According to some, the future belongs to American platform companies.
Manufacturing is a commodity, the real money comes from design, engineering and marketing. The US – by implication – should not worry about its (shrinking as a share of employment) manufacturing sector, but rather should concentrate on moving up the value-added chain.
That at least has been the model adopted by and large by much of the US electronics industry. Design the chips and Ipods, but leave most of the actual manufacturing to East Asia.
Physics/ finance guru Steve Hsu (congrats, by the way) notes one potential problem with this approach: there is no guarantee that high-end design and engineering jobs will remain in the US. I would add that at some point the US may have to actually pay for its imported goods (even if they are designed here in the US) by exporting real goods and services, not by exporting pieces of paper …
Which brings me to the car industry.
That seems to be an industry where a lot of the high-end design and engineering jobs are found in Japan and Germany (maybe Korea too) while a fair share of the assembly jobs are in the US. Think Toyota transplants. Toyota may source the design and engineering of some models to the US – I don't know enough to know. But my sense is that most of the engineering is still done in Japan.
I consequently found Figure 1.2 this report by the Center for Automotive Research (the report was commissioned by the a group of German, Korean and Japanese auto firms) rather interesting. Figure 1.2 is on p. 3 of the report/ p. 7 of the .pdf. Hat tip: Dan Drezner. The graph shows auto imports and transplant production over time.
Two things jumped out at me. First, right now, US sales of imported cars (imported assembly, imported design and engineering) and transplants (US assembly, imported design and engineering) are both rising. The chart ends in 2003, but I doubt the basic trend has changed, given the recent woes of GM and Ford.