Detroit’s Newest Lifeboat: Exporting Cars From The US

By Douglas A. McIntyre Published Apr 8, 5:25AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

The Big Three reason that if they cannot sell enough cars in the US, they can make them here and send them overseas. There new agreement with the UAW and a weak dollar make the projects feasible.

According to The Wall Street Journal "General Motors Corp is looking to export U.S.-made vehicles to Europe as well as to China and Latin American markets such as Brazil."

The plan makes a great deal of sense, at least on the face of it. GM (GM), Ford (F), and Chrysler have people who want to work and plants that want to produce. The US auto market may be as low as 15 million units this year, down from 16.1 million in 2007. That takes as much as $40 billion in sales out of the domestic economy.

Detroit faces one obvious hurdle. Many countries charge tariffs on vehicles coming in from the US, making them so expensive that no one will buy them. Less obvious but still troublesome is that the dollar runs in cycles and will not stay down forever. At some point the economics of the currency market will turn against the car guys the same way that it has turned against Japan more recently.

The most difficult problem the Big Three face is that when they get to these foreign markets they will find that all of the Japanese and Korean car companies are already there. And, many of the locals have auto companies of their own.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.