Detroit's bumpy ride: America's 'Big Three' carmakers are in trouble. But as GM, Ford, and Chrysler close factories and cut jobs, foreign carmakers--building their U.S. plants far from Detroit--are flourishing.

• Author: Maynard, Micheline
• Position: NATIONAL

Twenty years ago, Livonia, Michigan, was a prosperous Detroit suburb, with upscale neighborhoods and a glitzy new mall.

The local economy was thriving, thanks to Detroit's Big Three automakers--General Motors, Ford, and Chrysler--which operated humming factories near Livonia and employed thousands of managers who commuted to the auto companies' headquarters downtown.

Meanwhile, 300 miles to the south in Kentucky, drivers on Interstate 75 could zip by the tiny city of Georgetown and barely notice it.

Now, two decades later, the two cities have switched places.

Livonia is stumbling, as Detroit's automakers close factories and eliminate both blue- and white-collar jobs. Georgetown, on the other hand, is booming, thanks to Toyota. Since the 1980s, the Japanese carmaker has invested more than $5 billion in a sprawling manufacturing complex in Georgetown, leading to the construction of new schools, hotels, and dozens of smaller factories run by its suppliers.

The changing fortunes of Livonia and Georgetown offer more than a tale of two auto cities. They provide a look at the impact of broader economic shifts in the nation's auto industry. As Asian and European carmakers build more of their cars in the U.S., the industry as a whole is shifting its focus from north to south. These surging foreign competitors have located their new operations--and thousands of jobs--mostly in business-friendly Southern states.

The shift in the American auto industry carries with it not just thousands of jobs and billions of dollars, but also a sense of prosperity gained of lost. These changes are reflected in Livonia and Georgetown, and states like Michigan and Kentucky: Over the last two decades, the number of automotive-related manufacturing jobs in Michigan has fallen 34 percent, while the number of automotive jobs in Kentucky has jumped 152 percent.

THE BOOM YEARS

For 40 years, starting with the boom in the auto industry following World War II, Detroit's Big Three seemed invincible, powering the American economy forward and helping millions of workers move into the middle class. At its peak, GM alone employed more than 600,000 Americans.

Today, roughly 840,000 Americans work for the Big Three auto companies combined, and about 60,000 work for Japanese, German, and South Korean carmakers. But auto-industry leadership is moving farther and farther from Detroit, geographically and otherwise, as foreign companies like Toyota, Honda, and Nissan continue to expand their American operations. Meanwhile, GM, Ford, and DaimlerChrysler (Chrysler merged with Germany's DaimlerBenz in 1998) are struggling to stay alive, undertaking corporate restructurings that translate into plant closings and massive layoffs.

Collectively, the Big Three have cut, or announced plans to cut, nearly 140,000 jobs since 2000. And even as plants close in Michigan towns like Flint and Dearborn, Toyota has plans to open another plant in Mississippi.

Toyota's Camry has been America's best-selling car for the past five years. The company's new $1.3 billion plant in San Antonio, Texas, recently...