way, a Toyota is still a multi-national vehicle.
The advancement of communications technology is now making it possible for even the smallest of businesses to have manufacturers and distributors at overseas locations. There are those who claim that this takes jobs away from their native country but the process actually creates employment opportunities if you look closely at it. Just ask any of those international shipping companies that thought Lee Iacocca was wrong. |
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