This is the same question that was asked about the steel industry in the 70s. There are quite a few parallels there. Another “Big Three” used to be U.S. Steel (USS), Bethlehem Steel, and National Steel*. USS production peaked at 35 million tons in 1953; it acquired two large energy companies in the 80s and was de-listed from the Dow after 90 years in 1991. Its steel operations were spun off in 2001 and it acquired then-bankrupt National Steel in 2003. USS is now the world’s 10th largest steel producer with production of 21.5 million tons in 2007. Remember the great Hyman Roth line in The Godfather, "We're bigger than U.S. Steel"? Well, so are nine foreign steel makers. As for Beth Steel? It went belly-up too, in 2001. The remnants of the company were acquired by ArcelorMittal, the world's leading steel producer with more than 100 million tons per year in production. The list below (thanks Wikipedia) shows the top 10 steel producers for 2007.
1. 116.4 Mton ArcelorMittal (Global)2. 35.7 Mton Nippon Steel (Japan)
3. 34.0 Mton JFE (Japan)
4. 31.1 Mton POSCO (South Korea)
5. 28.6 Mton Shanghai Baosteel Group Corporation (China)
6. 26.6 Mton Tata Steel (Global)
7. 23.6 Mton LiaoNing An-Ben Iron and Steel Group (China)
8. 22.9 Mton Shagang Group (China)
9. 22.8 Mton HeBei Tangshan Iron & Steel Group (China)
10. 21.5 Mton United States Steel Corporation (United States)
Does their location, generally in East Asia, threaten U.S.strategic interests? Should we have maintained steel tarriffs that President Bush put in place in 2002 (and lifted a year later)? The general consensus seems to be that the global steel market can meet U.S. military and economic needs. If policymakers had known that structural steel prices would more than double from 2003-2008 and scrap metal prices would quintuple, perhaps tarriffs would have been a good way to keep more capacity online, however that is a separate discussion. The global steel price peaked in mid-2008 and is expected to continue its fall in 2009. As with all freely traded commodities, steel is sold to the highest bidder, and the Pentagon's hefty budget ensures that it will always be first in line for steel.
In the aftermath of the Second World War, Western European countries formed the European Coal and Steel Community to oversee these commodoties that were seen as essential to a military buildup. If this community could successfully control coal and steel production in Europe, it could keep neighboring countries from plunging Europe into a third war. The ECSC was successful in maintaining control of the market, however it oversaw the decline of the coal and steel industries in Europe. Its most lasting legacy, however, was that it became the forerunner to the European Economic Community, and, eventually, the European Union (EU). The EU is now responsible for approximately one-sixth of global steel production. In an ironic twist, however, Luxembourg, one of the six founders of ECSC, now hosts the world headquarters of ArcelorMittal.
Is a U.S. Car and Truck Community along the lines of the ECSC called for? Is an auto industry essential to a military buildup? Again, the answer is no. To address the example in the question, the A1 Abrams Tank is manufactured not by the Big 3, but by General Dynamics, in Lima, Ohio. Production of like military assets will remain within U.S. borders, despite Boeing's hysterical cries that the French will be building the KC-30 tankers.
The larger and more important question, however, is whether the outcome of conflict in the 21st century will be determined by how many tanks, bullets, and bombs can be produced. Given the example of the past seven-plus years, the military has not suffered due to a lack of expensive armaments (the lack of proper armor for Humvees was a strategic blunder, not driven by resource constraints). The most serious deficit the U.S. military confronts is not in materiel, but rather personnel. There is a shocking deficit in linguisitic and cultural understanding. The Iraq Study Group reported that of the 1,000 U.S. embassy personnel in Baghdad, only 6 were fluent in Arabic. This is not to mention Urdu, Pashto, Pnjabi, Balochi, Sindhi, Farsi, and the many other tongues in which conspiracies against the U.S. are plotted. Language alone, however, is not enough. Without a cultural understanding of the speakers of these tongues, secrets, codes and plots are unlikely to be distinguished from everyday conversation. Lieutenants and Captains in the Army and Marines form the front lines of U.S. Public Diplomacy, working with local community leaders, forging agreements, apologizing for misdeeds. These officers are trained war fighters. While the work they have done is remarkable, they are not properly equipped for this mission. If the United States is looking to invest in strategic assets to confront the threats of the 21st century, that investment would be much better made in human intelligence than in the auto industry.
*USS and Beth were the top two, National is thrown in to round out the troika.
For an interesting look at the state of the modern Pittsburgh Steeler, check out this podcast from NPR:
http://www.npr.org/blogs/money/2008/12/hear_too_big_to_fail_take_two.html
