The announcement by General Motors that it will cut 30,000 jobs and close some factories in an effort to reverse its downshifting revenue shows that the U.S. auto industry, perhaps out of stubbornness and a refusal to change its tradition of auto-making, is being seriously outperformed by overseas competitors.

Companies such as Honda, Toyota and others outside the United States have placed large investments in developing more reliable, efficient vehicles, and their numbers remain profitable. Foreign automakers realize that the demand for more fuel-efficient and environmentally friendly vehicles is on the rise, and that the American public, which now buys mostly foreign-made vehicles, has increasingly less interest in purchasing large polluting and gas-guzzling SUVs.

Yet G.M. continues to manufacture these vehicles, and has not invested enough in producing the vehicles that many drivers in the U.S. really want. Reports that have emerged in the past few weeks indicating G.M. could file for Chapter 11 bankruptcy, though unconfirmed by the company’s CEO, is only a further reminder that the U.S. auto industry needs to make some broad changes to its operation. It should follow in the footsteps of foreign automakers that have become increasingly popular in the U.S. market, and show that it has the ability to produce reliable cars according to consumers’ wants and needs.

And it isn’t only the auto industry that is losing to its foreign competitors. The outsourcing of jobs in the telecommunications industry and the technology sector is hurting the U.S. economy, which only a decade ago was at the forefront of these industries.

Countries such as Japan and South Korea have significantly upgraded their investments in producing newer, more advanced technology, leading these research fields ahead of a country as rich as the United States.

If G.M. had had better foresight, it likely would not have had to lay off 30,000 workers. Ford Motor Co. recently said it could cut 4,000 white-collar workers from its staff, further damaging already discouraging unemployment levels.

These companies should have realized that with record-setting gas prices appearing almost every week, drivers will have less of an interest in purchasing vehicles with low mileage per gallon, which G.M. has continued to produce.

And it is not too late for these companies to start looking to alternative modes of production, rather that sticking with its tradition of manufacturing large SUVs that are becoming less and less in demand.

Executives at these U.S. industries need to start looking to their foreign competitors as an example, rather than restrict their minds to within U.S. borders, if they want to jump-start these industries back into recovery mode.