A flood of new products from European and Asian manufacturers will ratchet up the pressure on Detroit to hold onto its share. With industry sales expected to head downhill this year, the competition will only intensify. The Lexus RX300, top, and the Honda Odyssey propelled Toyota and Honda to record U.S. sales in 2000. That's where the real risk is. The white-hot competition has not only cost Detroit market share, it has squeezed corporate profits.
Jobs also are on the line.
While Detroit automakers have largely resisted the temptation to build more factories and add more workers during the good times, the possibility of temporary and permanent layoffs is real. Clearly, the domestic carmakers can ill afford to allow their market share to slip further. A continuous free-fall will ultimately force hard decisions on capital investment and job growth. An increasingly smaller market share will ultimately trickle down to the middle-class households across Michigan that bank on the the jobs and contracts at GM, Ford and Chrysler. Foreign brands are storming bellwether markets.