The United States motor industry is in crisis, in spite of one of the better sales years in recent times. Importantly, long-time world leader General Motors is under pressure to keep a rampant, expanding Toyota Motor Corporation at bay, Ford is in financial trouble and major component supplier Delphi has filed for bankruptcy protection.

These latest setbacks, following on the troubled merger of Chrysler Corporation and Daimler-Benz, can have a catastrophic effect on the industry in the USA. Major plant shutdowns and labour cuts are in the pipeline.

GM, the world's largest vehicle manufacturer, is racing to cut costs in the face of huge operating losses and a warning to investors by the Bank of America that there was a one-in-three chance that GM would be forced to file for bankruptcy protection.

Now their major component supplier Delphi has had to file for Chapter 11 bankruptcy protection. Spun off from the General Motors conglomerate in 1999, Delphi is in a desperate bid to revitalise and improve productivity at its operations, so it can get back in the black.

A major source of the slide in the US motor industry is the huge pension and healthcare commitments many of the companies continue to bear. They are vigorously trying to renegotiate these responsibilities, which are a legacy of the bountiful past for the Big Three in the world's largest market.

General Motors South Africa says it will not be affected by the extensive cost cutting by its parent in North America, which is reputed to run to the loss of 30 000 manufacturing jobs and the closure of a dozen plants by 2008.

By contrast, GMSA says they will employ 450 more people at their Port Elizabeth facility this year as they ramp up production of the military-style Hummer H3 for the local and export markets in an R18-billion agreement over the model life of this all-terrain vehicle. The South African subsidiary of GM is also considering importing the luxury Cadillac brand to expand its representantation into the top end of the local market.

Just as the introduction of the Hummer H3 will be positive for GMSA, so the company has a major problem with another Hummer model, the larger H2 version. This model was made only in left hand drive form for limited world markets, but a number of outside conversion companies have built RHD versions. The latest to do this is a company at Kyalami Business Park in Gauteng, which is carrying out the conversions on behalf of the Toit's Motor Group, which is mainly dependent on Nissan sales. Toit's have already had the bakkie version of the Hummer H2 homologated by the SABS and are now submitting the SUV version for approval. Retail sales have started and are causing something of a storm at GMSA. It will be interesting to know what Nissan SA's stand is towards one of its dealer setting up a Hummer sales and service operation.

The Ford Motor Company is another US auto market in trouble with excess capacity and financial woes. Ford recently announced the closure of 14 plants and 30 000 job cuts as part of its "Way Forward" plan. The manufacturer is trying to restructure and cut costs with its second major turnaround plan in four years.

It is also seeking major concessions on healthcare costs from the United Auto Workers union. Soaring petrol prices have eroded Ford's sales of their high profit sport utility vehicles and light trucks, just as the rising fuel cost has impacted negatively on sales of these models in the GM and Dodge line-ups.

Shortly after the Ford announcement, DaimlerChrysler too revealed its new "efficiency plan" with the aim of streamlining the manufacturer by retrenching 6 000 of its general and administration employees.

Both GM and Ford are now moving quickly to make up leeway on Toyota in the development of petrol-electric hybrid vehicles to cut fuel consumption and emissions.

By contrast, Toyota Motor Corporation is due to increase capital spending in 2006 by 12 per cent from 2005, as it increases production capacity in Japan and abroad. This will boost capital spending to R79-billion in 2006.

Toyota aims to sell more than 8,5-million units this year as it builds up to meet a target of 15 per cent share of the total world market early in the next decade, increasing from 12 per cent as major rivals GM and Ford scale back production and consequently sales potential.