Note on the Decline of the “Big Three” U.S. Auto Producers

by: Robert E. Kennedy

Publication Date: February 16, 2010
Length: 12 pages
Product ID#: 1-429-048

Core Disciplines: Leadership/Organizational Behavior, Strategy & Management

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Teaching Note

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GM, Ford, and Chrysler, the “Big Three” of the U.S. automotive industry, dominated automobile output in the 1950s. Domestically, the Big Three had no competitors. Sixty years later, foreign nameplates had more than half the sales in the U.S. market. This note explores the Big Three’s decline over the last half a century and possible causes for their decline.

Teaching Objectives

After reading and discussing the material, students should:

  • How industry leaders can lose their edge, why auto executives made the decisions they did, and path dependence (i.e. how decisions in one period lock you into a certain set of options in later periods).
  • While the “Big 3” auto producers have collapsed, auto production in the US remains strong – primarily due to the rise of so-called “transplants.