Last week’s Senate decision to abandon an auto industry bailout bid has raised the possibility — again — that General Motors and Chrysler will not survive. It also rekindled the debate about protectionism. In a recent interview with Worldfocus, Professor Bruce Kogut discussed whether or not the American automotive industry is suffering from the protectionist policies adopted by several U.S. trading partners.
“By and large it’s not true [in Asia],” said Kogut. “China is a quickly growing market and GM is making a lot of money there; [GM] is also located inside Korea. American manufacturers have already placed investments and have plants operating there, so the case is more on the U.S. export side. There have been some constraints in exports to these markets, but most of them have been tapering down over time. The impact on the U.S. is not going to be very large.”
Do you think foreign protectionism has contributed to the decline of the Big Three automakers?