The report analyzes U.S. automobile industry performance during 1984 and the first half of 1985 and discusses developments affecting the industry through November 1985. Despite a substantial restructuring of its operations and product lines since the late 1970s, the U.S. automobile manufacturing industry continues to face serious competitive challenges. These challenges include narrowing the large Japanese cost advantage in the production of small cars and compact trucks, improving the quality of U.S.-made automotive products, and managing a changing and increasingly complex labor relations environment. The analysis indicates that U.S. automobile manufacturers currently are better prepared than in the early 1980's to respond effectively to the long-term competitive problems they face. During the past 2 years, the U.S. industry has made very significant progress in increasing productivity, controlling costs, and improving its labor relations climate. Industry actions to improve competitiveness have been supported by U.S. Government policies aimed at establishing and maintaining a sound economic environment. The Japanese Government's restraint on automobile exports to the United States also contributed to revitalization of the U.S. automobile industry.


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