U.S. automobile production has mounted a major comeback, but many of the parts used to assemble those cars increasingly

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answerhappygod
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U.S. automobile production has mounted a major comeback, but many of the parts used to assemble those cars increasingly

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U.S. automobile production has mounted a major comeback, but
many of the parts used to assemble those cars increasingly come
from other countries. In 2014, a record $138 billion in car parts
were imported, equivalent to $12,135 of content in every vehicle
built. That compares to $31.7 billion in parts imported in 1990 and
$89 billion in parts imported in 2008. Why are more and more parts
imported? Because parts can be made cheaper overseas. Mexico
accounted for the largest single share (34%), followed by China
(13%). To compete and survive, U.S. parts manufacturers have
shifted production overseas. For example, Detroit-based American
Axle has plants in low-wage countries such as Mexico, Brazil,
Poland, China, and Thailand. American workers in the parts industry
have seen their own wages fall by an inflation-adjusted 23% from a
decade earlier to $19.91 today in the face of this low-wage
competition. (Wages at U.S. assembly plants also declined during
the same period by 22% to $27.83.) At one of American Axle’s
plants, wages start at $10 per hour, roughly what Walmart recently
announced it will raise its starting wage to. At the Lear
Corporation parts plant in Selma, Alabama, Denise Barnett works in
a plant that supplies seats for a nearby Hyundai car assembly
plant. Just recently, she received a 92% pay increase to bring her
hourly wage to $12.25. She tries to work as much overtime as she
can to make ends meet, but the more overtime she works, the more
day care she has to pay for. Thomas DiDonato, the chief human
resources officer at Lear, says that the company pays competitive
market wages. Indeed, he notes that “if our employees couldn’t make
ends meet, they would demonstrate their dissatisfaction with their
feet” by leaving for a better job elsewhere. But, he notes,
instead, employee turnover at Lear is only 2%.
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