You folks really have had me thinking hard about these issues, big picture and details, of the decline of American guitar manufacturing.
I apologize for this being totally from the perspective of a USA citizen.
Consider this: in the early 70's it appeared that the leading American guitar companies were in an enviable position, including Gibson, Martin, Fender, Guild, Rickenbacker and Gretsch.
All had seen surges in sales and profits during the 60's. Most, if not all, had just built or expanded modern factories and hired many new hands to work in fairly-clean, high-wage, high-pride environments.
All had produced a share of all the iconic instruments of the 60's guitar boom and together they had a lock on all the top players. The instruments were part of the myth. What a marketing strength!
All had a reputation for quality, as well as innovation. (One could argue that the US auto industry got greedy on the marketing side, lazy at the drawing board and sloppy on the production line. I don't think that applies as much to the guitar makers).
What steel, autos and guitars did have in common was that all had probably overexpanded production capacity, circa 1972. With guitars, the boom was flattening out as the baby boomers grew up. There was an adjustment to be made there, already. Complicating that adjustment was a sudden flood of import competition for guitars, steel, and autos. This flood never really ceased in the 70's, 80's, 90's, and US government never took any meaningful steps to protect its industry. These other governments, however, were heavily protecting their own markets and subsidizing the industries mentioned. Furthermore, due to the high value of the dollar, compared to foreign currency, American goods became tremendously expensive in all export markets.
Slowly, sadly, surely, American manufacturers accepted the whole global view and international corporate mentality. Now the ones left standing - Fender and Gibson - have closed factories, such as Westerly and Kalamazoo, that had spectacular histories and are building an increasing share of their product overseas.
When we grieve about the Guild that was, it is for just one portion of lost Americana that we treasured. Multiply it by all those other sectors of the US economy - autos, steel, baseball gloves, electronics - and for me it is a tremendous loss for American culture and economic well-being.
The last baseball glove I bought for my son, when I got home I saw it was made in the Republic of Vietnam. GAD, the irony!
BTW, Martin seemed to recognize what was coming, as it focused on what it did best - high end acoustics. I admire what they accomplished.
Sorry. This was too long and probably not the time and place for such a rant.
"They're tearing the Buick City complex down,
I think we're the only people left in town."
-Old 97's