The Economy Of The Us Auto Industry VideoWho killed the US Auto Industry? As goes GM, so goes America, now it's subprime car loan's - YouTu
The Economy Of The Us Auto Industry - yet didBeginning in the later half of , a global-scale recession adversely affected the economy of the United States. A combination of several years of declining automobile sales and scarce availability of credit led to a more widespread crisis in the United States auto industry in the years of and Following dramatic drops in automobile sales throughout , two of the " Big Three " U. By April , the situation had worsened such that both GM and Chrysler were faced with imminent bankruptcy and liquidation. With the intent to prevent massive job losses and destabilizing damage to the entire manufacturing sector , the U. Both companies separately filed for this protection by June 1. General Motors emerged from bankruptcy as a new company majority-owned by the United States Treasury , and Chrysler emerged owned primarily by the United Auto Workers union and by Italian automaker Fiat S. Both companies terminated agreements with hundreds of their dealerships and GM discontinued several of its brands as part of bankruptcy proceedings. Ford Motor Company was able to survive without entering bankruptcy partly due to a large line of credit which it obtained in The Economy Of The Us Auto Industry.
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Global Auto Industry The main problem of the global auto industry is the declining market in developed nations. Increased competition between domestic auto companies and foreign auto companies has caused an oversaturation of the market with minimal potential buyers. Before the recession, banks were giving out loans to people who could not afford them.
Once the housing bubble burst, crumbling markets around the world, banks were forced to become more selective about potential borrowers.
With abundant supplies of automobiles sitting at dealerships, inventories skyrocketed. Even people that paid with cash were more hesitant to buy automobiles as the economy turned more and more unstable. The drastic increases in oil prices over the last few years has only aided in the steady decline of consumers.
Even though US auto companies still hold the highest percentage market share in SUV and trucks, gas prices had made that an incredibly costly niche as many have switch to more environmental and economical The Threat of New Entrants 5. The industry has been established for a long time. If you need to be competitive, the company must be able to mass produce to reach a certain level of economies of scale to keep the production cost low, so that the automobiles can be affordable to the consumer. Capital requirements; It takes an extreme amount of capital and a large sum of investment to manufacture the automobiles.]