Coca-Cola And Its Evolution

Coca-Cola And Its Evolution The Coca-Cola company started out as an insignificant one man business and over the last one hundred and ten years it has grown into one of the largest companies in the world. The first operator of the company was Dr. John Pemberton and the current operator is Roberto Goizueta. Without societies help, Coca-Cola could not have become over a 50 billion dollar business. Coca-Cola was invented by Dr. John Pemberton, an Atlanta pharmacist. He concocted the formula in a three legged brass kettle in his backyard on May 8, 1886. He mixed a combination of lime, cinnamon, coca leaves, and the seeds of a Brazilian shrub to make the fabulous beverage(Things go better with Coke 14). Coca-Cola debuted in Atlanta's largest pharmacy, Jacob's Pharmacy, as a five cent non- carbonated beverage. Later on, the carbonated water was added to the syrup to make the beverage that we know today as Coca-Cola. Coca-Cola was originally used as a nerve and brain tonic and a medical elixir. Coca-Cola was named by Frank Robinson, one of Pemberton's close friends, he also penned the famous Coca-Cola logo in unique script. Dr. John Pemberton sold a portion of the Coca-Cola company to Asa Candler, after Pemberton's death the remainder was sold to Candler. Pemberton was forced to sell because he was in a state of poor health and was in debt. He had paid $76.96 for advertising, but he only made $50.00 in profits. Candler acquired the whole company for $2,300(Coca-Cola multiple pages). Candler achieved a lot during his time as owner of the company. On January 31, 1893, the famous Coca-Cola formula was patented. He also opened the first syrup manufacturing plant in 1884. His great achievement was large scale bottling of Coca-Cola in 1899. In 1915, The Root Glass Company made the contour bottle for the Coca-Cola company. Candler aggressively advertised Coca-Cola in newspapers and on billboards. In the newspapers, he would give away coupons for a free Coke at any fountain. Coca-Cola was sold after the Prohibition Era to Ernest Woodruff for 25 million dollars. He gave Coca-Cola to his son, Robert Woodruff, who would be president for six decades(Facts, Figures, and Features Multiple pages). Robert Woodruff was an influential man in Atlanta because of his contributions to area colleges, universities, businesses and organizations. When he made a contribution, he would never leave his name, this is how he became to be known as "Mr. Anonymous." Woodruff introduced the six bottle carton in 1923. He also made Coca-Cola available through vending machine in 1929, that same year, the Coca- Cola bell glass was made available. He started advertising on the radio in the 1930s and on the television in 1950. Currently Coca-Cola is advertised on over five hundred TV channels around the world. In 1931, he introduced the Coke Santa as a Christmas promotion and it caught on. Candler also introduced the twelve ounce Coke can in 1960. The Coca-Cola contour bottle was patented in 1977. The two liter bottle was introduced in 1978, the same year the company also introduced plastic bottles(Coca-Cola multiple pages). Woodruff did have one dubious distinction, he raised the syrup prices for distributors. But he improved efficiency at every step of the manufacturing process. Woodruff also increased productivity by improving the sales department, emphasizing quality control, and beginning large-scale advertising and promotional campaigns. Woodruff made Coke available in every state of the Union through the soda fountain. For all of these achievements he earned the name, "The Boss"(Facts, Figures, and Features Multiple pages). In 1985, the Coca-Cola Company made what has been known as one of the biggest marketing blunder. The Coca-Cola company stumbled onto the new formula in efforts to produce diet Coke. They put forth 4 million dollars of research to come up with the new formula. The decision to change their formula and pull the old Coke off the market came about because taste tests showed a distinct preference for the new formula. The new formula was a sweeter variation with less tang, it was also slightly smoother(Demott 54). Robert Woodruff's death was a large contributor to the change because he stated that he would never change Coca-Cola's formula. Another factor that influenced the change was that Coke's market share fell 2.5 percent in four years. Each percentage point lost or gain meant 200 million dollars. A financial analyst said, "Coke's market share fell from 24.3 percent in 1980 to 21.8 percent in 1984"(Things go better with Coke 14). This was the first flavor change since the existence of the Coca- Cola company. The change was announced April 23, 1985 at the Vivian Beaumont Theater at the Lincoln Center. Some two hundred TV and newspaper reporters attended this very glitzy announcement. It included a question and answer session, a history of Coca-Cola, and many other elements(Oliver 131). The debut was accompanied by an advertising campaign that revived the Coca-Cola theme song of the early 1970s, "I'd Like to Buy the World a Coke"(Say it ain't so, Coke 24). The Jingle read like this: I'd like to teach the world to sing In perfect harmony. I'd like to buy the world a Coke And keep it company. The change to the world's best selling soft drink was heard by 81 percent of the United States population within twenty-four hours of the announcement. Within a week of the change, one thousand calls a day were flooding the company's eight hundred number (1-800-GET-COKE). Most of the callers were shocked and/or outraged, many said that they were considering switching to Pepsi. Within six weeks, the eight hundred number was being jammed by six thousand calls a day. The company also fielded over forty thousand letters, which were all answered and each person got a coupon for the new Coke. A retired Air Force officer, explained in a letter to the Coca-Cola company that he wanted to be cremated and interred in a Coke can, but now that this change had come about he was reconsidering(Pendergrast Multiple pages). Sharlotte Donneally, a thirty-six year old anthropologist said, "I hate the new stuff"(Demott 60). Wendy Koskela, a thirty-five year old vice president of an insurance company said, "It's too sweet. It tastes like Pepsi." She also stated, "Real Coke had punch. This taste almost like it's flat"(Demott 60). Many American consumers of Coca-Cola asked if they would have the final say. When Pepsi heard that the Coca-Cola company was changing its secret formula they said that it was a decision that Pepsi tastes better. Roger Enrico, the president and CEO of Pepsi-Cola wrote a letter to every major newspaper in the U.S. to declare the victory, the letter read like this(Oliver 128): It gives me great pleasure to offer each of you my heartiest congratulations. After eighty-seven years of going at it eyeball to eyeball, the other guy just blinked. Coca-Cola is withdrawing their product from the marketplace, and is reformulating brand Coke to be more like Pepsi...There is no question the long-term market success of Pepsi has forced this move...Maybe they finally realized what most of us have known for years, Pepsi tastes better than Coke. Well, people in trouble tend to do desperate things...and we'll have to keep our eye on them. But for now, I say, victory is sweet, and we have earned a celebration. We're going to declare a holiday on Friday. Enjoy! Best Regards, Roger Enrico President, CEO Pepsi-Cola USA Coca-Cola officials said, "The new formula will boost Coke's share by 1 percent. That is worth 200 million dollars a year." Coca-Cola management had to decide: Do nothing or "buy the world a new Coke"(Things go better with Coke 14). They decided to develop the new formula. Roberto Goizueta, the president of the Coca-Cola Company stated, "The old Coke formula, with its secret flavoring ingredient, called Merchandise 7X, will stay locked in the Trust Company of Georgia bank vault in Atlanta, never to be used again"(Demott et. al 55). This is what many Coke officials said, "This is the most significant soft drink development in the company's history"(Demott et. al 54). The change back to the old Coke was known as the Second Coming. Roberto Goizueta said, "Today, we have two messages to deliver to the American consumer, first, to those of you who are drinking Coca-Cola with its great new taste, our thanks...But there is a second group of consumers to whom we want to speak to today and our message to this group is simple: We have heard you"(Oliver 178). On July 10, 1985, eighty-seven days after the new Coke was introduced, the old Coke was brought back in addition to the new one. This was greatly due to dropping market share and consumer protest. The market share fell from a high of 15 percent to a low of 1.4 percent(Miller 38). Roberto Goizueta and Donald Keough took full blame for this failed product launch. Don Keough, Coca-Cola president, said in response to the comeback, "The truth is we are not dumb and we are not that smart"(New bottle 18). Roberto Goizueta's response when the change about, "We have heard you"(Moore 8). This was said to be a classic marketing retreat. Coca-Cola executives admitted that they had goofed by taking the old Coke off the market. One old Coke loyalist said, "The company had spoiled the taste of its ninety nine year old soft drink and betrayed a national trust"(Moore 8). Ike Herbert, a Coke marketer said, "You would have thought we had invented a cure for cancer"(Pendergrast 366). The Coca- Cola company's eight hundred number received eighteen thousand calls of gratitude. One caller said they felt like a lost friend had returned home. The comeback of old Coke drove stock prices to the highest level in twelve years. This was said to be the only way to regain the lead on the cola wars(Classic comeback of an old champ 12). In 1979, fifteen hundred employees moved to the new corporate headquarters in Atlanta located on North Avenue. The new corporate headquarters came to be known as "The Tower." During the time when the research for the new formula was taking place, it was known as "The Bunker"(Oliver 53). The known ingredients in present day Coca-Cola are water. caffeine, phosphoric acid, vanilla, various oils and essences and extracts of the coca leaf and the kola nut. The one in four hundred part of cocaine was removed from Coca-Cola in 1903(Demott 54). Five years after the infamous Coke fiasco, the Coca-Cola company tried to bring back the reformulated Coke. The effort to phase in Coke II into the soda market was quite unsuccessful(Miller 38). During the Woodruff era, Mr. Woodruff made a promise to the armed forces of the United States to supply Coca-Cola to every serviceperson. He said that costs and location did not matter, he supplied 5 billion bottles to the service. In the mid-1970's, more than half Coca-Cola sold was outside of the U.S. Coca-Cola products outsell closest competitor by more than two to one. One in every two colas and one in every three soft drinks is a Coca-Cola product(Facts, Figures, and Features 16). The best known trademark in the world is sold in about one hundred and forty countries to 5.8 billion people in eighty different languages. This is why Coca-Cola is the largest soft drink company in the world. Coca-Cola is worth more than 58 billion dollars on the stock market(Coca-Cola, The Coca-Cola Company 232). For more than 65 years, Coca-Cola has been a sponsor of the Olympics. The 1996 Summer Olympics will be held in Atlanta, Georgia, the home of Coca-Cola. One great earmark that the Coca-Cola company has is helping the people of Atlanta. They accomplish this through scholarships, hotlines, donations and contributions, etc. Another large accomplishment that the Coca-Cola has, is being the first company to make and use recycled plastic bottles. One way to see all of the achievements of the Coca- Cola company is to visit the World of Coke in Atlanta. It houses a collection of memorabilia, samples of the products, exhibits, and many other exciting items(Facts, Figures, and Features Multiple pages). All of what has been said is the basis of what Coca-Cola was built on. Without societies help, Coca-Cola could not have become over a 50 billion dollar business. Keep on consuming the world's favorite soft drink, Coca-Cola.

Consumer Alert

In an era when free enterprise is the key to an efficient, productive, and successful country, business sometimes digresses from their true duties of producing goods and services at an honest and decent price. Consumer Alert, founded in 1977, was founded with a single purpose in mind: "to advance the consumer interest through advocacy of free-market solutions to consumer dissatisfaction and scrutiny of any action which discourages competition in the marketplace." Consumer Alert was founded in 1977 as a national, non-profit membership organization for people concerned about excessive growth of government regulation at the national and state levels. Consumer Alert's mission is to inform the public about the consumer benefits of competitive enterprise and to expose the flawed economic, scientific and risk data that underlie certain public policies. Now, Consumer Alert is the home to the spare time of over 6,000 volunteers. Each of these volunteers donate their valuable time to Consumer Alert for the sole reason of upholding high ethics within the American marketplace. Anyone can become a member. The only qualification is that the individual have a distinct and strong faith in competitive enterprise, a healthy skepticism of government solutions, a dislike of government related monopolies, labor, or business, and be in the favor of safe technology, free trade, smaller government and lower taxes. We found that to become a member, all it would take is $35 and a mailed in request to their office in Washington. Consumer Alert depends on contributions from individual donors, corporations, and foundations to protect consumer choice and competition and promote sound science. Some basic facts about Consumer Alert are that the size of their annual budget (1988) was $411,900. This helps to maintain their bimonthly publication, Consumer Alerts Comments, and pay their full-time president, vice-president, and contracted legal counsel. Currently, their salaried executive officer is Frances B. Smith, and his office is where his lobbying is needed most, Washington DC. Consumer Alert has only one interest in mind, and only a single area where their influence can be fully realized. With a central office in Washington DC, Consumer Alert is always up-to-the-minute on news that effects the consuming public. They are continually active in issues such as privatization, free trade, deregulation in the marketplace, reduction in government spending, and a balanced budget without tax increase. Consumer Alert operates the National Consumer Coalition, which is comprised of 20 public policy organizations. Members of the coalition participate in various events, including a Washington DC forum that examines critical consumer issues. The coalition advances solutions to real consumer problems and seeks the most cost- effective manner in which to achieve desired results. As the coalition's sponsor, Consumer Alert actively publicizes public policy achievements by member organizations. Consumer Alert also sponsors conferences to foster discussion of important consumer issues. Consumer Alert is clearly on the side of the consuming people. The people, and preventing their abuse, is the number one priority for Consumer Alert as seen through their vigilant watch over legislation in out government. They are our watchdogs. Consumer Alert's National Consumer Coalition forum features leading public policy experts, journalists, authors, scientists, and public officials. With an educated board of members continually at their side, we believe that their tendencies would be towards a more conservative Republican standpoint. Just as Republicans call for minimization of government control over the economy, as does Consumer Alert with their strong stance on the deregulation of the marketplace. Consumer Alert is also very effective in their influence. Representatives of Consumer Alert are often called upon by federal regulatory agencies and congressional committees to testify on the consumer effects of proposed regulations and legislation. For example, Consumer Alert recently testified before both Senate and the House Banking subcommittees on how changes to disclosure laws would make the mortgage process more understandable to consumers. Consumer Alert identifies consumer problems that can be solved through litigation and supplies information to public interest legal groups active in protecting individual rights and consumer choice. Consumer Alert was instrumental, for example, in fostering legal action that successfully prevented universities from forcing all students to fund causes with which they do not agree, such as Public Interest Research Groups. Through a national program that stresses public education, coalition- building, litigation, testimony, conferences and forums to advance these views, Consumer Alert has a significant impact on the issues. The group supports the third rule of Lineberry's traditional democratic theory: enlightened understanding. With offices in Washington DC, Consumer Alert has individual members in all 50 states, and along with their bimonthly publication, Consumer Alert does a good job of ‘alerting' consumers and allowing them to have a louder voice in today's marketplace.

Colgate Palmolive

With a continuous expansion in it's product line, Colgate-Palmolive is taking on the look of one of the most stable stocks on the exchange. Colgate has a wide variety of products sold around the globe including, Colgate Toothpastes, Speed Stick Deodorants, Ajax Surface Cleaner, and Hill's Science Diet foods for house pets. Colgate was founded in 1806 in New York City on Dutch Street by William Colgate as a starch, soap and candle business. Colgate produced soaps and perfumes or the next 67 years and then in 1873, they introduced their first toothpastes, which were aromatic toothpastes. Then 13 years later, they introduced the first dental creme packaged in collapsible tubes similar to those used today. After 104 years of being in business on Dutch Street, the largest tenancy on record in New York City the entire Colgate organization moved to Jersey City. In 1928 Colgate made its greatest merger of all time with the Palmolive-Peet Company and in 1953 took on its present name of Colgate-Palmolive. By 1967 Colgate-Palmolive was on a roll with sales passing the 1 billion dollar mark. In the years after, Colgate began acquiring major companies and expanding its product line with the purchases of Hill's Pet Products in 1976, the Mennen Company in 1992 and in 1993 acquired the liquid soap brands of S.C. Johnson. Before the purchase of Mennen Co. in 1992, Colgate Palmolive had no major presence in the deodorant industry. With the purchase of Mennen Co. they held 16% of the deodorant market but had to compete with Proctor and Gamble, who held 26% of the market with products such as Sure, Secret and Old Spice. After the purchase of Mennen Co., which was easily purchased without resist for $670 million in cash, Colgate-Palmolive held 16% of the deodorant market with their Speed Stick and Lady Speed Stick deodorants, which are now the leading in world wide sales of deodorants. They also now own products under the Baby Magic name such Skin Bracer and Baby Magic Foot. Powder. In 1976 , Colgate-Palmolive acquired Hills Pet Products Inc. Since the foundation of this company in 1948, they have committed themselves to the health and welfare of dogs and cats. Today, Hill's Pet Nutrition Inc. is one of the leading pet food manufactures and is revolutionizing the pet food industry with its Prescription Diet products used by veterinarians to manage such conditions as obesity, heart disease, kidney disease and many others. Hill's Pet Products also manufacture Hill's Science Diet food. Hill's Pet Products has not always been a success. When it was founded in 1948 by Mark Morris it grew very slowly in it's specialty foods and attempted to enter into other areas of pet care such as flea baths and aquarium supplies. It was taken over a number of times but it seemed to be more of a loss rather than gain. In 1976 Colgate-Palmolive acquired it, attracted by it's Science Diet brand. Colgate revolutionized Hills Pet Nutrition by marketing not through supermarkets but through veterinarians and through pet food stores as the Prescription Diet product line. Since Hills Pet Nutrition was acquired they have had an increase in annual sales from $40 million to $832 million and now make up 11% of Colgate sales. After the takeover of Mennen Co. the price of Colgate-Palmolive Co. rose from 49.13, the 1991 high, to 60.63, the 1992 high. Their sales also increased by 947 million from 6060 million in 1991 to 7007 million in 1992. The net income also increased drastically from $125 million to $477 million. And lastly, the takeover increased the number employed by Colgate-Palmolive from 24,900 to 28,800. Through mergers and divestitures Colgate-Palmolive has grown from a small shop on dutch street to a major stock on the NYSE. Mergers and divestitures are economically wise because they allow for the larger more dependable companies to take another company's products and turn them on the right path, such as Hills Pet Products Inc. The government should not be allowed to regulate them because mergers allow for a more dependable product. Mergers and divestitures help competition between major companies and also bring more money in for the investor through dividends. Although this may cause unemployment, it does help the economy.

Increasing Shareholder Wealth

The goal of all corporations is to increase shareholder wealth. Shareholder wealth is increased is by increasing the corporation's profit. In a corporation involved in manufacturing, reducing the cost of the factors of production is essential for growth. One of the major components of production costs is labor. When in comes to labor costs, the corporation and the worker usually have very different goals. The corporation wants to pay the worker as little as possible, while maintaining the productivity and quality required by its customers. The worker, on the other hand, seeks to increase his or her personal wealth by demanding the highest possible wages and benefits. Because of this somewhat adversarial relationship, corporations and labor have developed strategies to strengthen their positions. One of Labor's main defenses is to organize in unions. The existence of unions can be an effective method of gaining a position of strength, especially when dealing with power corporations. Depending on the size of the corporation, they might have the power to employ methods which are difficult for the workers to prevent or counteract. One tactic used by corporations to reduce labor costs is the utilization of “sweatshop” labor. A sweatshop is a manufacturing facility that operates below minimum standards of safety and/or wages and benefits. Sweatshops flourished in the United States in the late 1800s and early 1900s. This paper will examine the re-emergence of sweatshop manufacturing in the U.S. and abroad, and its impact on how manufacturers do business. Two U.S. corporations will be discussed in detail. And the issue of utilizing low cost labor domestically and offshore, including arguments for against this practice, will be discussed. ISSUE BACKGROUND Since, by definition, sweatshops violate the basic rights of workers, a brief discussion of the history of the labor movement is a necessary element in understanding the use of sweatshops. This section is intended to give a brief outline of some of the events leading to worker's rights laws. The following information was excerpted from NBC News Online. June 3, 1900 Garment workers form the International Ladies' Garment Workers' Union to protest low pay, fifteen-hour workdays, no benefits, and unsafe working conditions. While weak at the onset, the ILGWU struggles to help all workers fight for better conditions and higher pay. 1909 November 22,1909-February 15, 1910 Organized by the ILGWU, 20,000 shirtwaist makers, mostly women and children, stage the first garment workers strike. Many picketers are beaten or fired. In the end, the garment workers win a pay raise and a work reduction to 52 hours of work per week. July - October, 1910 ILGWU organizes a second large strike which featured 50,000 cloak-makers. Taking their lead from the women, this mostly male strike won uniform wages, a shorter work week, and paid holidays. A Joint Board of Sanitary Control is set up, as well as an arbitration board. As a result of the strikes in 1909 and 1910, the ILGWU swells in membership. March 25, 1911 One of the worst fires in U.S. history breaks out at the Triangle Shirtwaist Company in Manhattan's Lower East Side, killing 146 garment workers. The Triangle fire prompts the government to take action and establish regulatory control over the industry. Days after the tragedy, 80,000 people participate in a funeral procession up Fifth Avenue. June 25, 1938 President Franklin Roosevelt signs the Fair Labor Standards Act (FLSA) — also known as the federal wage and hour law — guaranteeing a minimum hourly wage of 25 cents. The law is enforced by the Department of Labor's Wage and Hour Division and sets the federal minimum wage and overtime requirements. It also prohibits child labor and requires employers to keep adequate time and payroll records. In 1996, the FLSA covers more than 110 million workers. 1958 The largest nationwide ILGWU strike in union history occurs, with 100,000 union members walking out of factories. They win new concessions, including more holidays and higher wages. 1960s-1980s This three-decade period is marked by rapid globalization which hits the garment industry. In the 1960s, faced with increased unionization, higher wages, and better benefits in the Northeast, companies begin moving factories South. However, by the late-1970s, the South had all but caught up in terms of Union activity. In the 1980s, many manufacturers and retailers begin outsourcing their production to subcontractors in Central America and Asia. Countries such as Honduras, El Salvador, Nicaragua, Malaysia, Indonesia, and Singapore provide free-trade zones and laborers who would work, according to the National Labor Committee, for as cheap as 9 cents per hour. By the late 1980s and early 1990s, under increased competitionfrom foreign subcontractors, sweatshops start to flourish once again in the U.S. September 9, 1994 The U.S. Department of Labor announces it will step up enforcement of the FSLA "Hot Goods" provision. The Fair Labor Standards Act's "Hot Goods" clause allows the DOL to fine and seize the goods of those manufacturers and retailers who knowingly sell merchandise manufactured by companies violating the FLSA. While the provision had been a powerful weapon, it was rarely enforced in the past. Secretary of Labor Lynn Martin, who served under the Bush administration, was the first to warn garment manufacturers they would be held responsible under the provision. During the Clinton administration, sweatshops gained more media attention, Labor Secretary Robert Reich enforces the provision more stringently. August 2, 1995 The Department of Labor raids a factory in El Monte, California. The DOL finds 72 garment workers toiling in "virtual slavery" for negligible wages of as little as 70 cents per hour. Large U.S. retailers such as Disney, Hecht's and Bloomingdale's are found to have sold clothes made at El Monte. U.S. Labor Secretary Robert Reich notes that while "the El Monte operation was an extreme example of worker abuse...violations of minimum wage and overtime laws are the norm in the [garment] industry." Since then, the DOL has filed a civil suit seeking $5 million dollars in back wages for the rescued workers. The Department of Labor is currently in discussions with several large retailers on how to resolve the back wages issues without going to court. June 30, 1995 The ILGWU becomes the Union of Needletrades, Industrial & Textile Employees (UNITE). Since its transformation, UNITE has initiated numerous campaigns to bring attention to sweatshops and garment industry working conditions. September 12, 1995 DOL Secretary Robert Reich calls a Retail Summit in New York to address the issue of sweatshops. He calls on some of the biggest manufacturers and retailers to help wipe-out sweatshops. The summit results in part in a "Statement of Principles," which is presented by the National Retail Federation as part of their efforts to curb sweatshop labor. The document states that all of the participating retailers agree to require their suppliers to comply with all hour and wage laws that apply to them. The agreement, signed by 128 U.S. retailers, also emphasizes their promise to cooperate more closely with law enforcement. The NRF, which represents the $2.2 trillion retail industry, is the largest association of its kind. October 17, 1995 Secretary Reich hosts a meeting of manufacturers at the American Apparel Manufacturers Association. He invites retailers and manufacturers to join the government's effort against sweatshops, and makes public a list of manufacturers who signed compliance monitoring agreements. December 15, 1995 The Gap clothing company agrees to allow an independent monitor to evaluate its factories in Central America, becoming the first U.S. apparel company to do so. February 19, 1996 Secretary Reich releases the Department of Labor's Fair Labor Fashion Trendsetter List of manufacturers and retailers which are helping in the fight to abolish sweatshops. The 31companies on the list are praised for taking responsibility for monitoring the work practices of their contractors. April 29, 1996 The National Labor Committee, a private foundation, testifies before the Democratic Policy Committee on Child Labor and targets entertainer Kathie Lee Gifford's clothing line. Gifford says she was unaware that her Wal-Mart clothing line is assembled by illegal child laborers. At a congressional hearing, she speaks out against the practice of using sweatshop labor. May 23, 1996 The Department of Labor launches an investigation into Seo Fashions in New York City, which had failed to pay its workers for several weeks, and was manufacturing "Kathie Lee" clothing. May 24, 1996 Frank Gifford, Kathie Lee Gifford's husband, visits the Garment District Justice Center to hand out money to underpaid workers who had been

U.S Auto Industry's Market Share and Fluctuations

The U. S. auto industry's share of the market has experienced fluctuations over the past 50 years. These fluctuations have been caused by many reasons, but some of the main reasons include quality, price, and foreign competition. The Ford Motor Company, General Motors Company, and the Chrysler Corporation, a.k.a. "The Big Three", are the three largest manufacturers of automobiles in the world. " The Big Three" hold nearly 75% of the market and produce over 8 million automobiles per year. The largest competitors of " The Big Three" are Japanese auto producers that include Toyota, Nissan, and Honda. These three foreign manufacturers hold 20% of the market and produce about 2.7 million automobiles per year. General Motors Company, the world's largest automobile producer, originally was composed of four major vehicle manufacturers- Buick, Cadillac, Oldsmobile, and Oakland which became Pontiac. Presently, General Motors is made up of Buick, Cadillac, Oldsmobile, Chevrolet, Pontiac, and Saturn. During the first thirty years of operation GM's only major competition was from U. S. manufacturers. However, since the first foreign truck was imported from Japan in 1956, GM's share of the market began to decline. Foreign cars were smaller, more fuel efficient, less expensive, and often more reliable than their American counterparts. General Motor's market share dipped from nearly 44% in 1973 to below 30% in 1985. In response to this sudden drop in its share of the market GM founded the Saturn Company. Saturn produces compact cars very similar to Japanese imports at competitive prices. This response halted GM's declining share of the market. Today, General Motors maintains about 30% of the market. General Motors was the first large auto company to begin research on alternative fuel sources and continues to lead the way. Some developments of this research include the first production natural gas engine, and the first car powered completely by electricity. Many ideas are still in the process of being developed, such as affordable solar powered vehicles and ultralight plastic body parts. The Ford Motor Company, founded in 1903 by Henry Ford, was the largest car manufacturer in the world until 1929 when GM passed it. Ford is currently the second largest producer of automobiles in the world producing over 5 million cars per year and holding 25% of the market. In the late 1970s and early 80s when its share of the market was being taken over by foreign auto companies, Ford's response was different than that of GM's. Ford decided to buy small foreign companies and convert them to Ford production facilities. This would enable Ford to increase its share of the market in Europe and Asia. Also, this would allow Ford to avoid high tariffs placed on foreign cars in China and Japan. Ford motor company currently employs over 300,000 workers world-wide. In January of 1996, Ford merged its North American, South American, Asia-Pacific, European, and African Automotive Operations into a single organization, Ford Automotive Operations. This merger cut back on costs of developing new cars because now instead of five different organizations working on the same project only one organization would work on it. This decreased the amount of time and labor needed to improve or design new cars. In return the price of Ford products declined, resulting in more sales. Another approach of Ford was to enter joint-ventures with foreign companies. Through these joint-ventures the foreign companies would produce and assemble Ford automobiles for sale in that country. Ford is trying to assure future sales by researching vehicles that contain plastics that can be recycled into common materials. Also, Ford is currently working with the U. S. Department of Energy to develop alternative fuels, such as electricity, methanol/ethanol, natural gas and solar energy. The third member of the " Big Three", the Chrysler Corporation, was founded in 1921 when the Maxwell Motor Company failed and Walter P. Chrysler reorganized it. Chrysler was able to capture its share of the market when it acquired Dodge Brothers, Inc. and when Ford stopped production in 1927 to switch from producing the Model T to producing the Model A. During the 1950 and 60s Chrysler took over the operations of several small companies in France, Spain, and Britain. This enabled Chrysler to begin selling cars in Europe and compete with Ford and GM on foreign markets. In 1970, Mitsubishi Motors of Japan began producing compact cars under the Chrysler name to be sold in the United States. This led to a rise in Chrysler's share of the market until the early 80s when Mitsubishi began using its own name. To counter this move Chrysler formed a joint-venture with Renault of France to produce compact cars. Then in 1987 Chrysler purchased the Italian company, Nuova Automobili F. Lamborghini, maker of expensive sports cars. Chrysler also purchased the American Motors Corporation, the maker of Jeep products. These purchases increased Chrysler's share of the market from 11% to 16.3% and continuing to rise. Chrysler produces nearly 3 million automobiles a year under the Chrysler, Dodge, Plymouth, Jeep, and Eagle names. Chrysler is also in the process of producing alternative fuel cars. These include vehicles powered by electricity, liquefied natural gas, and gasoline- methanol mixture. The future share of the market for the " Big Three" should remain steady or even increase. Today, the " Big Three" is able to produce top-of-the-line, fuel efficient, affordable cars to compete with imports. The " Big Three" also leads the way in research on alternative fuels and designs that will make automobiles more efficient and less polluting. In conclusion, the United States automobile industry, which pioneered processes and technology in the early 1900s, has returned as the leader and will lead the auto industry into the 21st century.