Final answer:
The U.S. auto industry's shift to capital-intensive production is driven by the need for technological advancements, competitive pressures from imports, and the decline of union bargaining power, which together necessitate a focus on efficiency and innovation.
Step-by-step explanation:
The U.S. auto industry has become more capital-intensive over time primarily due to technological advancements and the competitive pressure from imported cars. With the rise of automation and high-tech manufacturing processes, the industry has seen a shift toward the adoption of high-tech capital equipment. This change has been driven by the need to remain competitive in a global market, where Japanese and European manufacturers have made significant inroads since the 1960s, leading to a decrease in U.S. auto manufacturing jobs. Moreover, increased competition from imports has weakened the bargaining power of unions in the auto sector, furthering the inclination toward capital-intensive production methods that can reduce labor costs. Government bailouts during economic crises have highlighted the vulnerability of traditional U.S. auto companies, stressing the importance of efficiency and innovation in production.